Burnham Holdings, Inc. Reports First Quarter Results
Burnham Holdings, Inc. (OTC-Pink: BURCA) reported its financial results for Q1 2023, showing a 13.5% increase in net sales, reaching $59.5 million, compared to the same quarter in 2022. The gross profit margin improved to 23.5% from 15.9%, driven by effective pricing strategies. The company transitioned from a net loss of ($0.8 million) in Q1 2022 to a net income of $3.0 million in Q1 2023, marking a significant turnaround. Earnings per share rose from ($0.16) to $0.64. Residential product sales grew by 7.8%, while commercial product sales surged by 33.6%. Despite this positive performance, challenges such as material inflation, supply chain issues, and rising interest rates persist. The company advised caution in interpreting these results as an indicator of future performance.
- Net sales increased by 13.5% to $59.5 million.
- Gross profit margin improved to 23.5% from 15.9%.
- Net income turned positive at $3.0 million compared to a loss of ($0.8 million).
- Earnings per share rose to $0.64 from ($0.16).
- Sales of commercial products increased by 33.6%.
- Interest expense increased due to rising rates, now at 6.60% versus 2.19% last year.
- Material inflation continues to impact costs.
- Supply chain challenges and staffing issues remain ongoing headwinds.
- Net sales were
$59.5 million $7.1 million 13.5% , versus 2022 as demand remained strong across both the residential and commercial businesses. - Gross profit margin was
23.5% versus15.9% for 2022, primarily as the result of pricing actions to offset inflation. Material inflation, supply chain and staffing challenges continue to remain headwinds. - Selling, general and administrative expenses were lower as a percentage of sales at
16.9% in 2023 versus17.2% in 2022. - Interest expense for the first quarter of 2023 was higher versus the prior year due to rising interest rates and higher working capital levels. Interest rates on the revolving credit facility as of
April 2, 2023 andApril 3, 2022 were6.60% and2.19% , respectively. - Net income for 2023 was
$3.0 million ( in 2022.$0.8) million - Earnings per share was
$0.64 $0.16
Sales of residential products increased by
Overall, we are pleased with the results of the first quarter of 2023. The multiple pricing actions undertaken throughout 2022 across all subsidiaries in response to continuing inflationary pressures had a positive impact resulting in improved price realization in the first quarter of 2023 and subsequent strong financial performance. However, supply chain issues for certain components persist and hiring and retaining qualified employees is an ongoing headwind. We continue to monitor the need for additional pricing actions to maintain margins as well as remaining diligent and ready to respond to continued instability and uncertainty in the greater macro-economic environment. Accordingly, we advise caution when using the first quarter financial results as an indicator of future performance or full year results.
The Company's balance sheet is strong, with adequate levels of working capital to support current and future business opportunities. Long-term debt was
The
Consolidated Statements of Income | ||||||
(In thousands, except per share amounts) | ||||||
(Unaudited) | ||||||
Three Months Ended | ||||||
2023 | 2022 | |||||
Net sales | $ 59,534 | $ 52,438 | ||||
Cost of goods sold | 45,556 | 44,078 | ||||
Gross profit | 13,978 | 8,360 | ||||
Selling, general and administrative expenses | 10,042 | 9,038 | ||||
Operating income (loss) | 3,936 | (678) | ||||
Other expense: | ||||||
Non-service related pension credit | 137 | 106 | ||||
Interest and investment gain (loss) | 282 | (133) | ||||
Interest expense | (499) | (275) | ||||
Other expense | (80) | (302) | ||||
Income (loss) before income taxes | 3,856 | (980) | ||||
Income tax expense (benefit) | 887 | (225) | ||||
Net income (loss) | $ 2,969 | $ (755) | ||||
Earnings (loss) per share | ||||||
Basic | $ 0.64 | $ (0.16) | ||||
Diluted | $ 0.64 | $ (0.16) | ||||
Cash dividends per share | $ 0.22 | $ 0.22 | ||||
Consolidated Balance Sheets | ||||||||
(In thousands) | ||||||||
(Unaudited) | (Unaudited) | |||||||
ASSETS | 2023 | 2022 | 2022 | |||||
Current Assets | ||||||||
Cash and cash equivalents | $ 6,382 | $ 6,994 | $ 5,711 | |||||
Trade accounts receivable, net | 23,280 | 29,243 | 19,342 | |||||
Inventories, net | 69,954 | 59,635 | 56,951 | |||||
Prepaid expenses and other current assets | 3,050 | 3,747 | 5,204 | |||||
Total Current Assets | 102,666 | 99,619 | 87,208 | |||||
Property, plant and equipment, net | 60,950 | 59,980 | 57,739 | |||||
Lease assets | 2,827 | 1,793 | 2,203 | |||||
Other long-term assets | 14,717 | 14,866 | 22,466 | |||||
Total Assets | $ 181,160 | $ 176,258 | $ 169,616 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable & accrued expenses | $ 30,768 | $ 36,047 | $ 27,145 | |||||
Current portion of long-term liabilities | 152 | 152 | 152 | |||||
Current portion of operating lease liabilities | 784 | 854 | 827 | |||||
Total Current Liabilities | 31,704 | 37,053 | 28,124 | |||||
Long-term debt | 41,029 | 33,721 | 30,940 | |||||
Lease liabilities | 2,043 | 939 | 1,376 | |||||
Other postretirement liabilities | 5,890 | 5,636 | 6,052 | |||||
Deferred income taxes | 7,746 | 7,822 | 8,934 | |||||
Shareholders' Equity | ||||||||
Preferred Stock | 530 | 530 | 530 | |||||
Class A Common Stock | 3,626 | 3,626 | 3,615 | |||||
Class B Convertible Common Stock | 1,318 | 1,318 | 1,329 | |||||
Additional paid-in capital | 16,565 | 16,565 | 16,354 | |||||
Retained earnings | 116,483 | 114,526 | 111,816 | |||||
Accumulated other comprehensive loss | (27,845) | (27,549) | (21,509) | |||||
(17,929) | (17,929) | (17,945) | ||||||
Total Shareholders' Equity | 92,748 | 91,087 | 94,190 | |||||
Total Liabilities and Shareholders' Equity | $ 181,160 | $ 176,258 | $ 169,616 | |||||
Consolidated Statements of Cash Flows | |||||
(In thousands) | |||||
(Unaudited) | |||||
Three Months Ended | |||||
2023 | 2022 | ||||
Net income (loss) | $ 2,969 | $ (755) | |||
Depreciation and amortization | 1,255 | 1,182 | |||
Pension and postretirement liabilities expense | (125) | 43 | |||
Other net adjustments | (975) | (937) | |||
Changes in operating assets and liabilities | (7,801) | (6,184) | |||
Net cash used by operating activities | (4,677) | (6,651) | |||
Purchase of property, plant and equipment | (2,231) | (1,431) | |||
Proceeds from borrowings | 7,308 | 9,110 | |||
Proceeds from stock option exercise and treasury activity, net | - | 40 | |||
Dividends paid | (1,012) | (1,011) | |||
Net (decrease) increase in cash and cash equivalents | $ (612) | $ 57 | |||
Cash and cash equivalents, beginning of period | $ 6,994 | $ 5,654 | |||
Net (decrease) increase in cash and cash equivalents | (612) | 57 | |||
Cash and cash equivalents, end of period | $ 6,382 | $ 5,711 | |||
Consolidated Statements of Stockholders' Equity | |||||||||||||||||
(In thousands) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Class B | Accumulated | ||||||||||||||||
Class A | Convertible | Additional | Other | ||||||||||||||
Preferred | Common | Common | Paid-in | Retained | Comprehensive | Stock, | Stockholders' | ||||||||||
Stock | Stock | Stock | Capital | Earnings | Loss | at Cost | Equity | ||||||||||
Balance at | $ 530 | $ 3,626 | $ 1,318 | $ 16,565 | $ 114,526 | $ (27,549) | $ (17,929) | $ 91,087 | |||||||||
Exercise of stock options | - | - | - | - | - | - | - | - | |||||||||
Conversion of common stock | - | - | - | - | - | - | - | - | |||||||||
Cash dividends declared: | |||||||||||||||||
Common stock - ( | - | - | - | - | (1,012) | - | - | (1,012) | |||||||||
Net income for the period | - | - | - | - | 2,969 | - | - | 2,969 | |||||||||
Other comprehensive loss, | |||||||||||||||||
net of tax ( | - | - | - | - | - | (296) | - | (296) | |||||||||
Balance at | $ 530 | $ 3,626 | $ 1,318 | $ 16,565 | $ 116,483 | $ (27,845) | $ (17,929) | $ 92,748 | |||||||||
Class B | Accumulated | ||||||||||||||||
Class A | Convertible | Additional | Other | ||||||||||||||
Preferred | Common | Common | Paid-in | Retained | Comprehensive | Stock, | Stockholders' | ||||||||||
Stock | Stock | Stock | Capital | Earnings | Loss | at Cost | Equity | ||||||||||
Balance at | $ 530 | $ 3,615 | $ 1,329 | $ 16,317 | $ 113,582 | $ (22,260) | $ (17,948) | $ 95,165 | |||||||||
Exercise of stock options | - | - | - | 37 | - | - | 3 | 40 | |||||||||
Conversion of common stock | - | - | - | - | - | - | - | - | |||||||||
Cash dividends declared: | |||||||||||||||||
Common stock - ( | - | - | - | - | (1,011) | - | - | (1,011) | |||||||||
Net loss for the period | - | - | - | - | (755) | - | - | (755) | |||||||||
Other comprehensive income, | |||||||||||||||||
net of tax ( | - | - | - | - | - | 751 | - | 751 | |||||||||
Balance at | $ 530 | $ 3,615 | $ 1,329 | $ 16,354 | $ 111,816 | $ (21,509) | $ (17,945) | $ 94,190 | |||||||||
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