EXTON, PA — Omega Flex, Inc. (NASDAQ: OFLX), a leader in the manufacture of flexible metal hose products, reported an 11.2% decrease in net sales year-over-year, according to CEO Dean W. Rivest. The company’s net sales for 2023 stood at $111,465,000, down from $125,487,000 in 2022. The decline was particularly pronounced in the fourth quarter of 2023, where sales were 8.7% lower than the same period in 2022.
The slump was primarily attributed to lower sales unit volumes, a result of the overall market contraction influenced by a decline in housing starts among other factors.
In tandem with the drop in sales, the company’s net income also fell by 12.1% in 2023, amounting to $20,763,000 compared to $23,622,000 in the previous year. This represents a decrease of $2,859,000, mostly due to the decrease in net sales.
Despite the downturn in sales, certain factors had a favorable impact on the company’s 2023 results. These include lower product liability reserves and expenses, reduced marketing commissions, higher interest income, and a decrease in executive incentive compensation. However, these benefits were partly offset by higher marketing salary-related expenses and travel costs, as well as provisions for excess inventories for MediTrac® corrugated medical tubing products.
The report highlightsthe challenges faced by Omega Flex amid a subdued housing market, which directly impacts the demand for its products. Nevertheless, the company’s efforts to control costs and enhance operational efficiency have helped mitigate some of the impact of the industry-wide downturn.
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