EXTON, PA — Omega Flex, Inc. (NASDAQ: OFLX) reported a 38.5% drop in first-half net income as weaker housing activity reduced sales volumes and higher raw material, tariff and product-launch costs pressured earnings, even as the company advanced new gas-piping products and secured European certification for its medical tubing.
Net sales for the six months ended June 30 fell 3.5% to $47.15 million from $48.86 million a year earlier. Second-quarter sales declined 5.8% from the comparable 2025 period.
Chief Executive Officer Dean W. Rivest attributed the revenue decline primarily to lower unit volumes as construction markets remained subdued, including weaker housing starts.
First-half net income fell to $4.75 million from $7.72 million. Second-quarter net income declined 35.6% from a year earlier.
Omega Flex identified higher raw material costs, including inbound transportation expenses and tariffs, along with marketing spending and product enhancement and certification costs, as the principal pressures on profit. Lower product-liability reserves and expenses provided a partial offset.
About 30% of the first-half earnings decline and 54% of the second-quarter decline stemmed from higher raw material costs and marketing expenses associated with inventory procurement and the rollout of a re-engineered flexible gas piping fitting, according to the company.
Management expects those costs to continue while inventory builds toward targeted levels and marketing for the product proceeds, but characterized the increase as temporary.
Omega Flex introduced the new TracPipe System fitting July 1. The redesigned component is intended for residential and commercial construction applications and supports larger-diameter systems of as much as two inches.
The company is also investing in equipment and facilities to expand capacity, improve operating efficiency and support geographic expansion.
A separate product development could broaden Omega Flex’s healthcare business. In August, its MediTrac corrugated medical tubing received Conformité Européenne, or CE, certification under the European Union Medical Device Regulation as a Class IIa medical device.
The certification allows Omega Flex to demonstrate compliance with applicable European safety, quality and clinical-performance requirements for MediTrac.
The company maintains that it is unaware of any other manufacturers of corrugated medical tubing. MediTrac is patent protected and also complies with NFPA 99 requirements and Canadian Standard Z7396.1 governing medical gas pipeline systems.
MediTrac is designed as a flexible alternative to rigid copper tubing for distributing medical gases in healthcare facilities. The product is manufactured by Omega Flex subsidiary Flex-Trac, Inc. in Exton.
Omega Flex reported installations of MediTrac in healthcare facilities across 48 U.S. states, Canada, the United Kingdom, Southeast Asia and other international markets.
“We believe MediTrac CMT has the potential to serve as a scalable growth platform that extends our engineering expertise into new geographic regions and markets,” Rivest stated.
The CE certification adds a potential international growth avenue as Omega Flex works through softer construction demand and elevated near-term costs in its core gas-piping business.
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