LANCASTER, Pa., April 22, 2024 /PRNewswire/ -- Burnham Holdings, Inc. (OTC-Pink: BURCA), the parent company of multiple subsidiaries that are leading domestic manufacturers of boilers, furnaces and related HVAC products and accessories for residential, commercial, and industrial applications, today reported its consolidated financial results for quarter ended March 31, 2024. Where noted, prior periods presented have been restated for a voluntary change in accounting principle related to our last-in, first-out (LIFO) inventory valuation as disclosed in our 2023 Annual Report.
Burnham Holdings, Inc.'s (BHI) consolidated financial performance for first quarter 2024 included the following:
- Net sales were $56.0 million for 2024, a decrease of $3.5 million, or 5.9%, versus 2023. Although BHI's subsidiary boiler and oil furnace market shares remain strong, HVAC industry unit volumes have experienced significant declines compared to the prior year.
- Gross profit margin was 24.9% for 2024 compared to 23.5% for 2023 primarily due to productivity and cost control across the subsidiaries as well as realization of pricing actions to offset inflation.
- Selling, general, and administrative expenses (SG&A) were essentially flat for the first quarter of 2024 compared to the first quarter of 2023. SG&A spend was in line with expectations although higher on a percentage of sales basis due to the decline in net sales.
- Net income for the first quarter of 2024 was $3.0 million, similar to the first quarter of 2023.
- EBITDA was $5.6 million, or 9.9%, for the first quarter of 2024 versus $5.6 million, or 9.4%, for the first quarter of 2023.
- Diluted earnings per share were $0.64 for the first quarters of 2024 and 2023.
For the first quarter of 2024, sales of residential products were lower by 11.4% versus the same period in 2023, while sales of commercial products were up 4.0% in 2024 versus 2023. Service and Rentals businesses contributed $1.6 million of net sales in the first quarter of 2024. Market shares across our subsidiaries remain strong despite continued industry decreases. We believe order patterns and our current backlogs are back in line with seasonal operating cycles.
Despite the fluctuating volumes impacting net sales, gross margin and operating margin dollars were flat to the prior year but as a percentage saw significant increases. We are diligently managing our cost structure to maintain margins as well as seeing productivity improvements in the manufacturing sites from our capital investment programs. We continue to assess input and operating costs for inflationary pressures and will evaluate pricing actions as necessary.
Average debt levels for the first quarter of 2024 were approximately $15.6 million lower than the first quarter of 2023. Accordingly, interest expense for the first quarter of 2024 was 40.7% lower than the first quarter of 2023. We continue to evaluate our working capital needs, including inventory levels, to ensure we can appropriately meet production volumes and fund future growth initiatives. We also previously announced that we have new lending facilities in place that provide us with up to $92.0 million in capacity. On January 30, 2024, a $10.0 million equipment financing line was entered into with our syndicated bank group that adds additional capacity and flexibility to our financing arrangements.
The Burnham Holdings, Inc. 2024 Annual Meeting of Shareholders is being held virtually today in Lancaster, PA at 11:30 a.m. A press release regarding today's shareholder voting and the Board of Directors determination regarding declaration of a quarterly dividend will be released later this afternoon.
Burnham Holdings, Inc. | |||||
Consolidated Statements of Income | |||||
(In thousands, except per share amounts) | |||||
(Unaudited) | |||||
Three Months Ended | |||||
March 31, | April 2, | ||||
2024 | 2023 | ||||
Net sales | $ 56,003 | $ 59,534 | |||
Cost of goods sold | 42,047 | 45,556 | |||
Gross profit | 13,956 | 13,978 | |||
Selling, general and administrative expenses | 10,022 | 10,042 | |||
Operating income | 3,934 | 3,936 | |||
Other (expense) / income: | |||||
Non-service related pension credit | 137 | 137 | |||
Interest and investment gain | 110 | 282 | |||
Interest expense | (296) | (499) | |||
Other expense | (49) | (80) | |||
Income before income taxes | 3,885 | 3,856 | |||
Income tax expense | 894 | 887 | |||
Net income | $ 2,991 | $ 2,969 | |||
Earnings per share: | |||||
Basic | $ 0.65 | $ 0.64 | |||
Diluted | $ 0.64 | $ 0.64 | |||
Cash dividends per share | $ 0.23 | $ 0.22 | |||
Burnham Holdings, Inc. | |||||||||
Consolidated Balance Sheets | |||||||||
(In thousands) | |||||||||
(Unaudited) | (Unaudited) | ||||||||
March 31, | December 31, | April 2, | |||||||
ASSETS | 2024 | 2023 | 2023 | ||||||
Current Assets | |||||||||
Cash and cash equivalents | $ 5,930 | $ 5,880 | $ 6,382 | ||||||
Trade accounts receivable, net | 19,188 | 31,023 | 23,280 | ||||||
Inventories, net | 67,297 | 58,017 | 71,866 | ||||||
Costs in Excess of Billings | 790 | 621 | - | ||||||
Prepaid expenses and other current assets | 5,080 | 1,954 | 3,050 | ||||||
Total Current Assets | 98,285 | 97,495 | 104,578 | ||||||
Property, plant and equipment, net | 66,203 | 64,437 | 60,950 | ||||||
Lease assets | 4,060 | 4,119 | 2,827 | ||||||
Other long-term assets | 19,063 | 18,620 | 14,717 | ||||||
Total Assets | $ 187,611 | $ 184,671 | $ 183,072 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
Current Liabilities | |||||||||
Accounts payable & accrued expenses | $ 31,046 | $ 35,365 | $ 30,693 | ||||||
Billings in excess of costs | 218 | 137 | - | ||||||
Current portion of: | |||||||||
Long-term liabilities | 1,171 | 1,171 | 152 | ||||||
Lease liabilities | 1,043 | 1,051 | 784 | ||||||
Long-term debt | 184 | 184 | - | ||||||
Total Current Liabilities | 33,662 | 37,908 | 31,629 | ||||||
Long-term debt | 32,125 | 27,232 | 41,029 | ||||||
Lease liabilities | 3,017 | 3,068 | 2,043 | ||||||
Other long-term liabilities | 5,907 | 5,933 | 5,890 | ||||||
Deferred income taxes | 9,186 | 9,095 | 8,185 | ||||||
Shareholders' Equity | |||||||||
Preferred Stock | 530 | 530 | 530 | ||||||
Class A Common Stock | 3,633 | 3,633 | 3,626 | ||||||
Class B Convertible Common Stock | 1,311 | 1,311 | 1,318 | ||||||
Additional paid-in capital | 11,869 | 11,769 | 12,003 | ||||||
Retained earnings | 123,217 | 121,291 | 117,956 | ||||||
Accumulated other comprehensive loss | (24,415) | (24,668) | (27,845) | ||||||
Treasury stock, at cost | (12,431) | (12,431) | (13,292) | ||||||
Total Shareholders' Equity | 103,714 | 101,435 | 94,296 | ||||||
Total Liabilities and Shareholders' Equity | $ 187,611 | $ 184,671 | $ 183,072 | ||||||
Burnham Holdings, Inc. | |||||
Consolidated Statements of Cash Flows | |||||
(In thousands) | |||||
(Unaudited) | |||||
Three Months Ended | |||||
March 31, | April 2, | ||||
2024 | 2023 | ||||
Cash flows from operating activities: | |||||
Net income | $ 2,991 | $ 2,969 | |||
Adjustments to reconcile net income to net cash provided | |||||
by operating activities: | |||||
Depreciation and amortization | 1,370 | 1,255 | |||
Deferred income taxes | 17 | (58) | |||
Provision for long-term employee benefits | (125) | (125) | |||
Share-based compensation expense | 100 | 75 | |||
Other reserves and allowances | (1,226) | (917) | |||
Changes in current assets and liabilities, net of acquisition: | |||||
Decrease in accounts receivable, net | 11,817 | 5,946 | |||
Increase in inventories, net | (9,279) | (10,318) | |||
Increase in other current assets | (3,214) | (134) | |||
Decrease in accounts payable and accrued expenses | (3,087) | (3,370) | |||
Net cash used by operating activities | (636) | (4,677) | |||
Cash flows from investing activities: | |||||
Capital expenditures | (3,134) | (2,223) | |||
Other investing activities | (8) | (8) | |||
Net cash used by investing activities | (3,142) | (2,231) | |||
Cash flows from financing activities: | |||||
Net proceeds from revolver | 4,939 | 7,308 | |||
Repayment of term loan | (46) | - | |||
Dividends paid | (1,065) | (1,012) | |||
Net cash provided by financing activities | 3,828 | 6,296 | |||
Net increase (decrease) in cash and cash equivalents | $ 50 | $ (612) | |||
Cash and cash equivalents, beginning of period | $ 5,880 | $ 6,994 | |||
Net increase (decrease) in cash and cash equivalents | 50 | (612) | |||
Cash and cash equivalents, end of period | $ 5,930 | $ 6,382 | |||
Burnham Holdings, Inc. | ||||||||||||||||
Consolidated Statements of Shareholders' Equity | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Class B | Accumulated | |||||||||||||||
Class A | Convertible | Additional | Other | Treasury | ||||||||||||
Preferred | Common | Common | Paid-in | Retained | Comprehensive | Stock, | Shareholders' | |||||||||
Stock | Stock | Stock | Capital | Earnings | Loss | at Cost | Equity | |||||||||
Balance at December 31, 2023 | $ 530 | $ 3,633 | $ 1,311 | $ 11,769 | $ 121,291 | $ (24,668) | $ (12,431) | $ 101,435 | ||||||||
Net income | - | - | - | - | 2,991 | - | - | 2,991 | ||||||||
Other comprehensive income, | ||||||||||||||||
net of tax | - | - | - | - | - | 253 | - | 253 | ||||||||
Cash dividends declared: | ||||||||||||||||
Common stock - ($0.88 per share) | - | - | - | - | (1,065) | - | - | (1,065) | ||||||||
Share-based compensation: | ||||||||||||||||
Expense recognition | - | - | - | 100 | - | - | - | 100 | ||||||||
Balance at March 31, 2024 | $ 530 | $ 3,633 | $ 1,311 | $ 11,869 | $ 123,217 | $ (24,415) | $ (12,431) | $ 103,714 | ||||||||
Class B | Accumulated | |||||||||||||||
Class A | Convertible | Additional | Other | Treasury | ||||||||||||
Preferred | Common | Common | Paid-in | Retained | Comprehensive | Stock, | Shareholders' | |||||||||
Stock | Stock | Stock | Capital | Earnings | Loss | at Cost | Equity | |||||||||
Balance at December 31, 2022 (as restated) | $ 530 | $ 3,626 | $ 1,318 | $ 11,928 | $ 115,999 | $ (27,549) | $ (13,292) | $ 92,560 | ||||||||
Net income | - | - | - | - | 2,969 | - | - | 2,969 | ||||||||
Other comprehensive loss, | ||||||||||||||||
net of tax | - | - | - | - | - | (296) | - | (296) | ||||||||
Cash dividends declared: | ||||||||||||||||
Common stock - ($0.88 per share) | - | - | - | - | (1,012) | - | - | (1,012) | ||||||||
Share-based compensation: | ||||||||||||||||
Expense recognition | - | - | - | 75 | - | - | - | 75 | ||||||||
Balance at April 2, 2023 | $ 530 | $ 3,626 | $ 1,318 | $ 12,003 | $ 117,956 | $ (27,845) | $ (13,292) | $ 94,296 | ||||||||
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SOURCE Burnham Holdings, Inc.