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AP

ALPHA PRO TECH LTD (APT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 net sales rose 3.7% to $14.8M and diluted EPS was $0.09; gross margin expanded 120 bps to 39.7% YoY, with Building Supply strength partially offset by face mask/face shield declines .
  • Building Supply segment grew 5.4% to $9.3M on 12.7% housewrap growth; Disposable Protective Apparel increased 1.1% to $5.5M with garments +10.4% but masks (-46.5%) and face shields (-33.6%) lagged .
  • Management flagged tariff-driven margin headwinds into Q4 and plans customer price increases; commentary remained constructive on national builder partnerships and 2026 new product introductions .
  • No formal guidance or earnings call transcript was available; consensus estimates from S&P Global were not available for EPS/revenue this quarter, limiting beat/miss analysis (Values retrieved from S&P Global).

What Went Well and What Went Wrong

What Went Well

  • Building Supply outperformed a weak housing backdrop: housewrap +12.7%, other woven +17.4%, segment sales +5.4% YoY to $9.3M .
  • Gross margin expanded to 39.7% (+120 bps YoY) on mix/pricing; net income rose 13.2% to $0.98M and diluted EPS to $0.09 .
  • CEO emphasized resilience and builder programs: “we again outperformed the market... our core building products... were up 3.5%” and expects 2026 new product introductions in self‑adhered roofing/flashing .

What Went Wrong

  • Disposable masks and shields underperformed: masks -46.5%, shields -33.6% YoY, diluting segment growth despite garments +10.4% .
  • Tariffs and price volatility expected to pressure Q4 gross profit; management will raise prices but still anticipates a negative effect .
  • Persistent demand/inventory issues in masks: “Sales of our face mask and face shield products... continue to lag... promotions and pricing incentives” needed to support recovery .

Financial Results

Consolidated P&L and Margins

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD)$14,251,000 $13,822,000 $16,672,000 $14,785,000
Gross Profit ($USD)$5,484,000 $5,392,000 $6,131,000 $5,868,000
Gross Margin (%)38.5% 39.0% 36.8% 39.7%
Operating Income ($USD)$737,000 $455,000 $1,335,000 $1,097,000
Net Income ($USD)$862,000 $613,000 $1,244,000 $976,000
Diluted EPS ($USD)$0.08 $0.06 $0.12 $0.09
Net Margin (%)6.0% 4.4% 7.5% 6.6%

Notes:

  • QoQ: Revenue declined sequentially vs Q2; gross margin rebounded from Q2 to 39.7% .
  • YoY: Gross margin expansion and net income growth despite product mix pressures .

Segment Sales

Segment ($USD)Q3 2024Q1 2025Q2 2025Q3 2025
Building Supply$8,800,000 $8,372,000 $11,100,000 $9,300,000
Disposable Protective Apparel$5,500,000 $5,450,000 $5,600,000 $5,500,000

Subsegment commentary (Q3 2025):

  • Housewrap +12.7%; other woven +17.4%; synthetic roof underlayment -11.0% YoY .
  • Garments +10.4%; masks -46.5%; face shields -33.6% YoY .

Balance Sheet and Cash KPIs

KPIDec 31, 2024Q1 2025Q2 2025Q3 2025
Cash & Equivalents ($USD)$18,636,000 $13,352,000 $14,464,000 $17,658,000
Working Capital ($USD)$47,500,000 $47,000,000 $47,500,000 $48,100,000
Current Ratio (x)16:1 21:1 17:1 14:1
Shares Repurchased (Quarter)—221,413 ($1.2M cost) 181,100 ($0.8M cost) 129,800 ($0.6M cost)
Repurchase Authorization Remaining ($USD)—$1.6M $2.7M $2.1M

Guidance Changes

No formal quantitative guidance was provided. Management commentary suggests:

  • Gross profit expected to face tariff headwinds in Q4 2025; price increases to partially offset .
  • Building Supply outlook constructive with builder partnerships; new product introductions anticipated in 2026 .
MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ4 2025None provided None provided Maintained: No formal guidance
Gross MarginQ4 2025None provided Expect negative tariff impact; price increases planned Qualitative caution
OpExFY 2025None provided None provided Maintained
Product Initiatives2026None provided New self‑adhered roofing/flashing products anticipated New commentary

Earnings Call Themes & Trends

No earnings call transcript was found for Q3 2025; themes below reflect management press release commentary.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Housing starts & Building SupplyQ2: Core building products +13.2% despite starts -9% YoY; record Building Supply quarter . Q1: Underlayment +21.8%; housewrap down due to private‑label changes .Outperformed market; core building products +3.5%; housewrap +12.7%; underlayment -11.0% vs ARMA trends .Mixed but resilient: strength in housewrap; underlayment softer QoQ.
Tariffs & pricingQ2: Tariffs, ocean freight and rebates pressured margin; planned price hikes starting July . Q1: Tariff uncertainty; India exposure could be advantaged vs China tariffs .Additional tariffs to weigh on Q4 gross profit; price increases announced to partially offset .Persistent headwind; mitigation via pricing.
Disposable garments/masks/shieldsQ2: Garments -11.3% (tough comp); masks weak due to channel overbuy; shields improving . Q1: Masks -50.5% YoY; garments +12.0% .Garments rebounded +10.4%; masks -46.5%; shields -33.6% YoY; promotions/incentives deployed .Garments improving; masks/shields still weak.
Builder partnerships & channel strategyQ2: Strong distribution partnerships, adding strategic regional players . Q1: Strengthening downstream relationships .National builder partnerships cited as key to outperformance .Ongoing strategic focus.
New product developmentQ1: Hired Director of Product/Business Development; other woven opportunities .2026 self‑adhered roofing/flashing expansions anticipated .Building toward 2026 launches.

Management Commentary

  • CEO on market outperformance: “we again outperformed the market, as our core building products (housewrap and synthetic roof underlayment) were up 3.5%...” .
  • CEO on product trajectory: “Looking ahead to 2026, we anticipate new product introductions as we continue to expand our self‑adhered roofing and flashing categories.” .
  • CEO on garments: “Sales of disposable protective garments... were up 10.4%, rebounding nicely across all product categories.” .
  • CFO on capital returns: “we had $2.1 million available for additional stock purchases... repurchased 129,800 shares... total of 21.8 million shares... ~$57.4 million” .
  • Margin outlook: “Management expects that tariffs will have a negative effect on gross profit in the fourth quarter of 2025... partially offset by announced price increases” .

Q&A Highlights

No Q3 2025 earnings call transcript was available; no Q&A disclosures identified in company documents .

Estimates Context

  • S&P Global consensus for EPS and revenue was not available for Q3 2025; coverage appears limited for APT (Values retrieved from S&P Global).
  • Without consensus, we cannot determine beat/miss; actuals provided below for reference.
MetricQ3 2025 ActualS&P Global ConsensusSurprise
Revenue ($USD)$14,785,000 N/A*N/A*
Diluted EPS ($USD)$0.09 N/A*N/A*

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Building Supply resilience continues to differentiate APT amid weak housing; housewrap growth and builder partnerships support segment stability .
  • Near-term margin risk from tariffs into Q4 is a key watch item; price increases should partially offset, but mix/headwinds in masks/shields remain .
  • Disposable garments regained momentum (+10.4% YoY), suggesting category normalization; masks/shields require demand recovery and successful promotions .
  • Cash-rich, debt-free balance sheet and ongoing buybacks provide flexibility; $17.7M cash, $48.1M working capital, $2.1M remaining authorization as of Q3 .
  • 2026 product introductions in self‑adhered roofing/flashing can be a medium-term growth catalyst; monitor development milestones and adoption .
  • With limited Street coverage, price can react more to company disclosures; watch Q4 margin commentary vs tariff trajectory and pricing execution .
  • Continue tracking ARMA shipment trends and single-family starts for read-through to underlayment/housewrap; APT has outperformed relative benchmarks .