Omega Flex (OFLX) 10-Q 4 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	Sep. 30, 2016shares
Details
Registrant Name	Omega Flex, Inc.
Registrant CIK	1,317,945
SEC Form	10-Q
Period End date	Sep. 30, 2016
Fiscal Year End	--12-31
Trading Symbol	oflx
Number of common stock shares outstanding	10,091,822
Filer Category	Accelerated Filer
Current with reporting	Yes
Voluntary filer	No
Well-known Seasoned Issuer	No
Amendment Flag	false
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands		Sep. 30, 2016		Dec. 31, 2015
Assets, Current
Cash and Cash Equivalents		$ 28,165		$ 30,152
Accounts Receivable		15,263	[1]	16,605	[2]
Inventories - Net		6,770		8,287
Other Current Assets		3,171		1,647
Total Current Assets		53,369		56,691
Property and Equipment - Net		4,479		4,638
Goodwill-Net		3,526		3,526
Deferred Taxes		100		114
Other Long Term Assets		2,925		1,305
Total Assets		64,399		66,274
Current Liabilities:
Accounts Payable, Current		2,031		2,489
Accrued Compensation		3,125		4,669
Accrued Commissions and Sales Incentives		3,239		4,333
Dividends Payable		0		8,578
Taxes Payable		129		433
Other Liabilities		3,286		3,050
Total Current Liabilities		11,810		23,552
Deferred Taxes		532		368
Other Long Term Liabilities		1,266		1,200
Total Liabilities		13,608		25,120
Commitments and Contingencies	[3]
Omega Flex, Inc. Shareholders' Equity:
Common Stock	[4]	102		102
Treasury Stock		(1)		(1)
Paid-in Capital		10,808		10,808
Retained Earnings		40,900		30,656
Accumulated Other Comprehensive Loss		(1,367)		(683)
Total Omega Flex, Inc. Shareholders' Equity		50,442		40,882
Noncontrolling Interest		349		272
Total Shareholders' Equity		50,791		41,154
Total Liabilities and Shareholders' Equity		$ 64,399		$ 66,274
[1]	Less allowance of $819.
[2]	Less allowance of $882.
[3]	See Note 5.
[4]	Common Stock – par value $0.01 Share: authorized 20,000,000 Shares: 10,153,633 shares issued and 10,091,822 outstanding.

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets - Parenthetical - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position
Allowance for Doubtful Accounts Receivable	$ 819	$ 882
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	10,091,822	10,091,822

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement
Net Sales	$ 23,942	$ 24,556	$ 68,408	$ 67,165
Cost of Goods Sold	9,165	9,270	26,450	26,151
Gross Profit	14,777	15,286	41,958	41,014
Selling Expense	3,913	4,009	11,666	11,599
General and Administrative Expense	4,209	4,210	12,432	10,906
Engineering Expense	808	690	2,299	2,041
Operating Profit	5,847	6,377	15,561	16,468
Interest Income (Expense), Net	28	19	68	50
Other Income (Expense), Net	(110)	(9)	(288)	(8)
Income Before Income Taxes	5,765	6,387	15,341	16,510
Income Tax Expense	1,848	2,114	4,980	5,338
Net Income	3,917	4,273	10,361	11,172
Net (Income) Loss attributable to the Noncontrolling Interest, net of tax	(29)	(41)	(117)	(128)
Net Income attributable to Omega Flex, Inc.	$ 3,888	$ 4,232	$ 10,244	$ 11,044
Basic and Diluted Earnings per Common Share	$ 0.39	$ 0.42	$ 1.02	$ 1.09
Basic and Diluted Weighted-Average Shares Outstanding	10,092	10,092	10,092	10,092

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income
Net Income	$ 3,917	$ 4,273	$ 10,361	$ 11,172
Other Comprehensive Income (Loss), Net of Tax:
Foreign Currency Translation Adjustment, Net of Taxes	(110)	(134)	(724)	(84)
Other Comprehensive Income	(110)	(134)	(724)	(84)
Comprehensive Income	3,807	4,139	9,637	11,088
Less: Comprehensive Income (Loss) Attributable to the Noncontrolling Interest	(23)	(33)	(77)	(122)
Total Comprehensive Income	$ 3,784	$ 4,106	$ 9,560	$ 10,966

Condensed Consolidated Stateme6

Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Flows from Operating Activities:
Net Income	$ 10,361	$ 11,172
Adjustments to Reconcile Net Income to Net Cash Provided By (Used In) Operating Activities:
Non-Cash Compensation Expense	409	104
Depreciation and Amortization	342	320
Provision for Losses on Accounts Receivable, net of write-offs and recoveries	(63)	67
Provision for Inventory Reserves	33	(22)
Deferred Taxes	164	(452)
Changes in Assets and Liabilities
Accounts Receivable Change	1,129	(1,642)
Inventory Change	1,373	(1,113)
Other Assets Change	(3,155)	(288)
Accounts Payable Change	(410)	(769)
Accrued Compensation Change	(1,479)	(732)
Accrued Commissions and Sales Incentives Change	(1,076)	523
Other Liabilities Change	(303)	(118)
Net Cash Provided by (Used in) Operating Activities	7,325	7,050
Cash Flows from Investing Activities:
Capital Expenditures	(191)	(456)
Net Cash Provided By (Used In) Investing Activities	(191)	(456)
Cash Flows from Financing Activities:
Dividend Paid	(8,578)	(4,945)
Net Cash Provided by (Used In) Financing Activities	(8,578)	(4,945)
Net Increase (Decrease) in Cash and Cash Equivalents	(1,444)	1,649
Translation effect on cash	(543)	(35)
Cash and Cash Equivalents - Beginning of Period	30,152	22,585
Cash and Cash Equivalents - Beginning of Period	28,165	24,199
Supplemental Disclosure of Cash Flow Information
Cash paid for Income Taxes	5,025	6,018
Cash paid for Interest	$ 0	$ 0

1. Basis of Presentation and De

1. Basis of Presentation and Description of Business	9 Months Ended
	Sep. 30, 2016
Notes
1. Basis of Presentation and Description of Business	1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Omega Flex, Inc. (Omega) and its subsidiaries (collectively the “Company”). The Company’s unaudited condensed consolidated financial statements for the quarter ended September 30, 2016 have been prepared in accordance with accounting principles generally accepted in the United States (GAAP), and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Company’s latest shareholders’ annual report (Form 10-K). All material inter-company accounts and transactions have been eliminated in consolidation. Certain amounts from prior years have been reclassified to conform to current year presentation. It is Management’s opinion that all adjustments necessary for a fair statement of the results for the interim periods have been made, and that all adjustments are of a normal recurring nature or a description is provided for any adjustments that are not of a normal recurring nature. Description of Business The Company is a leading manufacturer of flexible metal hose, and is currently engaged in a number of different markets, including construction, manufacturing, petrochemical transfer, pharmaceutical and other industries. The Company’s business is managed as a single operating segment that consists of the manufacture and sale of flexible metal hose and accessories. The Company’s products are concentrated in residential and commercial construction, and general industrial markets, with a comprehensive portfolio of intellectual property and patents issued in various countries around the world. The Company’s primary product, flexible gas piping, is used for gas piping within residential and commercial buildings. Through its flexibility and ease of use, the Company’s TracPipe ® ® ® ® ®

2. Significant Accounting Polic

2. Significant Accounting Policies	9 Months Ended
	Sep. 30, 2016
Notes
2. 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 at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant estimates and assumptions relate to revenue recognition and related sales incentives, accounts receivable allowances, inventory valuations, goodwill valuation, product liability reserve, stock-based compensation valuations and accounting for income taxes. Actual amounts could differ significantly from these estimates. Revenue Recognition The Company’s revenue recognition activities relate almost entirely to the manufacture and sale of flexible metal hose and pipe. Under GAAP, revenues are considered to have been earned when the Company has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. The following criteria represent preconditions to the recognition of revenue: · · · · The Company recognizes revenue upon shipment in accordance with the above principles. Gross sales are reduced for all consideration paid to customers for which no identifiable benefit is received by the Company. This includes promotional incentives, which includes various programs including year-end rebates and discounts. The amounts of certain incentives are known with reasonable certainty at the time of sale, while others are projected based upon the most reliable information available at the reporting date. Commissions are accounted for as a sales expense. 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. Carrying value 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 its 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 Doubtful Accounts Accounts receivable are reduced by an allowance for amounts that may become uncollectible in the future. The estimated allowance for uncollectible amounts is based primarily on specific analysis of accounts in the receivable portfolio and historical write-off experience. While management believes the allowance to be adequate, if the financial condition of the Company’s customers were to deteriorate, resulting in their inability to make payments, additional allowances may be required. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on any known collection issues, historical experience, and other currently available evidence. The reserve for future credits, discounts, and doubtful accounts was $819,000 and $882,000 as of September 30, 2016 and December 31, 2015, respectively. In regards to identifying uncollectible accounts, the Company reviews an aging report on a consistent basis to determine past due accounts, and utilizes a well established credit rating agency. The Company charges off those accounts that are deemed uncollectible once all collection efforts have been exhausted. Inventories Inventories are valued at the lower of cost or market. The cost of inventories is determined by the first-in, first-out (FIFO) method. The Company generally considers inventory quantities beyond two-years 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 carried 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 Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 350, Intangibles – Goodwill and Other, the Company performed an annual impairment test in accordance with this guidance as of December 31, 2015. This analysis did not indicate any impairment of goodwill. There were no circumstances that indicate that Goodwill might be impaired at September 30, 2016. 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. The Units follow a vesting schedule of three years from the grant date, and are then paid upon maturity. In accordance with FASB ASC Topic 718, Stock Compensation, the Company uses the Black-Scholes option pricing model as its method for determining the fair value of the Units. Further details of the Plan are provided in Note 6. Product Liability Reserves Product liability reserves represent the estimated unpaid amounts under the Company’s insurance policies with respect to existing claims. The Company uses the most current available data to estimate claims. As explained more fully under Note 5, Commitments and Contingencies, for various product liability claims covered under the Company’s general liability insurance policies, the Company must pay certain defense costs within its deductible or self-insured retention limits, ranging primarily from $25,000 to $1,000,000 per claim, depending on the terms of the policy in the applicable policy year, up to an aggregate amount. The Company is vigorously defending against all known claims. Fair Value of Financial and Nonfinancial Instruments The Company measures financial instruments in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures. The accounting standard defines fair value, establishes a framework for measuring fair value under GAAP, and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard creates a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. The Company relies on its actively traded share value – a Level 1 input – in determining the fair value of the reporting unit in its annual impairment test as described in the FASB ASC Topic 350, Intangibles - Goodwill and Other. 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 dilutive earnings per share are the same. Currency Translation Assets and liabilities denominated in foreign currencies, most of which relate to our United Kingdom subsidiary whose functional currency is British pound sterling, are translated into U.S. dollars at exchange rates prevailing on the balance sheet dates. The statements of income 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 income (other expense) 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. Under this method the Company records tax expense, related deferred taxes and tax benefits, and uncertainties in tax positions. 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, clarifies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company’s financial statements. This guidance prescribes a recognition threshold of more-likely than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. The Company follows the provisions of ASC 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. The Company elected to recognize interest and penalties related to income tax matters as a component of the income tax provision in the consolidated statements of income. For additional information regarding ASC 740-10, see Note 8 of the Company’s December 31, 2015 Form 10-K. The FASB Accounting Standards Update (ASU) 2015-17 eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments of ASU 2015-17 apply to all organizations that present a classified balance sheet. For public companies, the amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and the Company adopted this ASU prospectively in the calendar year ended December 31, 2015. As a result, the Company has presented all deferred tax assets and liabilities as noncurrent on its consolidated balance sheet starting with the year ended December 31, 2015. There was no impact on operations as a result of adoption of the FASB ASU 2015-17. Other Comprehensive Income For the three and nine months ended September 30, 2016 and 2015, respectively, the components of other comprehensive income consisted solely of foreign currency translation adjustments. Significant Concentration The Company has one significant customer who represents more than 10% of the Company’s Net Sales for the three and nine months ended September 30, 2016 and 2015, and more than 10% of the Company’s Accounts Receivable balance at September 30, 2016 and December 31, 2015. Geographically, the Company has a significant amount of sales in the United States versus internationally. These concentrations are discussed in detail in the Company’s December 31, 2015 Form 10-K, and there has been no significant change as of this quarterly report. Subsequent Events The Company evaluates all events or transactions through the date of the related filing that may have a material impact on its condensed consolidated financial statements. Refer to Note 9 of the condensed consolidated financial statements. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) lessees are required to recognize right-of-use assets and lease liabilities for all leases not considered short-term leases. By definition, a short-term lease is one in which: (a) the lease term is 12 months or less and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect an accounting policy by class of underlying asset under which right-of-use assets and lease liabilities are not recognized and lease payments are generally recognized as expense over the lease term on a straight-line basis. This change will result in lessees recognizing right-of-use assets and lease liabilities for most leases currently accounted for as operating leases under the legacy lease accounting guidance. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted.

3. Inventories

3. Inventories	9 Months Ended
	Sep. 30, 2016
Notes
3. Inventories	3. INVENTORIES Inventories, net of reserves, consisted of the following: September 30, December 31, 2016 2015 (dollars in thousands) Finished Goods $ 4,710 $ 6,082 Raw Materials 2,060 2,205 Inventories-Net $ 6,770 $ 8,287

4. Line of Credit

4. Line of Credit	9 Months Ended
	Sep. 30, 2016
Notes
4. Line of Credit	4. LINE OF CREDIT On December 29, 2014, the Company entered into an Amended and Restated Committed Revolving Line of Credit Note (“the Line”) and a Second Amendment to the Loan Agreement with Santander Bank, N.A. (“Santander”). The Line facility in the maximum amount of $15,000,000, has a five year term maturing on December 31, 2019, with funds available for working capital purposes and to fund dividends, and is unsecured. The Line provides for the payment of any borrowings at an interest rate of either LIBOR plus 1.00% to plus 1.35% (for borrowings with a fixed term of 30, 60, or 90 days), or Prime from 0.00% to plus 0.10%, depending upon the Company’s then existing financial ratios. At September 30, 2016, the Company’s financial ratios would allow for the most favorable rate under the agreement’s range, which would be a rate of 1.85%. Under the terms of the agreement, the Company is required to pay on a quarterly basis an unused facility fee equal to 10 basis points of the average unused balance of the total Line commitment. As of September 30, 2016 and December 31, 2015, the Company had no outstanding borrowings on its line of credit, and was in compliance with all debt covenants.

5. Commitments and Contingencie

5. Commitments and Contingencies	9 Months Ended
	Sep. 30, 2016
Notes
5. Commitments and Contingencies	5. 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 one current employee, and one former employee who retired at the end of 2010. 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 per month to $3,000 per month with the term of such payments limited to 15 years after the employee’s retirement at age 65. The agreements also provide for survivorship benefits if the employee dies before attaining age 65, and severance payments if the employee is terminated without cause; the amount of which is dependent on the length of company service at the date of termination. The net present value of the retirement payments associated with these agreements is $537,000 at September 30, 2016, of which $498,000 is included in Other Long Term Liabilities, and the remaining current portion of $39,000 is included in Other Liabilities, associated with each of the individuals as our current employee is expected to meet retirement age by the end of the year. The December 31, 2015 liability of $508,000, had $496,000 reported in Other Long Term Liabilities, and a current portion of $12,000 in Other Liabilities. The Company has obtained and is the beneficiary of three whole life insurance policies with respect to the two employees discussed above, and one other employee. The cash surrender value of such policies (included in Other Long Term Assets) amounts to $1,146,000 at September 30, 2016 and $1,091,000 at December 31, 2015. As disclosed in detail in Note 9 of the Company’s December 31, 2015 Form 10-K, under the caption “Leases”, the Company has several lease obligations in place that will be paid out over time. Most notably, the Company leases facilities in Banbury, England, and Exton, Pennsylvania in the United States that both serve the manufacturing, warehousing and distribution functions. Contingencies: In the ordinary and normal conduct of the Company’s business, it is subject to periodic lawsuits, investigations and claims (collectively, the “Claims”). Several years ago, the Company experienced an increase in the number of Claims related to lightning subrogation, which increased legal and product liability related expenses. The Company did not believe the Claims had legal merit, and therefore commenced a vigorous defense in response to the Claims. Due to the Company’s success over the years in defending itself, and success in several cases that went to trial, the pace of new Claims has trended lower over the last couple of years. Although the pace of new Claims has decreased, expenses during the first nine months of 2016 have increased over comparable periods due to the Company’s heightened and vigorous defense of certain cases. It is possible that the increased level of spending may continue through the remainder of 2016, and future years. To reiterate, the Company does not believe that the Claims have legal merit, and is therefore vigorously defending against those Claims. In 2010, the Company took its first Claim to trial in Pennsylvania, and the jury returned a verdict that the Company was not negligent in designing and selling the TracPipe product, but also returned a verdict for plaintiff on strict liability. The Company appealed that portion of the verdict, and in December 2014, the Supreme Court of Pennsylvania ruled in favor of the Company, and returned the case to the trial court for further hearings. The Company is currently appealing the trial court’s decision not to grant a new trial in this matter in spite of the Supreme Court decision. As a result of this new appeal, the Company was required during the second quarter of 2016 to post approximately $1,600,000 as security to proceed with the current appeal, and that collateral security is included in Other Long Term Assets as of September 30, 2016. In 2013, the Company won two of the Claims at two separate trials, both of which were held in U.S. District Court; one in St. Louis, Missouri and the other in Bridgeport, Connecticut. In both cases, the jury unanimously found that the Company was not negligent in designing its TracPipe ® ® George v Powercet Corporation, et. al The Company has in place commercial general liability insurance policies that cover the Claims, which are subject to deductibles or retentions, ranging primarily from $25,000 to $1,000,000 per claim (depending on the terms of the policy and the applicable policy year), up to an aggregate amount. Litigation is subject to many uncertainties and management is unable to predict the outcome of the pending suits and claims. The potential liability for a given claim could range from zero to a maximum of $1,000,000, depending upon the circumstances, and insurance deductible or retention in place for the respective claim year. The aggregate maximum exposure for all current open Claims is estimated to not exceed approximately $4,100,000, which represents the potential costs that may be incurred over time for the Claims within the applicable insurance policy deductibles or retentions. From time to time, depending upon the nature of a particular case, the Company may decide to spend in excess of a deductible or retention to enable more discretion regarding the defense, although this is not common. It is possible that the results of operations or liquidity of the Company, as well as the Company’s ability to procure reasonably priced insurance, could be adversely affected by the pending litigation, potentially materially. The Company is currently unable to estimate the ultimate liability, if any, that may result from the pending litigation, or potential litigation from future claims or claims that have not yet come to our attention, and accordingly, the liability in the consolidated financial statements primarily represents an accrual for legal costs for services previously rendered and outstanding settlements for existing claims. The liabilities recorded on the Company’s books at September 30, 2016 and December 31, 2015 were $277,000 and $249,000, respectively, and are included in Other Liabilities. Finally, in February of 2012, the Company was made aware of a fraud perpetrated by an outside party involving insurance related premiums that the Company had prepaid for umbrella coverage. The Company replaced the aforementioned insurance coverage upon becoming aware of the fraud. The assets were secured by a governmental agency which investigated the case, and held in a custodial account. In June of 2015, utilizing the secured funds, the court approved restitution to all victims including the Company. During the second quarter of 2016, the Company received $282,000 from the United States Department of Justice in restitution. Of the amount received, $213,000 relieved the value of the assets on the books and the remaining $69,000 was recorded as a reduction of operating expenses. At December 31, 2015, the value of the assets on the books amounted to $213,000 and were included in Other Long Term Assets.

6. Stock Based Plans

6. Stock Based Plans	9 Months Ended
	Sep. 30, 2016
Notes
6. Stock Based Plans	6. STOCK BASED PLANS Phantom Stock Plan Plan Description. does not § § § The Units are granted to participants upon the recommendation of the Company’s CEO, 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. Upon vesting, the Units represent a contractual right of payment for the value of the Unit. The Units will be paid on their maturity date, one year after all of the Units granted in a particular award have fully vested, unless an acceptable event occurs under the terms of the Plan prior to one year, which would allow for earlier payment. The amount to be paid to the participant on the maturity date is dependent on the type of Unit granted to the participant. The Units may be Full Value, Appreciation Only minus On December 9, 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 phantom stock units outstanding as of the record date of the common stock dividend. The dividend equivalent will be paid at the same time the underlying phantom stock units are paid to the participant. 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 his 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 Phantom Stock Units. Full Value Full Value 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 period of each grant or award. The FASB ASC Topic 718, Stock Compensation, requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates in order to derive the Company’s best estimate of awards ultimately to vest. Forfeitures represent only the unvested portion of a surrendered Unit and are typically estimated based on historical experience. Based on an analysis of the Company’s historical data, which has limited experience related to any stock-based plan forfeitures, the Company applied a 0% forfeiture rate to Plan Units outstanding in determining its Plan Unit compensation expense as of September 30, 2016. The total Phantom Stock related liability as of September 30, 2016 was $1,003,000, with $348,000 in Other Liabilities, and $655,000 included in Other Long Term Liabilities. At December 31, 2015, the total Phantom Stock liability was $905,000, with $310,000 in Other Liabilities, and $595,000 included in Other Long Term Liabilities. In accordance with FASB ASC Topic 718, Stock Compensation, the Company recorded compensation expense of approximately $409,000 and $104,000 for the nine months ended September 30, 2016, and 2015, respectively. The following table summarizes information about the Company’s nonvested phantom stock Units at September 30, 2016: Units Weighted Average Grant Date Fair Value Number of Phantom Stock Unit Awards: Nonvested at December 31, 2015 20,335 $ 22.74 Granted 10,460 $ 30.57 Vested (9,874) $ 20.16 Forfeited --- --- Canceled --- --- Nonvested at September 30, 2016 20,921 $ 27.87 Phantom Stock Unit Awards Expected to Vest 20,921 $ 27.87 The total unrecognized compensation costs calculated at September 30, 2016 are $532,000 which will be recognized through February of 2019. The Company will recognize the related expense over the weighted average period of 1.3 years.

7. Noncontrolling Interests

7. Noncontrolling Interests	9 Months Ended
	Sep. 30, 2016
Notes
7. Noncontrolling Interests	7. NONCONTROLLING INTERESTS The Company owns 100% of all subsidiaries, except for a small portion of one, which is owned by a Noncontrolling Interest. At December 31, 2015, total Shareholders’ Equity was $41,154,000, and the Noncontrolling Interest was $272,000. For the nine month period ended September 30, 2016, the Noncontrolling Interest’s portion of Net Income was approximately $117,000, and their portion of Other Comprehensive Income was a loss of $40,000. At September 30, 2016, total Shareholders’ Equity was $50,791,000, of which the Noncontrolling Interest held a value of $349,000. During the second quarter of 2016, the Company loaned the Noncontrolling Interest £100,000 British Pounds. The loan is non-interest bearing and repayment terms include application of any subsequent cash dividends and distributions in kind to the loan balance. At September 30, 2016, the loan is included in Other Long Term Assets.

8. Shareholders' Equity

8. Shareholders' Equity	9 Months Ended
	Sep. 30, 2016
Notes
8. Shareholders' Equity	8. SHAREHOLDERS’ EQUITY As of September 30, 2016 and December 31, 2015, the Company had authorized 20,000,000 common stock shares with par value of $0.01 per share. At both dates, the number of shares issued was 10,153,633, and the total number of outstanding shares was 10,091,822, with the 61,811 remainder representing shares held in Treasury. On December 10, 2015, the Board declared a special dividend of $0.85 per share to all Shareholders of record as of December 21, 2015, and payable on or before January 6, 2016. The Company paid its transfer agent $8,578,000 on January 5, 2016, and the transfer agent paid the shareholders on January 6, 2016. On December 10, 2014, the Board declared a special dividend of $0.49 per share to all Shareholders of record as of December 22, 2014, which was paid on January 5, 2015, in the amount of $4,945,000. On April 4, 2014, the Company’s Board of Directors authorized an extension of its stock repurchase program without expiration, up to a maximum amount of $1,000,000. The original program established in December of 2007 authorized the purchase of up to $5,000,000 of its common stock. The purchases may be made from time-to-time in the open market or in privately negotiated transactions, depending on market and business conditions. The Board retained the right to cancel, extend, or expand the share buyback program, at any time and from time-to-time. Since inception, the Company has purchased a total of 61,811 shares for approximately $932,000, or approximately $15 per share. The Company did not make any stock repurchases during 2016, or for the full year ended December 31, 2015.

9. Subsequent Events

9. Subsequent Events	9 Months Ended
	Sep. 30, 2016
Notes
9. Subsequent Events	9. SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred through the date of this filing. During this period, the Company did not have any material subsequent events that impacted its condensed consolidated financial statements.

1. Basis of Presentation and 16

1. Basis of Presentation and Description of Business: Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Omega Flex, Inc. (Omega) and its subsidiaries (collectively the “Company”). The Company’s unaudited condensed consolidated financial statements for the quarter ended September 30, 2016 have been prepared in accordance with accounting principles generally accepted in the United States (GAAP), and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Company’s latest shareholders’ annual report (Form 10-K). All material inter-company accounts and transactions have been eliminated in consolidation. Certain amounts from prior years have been reclassified to conform to current year presentation. It is Management’s opinion that all adjustments necessary for a fair statement of the results for the interim periods have been made, and that all adjustments are of a normal recurring nature or a description is provided for any adjustments that are not of a normal recurring nature.

2. Significant Accounting Pol17

2. Significant Accounting Policies: Use of Estimates (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
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 at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant estimates and assumptions relate to revenue recognition and related sales incentives, accounts receivable allowances, inventory valuations, goodwill valuation, product liability reserve, stock-based compensation valuations and accounting for income taxes. Actual amounts could differ significantly from these estimates.

2. Significant Accounting Pol18

2. Significant Accounting Policies: Revenue Recognition (Policies)	9 Months Ended
	Sep. 30, 2016
Revenue Recognition
Revenue Recognition	Revenue Recognition The Company’s revenue recognition activities relate almost entirely to the manufacture and sale of flexible metal hose and pipe. Under GAAP, revenues are considered to have been earned when the Company has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. The following criteria represent preconditions to the recognition of revenue: · · · · The Company recognizes revenue upon shipment in accordance with the above principles. Gross sales are reduced for all consideration paid to customers for which no identifiable benefit is received by the Company. This includes promotional incentives, which includes various programs including year-end rebates and discounts. The amounts of certain incentives are known with reasonable certainty at the time of sale, while others are projected based upon the most reliable information available at the reporting date. Commissions are accounted for as a sales expense.

2. Significant Accounting Pol19

2. Significant Accounting Policies: Cash Equivalents (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
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. Carrying value 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 its 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.

2. Significant Accounting Pol20

2. Significant Accounting Policies: Accounts Receivable and Provision For Doubtful Accounts (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
Accounts Receivable and Provision For Doubtful Accounts	Accounts Receivable and Provision for Doubtful Accounts Accounts receivable are reduced by an allowance for amounts that may become uncollectible in the future. The estimated allowance for uncollectible amounts is based primarily on specific analysis of accounts in the receivable portfolio and historical write-off experience. While management believes the allowance to be adequate, if the financial condition of the Company’s customers were to deteriorate, resulting in their inability to make payments, additional allowances may be required. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on any known collection issues, historical experience, and other currently available evidence. The reserve for future credits, discounts, and doubtful accounts was $819,000 and $882,000 as of September 30, 2016 and December 31, 2015, respectively. In regards to identifying uncollectible accounts, the Company reviews an aging report on a consistent basis to determine past due accounts, and utilizes a well established credit rating agency. The Company charges off those accounts that are deemed uncollectible once all collection efforts have been exhausted.

2. Significant Accounting Pol21

2. Significant Accounting Policies: Inventories (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
Inventories	Inventories Inventories are valued at the lower of cost or market. The cost of inventories is determined by the first-in, first-out (FIFO) method. The Company generally considers inventory quantities beyond two-years usage, measured on a historical usage basis, to be excess inventory and reduces the carrying value of inventory accordingly.

2. Significant Accounting Pol22

2. Significant Accounting Policies: Property and Equipment (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
Property and Equipment	Property and Equipment Property and equipment are carried 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.

2. Significant Accounting Pol23

2. Significant Accounting Policies: Goodwill (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
Goodwill	Goodwill In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 350, Intangibles – Goodwill and Other, the Company performed an annual impairment test in accordance with this guidance as of December 31, 2015. This analysis did not indicate any impairment of goodwill. There were no circumstances that indicate that Goodwill might be impaired at September 30, 2016.

2. Significant Accounting Pol24

2. Significant Accounting Policies: Stock-based Compensation Plans (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
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. The Units follow a vesting schedule of three years from the grant date, and are then paid upon maturity. In accordance with FASB ASC Topic 718, Stock Compensation, the Company uses the Black-Scholes option pricing model as its method for determining the fair value of the Units. Further details of the Plan are provided in Note 6.

2. Significant Accounting Pol25

2. Significant Accounting Policies: Product Liability Reserves (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
Product Liability Reserves	Product Liability Reserves Product liability reserves represent the estimated unpaid amounts under the Company’s insurance policies with respect to existing claims. The Company uses the most current available data to estimate claims. As explained more fully under Note 5, Commitments and Contingencies, for various product liability claims covered under the Company’s general liability insurance policies, the Company must pay certain defense costs within its deductible or self-insured retention limits, ranging primarily from $25,000 to $1,000,000 per claim, depending on the terms of the policy in the applicable policy year, up to an aggregate amount. The Company is vigorously defending against all known claims.

2. Significant Accounting Pol26

2. Significant Accounting Policies: Fair Value of Financial and Nonfinancial Instruments (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
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. The accounting standard defines fair value, establishes a framework for measuring fair value under GAAP, and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard creates a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. The Company relies on its actively traded share value – a Level 1 input – in determining the fair value of the reporting unit in its annual impairment test as described in the FASB ASC Topic 350, Intangibles - Goodwill and Other.

2. Significant Accounting Pol27

2. Significant Accounting Policies: Earnings Per Common Share (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
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 dilutive earnings per share are the same.

2. Significant Accounting Pol28

2. Significant Accounting Policies: Currency Translation (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
Currency Translation	Currency Translation Assets and liabilities denominated in foreign currencies, most of which relate to our United Kingdom subsidiary whose functional currency is British pound sterling, are translated into U.S. dollars at exchange rates prevailing on the balance sheet dates. The statements of income 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 income (other expense) in the period in which they occur.

2. Significant Accounting Pol29

2. Significant Accounting Policies: Income Taxes (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
Income Taxes	Income Taxes The Company accounts for tax liabilities in accordance with the FASB ASC Topic 740, Income Taxes. Under this method the Company records tax expense, related deferred taxes and tax benefits, and uncertainties in tax positions. 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, clarifies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company’s financial statements. This guidance prescribes a recognition threshold of more-likely than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. The Company follows the provisions of ASC 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. The Company elected to recognize interest and penalties related to income tax matters as a component of the income tax provision in the consolidated statements of income. For additional information regarding ASC 740-10, see Note 8 of the Company’s December 31, 2015 Form 10-K. The FASB Accounting Standards Update (ASU) 2015-17 eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments of ASU 2015-17 apply to all organizations that present a classified balance sheet. For public companies, the amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted and the Company adopted this ASU prospectively in the calendar year ended December 31, 2015. As a result, the Company has presented all deferred tax assets and liabilities as noncurrent on its consolidated balance sheet starting with the year ended December 31, 2015. There was no impact on operations as a result of adoption of the FASB ASU 2015-17.

2. Significant Accounting Pol30

2. Significant Accounting Policies: Other Comprehensive Income (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
Other Comprehensive Income	Other Comprehensive Income For the three and nine months ended September 30, 2016 and 2015, respectively, the components of other comprehensive income consisted solely of foreign currency translation adjustments.

2. Significant Accounting Pol31

2. Significant Accounting Policies: Significant Concentration (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
Significant Concentration	Significant Concentration The Company has one significant customer who represents more than 10% of the Company’s Net Sales for the three and nine months ended September 30, 2016 and 2015, and more than 10% of the Company’s Accounts Receivable balance at September 30, 2016 and December 31, 2015. Geographically, the Company has a significant amount of sales in the United States versus internationally. These concentrations are discussed in detail in the Company’s December 31, 2015 Form 10-K, and there has been no significant change as of this quarterly report.

2. Significant Accounting Pol32

2. Significant Accounting Policies: Subsequent Events (Policies)	9 Months Ended
	Sep. 30, 2016
Subsequent Events
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 condensed consolidated financial statements. Refer to Note 9 of the condensed consolidated financial statements.

2. Significant Accounting Pol33

2. Significant Accounting Policies: Recent Accounting Pronouncements (Policies)	9 Months Ended
	Sep. 30, 2016
Policies
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) lessees are required to recognize right-of-use assets and lease liabilities for all leases not considered short-term leases. By definition, a short-term lease is one in which: (a) the lease term is 12 months or less and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect an accounting policy by class of underlying asset under which right-of-use assets and lease liabilities are not recognized and lease payments are generally recognized as expense over the lease term on a straight-line basis. This change will result in lessees recognizing right-of-use assets and lease liabilities for most leases currently accounted for as operating leases under the legacy lease accounting guidance. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted.

3. Inventories_ Schedule of Inv

3. Inventories: Schedule of Inventory, Current (Tables)	9 Months Ended
	Sep. 30, 2016
Tables/Schedules
Schedule of Inventory, Current	September 30, December 31, 2016 2015 (dollars in thousands) Finished Goods $ 4,710 $ 6,082 Raw Materials 2,060 2,205 Inventories-Net $ 6,770 $ 8,287

6. Stock Based Plans_ Schedule

6. Stock Based Plans: Schedule of nonvested phantom stock units (Tables)	9 Months Ended
	Sep. 30, 2016
Tables/Schedules
Schedule of nonvested phantom stock units	Units Weighted Average Grant Date Fair Value Number of Phantom Stock Unit Awards: Nonvested at December 31, 2015 20,335 $ 22.74 Granted 10,460 $ 30.57 Vested (9,874) $ 20.16 Forfeited --- --- Canceled --- --- Nonvested at September 30, 2016 20,921 $ 27.87 Phantom Stock Unit Awards Expected to Vest 20,921 $ 27.87

2. Significant Accounting Pol36

2. Significant Accounting Policies: Accounts Receivable and Provision For Doubtful Accounts (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Details
Allowance for Doubtful Accounts Receivable	$ 819	$ 882

3. Inventories_ Schedule of I37

3. Inventories: Schedule of Inventory, Current (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Details
Inventory, Finished Goods, Net	$ 4,710	$ 6,082
Inventory, Raw Materials, Net	2,060	2,205
Inventories - Net	$ 6,770	$ 8,287

4. Line of Credit (Details)

4. Line of Credit (Details) - Santander Bank, N.A. - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Line of Credit Facility, Description	On December 29, 2014, the Company entered into an Amended and Restated Committed Revolving Line of Credit Note (“the Line”) and a Second Amendment to the Loan Agreement with Santander Bank, N.A. (“Santander”).
Line of Credit Facility, Maximum Borrowing Capacity	$ 15,000,000
Line of Credit Facility, Interest Rate Description	The Line provides for the payment of any borrowings at an interest rate of either LIBOR plus 1.00% to plus 1.35% (for borrowings with a fixed term of 30, 60, or 90 days), or Prime from 0.00% to plus 0.10%, depending upon the Company’s then existing financial ratios. At September 30, 2016, the Company’s financial ratios would allow for the most favorable rate under the agreement’s range, which would be a rate of 1.85%.
Line of Credit Facility, Commitment Fee Description	the Company is required to pay on a quarterly basis an unused facility fee equal to 10 basis points of the average unused balance of the total Line commitment.
Line of Credit Facility, Fair Value of Amount Outstanding	$ 0	$ 0

5. Commitments and Contingenc39

5. Commitments and Contingencies: Commitments (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Details
Loss Contingency, Management's Assessment and Process	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.
Deferred Compensation Arrangements, Overall, Description	The Company has salary continuation agreements with one current employee, and one former employee who retired at the end of 2010. 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 per month to $3,000 per month with the term of such payments limited to 15 years after the employee’s retirement at age 65. The agreements also provide for survivorship benefits if the employee dies before attaining age 65, and severance payments if the employee is terminated without cause; the amount of which is dependent on the length of company service at the date of termination.
Other Deferred Compensation Arrangements, Liability, Current and Noncurrent	$ 537	$ 508
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent	498	496
Other Deferred Compensation Arrangements, Liability, Current	39	12
Cash Surrender Value of Life Insurance	$ 1,146	$ 1,091

5. Commitments and Contingenc40

5. Commitments and Contingencies: Contingencies (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Prepaid for Litigation Contingencies	$ 1,600,000
Relieved Assets on Books After Legal Settlement		$ 213,000
Positive Outcome of Litigation
Proceeds from Legal Settlements	282,000
Allocation of Proceeds from Legal Settlements to Offset Operating Expenses	69,000
Insurance Claims
Product Liability Inurance Deductible - Range, minimum	25,000
Product Liability Inurance Deductible - Range, maximum	$ 1,000,000
Pending or Threatened Litigation
Product Liability Contingency, Loss Exposure Not Accrued, Description	The aggregate maximum exposure for all current open Claims is estimated to not exceed approximately $4,100,000, which represents the potential costs that may be incurred over time for the Claims within the applicable insurance policy deductibles or retentions.
Product Liability Contingency, Loss Exposure Not Accrued, Best Estimate	$ 4,100,000
Loss Contingency Accrual	$ 277,000	$ 249,000

6. Stock Based Plans (Details)

6. Stock Based Plans (Details) - Phantom Stock Plan - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, 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 1 million units of phantom stock to employees, officers or directors of the Company and of any of its subsidiaries. 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. The Units are not shares of the Company’s common stock
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	1,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award	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. The Units are not shares of the Company's common stock, and a recipient of the Units does not receive any of the following: (a) ownership interest in the Company, (b) shareholder voting rights, and (c) other incidents of ownership to the Company's common stock. The Units are granted to participants upon the recommendation of the Company's CEO, 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, and at a minimum, the Unit's value will be equal to the closing price of the Company's common stock on the grant date. The Units follow a vesting schedule, with a maximum vesting of 3 years after the grant date. Upon vesting, the Units represent a contractual right of payment for the value of the Unit. The Units will be paid on their maturity date, one year after all of the Units granted in a particular award have fully vested, unless an acceptable event occurs under the terms of the Plan prior to one year, which would allow for earlier payment. The amount to be paid to the participant on the maturity date is dependent on the type of Unit granted to the participant.
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights	The Units follow a vesting schedule, with a maximum vesting of three years after the grant date. Upon vesting, the Units represent a contractual right of payment for the value of the Unit.
Unvested units outstanding	20,921		20,335
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	10,460
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 30.57
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Share-based Liabilities Paid	$ 311,000
Fair Value, Option, Methodology and Assumptions	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 period of each grant or award.
Deferred Compensation Share-based Arrangements, Liability, Current and Noncurrent	$ 1,003,000		$ 905,000
Deferred Compensation Share-based Arrangements, Liability, Current	348,000		310,000
Deferred Compensation Share-based Arrangements, Liability, Classified, Noncurrent	655,000		$ 595,000
Allocated Share-based Compensation Expense	409,000	$ 104,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 532,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year 3 months 18 days

6. Stock Based Plans_ Schedul42

6. Stock Based Plans: Schedule of nonvested phantom stock units (Details) - Phantom Stock Plan	9 Months Ended
	Sep. 30, 2016USD ($)$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Beginning Balance	20,335
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares	$ 22.74
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	10,460
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares	$ 30.57
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(9,874)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ / shares	$ 20.16
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance	20,921
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value, Ending Balance | $ / shares	$ 27.87
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Expected to Vest, Outstanding, Number	20,921
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Expected to Vest, Weighted Average Grant Date Fair Value | $	$ 27.87

7. Noncontrolling Interests (De

7. Noncontrolling Interests (Details) £ in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2016GBP (£)	Dec. 31, 2015USD ($)
Details
Total Shareholders' Equity	$ 50,791		$ 50,791			$ 41,154
Shareholders' Equity attributable to non-controlling interest	349		349			$ 272
Net (Income) Loss attributable to the Noncontrolling Interest, net of tax	$ 29	$ 41	117	$ 128
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest			$ 40
Loan to non-controlling interest | £					£ 100

8. Shareholders' Equity (Detail

8. Shareholders' Equity (Details) - USD ($)	109 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Dec. 10, 2015	Dec. 10, 2014
Details
Common Stock, Shares Authorized	20,000,000	20,000,000
Common Stock, Par Value	$ 0.01	$ 0.01
Common Stock, Shares Issued	10,153,633	10,153,633
Common Stock, Shares Outstanding	10,091,822	10,091,822
Treasury Stock, Common, Shares	61,811	61,811
Dividends Payable, Amount Per Share			$ 0.85	$ 0.49
Stock Repurchase Program, Authorized Amount	$ 5,000,000
Stock Repurchased During Period, Shares	61,811
Stock Repurchased During Period, Value	$ 932,000