Alpha Pro Tech, the small Nogales, Arizona–based maker of disposable protective apparel and residential construction weatherization products, just delivered its strongest quarter of the post-pandemic cycle. Consolidated net sales of $18.7 million rose 12.0% from a year ago, net income reached $1.8 million (up 47%), and diluted earnings per share of $0.18 beat the prior-year $0.12. Operating income, the cleanest read on the underlying business, climbed 51% to $2.0 million, and gross margin expanded 0.6 points to 37.4% even as the company absorbed the lingering effect of last year's tariff cycle. The story underneath the headline is the same one management has been telling for a year: the Building Supply segment is grinding out a single-family-housing headwind, and the Disposable Protective Apparel segment is benefiting from what management called "improved sales to our largest international channel partner" plus tariff-driven price increases that finally cleared through the channel.
The asterisk on the quarter is the same one that has colored every APT print since the start of the year. The U.S. Supreme Court ruled in February that the International Emergency Economic Powers Act ("IEEPA") tariffs were unauthorized, U.S. Customs and Border Protection began processing refunds, and the company recognized $294,000 of refunds in Q2 2026 as a reduction in cost of goods sold, lifting gross profit by the same amount and net income by $219,000 (or $0.02 per diluted share). Excluding the refund, the quarter still looks excellent - net income of $1.6 million is up 29%, operating income of $1.7 million is up 30%, and gross margin of 35.8% is essentially in line with the year-ago 36.8%. Stripped of the refund halo, the underlying business grew nearly 30% on the bottom line. The accounting cushion does not change that.
The other number to flag is one that hasn't been printed in any headline yet. Subsequent to quarter-end, the company received approximately $3.2 million of additional IEEPA tariff refunds that were not recognized in the Q2 financials because the company is using the gain-contingency model and only books refunds when received. The Q2 line item is $294,000; the post-quarter clock is roughly eleven times that. If all of those subsequent refunds are eventually recognized (the company has not yet decided the accounting model for them), the gross profit lift could be substantially larger. This is the single most important date-driven line item that anyone who cares about APT should be tracking. The stock closed the day after the release at $5.37, valuing the company at roughly $54.8 million of market capitalization and $43.5 million of enterprise value against a balance sheet that holds $18.9 million of cash and no debt - a market cap that is essentially the cash plus a small premium for the operating businesses, and an EV/TTM EBITDA around 8x for a company that has just delivered a 30%-plus ex-refund earnings year-on-year. The setup is unusual: a tariff-tailwind sugar rush on top of a working operational beat, in a tiny-cap stock with almost no sell-side coverage (no analyst targets, no dividend, no debt) and 41% insider-plus-institutional ownership.