Omega Flex Q3 profit falls as material, new-product launch costs rise

Overview

• US flexible piping maker's Q3 net sales rose 6% yr/yr

• Q3 net income fell 36% yr/yr, mainly due to higher raw material costs and marketing efforts

• Company expects elevated costs to normalize over time

Outlook

• Company expects higher costs to continue as it builds inventory and markets its new fitting

• Omega Flex believes higher costs will be limited in duration and will normalize over time

Result Drivers

• RAW MATERIAL AND INVENTORY COSTS - Co said higher raw material, inbound transportation, tariff and inventory procurement costs weighed on net income

• MARKETING EXPENSES - Co said marketing efforts related to the launch of its re-engineered TracPipe fitting weighed on earnings

• NEW PRODUCT LAUNCH - Introduction of re-engineered gas piping fitting led to higher procurement and marketing costs, per CEO Dean W. Rivest

Company press release:

Key Details

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)