Burnham Holdings, Inc. Reports First Quarter 2024 Financial Results

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Burnham Holdings, Inc. reported its first quarter 2024 financial results with net sales of $56.0 million, a 5.9% decrease from 2023. Gross profit margin increased to 24.9% due to cost control. SG&A expenses remained flat. Net income was $3.0 million. EBITDA was $5.6 million. Sales of residential products decreased by 11.4% while commercial products increased by 4.0%. Burnham Holdings reduced debt levels by $15.6 million. The company generated interest expense 40.7% lower than the previous year. Burnham Holdings has new lending facilities providing up to $92.0 million in capacity. The company's 2024 Annual Meeting of Shareholders is being held virtually.

Positive

• Net sales for Burnham Holdings, Inc. in the first quarter of 2024 were $56.0 million, down 5.9% from 2023.
• Gross profit margin increased to 24.9% in 2024 compared to 23.5% in 2023 due to productivity and cost control.
• SG&A expenses remained flat in the first quarter of 2024 compared to 2023.
• Net income for the first quarter of 2024 was $3.0 million, similar to the same period in 2023.
• EBITDA for the first quarter of 2024 was $5.6 million, representing a 9.9% margin.
• Sales of residential products decreased by 11.4% in the first quarter of 2024, while sales of commercial products increased by 4.0%.
• Burnham Holdings reduced debt levels by approximately $15.6 million in the first quarter of 2024.
• Interest expense for the first quarter of 2024 was 40.7% lower than the first quarter of 2023.
• Burnham Holdings announced new lending facilities providing up to $92.0 million in capacity.
• The company's 2024 Annual Meeting of Shareholders is being held virtually.

Negative

• Net sales decreased by 5.9% in the first quarter of 2024 compared to 2023.
• Despite cost control, net income did not show significant growth compared to the prior year.
• Sales of residential products experienced a significant decline of 11.4% in the first quarter of 2024.
• Although interest expense decreased, Burnham Holdings still has considerable debt levels.
• The decrease in net sales raises concerns about the company's future growth trajectory.

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.

FAQ

What were Burnham Holdings, Inc.'s net sales in the first quarter of 2024?

Burnham Holdings, Inc. reported net sales of $56.0 million in the first quarter of 2024, a 5.9% decrease from 2023.

How did the gross profit margin change in 2024 compared to 2023?

The gross profit margin increased to 24.9% in 2024 from 23.5% in 2023.

What was Burnham Holdings, Inc.'s net income for the first quarter of 2024?

Burnham Holdings, Inc. reported a net income of $3.0 million for the first quarter of 2024, similar to the same period in 2023.

What was the EBITDA for Burnham Holdings, Inc. in the first quarter of 2024?

Burnham Holdings, Inc. had an EBITDA of $5.6 million in the first quarter of 2024, representing a 9.9% margin.

Did sales of residential products increase or decrease in the first quarter of 2024?

Sales of residential products decreased by 11.4% in the first quarter of 2024.

How much did Burnham Holdings, Inc. reduce debt levels by in the first quarter of 2024?

Burnham Holdings, Inc. reduced debt levels by approximately $15.6 million in the first quarter of 2024.

What was the interest expense change for Burnham Holdings, Inc. in the first quarter of 2024 compared to 2023?

Interest expense for the first quarter of 2024 was 40.7% lower than the first quarter of 2023.

What new financial facilities did Burnham Holdings, Inc. announce?

Burnham Holdings announced new lending facilities that provide up to $92.0 million in capacity.

Where is Burnham Holdings, Inc.'s 2024 Annual Meeting of Shareholders being held?

The company's 2024 Annual Meeting of Shareholders is being held virtually.