EXTON, Pa., March 20, 2013 (GLOBE NEWSWIRE) -- Omega Flex, Inc. (the "Company") (Nasdaq:OFLX) announced that its English subsidiary, Omega Flex Limited ("OFL"), has reached an agreement to settle litigation related to a construction project in Milton Keynes, England that involved a number of parties and issues. This agreement fully resolves all claims related to the construction project, including claims regarding performance deficiencies of OFL products at the site. OFL believes that the claims are without merit and strongly disagrees with the allegation that the products caused any delays or damages at the site. Following protracted litigation and the uncertain prospects of a trial and the possibility of costs being assessed against OFL, the board of directors of OFL decided that it would be in the best interests of that company to enter into this agreement to resolve these claims and avoid potentially costly litigation. OFL agreed to resolve claims by making a one-time payment of £800,000, which on a consolidated basis after considering all ancillary charges, will result in an after-tax charge to earnings of the Company of $820,000 ($0.08 per diluted common share) in both the Company's fourth quarter and year ended December 31, 2012. The settlement agreement was entered into after the Company announced its preliminary results of operations for the fourth quarter and year ended December 31, 2012, but prior to the filing of the Company's Annual Report on Form 10-K with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2012. In accordance with U.S. generally accepted accounting principles, the Company is required to recognize the consummation of this agreement as a subsequent event in its 2012 fiscal year results because the event is related to conditions that existed at the balance sheet date of December 31, 2012. The Company's Net Sales and Net Income attributable to Omega Flex, Inc. for the quarter and year ended December 31, 2012, as reported in the Company's Current Report on Form 8-K furnished on February 21, 2013, are being revised to reflect the effects of the settlement agreement as indicated below. Although this agreement will not have an effect on full year 2013 earnings, cash flow from operations will be impacted when this settlement payment is made.
|OMEGA FLEX, INC. (OFLX)|
|Twelve Months Ended December 31,||Three Months Ended December 31,|
|Net Income attributable to Omega Flex, Inc.||$6,876,000||$4,647,000||$774,000||$1,708,000|
|Earnings Per Share – Basic and Diluted||$0.68||$0.46||$0.08||$0.17|
|Weighted Average Shares – Basic and Diluted||10,091,822||10,091,822||10,091,822||10,091,822|
CONTACT: Timothy Scanlan (860) 704-6820