Omega Flex Q3 profit falls as material and new-product launch costs rise
OFLX•Omega Flex's third-quarter net sales rose 6% year over year, while net income fell 36% to $2.36 million. The company cited higher material, transportation, tariff, inventory and marketing costs; basic EPS was $0.23.
1. Costs weigh on earnings
Omega Flex said higher raw material, inbound transportation, tariff and inventory procurement costs, along with marketing for its re-engineered TracPipe fitting, weighed on third-quarter net income. CEO Dean W. Rivest said the product launch led to higher procurement and marketing costs. The company expects elevated costs to continue as it builds inventory and markets the fitting, but believes they will be limited in duration and normalize over time.
