For the third quarter of 2024, Omega Flex, Inc. (OFLX Quick QuoteOFLX - Free Report) reported an earnings per share (EPS) of 46 cents, a decrease from 55 cents in the same period in 2023. 

Revenue for the quarter totaled $24.9 million, representing a decline of 9.5% from $27.5 million in the prior-year quarter. 

Omega Flex’s revenue contraction in the third quarter was primarily driven by decreased unit volumes as market demand softened. Additionally, the housing sector, which significantly influences the demand for Omega Flex’s piping products, experienced a downturn. The cumulative revenues for the nine months ended Sept. 30, 2024, totaled $74.7 million, a 10.3% decrease from $83.3 million in the comparable period of 2023. 

To mitigate the impact of lower sales, Omega Flex leveraged cost-saving measures, including a reduction in raw material costs, which partially offset the sales decline. However, the company faced higher fixed overhead expenses due to newly leased facilities, which increased its cost base. The balance between cost management and decreased production capacity proved challenging, as lower production volumes weakened the cost absorption of factory labor and overhead, significantly impacting margins.

Net income for the third quarter of 2024 was $4.6 million, down 17.2% compared to $5.6 million in the third quarter of 2023. For the nine-month period, Omega Flex’s net income was $13.3 million, a 16% reduction from $15.9 million in the prior year. The decrease in profitability is attributed to lower sales and decreased production efficiency, which resulted in a weaker absorption of factory labor and overhead costs. 

For the nine months ended Sept. 30, 2024, the EPS was $1.32 compared to $1.57 for the same period in 2023, reflecting a decrease.