Omega Flex Inc
For the period ended Mar 31, 2025. Filed May 2, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 2, 2025
OFLX$23.91-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-01.
0001493152-24-043338
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0001641172-25-008286
Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 51 previous paragraphs and 41 current paragraphs.
23 unchanged; 15 reworded; 3 added; 4 removed; 9 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
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 report
In November 2023, the FASB issued ASU No. 2023-07,Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The purpose of the guidance is to enable investors to better understand an entity’s overall performance and assess potential future cash flows. The amendment is effective for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024. The impact of the adoption did not have a material impact on the Company’s Condensed Consolidated Financial Statements.
Current report
In November 2024, the FASB issued ASU No. 2024-03,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires new tabular disclosures disaggregating prescribed expense categories within relevant income statement captions. The amendment is effective for annual periods beginning after December 15, 2026 and interim periods in fiscal years beginning after December 15, 2027. The Company is in the process of evaluating the impact of ASU No. 2024-03 on its Condensed Consolidated Financial Statements.
Removed paragraphs (4)
Previous report
The Company’s cash balance of $45,873,000 on September 30, 2024 decreased $483,000 (1.0%) from a $46,356,000 balance at December 31, 2023 mainly due to dividend payments of $10,095,000, as detailed in Note 9, Shareholders’ Equity, to the Condensed Consolidated Financial Statements included in this report, and capital expenditures of $1,443,000 mostly offset by cash provided by operating activities of $11,097,000. See the Company’s Condensed Consolidated Cash Flow Statements for further details regarding the change in cash.
Previous report
Nine months ended September 30, 2024 compared to nine months ended September 30, 2023
Previous report
Gross Profit. The Company’s gross profit margins were 61.1% and 61.7% for the nine months ended September 30, 2024 and 2023, respectively. The decline in gross profit margin is mainly due to lower production, which caused lower absorption of factory labor and overhead costs, and higher overhead expenses mainly due to newly leased facilities. This is partly offset by lower raw material costs and a decrease in the provision for excess inventories for MediTrac® CMT products.
Previous report
In March 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-04,*Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,*updated in December 2022 by ASU No. 2022-06,Deferral of Sunset Date of Topic 848. The ASUs apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The ASUs provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the ASUs do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. ASU 2020-04, as updated by ASU 2022-06, is effective for all entities as of March 12, 2020, through December 31, 2024. The impact of the adoption did not have a material impact on the Company’s Condensed Consolidated Financial Statements.
Reworded paragraphs (15)
Previous wording
The Company’s business is managed as a single operating segment that consists of the manufacture and sale of flexible metal hose, fittings, and accessories. The Company’s products are concentrated in residential and commercial construction, and general industrial markets, with a comprehensive portfolio of intellectual property and patents issued in various countries around the world. The Company’s primary product, flexible gas piping, is used for gas piping within residential and commercial buildings. Through its flexibility and ease of use, the Company’s TracPipe® and TracPipe®CounterStrike® flexible gas piping, along with its fittings distributed under the trademarks AutoFlare®, allows users to substantially cut the time required to install gas piping, as compared to traditional methods. The Company’s newest product line MediTrac® corrugated medical tubing (“CMT”) is used for piping medical gases (oxygen, nitrogen, nitrous oxide, carbon dioxide, and medical vacuum) in health care facilities. Building on the recognized strengths and strategies employed in the flexible gas piping market, MediTrac®CMT can be used in place of rigid copper pipe, and due to its long continuous lengths and flexibility, it can be installed approximately five times faster than rigid copper pipe, saving on installation labor and construction schedules. The Company’s products are manufactured at its Exton, Pennsylvania and Houston, Texas facilities in the U.S., and in Banbury, Oxfordshire in the U.K. A majority of the Company’s sales across all industries are generated through independent outside sales organizations such as sales representatives, wholesalers and distributors, or a combination of both. The Company has a broad distribution network in North America and to a lesser extent in other global markets.
Current wording
The Company’s business is managed as a single operating segment that consists of the manufacture and sale of flexible metal hose, fittings, and accessories. The Company’s products are concentrated in residential and commercial construction within buildings, and general industrial markets, with a comprehensive portfolio of intellectual property and patents issued in various countries around the world. The residential and commercial construction market also utilizes corrugated stainless steel tubing (“CSST”) primarily for flexible gas piping. Through its flexibility and ease of use, the Company’s TracPipe® CSST and TracPipe®CounterStrike® CSST, along with its fittings distributed under the trademark AutoFlare®, allows users to substantially cut the time required to install gas piping, as compared to traditional methods. The Company’s newest product line MediTrac® corrugated medical tubing (“CMT”) is used for piping medical gases (oxygen, nitrogen, nitrous oxide, carbon dioxide, and medical vacuum) in health care facilities. Building on the recognized strengths and strategies employed in the flexible gas piping market, MediTrac® CMT can be used in place of rigid copper pipe, and due to its long continuous lengths and flexibility, it can be installed approximately five times faster than rigid copper pipe, saving on installation labor and construction schedules. The Company’s products are manufactured at its Exton, Pennsylvania and Houston, Texas facilities in the U.S., and in Banbury, Oxfordshire in the U.K. A majority of the Company’s sales across all industries are generated through independent outside sales organizations such as sales representatives, wholesalers and distributors, or a combination of both. The Company has a broad distribution network in North America and to a lesser extent in other global markets.
Previous wording
Retained earnings were $71,630,000 and $68,493,000 as of September 30, 2024 and December 31, 2023, respectively, increasing $3,137,000 or 4.6%. 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 2024, as discussed in detail in Note 9, Shareholders’ Equity, to the Condensed Consolidated Financial Statements included in this report.
Current wording
Retained earnings were $73,016,000 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.
Previous wording
Net Sales. The Company’s 2024 third quarter sales of $24,880,000 decreased $2,616,000 or 9.5% compared to the third quarter of 2023, which generated sales of $27,496,000. 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 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.
Previous wording
Gross Profit. The Company’s gross profit margins were 61.7% and 61.6% for the quarters ended September 30, 2024 and 2023, respectively.
Current 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.
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 $4,976,000 and $5,059,000 for the quarters ended September 30, 2024 and 2023, respectively, representing a decrease of $83,000 or 1.6%. The decrease is mostly related to commissions due to the lower sales. Selling expenses increased as a percent of net sales compared to last year, being 20.0% for the quarter ended September 30, 2024, and 18.4% for the quarter ended September 30, 2023.
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 $5,001,000 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.
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 $3,848,000 and $4,037,000 for the quarters ended September 30, 2024 and 2023, respectively, decreasing by $189,000 or 4.7%. The incentive compensation component, which is aligned with profitability, decreased mainly due to the changes in the executive management team at the beginning of the year. Product liability reserves and expenses were also lower. These were partly offset by increases in 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. As a percentage of sales, general and administrative expenses increased to 15.5% for the quarter ended September 30, 2024 from 14.7% for the quarter ended September 30, 2023.
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 $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.
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 $1,058,000 and $992,000 for the quarters ended September 30, 2024 and 2023, respectively, increasing by $66,000 or 6.7%. Engineering expenses increased as a percentage of sales, being 4.3% for the quarter ended September 30, 2024, and 3.6% for the same quarter in 2023.
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 $1,130,000 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.
Previous wording
Operating Profits. Reflecting all of the factors mentioned above, operating profits were $5,468,000 and $6,859,000 for the quarters ended September 30, 2024 and 2023, respectively, decreasing by $1,391,000 or 20.3%.
Current 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%.
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 $586,000 of interest income for the third quarter of 2024 and $502,000 for the third quarter of 2023. Higher invested cash balances are mainly responsible for the higher interest income.
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 $511,000 of interest income for the first quarter of 2025 and $546,000 for the first quarter of 2025.
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 $21,000 during the third quarter of 2024 compared to a loss of $41,000 during the third quarter of 2023.
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 $83,000 during the first quarter of 2025 compared to a loss of $29,000 during the first quarter of 2024.
Previous wording
Income Tax Expense. Income tax expense was $1,479,000 for the third quarter of 2024, compared to $1,746,000 for the third quarter in 2023, decreasing $267,000 or 15.3%, mostly the result of lower income before income taxes.
Current 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.
Previous wording
As of September 30, 2024, the Company had a cash balance of $45,873,000. 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 September 30, 2024. As of December 31, 2023, the Company had a cash balance of $46,356,000, with no borrowings against the line of credit.
Current 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.
Previous wording
For the nine months ended September 30, 2024, the Company’s operating activities provided cash of $11,097,000, compared to the nine months ended September 30, 2023 which provided cash of $11,496,000, a decrease of $399,000. For details of the operating cash flows refer to the Condensed Consolidated Statements of Cash Flows in Part I – Financial Information on page nine.
Current 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.
Previous wording
Cash used in investing activities during the nine months ended September 30, 2024 and 2023 was $1,443,000 and $1,455,000, respectively, as a result of payments for mainly leasehold improvements and manufacturing equipment capital expenditures.
Current wording
Cash used in investing activities during the 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.
Previous wording
All financing activities relate to dividend payments, which are detailed in Note 9, Shareholders’ Equity. Dividend payments through the first nine months of 2024 and 2023 amounted to $10,095,000 and $9,793,000, respectively.
Current 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.
Rearranged previous paragraphs (9)
Previous report — wording carried elsewhere
The Company reported comparative results from operations for the nine month periods ended September 30, 2024 and 2023 as follows:
Previous report — wording carried elsewhere
Net Sales. The Company’s sales for the first nine months of 2024 of $74,716,000 decreased $8,602,000 or 10.3% compared to the first nine months of 2023, which generated sales of $83,318,000. 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 report — wording carried elsewhere
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 $15,202,000 and $15,631,000 for the nine months ended September 30, 2024 and 2023, respectively, representing a decrease of $429,000 or 2.7%. The decrease is mostly related to commissions and freight due to lower sales. These decreases were partially offset by higher travel and recruiting expenses. Selling expenses increased as a percent of net sales compared to last year, being 20.3% for the nine months ended September 30, 2024, and 18.8% for the nine months ended September 30, 2023.
Previous report — wording carried elsewhere
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 $11,687,000 and $13,204,000 for the nine months ended September 30, 2024 and 2023, respectively, decreasing by $1,517,000 or 11.5%. The incentive compensation component, which is aligned with profitability, decreased mainly due to the changes in the executive management team at the beginning of the year and lower profits. Product liability reserves and expenses were also lower along with stock based compensation, which moves in relation to the Company’s stock price, as detailed in Note 7, Stock Based Compensation Plans. These were partly offset by increases in staffing and computer related expenses. As a percentage of sales, general and administrative expenses decreased to 15.6% for the nine months ended September 30, 2024 from 15.8% for the nine months ended September 30, 2023.
Previous report — wording carried elsewhere
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 $2,973,000 and $2,854,000 for the nine months ended September 30, 2024 and 2023, respectively, increasing by $119,000 or 4.2% mainly due to higher consulting expenses. Engineering expenses increased as a percentage of sales, being 4.0% for the nine months ended September 30, 2024, and 3.4% for the nine months ended September 30, 2023.
Previous report — wording carried elsewhere
Operating Profits. Reflecting all of the factors mentioned above, operating profits were $15,809,000 and $19,686,000 for the nine months ended September 30, 2024 and 2023, respectively, decreasing by $3,877,000 or 19.7%.
Previous report — wording carried elsewhere
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 $1,741,000 and $1,179,000 of interest income during the first nine months of 2024 and 2023, respectively. Higher invested cash balances and interest rates are mainly responsible for the higher interest income.
Previous report — wording carried elsewhere
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 loss of $39,000 during the first nine months of 2024 compared to a gain of $14,000 during the first nine months of 2023.
Previous report — wording carried elsewhere
Income Tax Expense. Income tax expense was $4,241,000 for the first nine months of 2024, compared to $5,014,000 for the same period in 2023, decreasing $773,000 or 15.4%, mostly the result of lower income before income taxes.