EXTON, PA — Omega Flex, Inc. (NASDAQ: OFLX) has reported a decrease in net sales and income for the first half of 2024 compared to the same period in 2023, according to CEO Dean W. Rivest.
Net sales for the first six months of 2024 reached $49.8 million, down from $55.8 million in the first half of 2023. This represents a decline of $5.9 million or 10.7%. For the second quarter of 2024, net sales were 4.7% lower than the same period last year. The company attributed the decline primarily to reduced sales volumes, driven in part by a decrease in housing starts.
Net income for the first six months of 2024 fell to $8.7 million, compared to $10.3 million for the same period in 2023, marking a decrease of $1.6 million or 15.4%. For the second quarter alone, net income was 1.3% lower than the same period in 2023. The drop in net income is mainly linked to the reduced net sales and a consequent decrease in production, which led to lower absorption of factory labor and overhead costs.
Several factors helped to mitigate the impact of the lower net sales. These included reduced raw material costs, lower executive incentive and stock-based compensation, decreased product liability reserves and expenses, reduced marketing commissions and freight, a lower provision for income taxes, and higher interest income.
Despite these cost-saving measures, the overall decline in sales and production has had a noticeable impact on Omega Flex’s financial performance in the first half of 2024.
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