Omega Flex, Inc.

Previous wording

The Company’s cash balance of $49,226,000 on March 31, 2025 decreased $2,473,000 (4.8%) from a $51,699,000 balance at December 31, 2024. Consistent with prior years, the Company paid a significant amount of cash during the first quarter for obligations that were accrued as of the end of the preceding year such as incentive related compensation. The Company also paid a dividend during 2025 totaling $3,432,000, as detailed in Note 9, Shareholders’ Equity, to the Condensed Consolidated Financial Statements included in this report. These cash outflows were partially offset by income from operations. See the Company’s Condensed Consolidated Cash Flow Statements for further details regarding the change in cash.

Current wording

The Company’s cash balance of $50,734,000 on June 30, 2025 decreased $965,000 (1.9%) from a $51,699,000 balance at December 31, 2024. Consistent with prior years, the Company paid a significant amount of cash during the first quarter for obligations that were accrued as of the end of the preceding year such as incentive related compensation. The Company also paid dividends during 2025 totaling $6,864,000, as detailed in Note 9, Shareholders’ Equity, to the Condensed Consolidated Financial Statements included in this report, and capital expenditures of $996,000 mostly offset by cash provided by operating activities of $7,013,000. These cash outflows were partially offset by income from operations. See the Company’s Condensed Consolidated Cash Flow Statements for further details regarding the change in cash.

Previous wording

Retained earnings were $73,016,000 and $72,880,000 as of March 31, 2025 and December 31, 2024, respectively, increasing $136,000 or 0.2%. The increase was primarily due to net income during the year, as provided on the Company’s Condensed Consolidated Statements of Income, partially offset by dividends declared during 2025, as discussed in detail in Note 9, Shareholders’ Equity, to the Condensed Consolidated Financial Statements included in this report.

Current wording

Retained earnings were $73,740,000 and $72,880,000 as of June 30, 2025 and December 31, 2024, respectively, increasing $860,000 or 1.2%. The increase was primarily due to net income during the year, as provided on the Company’s Condensed Consolidated Statements of Income, partially offset by dividends declared during 2025, as discussed in detail in Note 9, Shareholders’ Equity, to the Condensed Consolidated Financial Statements included in this report.

Previous wording

Gross Profit. The Company’s gross profit margins were 60.3% and 59.9% for the quarters ended March 31, 2025 and 2024, respectively.

Current wording

Gross Profit. The Company’s gross profit margins were 60.4% and 61.8% for the quarters ended June 30, 2025 and 2024, respectively.

Previous wording

Selling Expenses. Selling expenses consist primarily of employee salaries and associated overhead costs, commissions, and the cost of marketing programs such as advertising, trade shows and related communication costs, and freight. Selling expenses were $5,001,000 and $5,352,000 for the quarters ended March 31, 2025 and 2024, respectively, representing a decrease of $351,000 or 6.6%. The decrease is mostly related to lower staffing related expenses and commissions due to lower sales. Selling expenses increased as a percentage of net sales compared to last year, being 21.4% for the quarter ended March 31, 2025, and 21.2% for the quarter ended March 31, 2024.

Current wording

Selling Expenses. Selling expenses consist primarily of employee salaries and associated overhead costs, commissions, and the cost of marketing programs such as advertising, trade shows and related communication costs, and freight. Selling expenses were $5,217,000 and $4,874,000 for the quarters ended June 30, 2025 and 2024, respectively, representing an increase of $343,000 or 7.0%. The increase is mostly related to higher advertising, commissions, due to higher sales, and travel. Selling expenses increased as a percentage of net sales compared to last year, being 20.4% for the quarter ended June 30, 2025, and 19.8% for the quarter ended June 30, 2024.

Previous wording

General and Administrative Expenses. General and administrative expenses consist primarily of employee salaries, benefits for administrative, executive and finance personnel, legal and accounting, and corporate general and administrative services. General and administrative expenses were $3,891,000 and $3,758,000 for the quarters ended March 31, 2025 and 2024, respectively, increasing by $133,000 or 3.5%. The increase is due to higher product liability reserves and expenses and staffing related costs. These were partly offset by decreases in stock based compensation, which moves in relation to the Company’s stock price, as detailed in Note 7, Stock Based Compensation Plans, and the incentive compensation component which is aligned with profitability. As a percentage of sales, general and administrative expenses increased to 16.7% for the quarter ended March 31, 2025 from 14.9% for the quarter ended March 31, 2024.

Current wording

General and Administrative Expenses. General and administrative expenses consist primarily of employee salaries, benefits for administrative, executive and finance personnel, legal and accounting, and corporate general and administrative services. General and administrative expenses were $4,133,000 and $4,081,000 for the quarters ended June 30, 2025 and 2024, respectively, increasing by $52,000 or 1.3%. The increase is due to stock based compensation, which moves in relation to the Company’s stock price, as detailed in Note 7, Stock Based Compensation Plans, and staffing related costs. These were partly offset by a decrease in director fees and expenses. As a percentage of sales, general and administrative expenses decreased to 16.2% for the quarter ended June 30, 2025 from 16.6% for the quarter ended June 30, 2024.

Previous wording

Engineering Expense. Engineering expenses consist of development expenses associated with the development of new products and enhancements to existing products, and manufacturing engineering costs. Engineering expenses were $1,130,000 and $931,000 for the quarters ended March 31, 2025 and 2024, respectively, increasing by $199,000 or 21.4%. The increase is mostly due to outside consulting and staffing related expenses. Engineering expenses increased as a percentage of sales, being 4.8% for the quarter ended March 31, 2025, and 3.7% for the same quarter in 2024.

Current wording

Engineering Expense. Engineering expenses consist of development expenses associated with the development of new products and enhancements to existing products, and manufacturing engineering costs. Engineering expenses were $1,350,000 and $984,000 for the quarters ended June 30, 2025 and 2024, respectively, increasing by $366,000 or 37.2%. The increase is mostly due to product development and certification related expenses. Engineering expenses increased as a percentage of sales, being 5.3% for the quarter ended June 30, 2025, and 4.0% for the same quarter in 2024.

Previous wording

Operating Profits. Reflecting all of the factors mentioned above, operating profits were $4,050,000 and $5,058,000 for the quarters ended March 31, 2025 and 2024, respectively, decreasing by $1,008,000 or 19.9%.

Current wording

Operating Profits. Reflecting all of the factors mentioned above, operating profits were $4,722,000 and $5,283,000 for the quarters ended June 30, 2025 and 2024, respectively, decreasing by $561,000 or 10.6%.

Previous wording

Interest Income. Interest income is recorded on cash investments, and interest expense is recorded at times when the Company has debt amounts outstanding on its line of credit. The Company recorded $511,000 of interest income for the first quarter of 2025 and $546,000 for the first quarter of 2025.

Current wording

Interest Income. Interest income is recorded on cash investments, and interest expense is recorded at times when the Company has debt amounts outstanding on its line of credit. The Company recorded $493,000 of interest income for the second quarter of 2025 and $609,000 for the second quarter of 2024. The decrease is mainly due to lower interest rates.

Previous wording

Other Income (Expense). Other income (expense) primarily consists of foreign currency exchange gains (losses) on transactions settled in currencies other than the Company’s local currency, typically related to the Company’s foreign U.K. and France subsidiaries. There was a gain of $83,000 during the first quarter of 2025 compared to a loss of $29,000 during the first quarter of 2024.

Current wording

Other Income (Expense). Other income (expense) primarily consists of foreign currency exchange gains (losses) on transactions settled in currencies other than the Company’s local currency, typically related to the Company’s foreign U.K. and France subsidiaries. There was a gain of $229,000 during the second quarter of 2025 compared to a loss of $31,000 during the second quarter of 2024 mainly due to the weakening of the U.S. dollar compared to the British Pound and Euro.

Previous wording

Income Tax Expense. Income tax expense was $1,124,000 for the first quarter of 2025, compared to $1,375,000 for the first quarter in 2024, decreasing $251,000 or 18.3%, mostly the result of lower income before income taxes.

Current wording

Income Tax Expense. Income tax expense was $1,341,000 for the second quarter of 2025, compared to $1,387,000 for the second quarter in 2024, decreasing $46,000 or 3.3%, mostly the result of lower income before income taxes.

Previous wording

Net Sales. The Company’s 2025 first quarter sales of $23,330,000 decreased $1,886,000 or 7.5% compared to the first quarter of 2024, which generated sales of $25,216,000. The decrease in sales is mainly due to lower sales unit volumes as a result of the overall market being suppressed because of, among other factors, a decline in housing starts.

Current wording

Net Sales. The Company’s sales for the first six months of 2025 of $48,855,000 decreased $981,000 or 2.0% compared to the first six months of 2024, which generated sales of $49,836,000. The decrease in sales is mainly due to lower sales unit volumes as a result of the overall market being suppressed because of, among other factors, a decline in housing starts.

Previous wording

As of March 31, 2025, the Company had a cash balance of $49,226,000. Additionally, the Company has a $15,000,000 line of credit available, as discussed in detail in Note 5, which had no borrowings outstanding upon it as of March 31, 2025. As of December 31, 2024, the Company had a cash balance of $51,699,000, also with no borrowings against the line of credit.

Current wording

As of June 30, 2025, the Company had a cash balance of $50,734,000. Additionally, the Company has a $15,000,000 line of credit available, as discussed in detail in Note 5, which had no borrowings outstanding upon it as of June 30, 2025. As of December 31, 2024, the Company had a cash balance of $51,699,000, also with no borrowings against the line of credit.

Previous wording

For the three months ended March 31, 2025, the Company’s operating activities provided cash of $1,555,000, compared to the three months ended March 31, 2024 which provided cash of $2,704,000, a decrease of $1,149,000. For details of the operating cash flows refer to the Condensed Consolidated Statements of Cash Flows in Part I – Financial Information on page eight.

Current wording

For the six months ended June 30, 2025, the Company’s operating activities provided cash of $7,013,000, compared to the six months ended June 30, 2024 which provided cash of $7,107,000, a decrease of $94,000. For details of the operating cash flows refer to the Condensed Consolidated Statements of Cash Flows in Part I – Financial Information on page eight.

Previous wording

Cash used in investing activities during the three months ended March 31, 2025 and 2024 was $552,000 and $461,000, respectively, as a result of payments for mainly leasehold improvements and manufacturing equipment capital expenditures.

Current wording

Cash used in investing activities during the six months ended June 30, 2025 and 2024 was $996,000 and $1,099,000, respectively, as a result of payments for mainly leasehold improvements and manufacturing equipment capital expenditures.

Previous wording

All financing activities relate to dividend payments, which are detailed in Note 9, Shareholders’ Equity. Dividend payments through the first three months of 2025 and 2024 amounted to $3,432,000 and $3,332,000, respectively.

Current wording

All financing activities relate to dividend payments, which are detailed in Note 9, Shareholders’ Equity. Dividend payments through the first six months of 2025 and 2024 amounted to $6,864,000 and $6,663,000, respectively.