Omega Flex Inc. (OFLX, Financial) filed Quarterly Report for the period ended 2010-08-04.
Omega Flex Inc. has a market cap of $148 million; its shares were traded at around $14.67 with a P/E ratio of 28.8 and P/S ratio of 3.3. OFLX is in the portfolios of Third Avenue Management.
During 2010, the Company s inventory balance has increased $422 from $6,188 at December 31, 2009 to $6,610 at June 30, 2010. The increase is largely due to a ramp up of raw material purchases in the UK in anticipation of sales orders in new territories, as well as a slight increase in the cost of inventory.
General and Administrative Expenses. General and administrative expenses consist primarily of employee salaries, benefits for administrative, executive and finance personnel, legal and accounting, and corporate general and administrative services. General and administrative expenses were $2,719 and $3,547 for the six months ended June, 2009 and 2010, respectively. The increase was largely attributable to an increase in staffing expenses of $628, mostly related to incentive compensation, and a $100 increase in legal and consulting, along with other various insignificant components. Notably, the prior year recognized income of $265 related to the Parker Hannifin settlement, which therefore decreased the 2009 expense. General and administrative expense, as a percentage of sales, increased from 13.4% for the six months ended June 30, 2009 to 15.8% for the six months ended June 30, 2010.
Cash used in investing activities for the first six months of 2010 was $71, compared with $3,553 used in the first six months of 2009, which includes a $3,250 loan to our former parent company. Capital spending was $71 and $303 in the first six months ended June 30, 2010 and June 30, 2009, respectively.
On December 17, 2009, the Company agreed to a Revolving Line of Credit Note and a Loan Agreement with Sovereign Bank, NA (“Sovereign”). The Company thereby established a line of credit facility in the maximum amount of $15,000, maturing on December 31, 2010, with funds available for working capital purposes and to fund dividends. This supersedes the existing $7,500 line of credit the Company previously had in place with Sovereign. The loan is collateralized by all of the Company s tangible and intangible assets. The loan agreement provides for the payment of any loan under the agreement at a rate that is either prime rate plus 0.75%, or LIBOR rate plus 3%, with a 4% floor. The Company was also required to pay a nominal commitment fee for the additional $7,500 of available funds, and is delegated to pay a “Line Fee” equal to 17.5 basis points of the average unused balance on a quarterly basis. The Company has no other loans or loan balances outstanding at June 30, 2010.
As noted above, the Company made payments of $2,003 towards the $7,500 December 31, 2009 line of credit balance during the second quarter of 2010, bringing the outstanding balance to $5,497 as of June 30, 2010. The Company anticipates continued payments against the principal balance of the aforementioned outstanding line of credit during the third quarter of 2010 and may potentially payoff the entire balance of the debt by the end of the year.
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Omega Flex Inc. has a market cap of $148 million; its shares were traded at around $14.67 with a P/E ratio of 28.8 and P/S ratio of 3.3. OFLX is in the portfolios of Third Avenue Management.
Highlight of Business Operations:
Cash has been positively generated during 2010 from operations, but shows a decrease of $1,267 from December 31, 2009 to June 30, 2010, largely as a result of approximately $2,000 in cash applied towards the outstanding line of credit during the second quarter. This also explains the $2,000 decrease in the line of credit. Effective during the second quarter of 2010, the Company implemented an automatic sweep of funds against the line of credit, therefore requiring a $438 reclass of outstanding checks to Accounts Payable previously considered cash. This also largely explains the $360 increase in Accounts Payable.During 2010, the Company s inventory balance has increased $422 from $6,188 at December 31, 2009 to $6,610 at June 30, 2010. The increase is largely due to a ramp up of raw material purchases in the UK in anticipation of sales orders in new territories, as well as a slight increase in the cost of inventory.
General and Administrative Expenses. General and administrative expenses consist primarily of employee salaries, benefits for administrative, executive and finance personnel, legal and accounting, and corporate general and administrative services. General and administrative expenses were $2,719 and $3,547 for the six months ended June, 2009 and 2010, respectively. The increase was largely attributable to an increase in staffing expenses of $628, mostly related to incentive compensation, and a $100 increase in legal and consulting, along with other various insignificant components. Notably, the prior year recognized income of $265 related to the Parker Hannifin settlement, which therefore decreased the 2009 expense. General and administrative expense, as a percentage of sales, increased from 13.4% for the six months ended June 30, 2009 to 15.8% for the six months ended June 30, 2010.
Cash used in investing activities for the first six months of 2010 was $71, compared with $3,553 used in the first six months of 2009, which includes a $3,250 loan to our former parent company. Capital spending was $71 and $303 in the first six months ended June 30, 2010 and June 30, 2009, respectively.
On December 17, 2009, the Company agreed to a Revolving Line of Credit Note and a Loan Agreement with Sovereign Bank, NA (“Sovereign”). The Company thereby established a line of credit facility in the maximum amount of $15,000, maturing on December 31, 2010, with funds available for working capital purposes and to fund dividends. This supersedes the existing $7,500 line of credit the Company previously had in place with Sovereign. The loan is collateralized by all of the Company s tangible and intangible assets. The loan agreement provides for the payment of any loan under the agreement at a rate that is either prime rate plus 0.75%, or LIBOR rate plus 3%, with a 4% floor. The Company was also required to pay a nominal commitment fee for the additional $7,500 of available funds, and is delegated to pay a “Line Fee” equal to 17.5 basis points of the average unused balance on a quarterly basis. The Company has no other loans or loan balances outstanding at June 30, 2010.
As noted above, the Company made payments of $2,003 towards the $7,500 December 31, 2009 line of credit balance during the second quarter of 2010, bringing the outstanding balance to $5,497 as of June 30, 2010. The Company anticipates continued payments against the principal balance of the aforementioned outstanding line of credit during the third quarter of 2010 and may potentially payoff the entire balance of the debt by the end of the year.
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