Omega Flex Reports 7.5% Decline in Net Sales for Q1 2025

Omega Flex, Inc. reported a decline in financial performance for the first quarter of 2025, with net sales of $23.33 million, a decrease of 7.5% from $25.22 million in the same period of 2024. The company's gross profit also fell to $14.07 million, down from $15.10 million, resulting in a gross profit margin of 60.3%, slightly up from 59.9% year-over-year. Operating profit decreased by 19.9% to $4.05 million, compared to $5.06 million in the prior year. Net income attributable to Omega Flex was $3.57 million, down from $4.22 million, leading to basic and diluted earnings per share of $0.35, compared to $0.42 in the previous year.

The company's financial position showed a decrease in total assets, which fell to $102.75 million from $105.89 million at the end of 2024. Current assets also declined, primarily due to a decrease in cash and cash equivalents, which dropped to $49.23 million from $51.70 million. Current liabilities decreased significantly from $17.44 million to $14.37 million, largely due to reductions in accrued compensation and commissions. Shareholders' equity increased slightly to $83.28 million from $83.18 million, driven by retained earnings growth despite dividend payments totaling $3.43 million.

Operationally, Omega Flex continues to focus on its core business of manufacturing flexible metal hose and accessories, with a significant portion of sales generated through independent sales organizations. The company has maintained its employee headcount at approximately 10,094, consistent with the previous year. However, the decline in sales unit volumes has been attributed to a general market suppression, particularly a decrease in housing starts, which has impacted demand for its products.

Strategically, Omega Flex is investing in product development, as evidenced by increased engineering expenses, which rose by 21.4% to $1.13 million. The company is also expanding its product offerings, including the introduction of its MediTrac® corrugated medical tubing, aimed at healthcare facilities. The company’s outlook remains cautious, with management indicating that future performance will depend on market conditions and the success of new product launches. Omega Flex believes that its existing cash reserves and available credit will be sufficient to meet anticipated cash needs for at least the next twelve months.