Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 01, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-51372 | ||
Entity Registrant Name | Omega Flex, Inc. | ||
Entity Central Index Key | 0001317945 | ||
Entity Tax Identification Number | 23-1948942 | ||
Entity Incorporation, State or Country Code | PA | ||
Entity Address, Address Line One | 451 Creamery Way | ||
Entity Address, City or Town | Exton | ||
Entity Address, State or Province | PA | ||
Entity Address, Postal Zip Code | 19341 | ||
City Area Code | (610) | ||
Local Phone Number | 524-7272 | ||
Title of 12(b) Security | Common stock, par value $0.01 per share | ||
Trading Symbol | OFLX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 344,436,584 | ||
Entity Common Stock, Shares Outstanding | 10,094,322 | ||
Dcuments IncorporatedByReference | The information required by Part III (Items 10, 11, 12, 13, and 14) is incorporated by reference from the registrant’s definitive proxy statement (to be filed pursuant to Regulation 14A no later than 120 days after December 31, 2023, or April 29, 2024) for the 2024 annual meeting of shareholders | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Firm ID | 49 | ||
Auditor Name | RSM US LLP | ||
Auditor Location | Blue Bell, Pennsylvania |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and Cash Equivalents | $ 46,356 | $ 37,703 |
Accounts Receivable - less allowances of $1,126 and $1,111, respectively | 15,361 | 17,503 |
Inventories - Net | 15,597 | 17,764 |
Other Current Assets | 2,874 | 2,785 |
Total Current Assets | 80,188 | 75,755 |
Right-Of-Use Assets - Operating | 2,940 | 3,205 |
Property and Equipment - Net | 8,951 | 8,404 |
Goodwill - Net | 3,526 | 3,526 |
Deferred Taxes | 189 | 923 |
Other Long Term Assets | 4,440 | 5,871 |
Total Assets | 100,234 | 97,684 |
Current Liabilities: | ||
Accounts Payable | 2,090 | 2,290 |
Accrued Compensation | 3,198 | 3,782 |
Accrued Commissions and Sales Incentives | 4,428 | 4,996 |
Dividends Payable | 3,332 | 3,232 |
Taxes Payable | 190 | 109 |
Lease Liability - Operating | 454 | 447 |
Other Liabilities | 4,390 | 7,530 |
Total Current Liabilities | 18,082 | 22,386 |
Lease Liability - Operating, net of current portion | 2,492 | 2,763 |
Deferred Taxes | 6 | |
Tax Payable Long Term | 205 | 370 |
Other Long Term Liabilities | 603 | 986 |
Total Liabilities | 21,382 | 26,511 |
Commitments and Contingencies (Note 7) | ||
Omega Flex, Inc. Shareholders’ Equity: | ||
Common Stock – par value $0.01 share: authorized 20,000,000 shares: 10,153,633 shares issued and 10,094,322 shares outstanding as of December 31, 2023 and December 31, 2022, respectively | 102 | 102 |
Treasury Stock | (1) | (1) |
Paid-in Capital | 11,025 | 11,025 |
Retained Earnings | 68,493 | 60,954 |
Accumulated Other Comprehensive Loss | (930) | (1,103) |
Total Omega Flex, Inc. Shareholders’ Equity | 78,689 | 70,977 |
Noncontrolling Interest | 163 | 196 |
Total Shareholders’ Equity | 78,852 | 71,173 |
Total Liabilities and Shareholders’ Equity | $ 100,234 | $ 97,684 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 1,126 | $ 1,111 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 10,153,633 | 10,153,633 |
Common stock, shares outstanding | 10,094,322 | 10,094,322 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Net Sales | $ 111,465 | $ 125,487 | $ 130,011 |
Cost of Goods Sold | 43,100 | 47,182 | 48,480 |
Gross Profit | 68,365 | 78,305 | 81,531 |
Selling Expense | 20,993 | 21,931 | 20,429 |
General and Administrative Expense | 17,705 | 20,625 | 21,430 |
Engineering Expense | 3,868 | 4,733 | 4,610 |
Operating Profit | 25,799 | 31,016 | 35,062 |
Interest Income | 1,700 | 174 | 35 |
Other Income (Expense) | 46 | (211) | 21 |
Income Before Income Taxes | 27,545 | 30,979 | 35,118 |
Income Tax Expense | 6,825 | 7,327 | 8,862 |
Net Income | 20,720 | 23,652 | 26,256 |
Less: Net Loss (Income) – Noncontrolling Interest | 43 | (30) | (61) |
Net Income attributable to Omega Flex, Inc. | $ 20,763 | $ 23,622 | $ 26,195 |
Earnings per common share - Basic | $ 2.06 | $ 2.34 | $ 2.60 |
Earnings per common share - Diluted | 2.06 | 2.34 | 2.60 |
Cash Dividends Declared per Common Share | $ 1.31 | $ 1.26 | $ 1.18 |
Weighted average shares outstanding - Basic | 10,094 | 10,094 | 10,094 |
Weighted average shares outstanding - Diluted | 10,094 | 10,094 | 10,094 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Net Income | $ 20,720 | $ 23,652 | $ 26,256 |
Other Comprehensive Income (Loss): | |||
Foreign Currency Translation Adjustment | 183 | (299) | (52) |
Other Comprehensive Income (Loss) | 183 | (299) | (52) |
Comprehensive Income | 20,903 | 23,353 | 26,204 |
Comprehensive Loss (Income) Attributable to the Noncontrolling Interest | 33 | (7) | (58) |
Total Other Comprehensive Income | $ 20,936 | $ 23,346 | $ 26,146 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Treasury Stock, Common [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income Loss [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2020 | $ 102 | $ (1) | $ 11,025 | $ 35,769 | $ (778) | $ 260 | $ 46,377 |
Balance, shares at Dec. 31, 2020 | 10,094,322 | ||||||
Net Income | 26,195 | 61 | 26,256 | ||||
Cumulative Translation Adjustment | (49) | (3) | (52) | ||||
Dividends Declared | (11,911) | (129) | (12,040) | ||||
Balance at Dec. 31, 2021 | $ 102 | (1) | 11,025 | 50,053 | (827) | 189 | 60,541 |
Balance, shares at Dec. 31, 2021 | 10,094,322 | ||||||
Net Income | 23,622 | 30 | 23,652 | ||||
Cumulative Translation Adjustment | (276) | (23) | (299) | ||||
Dividends Declared | (12,721) | (12,721) | |||||
Balance at Dec. 31, 2022 | $ 102 | (1) | 11,025 | 60,954 | (1,103) | 196 | 71,173 |
Balance, shares at Dec. 31, 2022 | 10,094,322 | ||||||
Net Income | 20,763 | (43) | 20,720 | ||||
Cumulative Translation Adjustment | 173 | 10 | 183 | ||||
Dividends Declared | (13,224) | (13,224) | |||||
Balance at Dec. 31, 2023 | $ 102 | $ (1) | $ 11,025 | $ 68,493 | $ (930) | $ 163 | $ 78,852 |
Balance, shares at Dec. 31, 2023 | 10,094,322 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flows from Operating Activities: | |||
Net Income | $ 20,720 | $ 23,652 | $ 26,256 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | |||
Non-Cash Compensation Expense | 292 | 156 | 506 |
Non-Cash Lease Expense | 462 | 481 | 328 |
Depreciation and Amortization | 1,099 | 1,096 | 1,020 |
Provision for Losses on Accounts Receivable, net of write-offs and recoveries | 5 | (301) | 286 |
Deferred Taxes | 728 | (1,337) | 305 |
Provision for Inventory Reserves | 1,107 | 91 | 101 |
Changes in Assets and Liabilities: | |||
Accounts Receivable | 2,182 | 3,396 | (943) |
Inventories | 1,227 | (2,578) | (4,185) |
Other Assets | 1,344 | (4,429) | (509) |
Accounts Payable | (205) | (1,002) | 894 |
Accrued Compensation | (590) | (3,194) | 1,582 |
Accrued Commissions and Sales Incentives | (572) | (2,179) | 2,835 |
Lease Liabilities | (461) | (475) | (335) |
Other Liabilities | (3,916) | 1,869 | (2,992) |
Net Cash Provided by Operating Activities | 23,422 | 15,246 | 25,149 |
Cash Flows from Investing Activities: | |||
Capital Expenditures | (1,642) | (942) | (971) |
Net Cash Used In Investing Activities | (1,642) | (942) | (971) |
Cash Flows from Financing Activities: | |||
Dividends Paid | (13,124) | (9,489) | (14,867) |
Net Cash Used In Financing Activities | (13,124) | (9,489) | (14,867) |
Net Increase in Cash and Cash Equivalents | 8,656 | 4,815 | 9,311 |
Translation effect on cash | (3) | (25) | (31) |
Cash and Cash Equivalents - Beginning of Year | 37,703 | 32,913 | 23,633 |
Cash and Cash Equivalents - End of Year | 46,356 | 37,703 | 32,913 |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid for Income Taxes | 6,057 | 8,678 | 9,602 |
Cash paid for Interest | |||
Declared Dividend | 3,332 | 3,232 | |
Additions to Right-Of-Use Assets obtained from new operating Lease Liabilities | $ 65 | $ 644 | $ 3,261 |
BASIS OF PRESENTATION AND CONSO
BASIS OF PRESENTATION AND CONSOLIDATION | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND CONSOLIDATION | 1. BASIS OF PRESENTATION AND CONSOLIDATION Basis of Presentation The accompanying Consolidated Financial Statements include the accounts of Omega Flex, Inc. and its subsidiaries (collectively the “Company”). The Company’s audited Consolidated Financial Statements for the years ended December 31, 2023, 2022 and 2021 have been prepared in accordance with accounting standards set by the Financial Accounting Standards Board (FASB) and Article 5 of Regulation S-X. Certain amounts from prior years have been reclassified to conform to current year presentation. All material intercompany accounts and transactions have been eliminated in consolidation. Description of Business The Company is a leading manufacturer of flexible metal hose, which is used in a variety of applications to carry gases and liquids within their particular applications. The Company’s business is controlled as a single operating segment that consists of the manufacture and sale of flexible metal hose and accessories. These applications include carrying fuel gases within residential and commercial buildings; gasoline and diesel gasoline products (both above and below the ground) in a double containment piping to contain any possible leaks, which is used in automotive and marina refueling, and fueling for back-up generation; and medical gases in health care facilities. The Company’s flexible metal piping is also used to carry other types of gases and fluids in a number of industrial applications where the customer requires the piping to have both a degree of flexibility and/or an ability to carry corrosive compounds or mixtures, or to carry at both very high and very low (cryogenic) temperatures. The Company manufactures flexible metal hose at its facilities in Exton, Pennsylvania and Houston, Texas, in the U.S., and in Banbury, Oxfordshire in the U.K., and sells its products through distributors, wholesalers and to OEMs throughout North America, and in certain European markets. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management develops, and changes periodically, these estimates and assumptions based on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual amounts could differ significantly from these estimates. Revenue Recognition The Company applies the requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers The principle of Topic 606 was achieved through applying the following five-step approach: ● Identification of the contract, or contracts, with a customer — ● Identification of the performance obligations in the contract — ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract ● Recognition of revenue when, or as, the Company satisfies a performance obligation ■ The Company has a present right to payment ■ The customer has legal title to the goods ■ The Company has transferred physical possession of the goods ■ The customer has the significant risks and rewards of ownership of the goods ■ The customer has accepted the goods It is important to note that the indicators are not a set of conditions that must be met before the Company can conclude that control of the goods has transferred to the customer. The indicators are a list of factors that are often present if a customer has control of the goods. The Company has typical, unmodified FOB shipping point terms. As the seller, the Company can determine that the shipped goods meet the agreed-upon specifications in the contract or customer purchase order (e.g., items, quantities, and prices) with the buyer, so customer acceptance would be deemed a formality, as noted in ASC 606-10-55-86. As a result, the Company has a legal right to payment upon shipment of the goods. Based upon the above, the Company has concluded that control substantively transfers to the customer upon shipment. Other considerations of Topic 606 include the following: ● Contract Costs - ● Warranties ● Returned Goods ● Volume Rebates (Promotional Incentives) ■ The amount of consideration is highly susceptible to factors outside the Company’s influence. The uncertainty about the amount of consideration is not expected to be resolved for a long period of time. The Company’s experience with similar types of contracts is limited. ■ The contract has a large number and broad range of possible consideration amounts. If it was concluded that the above factors were in place for the Company, it would support the probability of a significant reversal of revenue. However, as none of the four factors apply to the Company, promotional incentives are recorded as a reduction of revenue based upon estimates of the eligible products expected to be sold. Regarding disaggregated revenue disclosures, as previously noted, the Company’s business is controlled as a single operating segment that consists of the manufacture and sale of flexible metal hose. Most of the Company’s transactions are very similar in nature, contract, terms, timing, and transfer of control of goods. As indicated in this Note 2, Significant Accounting Policies, in these Consolidated Financial Statements, under the caption “Significant Concentrations”, the majority of the Company’s sales were geographically contained within North America, with the remainder scattered internationally. All performance assessments and resource allocations are generally based upon the review of the results of the Company as a whole. Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents include investments in an institutional money market fund, which invests in U.S. Treasury bills, notes, and bonds, and/or repurchase agreements, backed by such obligations, and in U.S. Treasury bills and certificates of deposit. Carrying value approximates fair value except for U.S. Treasury bills and certificates of deposit where amortized cost approximates fair value. Cash and cash equivalents are deposited at various area banks, which at times may exceed federally insured limits. The Company monitors the viability of the banking institutions carrying their assets on a regular basis and has the ability to transfer cash to various institutions during times of risk. The Company has not experienced any losses related to these cash balances and believes its credit risk to be minimal. Accounts Receivable and Provision for Credit Losses All accounts receivable is stated at amortized cost, net of allowances for credit losses, and adjusted for any write-offs. The Company maintains allowances for credit losses, which represent an estimate of expected losses over the remaining contractual life of its receivables considering current market conditions and estimates for supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing assessments and evaluations of collectability, historical loss experience, and future expectations in estimating credit losses in its receivable portfolio. For accounts receivable, the Company uses historical loss experience rates and applies them to a related aging analysis while also considering customer and/or economic risk where appropriate. Determination of the proper amount of allowances requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, as a result, operating profit. The allowances consider numerous quantitative and qualitative factors that include receivable type, historical loss experience, delinquency trends, collection experience, current economic conditions, estimates for supportable forecasts, when appropriate, and credit risk characteristics. The reserve for credit losses, which include future credits, discounts, and doubtful accounts, was $ 1,126,000 1,111,000 Inventories Inventories are valued at the lower of cost or net realizable value. The cost of inventories is determined by the first-in, first-out (FIFO) method. The Company generally considers inventory quantities beyond two years of usage, measured on a historical usage basis, to be excess inventory and reduces the carrying value of inventory accordingly. Property and Equipment Property and equipment are initially recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or, for leasehold improvements, the life of the lease, if shorter. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in other income or expense for the period. The cost of maintenance and repairs is expensed as incurred; significant improvements are capitalized. Goodwill In accordance with FASB ASC Topic 350, Intangibles – Goodwill and Other Stock-Based Compensation Plans In 2006, the Company adopted a Phantom Stock Plan (the “Plan”), which allows the Company to grant phantom stock units (“Units”) to certain key employees, officers, or directors. The Units each represent a contractual right to payment of compensation in the future based upon the market value of the Company’s common stock and are accordingly recorded as liabilities. The Units follow a vesting schedule over three years from the grant date and are then paid upon maturity. In accordance with FASB ASC Topic 718, Compensation - Stock Compensation The Plan has been amended and restated, for all grants made starting January 1, 2023, to set the vesting method to three-year cliff vesting following the grant date, with payment upon maturity. Additionally, for grants made starting January 1, 2023, upon retirement at age 67 or greater, and with one year of continuous service prior to retirement, vesting of the issued grant(s) would accelerate on a pro-rata basis, 1/3 per year from the grant date. Further details of the Plan are provided in Note 8, Stock-Based Compensation Plans, to the Consolidated Financial Statements included in this report. Product Liability Reserves Product liability reserves represent the estimated unpaid amounts under the Company’s insurance policy deductibles or self-insured retention limits, with respect to existing claims. The Company uses the most current available data to estimate claims. As explained more fully under Note 7, Commitments and Contingencies, to the Consolidated Financial Statements included in this report for various product liability claims covered under the Company’s general liability insurance policies, the Company must pay certain defense and settlement costs within its deductible or self-insured retention limits, ranging primarily from $ 250,000 3,000,000 Leases The Company applies the requirements of FASB ASC Topic 842, Leases 1. The lease transfers ownership of the underlying asset to the lessee by the end of the lease term. 2. The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise. 3. The lease term is for the major part of the remaining economic life of the underlying asset. 4. The present value of the sum of lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset. 5. The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. For any leases that do not meet the criteria identified above for finance leases, the Company treats such leases as operating leases. As of December 31, 2023 and 2022, each of the Company’s leases is classified as an operating lease. Both finance and operating leases are reflected on the balance sheet as lease or “right-of-use” assets and lease liabilities. There are some exceptions which the Company has elected in its accounting policies. For leases with terms of twelve months or less, or below the Company’s general capitalization policy threshold, the Company has elected an accounting policy to not recognize lease assets and lease liabilities for all asset classes. The Company recognizes lease expense for such leases generally on a straight-line basis over the lease term. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain to be exercised. Certain leases contain non-lease components, such as common area maintenance, which are generally accounted for separately. In general, the Company will assess if non-lease components are fixed and determinable, or variable, when determining if the component should be included in the lease liability. For purposes of calculating the present value of the lease obligations, the Company utilizes the implicit interest rate within the lease agreement when known and/or determinable, and otherwise utilizes its incremental borrowing rate at the time of the lease agreement. Fair Value of Financial and Nonfinancial Instruments The Company measures financial instruments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures Intangibles - Goodwill and Other Advertising Expense Advertising costs are charged to operations as incurred and are included in selling expenses in the accompanying consolidated statement of operations. Such charges aggregated $ 913,000 976,000 877,000 Research and Development Expense Research and development expenses are charged to operations as incurred. Such charges totaled $ 433,000 653,000 627,000 Shipping Costs Shipping costs are included in selling expense on the consolidated statements of operations. The expense relating to shipping was $ 2,740,000 3,548,000 3,814,000 Earnings per Common Share Basic earnings per share have been computed using the weighted-average number of common shares outstanding. For the periods presented, there are no dilutive securities. Consequently, basic and diluted earnings per share are the same. Currency Translation Assets and liabilities denominated in foreign currencies are translated into U.S. dollars at exchange rates prevailing on the balance sheet dates. The assets and liabilities denominated in foreign currencies relate to the Company’s U.K. subsidiary whose functional currency is the British Pound and the U.K. subsidiary’s France subsidiary whose functional currency is the Euro. The Consolidated Statements of Operations are translated into U.S. dollars at average exchange rates for the period. Adjustments resulting from the translation of financial statements are excluded from the determination of income and are accumulated in a separate component of shareholders’ equity. Exchange gains and losses resulting from foreign currency transactions are included in the statements of operations in the period in which they occur. Income Taxes The Company accounts for tax liabilities in accordance with the FASB ASC Topic 740, Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize the benefit, or that future deductibility is uncertain. The FASB ASC Topic 740, Income Taxes The Company follows the provisions of FASB ASC Subtopic 740-10 relative to accounting for uncertainties in tax positions. These provisions provide guidance on the recognition, de-recognition and measurement of potential tax benefits associated with tax positions. Effective January 1, 2022, as a result of changes made by the Tax Cuts and Jobs Act of 2017, the Company is required to capitalize certain research and development expenses for tax purposes, and amortize those expenses over a five year period, resulting in a deferred tax asset for the capitalized amounts. Other Comprehensive Income For the years ended December 31, 2023, 2022 and 2021, respectively, the components of other comprehensive income consisted solely of foreign currency translation adjustments. Significant Concentrations One customer represented 12% to 14% of sales during each of the fiscal years in the period from 2021 to 2023, and that same customer accounted for approximately 19% of the accounts receivable balance over the last two years. No other customer represented more than 10% of accounts receivable or sales. Geographically, North America accounted for approximately 93% to 96% of the Company’s sales during the last three years Subsequent Events The Company evaluates all events or transactions through the date of the related filing that may have a material impact on its Consolidated Financial Statements. Refer to Note 14, Subsequent Events. Recent Accounting Pronouncements In March 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, Deferral of Sunset Date of Topic 848 In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 3. INVENTORIES Inventories, net of reserves of $ 692,000 571,000 SCHEDULE OF INVENTORIES, NET OF RESERVES 2023 2022 December 31, 2023 2022 (in thousands) Finished Goods $ 6,161 $ 6,744 Raw Materials 9,436 11,020 Inventories - Net $ 15,597 $ 17,764 See Note 5, Other Long Term Assets, for details on inventories which are estimated to be used beyond the next twelve months. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT Property and equipment consisted of the following As of December 31: SCHEDULE OF PROPERTY AND EQUIPMENT 2023 2022 Depreciation and Amortization Est. Useful Lives (in thousands) Land $ 1,205 $ 1,205 Buildings 6,640 6,640 39 Leasehold Improvements 403 396 3 10 Equipment 17,143 15,448 3 10 Property and Equipment - Gross 25,391 23,689 Accumulated Depreciation (16,440 ) (15,285 ) Property and Equipment - Net $ 8,951 $ 8,404 The above amounts include capital related items of $ 1,349,000 535,000 1,099,000 1,096,000 1,020,000 |
OTHER LONG TERM ASSETS
OTHER LONG TERM ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER LONG TERM ASSETS | 5. OTHER LONG TERM ASSETS Other long term assets were as follows as of December 31: SCHEDULE OF OTHER LONG TERM ASSETS 2023 2022 (in thousands) Inventories $ 2,620 $ 4,261 Cash surrender value of life insurance policies 1,681 1,546 Other 139 64 Other Long Term Assets $ 4,440 $ 5,871 The Company maintains inventories, net of reserves of $ 1,000,000 0 The Company has obtained and is the beneficiary of life insurance policies with respect to past employees. |
LINE OF CREDIT AND OTHER BORROW
LINE OF CREDIT AND OTHER BORROWINGS | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT AND OTHER BORROWINGS | 6. LINE OF CREDIT AND OTHER BORROWINGS On July 3, 2023, the Company agreed to an Amended and Restated Loan Agreement with Santander Bank, N.A. (the “Bank”), and a Second Amended and Restated Committed Revolving Line of Credit Note to the Bank (both documents together, the “Facility”). The Facility is an unsecured revolving credit facility in the maximum amount of $ 15,000,000 1,000,000 June 1, 2028 The Applicable Margin for the Term SOFR Reference Rate is plus 0.75% to plus 1.75%, and for Prime Rate, up to plus 0.50%, depending upon the Company’s then existing specified financial ratios. As of December 31, 2023, the Company’s ratio would allow for the most favorable rate under the Facility’s ranges or 6.09%. The Company is also required to pay on a quarterly basis an unused facility fee of 10 basis points of the average unused balance of the note and an annual commitment fee of $ 5,000 On December 1, 2017, the Company agreed to an Amended and Restated Revolving Line of Credit Note (the “Line”) and Third Amendment to the Loan Agreement with the Bank. The Company established a line of credit facility in the maximum amount of $ 15,000,000 December 1, 2022 The loan agreement provided for the payment of any borrowings under the agreement at an interest rate range of either LIBOR plus 0.75% to plus 1.75% (for borrowings with a fixed term of 30, 60, or 90 days), or Prime Rate up to Prime Rate plus 0.50% (for borrowings with no fixed term other than to the effective date of the Facility of July 3, 2023), depending upon the Company’s then existing financial ratios. The Company was also required to pay on a quarterly basis an unused facility fee of 10 basis points of the average unused balance of the note. As of December 31, 2023 and as of December 31, 2022, the Company had no outstanding borrowings on the Facility or the Line, as applicable, and was in compliance with all debt covenants. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES Commitments Under a number of indemnity agreements between the Company and each of its officers and directors, the Company has agreed to indemnify each of its officers and directors against any liability asserted against them in their capacity as an officer or director, or both. The Company’s indemnity obligations under the indemnity agreements are subject to certain conditions and limitations set forth in each of the agreements. Under the terms of the agreement, the Company is contingently liable for costs which may be incurred by the officers and directors in connection with claims arising by reason of these individuals’ roles as officers and directors. The Company has obtained directors’ and officers’ insurance policies to fund certain obligations under the indemnity agreements. The Company has salary continuation agreements with past employees. These agreements provide for monthly payments to each of the employees or their designated beneficiary upon the employee’s retirement or death. The payment benefits range from $ 1,000 3,000 326,000 278,000 48,000 357,000 309,000 48,000 In addition to the above, the Company has other contractual employment and or change of control agreements in place with key employees, as previously disclosed and noted in the Exhibit Index to this Form 10-K. Obligations related to these arrangements are currently indeterminable due to the variable nature and timing of possible events required to incur such obligations. As disclosed in detail in Note 10, Leases, to the Consolidated Financial Statements included in this report, the Company has several lease obligations in place that will be paid over time. Most notably, the Company leases a facility in Banbury, England that serves the manufacturing, warehousing, and distribution functions. Lastly, the Company has numerous contractual obligations in place for the forthcoming year, mainly related to purchase obligations for the Company’s raw material inventories, totaling $ 12,895,000 Contingencies In the ordinary and normal conduct of the Company’s business, it is subject to lawsuits, investigations, and claims (collectively, the “Claims”). The Claims generally relate to potential lightning or other electrical damage to our flexible gas piping products and may result in legal and product liability related expenses. The Company does not believe the Claims have legal merit and vigorously defends them. It is possible that the Company may incur increased litigation costs in the future due to a variety of factors, including a higher number of Claims, higher legal and expert costs, and higher insurance deductibles or self-insured retention limits (or “retentions”). The Company has in place commercial general liability insurance policies that cover most Claims, which are subject to deductibles or retentions, ranging primarily from $ 250,000 3,000,000 3,000,000 3,724,000 947,000 3,848,000 |
STOCK BASED COMPENSATION PLANS
STOCK BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK BASED COMPENSATION PLANS | 8. STOCK BASED COMPENSATION PLANS Phantom Stock Plan Plan Description. On April 1, 2006, the Company adopted the Omega Flex, Inc. 2006 Phantom Stock Plan (the “Plan”). The Plan authorizes the grant of up to one million units of phantom stock to employees, officers, or directors of the Company. The phantom stock units (“Units”) each represent a contractual right to payment of compensation in the future based on the market value of the Company’s common stock. ■ ownership interest in the Company; ■ shareholder voting rights; and ■ other incidents of ownership to the Company’s common stock The Units are granted to participants upon the recommendation of the Company’s President, and the approval of the Compensation Committee. Each of the Units that are granted to a participant will be initially valued by the Compensation Committee at an amount equal to the closing price of the Company’s common stock on the grant date but are recorded at fair value using the Black-Sholes method as described below. The Units follow a vesting schedule, with a maximum vesting of three years after the grant date. Grants made on or after January 1, 2023, will fully vest three-years from the grant date. Upon vesting, the Units represent a contractual right of payment for the value of the Unit and therefore are stated as liabilities in accordance with FASB ASC Topic 718, Compensation - Stock Compensation In 2009, the Board of Directors authorized an amendment to the Plan to pay an amount equal to the value of any cash or stock dividend declared by the Company on its common stock to be accrued to the Units outstanding as of the record date of the common stock dividend. The dividend equivalent will be paid at the same time the underlying Units are paid to the participant. In addition, the Plan has been amended and restated, for all grants made starting January 1, 2023, to set the vesting method to three-year cliff vesting following the grant date, with payment upon maturity. Additionally, for grants made starting January 1, 2023, upon retirement at age 67 or greater, and with one year of continuous service prior to retirement, vesting of the issued grant(s) would accelerate on a pro-rata basis, 1/3 per year from the grant date. In certain circumstances, the Units may be immediately vested upon the participant’s death or disability. All Units granted to a participant are forfeited if the participant is terminated from their relationship with the Company or its subsidiary for “cause,” which is defined under the Plan. If a participant’s employment or relationship with the Company is terminated for reasons other than for “cause,” then any vested Units will be paid to the participant upon termination. However, Units granted to certain “specified employees” as defined in Section 409A of the Internal Revenue Code will be paid approximately 181 days after termination. Grants of Units. 6,653 673,000 5,120 2,536 108.47 597 1,500 76.04 133,000 1,508 72,000 575 132,000 1,149 96,000 1,125 6,440 The Company uses the Black-Scholes option pricing model as its method for determining fair value of the Units. The Company uses the straight-line method of attributing the value of the stock based compensation expense relating to the Units. The compensation expense (including adjustment of the liability to its fair value) from the Units is recognized over the vesting and maturity periods of each grant. The FASB ASC Topic 718, Compensation - Stock Compensation The Company recognizes the reversal of any previously recognized compensation expense on forfeited awards in the period that the award is forfeited. For the year ended December 31, 2023, a reversal of $ 22,000 597 The total liability related to the Units as of December 31, 2023 was $ 530,000 206,000 324,000 1,343,000 665,000 678,000 Related to the Plan, in accordance with FASB ASC Topic 718, Compensation - Stock Compensation 292,000 156,000 506,000 The following table summarizes information about the Company’s nonvested and unmatured Units as of and for the year ended December 31, 2023: SUMMARY OF NONVESTED PHANTOM STOCK UNITS Units Weighted Average Grant Date Fair Value Number of Units: Nonvested and Unmatured as of December 31, 2022 6,653 $ 129.09 Granted 4,036 $ 96.42 Vested (3,652 ) $ 120.40 Forfeited (597 ) $ 147.37 Canceled — — Nonvested and Unmatured as of December 31, 2023 6,440 $ 111.85 Units Expected to Vest and Mature 6,440 $ 111.85 The total unrecognized compensation costs calculated as of December 31, 2023 were $ 316,000 1.5 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 9. INCOME TAXES Income tax expense consisted of the following: SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) December 31, 2023 2022 2021 (in thousands) Federal Income Tax: Current $ 5,279 $ 7,453 $ 7,197 Deferred 745 (1,156 ) 264 State Income Tax: Current 821 1,126 1,062 Deferred 113 (173 ) 43 Foreign Income Tax: Current (3 ) 84 298 Deferred (130 ) (7 ) (2 ) Income Tax Expense $ 6,825 $ 7,327 $ 8,862 Pre-tax income included foreign income of $ 458,000 437,000 1,500,000 Total income tax expense differed from statutory income tax expense, computed by applying the U.S. federal income tax rate of 21 SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION December 31, 2023 2022 2021 (in thousands) Computed Statutory Income Tax Expense $ 5,785 $ 6,505 $ 7,362 State Income Tax, Net of Federal Tax Benefit 738 753 902 Foreign Tax Rate Differential (37 ) (9 ) (29 ) Valuation Allowance 81 - - Executive Compensation Limitation 258 296 773 Foreign Derived Intangible Income Deduction (93 ) (98 ) (107 ) Research Credit - (171 ) (59 ) Other - Net 93 51 20 Income Tax Expense $ 6,825 $ 7,327 $ 8,862 A deferred income tax (expense) benefit results from temporary timing differences in the recognition of income and expense for income tax and financial reporting purposes. The components of and changes in the net deferred tax assets (liabilities) which give rise to this deferred income tax (expense) benefit for the years ended December 31, 2023 and 2022 are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES December 31, 2023 2022 (in thousands) Deferred Tax Assets: Compensation Assets $ 191 $ 201 Inventory Valuation 656 529 Accounts Receivable Valuation 200 259 Deferred Litigation Costs 11 12 Capitalized Research Costs 485 590 Accrued Product Liability 217 900 Foreign Net Operating Losses 312 78 Valuation Allowance for Loss Carryover (176 ) (78 ) Other 24 17 Compensation Liabilities 196 360 Total Deferred Assets $ 2,116 $ 2,868 Deferred Tax Liabilities: Prepaid Expenses (612 ) (592 ) Depreciation and Amortization (1,315 ) (1,359 ) Total Deferred Liabilities $ (1,927 ) $ (1,951 ) Total Deferred Tax Asset $ 189 $ 917 Management believes it is more likely than not that the Company will have sufficient taxable income when these timing differences reverse and that the deferred tax assets will be realized except for a carryover of foreign operating losses incurred by one of its foreign subsidiaries. Due to the uncertainty of future income in the foreign subsidiary, the Company has recognized a valuation allowance related to the foreign operating losses carrying forward. The Company is currently subject to audit by the Internal Revenue Service for the calendar years ended 2020 through 2022. The Company and its Subsidiaries’ state income tax returns are subject to audit for the calendar years ended 2019 through 2022. As of December 31, 2023, the Company had no liability for unrecognized tax benefits related to various federal and state income tax matters. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
LEASES | 10. LEASES In the U.S., the Company owns its two main operating facilities located in Exton, Pennsylvania. In addition to the owned facilities, the Company also has operations in other locations that are leased, as well as other leased assets. In conjunction with the guidance for leases, as defined by FASB ASC Topic 842, Leases In the U.S., the Company leases a facility in Houston, Texas, which currently provides manufacturing, stocking, and sales operations, with the lease term running through October 2024, and a facility in Malvern, Pennsylvania, with a three year term ending in December 2024, that provides warehousing. Additionally, the Company has an operating lease agreement for its corporate office space in Middletown, Connecticut, with the lease term ending in June 2027. In the U.K., the Company leases a facility in Banbury, England, which serves manufacturing, warehousing, and other operational functions. The lease in Banbury has a 15-year term ending in March 2036. With a lease commencement date of January 1, 2024, the Company leased a facility in West Chester, Pennsylvania providing approximately 28,000 In addition to property rentals, the Company also has lease agreements in place for various fleet vehicles and equipment with various lease terms. As of December 31, 2023, the Company has right-of-use assets of $ 2,940,000 2,946,000 454,000 3,205,000 3,210,000 447,000 10.57 1.07 Rent expense for operating leases was $ 467,000 504,000 421,000 Future minimum lease payments under non-cancelable leases as of December 31, 2023 are as follows: SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES Twelve Months Ending December 31, Operating Leases (in thousands) 2024 $ 482 2025 316 2026 296 2027 250 2028 215 Thereafter 1,541 Total Future Minimum Lease Payments 3,100 Less: Interest 154 Lease Liability 2,946 Less: Current Portion of Lease Liability 454 Lease Liability – Net of Current Portion $ 2,492 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | 11. EMPLOYEE BENEFIT PLANS Defined Contribution and 401(K) Plans The Company maintains a qualified non-contributory profit-sharing plan (the “Plan”) covering all eligible employees. There were $ 484,000 474,000 441,000 Contributions to the Plan are defined as three percent ( 3 6 The Company also maintains a savings and retirement plan qualified under Internal Revenue Code Section 401(k) for all employees. Employees are eligible to participate in the Plan the first day of the month following date of hire. Participants may elect to have up to fifty percent ( 50 50 6 330,000 319,000 315,000 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | 12. SHAREHOLDERS’ EQUITY As of December 31, 2023 and December 31, 2022, the Company had 20,000,000 0.01 10,094,322 59,311 10,153,633 During 2023, 2022, and 2021, upon approval of the Board of Directors (the “Board”) the Company has declared and paid regular quarterly dividends, as set forth in the following table: SCHEDULE OF REGULAR QUARTER DIVIDEND PAYMENTS Dividend Declared Dividend Paid Date Price Per Share Date Amount December 6, 2023 $ 0.33 January 4, 2024 $ 3,332,000 September 11, 2023 $ 0.33 October 6, 2023 $ 3,331,000 June 13, 2023 $ 0.33 July 7, 2023 $ 3,332,000 March 28, 2023 $ 0.32 April 24, 2023 $ 3,229,000 December 7, 2022 $ 0.32 January 4, 2023 $ 3,232,000 September 30, 2022 $ 0.32 October 24, 2022 $ 3,231,000 June 10, 2022 $ 0.32 July 5, 2022 $ 3,230,000 March 29, 2022 $ 0.30 April 25, 2022 $ 3,028,000 December 9, 2021 $ 0.30 December 30, 2021 $ 3,029,000 September 15, 2021 $ 0.30 October 4, 2021 $ 3,028,000 June 9, 2021 $ 0.30 July 6, 2021 $ 3,028,000 March 24, 2021 $ 0.28 April 14, 2021 $ 2,827,000 In addition to the above dividend amounts, there were dividends approved by the Company’s foreign subsidiary during September 2021 which amounted to an outlay of cash of $ 129,000 It should be noted that from time to time, the Board may elect to pay special dividends, in addition to or in lieu of the regular quarterly dividends, depending upon the financial condition of the Company. The most recent special dividend was declared and paid in December 2019. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 13. RELATED PARTY TRANSACTIONS From time to time, the Company may have related party transactions (“RPTs”). RPTs represent any transaction between the Company and any Company employee, director or officer, or any related entity, or relative, etc. The Company performs a review of transactions each year to determine if any RPTs exist, and if so, determines if the related parties act independently of each other in a fair transaction. Through this investigation the Company noted a limited number of RPTs. In all cases, these RPTs have been determined to be arms length transactions with no indication that they are influenced by the related relationships. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred through the date of this filing. During this period, one event came to the Company’s attention that would impact the Consolidated Financial Statements as of and for the period ended December 31, 2023. With a lease commencement date of January 1, 2024, the Company leased a facility in West Chester, Pennsylvania providing approximately 28,000 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management develops, and changes periodically, these estimates and assumptions based on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual amounts could differ significantly from these estimates. |
Revenue Recognition | Revenue Recognition The Company applies the requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers The principle of Topic 606 was achieved through applying the following five-step approach: ● Identification of the contract, or contracts, with a customer — ● Identification of the performance obligations in the contract — ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract ● Recognition of revenue when, or as, the Company satisfies a performance obligation ■ The Company has a present right to payment ■ The customer has legal title to the goods ■ The Company has transferred physical possession of the goods ■ The customer has the significant risks and rewards of ownership of the goods ■ The customer has accepted the goods It is important to note that the indicators are not a set of conditions that must be met before the Company can conclude that control of the goods has transferred to the customer. The indicators are a list of factors that are often present if a customer has control of the goods. The Company has typical, unmodified FOB shipping point terms. As the seller, the Company can determine that the shipped goods meet the agreed-upon specifications in the contract or customer purchase order (e.g., items, quantities, and prices) with the buyer, so customer acceptance would be deemed a formality, as noted in ASC 606-10-55-86. As a result, the Company has a legal right to payment upon shipment of the goods. Based upon the above, the Company has concluded that control substantively transfers to the customer upon shipment. Other considerations of Topic 606 include the following: ● Contract Costs - ● Warranties ● Returned Goods ● Volume Rebates (Promotional Incentives) ■ The amount of consideration is highly susceptible to factors outside the Company’s influence. The uncertainty about the amount of consideration is not expected to be resolved for a long period of time. The Company’s experience with similar types of contracts is limited. ■ The contract has a large number and broad range of possible consideration amounts. If it was concluded that the above factors were in place for the Company, it would support the probability of a significant reversal of revenue. However, as none of the four factors apply to the Company, promotional incentives are recorded as a reduction of revenue based upon estimates of the eligible products expected to be sold. Regarding disaggregated revenue disclosures, as previously noted, the Company’s business is controlled as a single operating segment that consists of the manufacture and sale of flexible metal hose. Most of the Company’s transactions are very similar in nature, contract, terms, timing, and transfer of control of goods. As indicated in this Note 2, Significant Accounting Policies, in these Consolidated Financial Statements, under the caption “Significant Concentrations”, the majority of the Company’s sales were geographically contained within North America, with the remainder scattered internationally. All performance assessments and resource allocations are generally based upon the review of the results of the Company as a whole. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents include investments in an institutional money market fund, which invests in U.S. Treasury bills, notes, and bonds, and/or repurchase agreements, backed by such obligations, and in U.S. Treasury bills and certificates of deposit. Carrying value approximates fair value except for U.S. Treasury bills and certificates of deposit where amortized cost approximates fair value. Cash and cash equivalents are deposited at various area banks, which at times may exceed federally insured limits. The Company monitors the viability of the banking institutions carrying their assets on a regular basis and has the ability to transfer cash to various institutions during times of risk. The Company has not experienced any losses related to these cash balances and believes its credit risk to be minimal. |
Accounts Receivable and Provision for Credit Losses | Accounts Receivable and Provision for Credit Losses All accounts receivable is stated at amortized cost, net of allowances for credit losses, and adjusted for any write-offs. The Company maintains allowances for credit losses, which represent an estimate of expected losses over the remaining contractual life of its receivables considering current market conditions and estimates for supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing assessments and evaluations of collectability, historical loss experience, and future expectations in estimating credit losses in its receivable portfolio. For accounts receivable, the Company uses historical loss experience rates and applies them to a related aging analysis while also considering customer and/or economic risk where appropriate. Determination of the proper amount of allowances requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, as a result, operating profit. The allowances consider numerous quantitative and qualitative factors that include receivable type, historical loss experience, delinquency trends, collection experience, current economic conditions, estimates for supportable forecasts, when appropriate, and credit risk characteristics. The reserve for credit losses, which include future credits, discounts, and doubtful accounts, was $ 1,126,000 1,111,000 |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value. The cost of inventories is determined by the first-in, first-out (FIFO) method. The Company generally considers inventory quantities beyond two years of usage, measured on a historical usage basis, to be excess inventory and reduces the carrying value of inventory accordingly. |
Property and Equipment | Property and Equipment Property and equipment are initially recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or, for leasehold improvements, the life of the lease, if shorter. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in other income or expense for the period. The cost of maintenance and repairs is expensed as incurred; significant improvements are capitalized. |
Goodwill | Goodwill In accordance with FASB ASC Topic 350, Intangibles – Goodwill and Other |
Stock-Based Compensation Plans | Stock-Based Compensation Plans In 2006, the Company adopted a Phantom Stock Plan (the “Plan”), which allows the Company to grant phantom stock units (“Units”) to certain key employees, officers, or directors. The Units each represent a contractual right to payment of compensation in the future based upon the market value of the Company’s common stock and are accordingly recorded as liabilities. The Units follow a vesting schedule over three years from the grant date and are then paid upon maturity. In accordance with FASB ASC Topic 718, Compensation - Stock Compensation The Plan has been amended and restated, for all grants made starting January 1, 2023, to set the vesting method to three-year cliff vesting following the grant date, with payment upon maturity. Additionally, for grants made starting January 1, 2023, upon retirement at age 67 or greater, and with one year of continuous service prior to retirement, vesting of the issued grant(s) would accelerate on a pro-rata basis, 1/3 per year from the grant date. Further details of the Plan are provided in Note 8, Stock-Based Compensation Plans, to the Consolidated Financial Statements included in this report. |
Product Liability Reserves | Product Liability Reserves Product liability reserves represent the estimated unpaid amounts under the Company’s insurance policy deductibles or self-insured retention limits, with respect to existing claims. The Company uses the most current available data to estimate claims. As explained more fully under Note 7, Commitments and Contingencies, to the Consolidated Financial Statements included in this report for various product liability claims covered under the Company’s general liability insurance policies, the Company must pay certain defense and settlement costs within its deductible or self-insured retention limits, ranging primarily from $ 250,000 3,000,000 |
Leases | Leases The Company applies the requirements of FASB ASC Topic 842, Leases 1. The lease transfers ownership of the underlying asset to the lessee by the end of the lease term. 2. The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise. 3. The lease term is for the major part of the remaining economic life of the underlying asset. 4. The present value of the sum of lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset. 5. The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. For any leases that do not meet the criteria identified above for finance leases, the Company treats such leases as operating leases. As of December 31, 2023 and 2022, each of the Company’s leases is classified as an operating lease. Both finance and operating leases are reflected on the balance sheet as lease or “right-of-use” assets and lease liabilities. There are some exceptions which the Company has elected in its accounting policies. For leases with terms of twelve months or less, or below the Company’s general capitalization policy threshold, the Company has elected an accounting policy to not recognize lease assets and lease liabilities for all asset classes. The Company recognizes lease expense for such leases generally on a straight-line basis over the lease term. The Company determines if a contract is a lease at the inception of the arrangement. The Company reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain to be exercised. Certain leases contain non-lease components, such as common area maintenance, which are generally accounted for separately. In general, the Company will assess if non-lease components are fixed and determinable, or variable, when determining if the component should be included in the lease liability. For purposes of calculating the present value of the lease obligations, the Company utilizes the implicit interest rate within the lease agreement when known and/or determinable, and otherwise utilizes its incremental borrowing rate at the time of the lease agreement. |
Fair Value of Financial and Nonfinancial Instruments | Fair Value of Financial and Nonfinancial Instruments The Company measures financial instruments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures Intangibles - Goodwill and Other |
Advertising Expense | Advertising Expense Advertising costs are charged to operations as incurred and are included in selling expenses in the accompanying consolidated statement of operations. Such charges aggregated $ 913,000 976,000 877,000 |
Research and Development Expense | Research and Development Expense Research and development expenses are charged to operations as incurred. Such charges totaled $ 433,000 653,000 627,000 |
Shipping Costs | Shipping Costs Shipping costs are included in selling expense on the consolidated statements of operations. The expense relating to shipping was $ 2,740,000 3,548,000 3,814,000 |
Earnings per Common Share | Earnings per Common Share Basic earnings per share have been computed using the weighted-average number of common shares outstanding. For the periods presented, there are no dilutive securities. Consequently, basic and diluted earnings per share are the same. |
Currency Translation | Currency Translation Assets and liabilities denominated in foreign currencies are translated into U.S. dollars at exchange rates prevailing on the balance sheet dates. The assets and liabilities denominated in foreign currencies relate to the Company’s U.K. subsidiary whose functional currency is the British Pound and the U.K. subsidiary’s France subsidiary whose functional currency is the Euro. The Consolidated Statements of Operations are translated into U.S. dollars at average exchange rates for the period. Adjustments resulting from the translation of financial statements are excluded from the determination of income and are accumulated in a separate component of shareholders’ equity. Exchange gains and losses resulting from foreign currency transactions are included in the statements of operations in the period in which they occur. |
Income Taxes | Income Taxes The Company accounts for tax liabilities in accordance with the FASB ASC Topic 740, Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize the benefit, or that future deductibility is uncertain. The FASB ASC Topic 740, Income Taxes The Company follows the provisions of FASB ASC Subtopic 740-10 relative to accounting for uncertainties in tax positions. These provisions provide guidance on the recognition, de-recognition and measurement of potential tax benefits associated with tax positions. Effective January 1, 2022, as a result of changes made by the Tax Cuts and Jobs Act of 2017, the Company is required to capitalize certain research and development expenses for tax purposes, and amortize those expenses over a five year period, resulting in a deferred tax asset for the capitalized amounts. |
Other Comprehensive Income | Other Comprehensive Income For the years ended December 31, 2023, 2022 and 2021, respectively, the components of other comprehensive income consisted solely of foreign currency translation adjustments. |
Significant Concentrations | Significant Concentrations One customer represented 12% to 14% of sales during each of the fiscal years in the period from 2021 to 2023, and that same customer accounted for approximately 19% of the accounts receivable balance over the last two years. No other customer represented more than 10% of accounts receivable or sales. Geographically, North America accounted for approximately 93% to 96% of the Company’s sales during the last three years |
Subsequent Events | Subsequent Events The Company evaluates all events or transactions through the date of the related filing that may have a material impact on its Consolidated Financial Statements. Refer to Note 14, Subsequent Events. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, Deferral of Sunset Date of Topic 848 In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES, NET OF RESERVES | SCHEDULE OF INVENTORIES, NET OF RESERVES 2023 2022 December 31, 2023 2022 (in thousands) Finished Goods $ 6,161 $ 6,744 Raw Materials 9,436 11,020 Inventories - Net $ 15,597 $ 17,764 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consisted of the following As of December 31: SCHEDULE OF PROPERTY AND EQUIPMENT 2023 2022 Depreciation and Amortization Est. Useful Lives (in thousands) Land $ 1,205 $ 1,205 Buildings 6,640 6,640 39 Leasehold Improvements 403 396 3 10 Equipment 17,143 15,448 3 10 Property and Equipment - Gross 25,391 23,689 Accumulated Depreciation (16,440 ) (15,285 ) Property and Equipment - Net $ 8,951 $ 8,404 |
OTHER LONG TERM ASSETS (Tables)
OTHER LONG TERM ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF OTHER LONG TERM ASSETS | Other long term assets were as follows as of December 31: SCHEDULE OF OTHER LONG TERM ASSETS 2023 2022 (in thousands) Inventories $ 2,620 $ 4,261 Cash surrender value of life insurance policies 1,681 1,546 Other 139 64 Other Long Term Assets $ 4,440 $ 5,871 |
STOCK BASED COMPENSATION PLANS
STOCK BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Phantom Share Units (PSUs) [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
SUMMARY OF NONVESTED PHANTOM STOCK UNITS | SUMMARY OF NONVESTED PHANTOM STOCK UNITS Units Weighted Average Grant Date Fair Value Number of Units: Nonvested and Unmatured as of December 31, 2022 6,653 $ 129.09 Granted 4,036 $ 96.42 Vested (3,652 ) $ 120.40 Forfeited (597 ) $ 147.37 Canceled — — Nonvested and Unmatured as of December 31, 2023 6,440 $ 111.85 Units Expected to Vest and Mature 6,440 $ 111.85 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) | Income tax expense consisted of the following: SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) December 31, 2023 2022 2021 (in thousands) Federal Income Tax: Current $ 5,279 $ 7,453 $ 7,197 Deferred 745 (1,156 ) 264 State Income Tax: Current 821 1,126 1,062 Deferred 113 (173 ) 43 Foreign Income Tax: Current (3 ) 84 298 Deferred (130 ) (7 ) (2 ) Income Tax Expense $ 6,825 $ 7,327 $ 8,862 |
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION | Total income tax expense differed from statutory income tax expense, computed by applying the U.S. federal income tax rate of 21 SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION December 31, 2023 2022 2021 (in thousands) Computed Statutory Income Tax Expense $ 5,785 $ 6,505 $ 7,362 State Income Tax, Net of Federal Tax Benefit 738 753 902 Foreign Tax Rate Differential (37 ) (9 ) (29 ) Valuation Allowance 81 - - Executive Compensation Limitation 258 296 773 Foreign Derived Intangible Income Deduction (93 ) (98 ) (107 ) Research Credit - (171 ) (59 ) Other - Net 93 51 20 Income Tax Expense $ 6,825 $ 7,327 $ 8,862 |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES December 31, 2023 2022 (in thousands) Deferred Tax Assets: Compensation Assets $ 191 $ 201 Inventory Valuation 656 529 Accounts Receivable Valuation 200 259 Deferred Litigation Costs 11 12 Capitalized Research Costs 485 590 Accrued Product Liability 217 900 Foreign Net Operating Losses 312 78 Valuation Allowance for Loss Carryover (176 ) (78 ) Other 24 17 Compensation Liabilities 196 360 Total Deferred Assets $ 2,116 $ 2,868 Deferred Tax Liabilities: Prepaid Expenses (612 ) (592 ) Depreciation and Amortization (1,315 ) (1,359 ) Total Deferred Liabilities $ (1,927 ) $ (1,951 ) Total Deferred Tax Asset $ 189 $ 917 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES | SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES Twelve Months Ending December 31, Operating Leases (in thousands) 2024 $ 482 2025 316 2026 296 2027 250 2028 215 Thereafter 1,541 Total Future Minimum Lease Payments 3,100 Less: Interest 154 Lease Liability 2,946 Less: Current Portion of Lease Liability 454 Lease Liability – Net of Current Portion $ 2,492 |
SHAREHOLDERS_ EQUITY (Tables)
SHAREHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
SCHEDULE OF REGULAR QUARTER DIVIDEND PAYMENTS | SCHEDULE OF REGULAR QUARTER DIVIDEND PAYMENTS Dividend Declared Dividend Paid Date Price Per Share Date Amount December 6, 2023 $ 0.33 January 4, 2024 $ 3,332,000 September 11, 2023 $ 0.33 October 6, 2023 $ 3,331,000 June 13, 2023 $ 0.33 July 7, 2023 $ 3,332,000 March 28, 2023 $ 0.32 April 24, 2023 $ 3,229,000 December 7, 2022 $ 0.32 January 4, 2023 $ 3,232,000 September 30, 2022 $ 0.32 October 24, 2022 $ 3,231,000 June 10, 2022 $ 0.32 July 5, 2022 $ 3,230,000 March 29, 2022 $ 0.30 April 25, 2022 $ 3,028,000 December 9, 2021 $ 0.30 December 30, 2021 $ 3,029,000 September 15, 2021 $ 0.30 October 4, 2021 $ 3,028,000 June 9, 2021 $ 0.30 July 6, 2021 $ 3,028,000 March 24, 2021 $ 0.28 April 14, 2021 $ 2,827,000 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Allowance for doubtful accounts receivable | $ 1,126,000 | $ 1,111,000 | |
Advertising cost | 913,000 | 976,000 | $ 877,000 |
Research and development expense | 433,000 | 653,000 | 627,000 |
Shipping costs | $ 2,740,000 | $ 3,548,000 | $ 3,814,000 |
Concentration risk percentage description | One customer represented 12% to 14% of sales during each of the fiscal years in the period from 2021 to 2023, and that same customer accounted for approximately 19% of the accounts receivable balance over the last two years. No other customer represented more than 10% of accounts receivable or sales. Geographically, North America accounted for approximately 93% to 96% of the Company’s sales during the last three years | ||
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Defense and settlement costs per claim | $ 250,000 | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Defense and settlement costs per claim | $ 3,000,000 |
SCHEDULE OF INVENTORIES, NET OF
SCHEDULE OF INVENTORIES, NET OF RESERVES (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 6,161 | $ 6,744 |
Raw Materials | 9,436 | 11,020 |
Inventories - Net | $ 15,597 | $ 17,764 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Inventory valuation reserves | $ 692 | $ 571 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment - Gross | $ 25,391 | $ 23,689 |
Accumulated Depreciation | (16,440) | (15,285) |
Property and Equipment - Net | 8,951 | 8,404 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment - Gross | 1,205 | 1,205 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment - Gross | $ 6,640 | 6,640 |
Property and equipment, useful lives | 39 years | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment - Gross | $ 403 | 396 |
Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives | 3 years | |
Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives | 10 years | |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment - Gross | $ 17,143 | $ 15,448 |
Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful lives | 10 years |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Construction in progress, gross | $ 1,349 | $ 535 | |
Depreciation and amortization expense | $ 1,099 | $ 1,096 | $ 1,020 |
SCHEDULE OF OTHER LONG TERM ASS
SCHEDULE OF OTHER LONG TERM ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Inventories | $ 2,620 | $ 4,261 |
Cash surrender value of life insurance policies | 1,681 | 1,546 |
Other | 139 | 64 |
Other Long Term Assets | $ 4,440 | $ 5,871 |
OTHER LONG TERM ASSETS (Details
OTHER LONG TERM ASSETS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Inventories, net of reserves | $ 1,000 | $ 0 |
LINE OF CREDIT AND OTHER BORR_2
LINE OF CREDIT AND OTHER BORROWINGS (Details Narrative) - Loan Agreement [Member] - USD ($) $ in Thousands | Jul. 03, 2023 | Dec. 01, 2017 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 15,000 | $ 15,000 |
Line of credit facility, additional borrowing capacity | $ 1,000 | |
Line of credit facility, expiration date | Jun. 01, 2028 | Dec. 01, 2022 |
Line of credit facility, interest rate description | The Applicable Margin for the Term SOFR Reference Rate is plus 0.75% to plus 1.75%, and for Prime Rate, up to plus 0.50%, depending upon the Company’s then existing specified financial ratios. As of December 31, 2023, the Company’s ratio would allow for the most favorable rate under the Facility’s ranges or 6.09%. | The loan agreement provided for the payment of any borrowings under the agreement at an interest rate range of either LIBOR plus 0.75% to plus 1.75% (for borrowings with a fixed term of 30, 60, or 90 days), or Prime Rate up to Prime Rate plus 0.50% (for borrowings with no fixed term other than to the effective date of the Facility of July 3, 2023), depending upon the Company’s then existing financial ratios. |
Line of credit facility, commitment fee description | The Company is also required to pay on a quarterly basis an unused facility fee of 10 basis points of the average unused balance of the note and an annual commitment fee of $5,000 due and payable on each anniversary date of the Facility. | The Company was also required to pay on a quarterly basis an unused facility fee of 10 basis points of the average unused balance of the note. |
Commitment fee | $ 5 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Loss Contingencies [Line Items] | ||
Employee benefit payment term description | The payment benefits range from $1,000 to $3,000 per month with the term of such payments limited to 15 years after the employee’s retirement. | |
Other compensation liabilities | $ 326 | $ 357 |
Other compensation liabilities, noncurrent | 278 | 309 |
Other compensation liabilities, current | 48 | 48 |
Inventories | 12,895 | |
Maximum aggregate claim amount | 3,724 | |
Liabilities recorded | 947 | $ 3,848 |
Minimum [Member] | ||
Loss Contingencies [Line Items] | ||
Payment benefit to employee's | 1 | |
Deductibles per claim | 250 | |
Maximum [Member] | ||
Loss Contingencies [Line Items] | ||
Payment benefit to employee's | 3 | |
Deductibles per claim | 3,000 | |
Maximum [Member] | Insurance Claims [Member] | ||
Loss Contingencies [Line Items] | ||
Potential liability per claim maximum range, value | $ 3,000 |
SUMMARY OF NONVESTED PHANTOM ST
SUMMARY OF NONVESTED PHANTOM STOCK UNITS (Details) - Phantom Share Units (PSUs) [Member] | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Nonvested units, beginning balance | shares | 6,653 |
Nonvested weighted average grant date fair value, beginning balance | $ / shares | $ 129.09 |
Nonvested units, granted | shares | 4,036 |
Nonvested weighted average grant date fair value, granted | $ / shares | $ 96.42 |
Nonvested units, vested | shares | (3,652) |
Nonvested weighted average grant date fair value, vested | $ / shares | $ 120.40 |
Nonvested units, forfeited | shares | (597) |
Nonvested weighted average grant date fair value, forfeited | $ / shares | $ 147.37 |
Nonvested units, canceled | shares | |
Nonvested weighted average grant date fair value, canceled | $ / shares | |
Nonvested units, ending balance | shares | 6,440 |
Nonvested weighted average grant date fair value, ending balance | $ / shares | $ 111.85 |
Phantom stock unit awards expected to vest, units | shares | 6,440 |
Phantom stock unit awards expected to vest, weighted average grant date fair value | $ / shares | $ 111.85 |
STOCK BASED COMPENSATION PLAN_2
STOCK BASED COMPENSATION PLANS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||
Aug. 25, 2023 | Mar. 08, 2023 | Dec. 31, 2023 | Oct. 31, 2023 | Sep. 30, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Unvested units outstanding | 6,440 | 6,440 | 6,653 | |||||||
Share based compensation paid in period | $ 673,000 | |||||||||
Share based compensation vested shares | 5,120 | |||||||||
Nonvested forfeited units | 597 | 597 | ||||||||
Compensation expense | $ 22,000 | |||||||||
Share based compensation liability | $ 530,000 | 530,000 | $ 1,343,000 | |||||||
Share based compensation liability, current | 206,000 | 206,000 | 665,000 | |||||||
Share based compensation liability, non-current | 324,000 | 324,000 | 678,000 | |||||||
Unrecognized compensation costs | 316,000 | $ 316,000 | ||||||||
Compensation expense, weighted average recognize period | 1 year 6 months | |||||||||
Phantom Stock Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Share based compensation, description | On April 1, 2006, the Company adopted the Omega Flex, Inc. 2006 Phantom Stock Plan (the “Plan”). The Plan authorizes the grant of up to one million units of phantom stock to employees, officers, or directors of the Company. The phantom stock units (“Units”) each represent a contractual right to payment of compensation in the future based on the market value of the Company’s common stock. | |||||||||
Share based compensation vesting rights | The Units are granted to participants upon the recommendation of the Company’s President, and the approval of the Compensation Committee. Each of the Units that are granted to a participant will be initially valued by the Compensation Committee at an amount equal to the closing price of the Company’s common stock on the grant date but are recorded at fair value using the Black-Sholes method as described below. The Units follow a vesting schedule, with a maximum vesting of three years after the grant date. Grants made on or after January 1, 2023, will fully vest three-years from the grant date. Upon vesting, the Units represent a contractual right of payment for the value of the Unit and therefore are stated as liabilities in accordance with FASB ASC Topic 718, | |||||||||
Compensation expense | $ 292,000 | $ 156,000 | $ 506,000 | |||||||
Full Value Units [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Share based compensation grants in period | 1,500 | 2,536 | ||||||||
Share based compensation weighted average grant date fair value | $ 76.04 | $ 108.47 | ||||||||
Two Thousand Ninteen [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Share based compensation paid in period | $ 133,000 | |||||||||
Share based compensation vested shares | 1,508 | |||||||||
Two Thousand Twenty Two [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Share based compensation paid in period | $ 96,000 | $ 132,000 | $ 72,000 | |||||||
Share based compensation vested shares | 1,125 | 1,149 | 575 |
SCHEDULE OF COMPONENTS OF INCOM
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 5,279 | $ 7,453 | $ 7,197 |
Deferred | 745 | (1,156) | 264 |
Current | 821 | 1,126 | 1,062 |
Deferred | 113 | (173) | 43 |
Current | (3) | 84 | 298 |
Deferred | (130) | (7) | (2) |
Income Tax Expense | $ 6,825 | $ 7,327 | $ 8,862 |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) (Parenthetical) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Federal income tax rate, percentage | 21% |
SCHEDULE OF EFFECTIVE INCOME _2
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Computed Statutory Income Tax Expense | $ 5,785 | $ 6,505 | $ 7,362 |
State Income Tax, Net of Federal Tax Benefit | 738 | 753 | 902 |
Foreign Tax Rate Differential | (37) | (9) | (29) |
Valuation Allowance | 81 | ||
Executive Compensation Limitation | 258 | 296 | 773 |
Foreign Derived Intangible Income Deduction | (93) | (98) | (107) |
Research Credit | (171) | (59) | |
Other - Net | 93 | 51 | 20 |
Income Tax Expense | $ 6,825 | $ 7,327 | $ 8,862 |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Compensation Assets | $ 191 | $ 201 |
Inventory Valuation | 656 | 529 |
Accounts Receivable Valuation | 200 | 259 |
Deferred Litigation Costs | 11 | 12 |
Capitalized Research Costs | 485 | 590 |
Accrued Product Liability | 217 | 900 |
Foreign Net Operating Losses | 312 | 78 |
Valuation Allowance for Loss Carryover | (176) | (78) |
Other | 24 | 17 |
Compensation Liabilities | 196 | 360 |
Total Deferred Assets | 2,116 | 2,868 |
Prepaid Expenses | (612) | (592) |
Depreciation and Amortization | (1,315) | (1,359) |
Total Deferred Liabilities | (1,927) | (1,951) |
Total Deferred Tax Asset | $ 189 | $ 917 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Foreign income included in pre-tax income | $ 458 | $ 437 | $ 1,500 |
SCHEDULE OF FUTURE MINIMUM RENT
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING LEASES (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases | ||
2024 | $ 482 | |
2025 | 316 | |
2026 | 296 | |
2027 | 250 | |
2028 | 215 | |
Thereafter | 1,541 | |
Total Future Minimum Lease Payments | 3,100 | |
Less: Interest | 154 | |
Lease Liability | 2,946 | $ 3,210 |
Less: Current Portion of Lease Liability | 454 | 447 |
Lease Liability – Net of Current Portion | $ 2,492 | $ 2,763 |
LEASES (Details Narrative)
LEASES (Details Narrative) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 01, 2024 ft² | |
Right of use assets - operating | $ 2,940 | $ 3,205 | ||
Lease liability | 2,946 | 3,210 | ||
Lease liability, current | $ 454 | 447 | ||
Weighted average remaining lease term | 10 years 6 months 25 days | |||
Operating lease, weighted average discount rate, percent | 1.07% | |||
Operating lease expense | $ 467 | $ 504 | $ 421 | |
Subsequent Event [Member] | ||||
Area of land | ft² | 28,000 | |||
Banbury [Member] | ||||
Operating leases term, description | The lease in Banbury has a 15-year term ending in March 2036. |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Contributions accrued for the plan | $ 330 | $ 319 | $ 315 |
Employee contributions, description | The Company also maintains a savings and retirement plan qualified under Internal Revenue Code Section 401(k) for all employees. Employees are eligible to participate in the Plan the first day of the month following date of hire. Participants may elect to have up to fifty percent (50%) of their compensation withheld, up to the maximum allowed by the Internal Revenue Code. After completing one year of service, the Company contributed an additional amount equal to 50% of all employee contributions, up to a maximum of 6% of an employee’s gross wages. | ||
Contribution percentage on gross wages | 6% | ||
Employee contribution percentage | 50% | ||
Qualified Non-Contributory Profit Sharing [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Contributions accrued for the plan | $ 484 | $ 474 | $ 441 |
Employee contributions, description | Contributions to the Plan are defined as three percent (3%) of gross wages up to the current Old Age, Survivors, and Disability (OASDI) limit and six percent (6%) of the excess over the OASDI limit, subject to the maximum allowed under the Employee Retirement Income Security Act (ERISA). Participant balances vest over six years. | ||
Qualified Non-Contributory Profit Sharing [Member] | Minimum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Contribution percentage on gross wages | 3% | ||
Qualified Non-Contributory Profit Sharing [Member] | Maximum [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Contribution percentage on gross wages | 6% |
SCHEDULE OF REGULAR QUARTER DIV
SCHEDULE OF REGULAR QUARTER DIVIDEND PAYMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 06, 2023 | Sep. 11, 2023 | Jun. 13, 2023 | Mar. 28, 2023 | Dec. 07, 2022 | Sep. 30, 2022 | Jun. 10, 2022 | Mar. 29, 2022 | Dec. 09, 2021 | Sep. 15, 2021 | Jun. 09, 2021 | Mar. 24, 2021 |
Equity [Abstract] | ||||||||||||
Dividends payable, date declared | Dec. 06, 2023 | Sep. 11, 2023 | Jun. 13, 2023 | Mar. 28, 2023 | Dec. 07, 2022 | Sep. 30, 2022 | Jun. 10, 2022 | Mar. 29, 2022 | Dec. 09, 2021 | Sep. 15, 2021 | Jun. 09, 2021 | Mar. 24, 2021 |
Dividends payable, amount per share | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.32 | $ 0.32 | $ 0.32 | $ 0.32 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.28 |
Dividends payable, date to be paid | Jan. 04, 2024 | Oct. 06, 2023 | Jul. 07, 2023 | Apr. 24, 2023 | Jan. 04, 2023 | Oct. 24, 2022 | Jul. 05, 2022 | Apr. 25, 2022 | Dec. 30, 2021 | Oct. 04, 2021 | Jul. 06, 2021 | Apr. 14, 2021 |
Dividend paid on or before date, amount | $ 3,332 | $ 3,331 | $ 3,332 | $ 3,229 | $ 3,232 | $ 3,231 | $ 3,230 | $ 3,028 | $ 3,029 | $ 3,028 | $ 3,028 | $ 2,827 |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | |||
Common stock, shares authorized | 20,000,000 | 20,000,000 | |
Common stock, par value | $ 0.01 | $ 0.01 | |
Common stock, shares outstanding | 10,094,322 | 10,094,322 | |
Treasury stock, common, shares | 59,311 | 59,311 | |
Common stock, shares issued | 10,153,633 | 10,153,633 | |
Foreign subsidiary's noncontrolling interest | $ 129 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | Jan. 01, 2024 ft² |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Area of land | 28,000 |