EXTON, PA — Omega Flex Inc. (Nasdaq: OFLX) reported a 36% decline in third-quarter profit despite higher sales, as tariffs, raw material expenses and costs associated with introducing a redesigned gas piping fitting weighed on earnings at the Exton-based manufacturer.
Net income fell to $2.36 million, or 23 cents per diluted share, for the quarter ended September 30, 2026, compared with $3.69 million, or 37 cents per share, a year earlier.
Quarterly net sales increased 6% to $25.7 million from $24.2 million, indicating that higher operating costs more than offset revenue growth.
The company attributed the earnings decline primarily to increased raw material costs, including inbound transportation expenses and tariffs, along with marketing expenditures associated with a new product introduction.
Omega Flex reported that approximately 102% of the year-over-year quarterly earnings decline was attributable to higher costs associated with procuring inventory and introducing its redesigned flexible gas piping fitting.
Lower product liability reserves and expenses partially offset those increases.
The company introduced the re-engineered fitting under its TracPipe brand on July 1, targeting residential and commercial construction applications.
The redesigned product is intended to simplify installation and accommodate larger-diameter commercial gas piping systems, including installations measuring up to two inches.
Omega Flex has been purchasing inventory and increasing marketing activity to support the product introduction, adding costs during the transition.
Management expects those expenses to continue as the company builds inventory toward targeted levels and markets the fitting, although it anticipates that the elevated costs will eventually normalize.
The financial pressure extended across the first nine months of 2026.
Net income declined 37.7% to $7.11 million, or 70 cents per diluted share, from $11.41 million, or $1.13 per share, during the comparable period in 2025.
Nine-month sales were largely unchanged at $72.85 million, down $242,000, or 0.3%, from $73.09 million a year earlier.
Approximately 52% of the nine-month earnings decline was attributable to the additional raw material, transportation, tariff and marketing costs associated with the redesigned fitting.
The results reflect a period of increased spending as Omega Flex introduces the product while contending with higher input costs.
Beyond the product rollout, the company is investing in equipment and facilities to expand manufacturing capacity, improve operating efficiency and support geographic expansion.
Those investments are intended to increase Omega Flex’s ability to supply existing customers and distribution partners while entering additional markets.
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