Burnham Holdings, Inc. Reports Full Year 2023 Financial Results, Raises Dividend and Board Actions

Rhea-AI Summary

Burnham Holdings, Inc. reported strong financial results for 2023, with net sales reaching $253.0 million, a 5.2% increase from 2022. The company's gross profit margin improved to 23.6%, and net income rose to $9.4 million. Despite higher SG&A expenses and an impairment loss, the company's performance was commendable, leading to a dividend increase of 4.5%.

Positive

• Net sales for Burnham Holdings, Inc. in 2023 were $253.0 million, up by 5.2% from 2022.
• Gross profit margin increased to 23.6% in 2023 compared to 19.2% in 2022.
• Net income for 2023 was $9.4 million, the highest since 2004.
• The company declared a quarterly dividend of $0.23 per share, a 4.5% increase.
• Board actions included virtual meetings, bylaws amendments, and a virtual annual meeting on April 22, 2024.

Negative

• SG&A expenses rose by 19.0% in 2023 compared to 2022.
• An impairment loss of $2.3 million was recognized on the investment in EnviroPower.
• Interest expense increased in 2023 due to higher debt levels and borrowing costs.

LANCASTER, Pa., Feb. 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 the twelve months ended December 31, 2023.  Audited consolidated financial statements and footnotes will be included in our Annual Report, expected to be available in mid- to late March 2024.  Prior periods presented have been restated for a voluntary change in accounting principle related to our last-in, first-out (LIFO) inventory valuation.  For 2022, the impact increased net income by $0.4 million and diluted earnings per share by $0.08.

Burnham Holdings, Inc.'s consolidated financial performance for the year ended December 31, 2023 included the following:

• Net sales were $253.0 million for 2023, an increase of $12.4 million, or 5.2%, versus 2022.  The net sales figure for 2023 represents the highest net sales number in BHI history, eclipsing the previous mark of $251.7 million set in 2004.
• Gross profit margin was 23.6% for 2023 compared to 19.2% for 2022 primarily due to continued realization of pricing actions to offset inflation.  Operating efficiency also contributed to improved margins as cost of goods sold decreased by $1.2 million versus 2022 despite higher the 5.2% growth in net sales.
• Selling, general, and administrative expenses (SG&A) were $43.1 million in 2023 compared to $36.2 million in 2022, an increase of $6.7 million, or 19.0%. Prior year spend was lower than historical norms as we slowly returned to pre-Covid staffing, travel, and administrative spending levels. Although higher on a percentage of sales basis, SG&A spend was in line with expectations.
• The Company recognized a $2.3 million impairment of its investment in EnviroPower.
• Net income for 2023 was $9.4 million compared to $5.4 million in 2022 and is the highest net income since 2004.
• Diluted earnings per share were $2.02 for 2023 versus $1.18 in 2022.

For 2023, sales of residential products were higher by 5.0% versus the same period in 2022, while sales of commercial products increased by 1.4% in 2023 versus 2022.  Our new Service and Rentals businesses contributed $2.6 million of net sales in 2023.  Overall, we are pleased with 2023's results as order velocity remains strong and our current backlogs are back in line with seasonal operating cycles.

As previously noted, pricing actions taken during 2022 and 2023 contributed to the margin expansion realized in 2023.  Further positive impacts on the results were provided by tighter inventory controls, which resulted in lower inventory across the organization, as well as a focus on overhead expenses and spending.  Reduced volatility in raw material costs also had a significant impact on 2023 results.  We will continue to closely monitor these areas as leading indicators for additional pricing actions during 2024. 

Average debt levels were higher throughout 2023 due to increased working capital needs and inflationary pressures impacting inventory valuations.  In addition, interest rate hikes throughout 2023 increased borrowing costs.  As a result of both factors, interest expense for 2023 was higher than 2022.  However, year-end total debt was $6.3 million lower than the prior year.  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.

At its meeting on February 22, 2024, Burnham Holdings, Inc.'s Board of Directors declared a quarterly common stock dividend of $0.23 per share, an increase of 4.5%.  The dividend is payable on March 28, 2024 for shareholders of record as of March 21, 2024.  Additionally, the Board of Directors amended the bylaws to confirm the ability to conduct meetings virtually, revise officer and director indemnification provisions, and remove the minimum and maximum numbers of directors required on the Board.

Burnham Holdings, Inc.'s Annual Meeting, with a shareholder record date of March 1, 2024, will be held virtually via a secure website meeting platform on Monday, April 22, 2024, beginning at 11:30 a.m. eastern.

Burnham Holdings, Inc. Consolidated Statements of Income Years ended December 31, 2023 and 2022 (In thousands, except per share amounts)
		(Unaudited)		(Restated)
		2023		2022
Net sales		$          252,982		$           240,547
Cost of goods sold		193,223		194,403
Gross profit		59,759		46,144
Selling, general and administrative expenses		43,137		36,245
Investment impairment loss		2,298		-
Operating income		14,324		9,899
Other expense:
Non-service related pension credit		57		130
Interest and investment gain (loss)		872		(1,124)
Interest expense		(2,733)		(1,690)
Other expense		(1,804)		(2,684)
Income before income taxes		12,520		7,215
Income tax expense		3,094		1,790
Net income		$              9,426		$               5,425
Earnings per share:
Basic		$                2.04		$                 1.18
Diluted		$                2.02		$                 1.18
Cash dividends per share		$                0.88		$                 0.88

 

Burnham Holdings, Inc. Consolidated Balance Sheets December 31, 2023 and 2022 (In thousands)
				(Unaudited)		(Restated)
ASSETS				2023		2022
Current Assets
	Cash and cash equivalents			$              5,880		$              6,994
	Trade accounts receivable, net			31,023		29,243
	Inventories, net			58,017		61,547
	Costs in Excess of Billings			621		-
	Prepaid expenses and other current assets			1,954		3,747
		Total Current Assets		97,495		101,531
Property, plant and equipment, net				64,437		59,980
Lease assets				4,119		1,793
Other long-term assets				18,620		14,866
		Total Assets		$          184,671		$          178,170
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
	Accounts payable & accrued expenses			$            35,365		$            36,047
	Billings in excess of costs			137		-
	Current portion of:
	Long-term liabilities			1,171		152
	Lease liabilities			1,051		854
	Long-term debt			184		-
		Total Current Liabilities		37,908		37,053
Long-term debt				27,232		33,721
Lease liabilities				3,068		939
Other long-term liabilities				5,933		5,636
Deferred income taxes				9,095		8,261
Shareholders' Equity
	Preferred Stock			530		530
	Class A Common Stock			3,633		3,626
	Class B Convertible Common Stock			1,311		1,318
	Additional paid-in capital			11,769		16,565
	Retained earnings			121,291		115,999
	Accumulated other comprehensive loss			(24,668)		(27,549)
	Treasury stock, at cost			(12,431)		(17,929)
		Total Shareholders' Equity		101,435		92,560
		Total Liabilities and Shareholders' Equity		$          184,671		$          178,170

 

Burnham Holdings, Inc. Consolidated Statements of Cash Flows Years ended December 31, 2023 and 2022 (In thousands)
		(Unaudited)		(Restated)
		2023		2022
Cash flows from operating activities:
Net income		$              9,426		$              5,425
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization		4,984		4,802
Investment impairment loss		2,298		-
Deferred income taxes		132		2
Provision for long-term employee benefits		(22)		(119)
Contributions to pension trust		-		-
Other reserves and allowances		(64)		920
Changes in current assets and liabilities:
Increase in accounts receivable, net		(1,804)		(4,318)
Decrease (increase) in inventories, net		1,618		(9,037)
(Increase) decrease in other current assets		(294)		312
Increase in accounts payable and accrued expenses		4,207		3,213
Net cash provided by operating activities		20,481		1,200
Cash flows from investing activities:
Capital expenditures		(9,433)		(7,278)
Investment in EnviroPower		(141)		(611)
Purchase of CSI		(2,277)		-
Other investing activities		(7)		(8)
Net cash used by investing activities		(11,858)		(7,897)
Cash flows from financing activities:
Net proceeds from borrowings		(6,305)		11,891
Proceeds from share-based compensation activity		680		248
Repurchase of common and preferred stock		22		19
Dividends paid		(4,134)		(4,121)
Net cash (used by) provided by financing activities		(9,737)		8,037
Net (decrease) increase in cash and cash equivalents		$             (1,114)		$              1,340
Cash and cash equivalents, beginning of period		6,994		5,654
Net (decrease) increase in cash and cash equivalents		(1,114)		1,340
Cash and cash equivalents, end of period		$              5,880		$              6,994

 

View original content:https://www.prnewswire.com/news-releases/burnham-holdings-inc-reports-full-year-2023-financial-results-raises-dividend-and-board-actions-302069365.html

SOURCE Burnham Holdings, Inc.

FAQ

What was Burnham Holdings, Inc.'s net sales for 2023?

Burnham Holdings, Inc.'s net sales for 2023 were $253.0 million, a 5.2% increase from 2022.

What was the gross profit margin for Burnham Holdings, Inc. in 2023?

The gross profit margin for Burnham Holdings, Inc. was 23.6% in 2023.

What was the net income for Burnham Holdings, Inc. in 2023?

Burnham Holdings, Inc.'s net income for 2023 was $9.4 million, the highest since 2004.

What dividend increase did Burnham Holdings, Inc. declare for its common stock?

Burnham Holdings, Inc. declared a 4.5% increase in the quarterly common stock dividend, now at $0.23 per share.

When is Burnham Holdings, Inc.'s virtual annual meeting scheduled for shareholders?

Burnham Holdings, Inc.'s virtual annual meeting is set for Monday, April 22, 2024, beginning at 11:30 a.m. eastern time.