BURNHAM HOLDINGS, INC. ANNOUNCES FULL-YEAR 2022 FINANCIAL RESULTS

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Feb 16, 2023, 17:11 ET

LANCASTER, Pa., Feb. 16, 2023 /PRNewswire/ -- Burnham Holdings, Inc. (OTC-Pink: BURCA), the parent company of multiple subsidiaries that are leading domestic manufacturers of boilers, and related HVAC products and accessories (including furnaces, radiators, and air conditioning systems) for residential, commercial and industrial applications, today reported its financial results for the twelve months ended December 31, 2022. Further details of the results below, as well as complete audited financial statements and footnotes, will be provided in our Annual Report (expected to be available in late March 2023).

Burnham Holdings, Inc.'s financial performance for the year ended 2022 included the following:

Net sales were $240.5 million for 2022, an increase of $22.0 million, or 10.1%, versus 2021 as demand remained strong across both the residential and commercial businesses.
Gross profit margin was 19.0% for 2022 versus 16.0% for 2021, 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 up $2.4 million year over year but improved as a percentage of sales at 15.1% in 2022 versus 15.5% in 2021.
Net income for 2022 was $5.1 million versus $1.0 million in 2021. Rising interest rates and higher working capital levels resulted in higher interest expense versus the same period last year.
Earnings per share was $1.10 for 2022 versus $0.22 for 2021.

Sales of residential products increased by 6.6% in 2022 versus 2021, while sales of commercial products increased by 21.9% in 2022 versus 2021. Incoming orders were strong in 2022 as both the residential and commercial year-end backlogs were higher by $13.1 million and $7.9 million, respectively, versus the prior year.

While we are seeing signs of improvement, profitability continues to be pressured by significant challenges in hiring and retaining qualified employees as well as multiple supply chain issues. Additionally, production quantities and efficiencies for finished goods have been negatively impacted by the availability of both internally and externally sourced parts. Appropriate pricing actions were taken across all subsidiaries in response to continuing inflationary pressures and we continue to monitor the need for additional pricing actions to maintain margins. We continue to remain diligent and ready to respond to continued instability and uncertainty in the greater macro-economic environment.

The Company's balance sheet continues to be strong, with adequate levels of working capital to support current and future business opportunities. Long-term debt of $33.7 million was $11.9 million higher than last year as a result of increased working capital levels. Approximately 46% of the increase was attributable to inflationary pressures impacting inventory valuations, with the balance of the increase versus December 31, 2021 resulting from increased working capital needed to support higher sales and production volumes.

At its meeting on February 16, 2023, Burnham Holdings, Inc.'s Board of Directors declared a quarterly common stock dividend of $0.22 per share, payable on March 10, 2023 with a record date of March 3, 2023; and has scheduled the 2023 Annual Meeting of Shareholders for Monday, April 24th with a shareholder record date of March 1, 2023. The meeting will be held at the Penn Square Marriott in Lancaster, Pennsylvania beginning at 11:30 A.M.

Burnham Holdings, Inc.
Consolidated Statements of Income
Twelve months ended December 31, 2022 and 2021
(In thousands, except per share amounts)

			(Unaudited)
			2022	2021
Net sales			$ 240,547	$ 218,508
Cost of goods sold			194,871	183,486
		Gross profit	45,676	35,022
Selling, general and administrative expenses			36,245	33,891
		Operating income	9,431	1,131
Other income (expense):
	Non-service related pension credit		130	574
	Investment loss net of interest income		(1,124)	596
	Interest expense		(1,690)	(1,049)
		Other (expense) income	(2,684)	121
Income before income taxes			6,747	1,252
Income tax expense			1,682	229
	Net income		$ 5,065	$ 1,023

	Earnings per share
		Basic	$ 1.10	$ 0.22
		Diluted	$ 1.10	$ 0.22
	Cash dividends per share		$ 0.88	$ 0.88

Burnham Holdings, Inc.
Consolidated Balance Sheets
December 31, 2022 and 2021
(In thousands)

			(Unaudited)
ASSETS			2022	2021
Current Assets
	Cash and cash equivalents		$ 6,994	$ 5,654
	Trade accounts receivable, net		29,243	24,920
	Inventories, net		59,635	51,066
	Prepaid expenses and other current assets		3,747	4,717
		Total Current Assets	99,619	86,357
Property, plant and equipment, net			59,980	57,496
Lease assets			1,793	2,065
Other long-term assets			14,866	21,551
		Total Assets	$ 176,258	$ 167,469

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
	Accounts payable & accrued expenses		$ 36,047	$ 33,442
	Current portion of long-term liabilities		152	152
	Current portion of operating lease liabilities		854	765
		Total Current Liabilities	37,053	34,359
Long-term debt			33,721	21,830
Lease liabilities			939	1,300
Other postretirement liabilities			5,636	6,062
Deferred income taxes			7,822	8,753
Shareholders' Equity
	Preferred Stock		530	530
	Class A Common Stock		3,626	3,615
	Class B Convertible Common Stock		1,318	1,329
	Additional paid-in capital		16,565	16,317
	Retained earnings		114,526	113,582
	Accumulated other comprehensive loss		(27,549)	(22,260)
	Treasury stock, at cost		(17,929)	(17,948)
		Total Shareholders' Equity	91,087	95,165
		Total Liabilities and Shareholders' Equity	$ 176,258	$ 167,469

Burnham Holdings, Inc.
Consolidated Statements of Cash Flows
Twelve months ended December 31, 2022 and 2021
(In thousands)

	(Unaudited)
	2022	2021
Cash flows from operating activities:
Net income	$ 5,065	$ 1,023
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization	4,802	4,543
Deferred income taxes	(106)	152
Provision for long-term employee benefits	(119)	93
Contributions to pension trust	-	(500)
Other reserves and allowances	920	1,165
Changes in current assets and liabilities:
(Increase) decrease in accounts receivable, net	(4,318)	3,734
(Increase) decrease in inventories, net	(8,569)	(1,863)
Decrease (increase) in other current assets	312	(591)
Increase (decrease) in accounts payable and accrued expenses	3,212	2,772
Net cash provided by operating activities	1,199	10,528

Cash flows from investing activities:
Capital expenditures	(7,278)	(9,534)
Investment in EnviroPower	(611)	(796)
Other investing activities	(8)	(8)
Net cash used by investing activities	(7,897)	(10,338)

Cash flows from financing activities:
Net proceeds from borrowings	11,892	3,561
Proceeds from share-based compensation activity	248	202
Repurchase of common and preferred stock	19	16
Dividends paid	(4,121)	(4,074)
Net cash provided by (used by) financing activities	8,038	(295)

Net increase (decrease) in cash and cash equivalents	$ 1,340	$ (105)

Cash and cash equivalents, beginning of period	5,654	5,759
Net increase in cash and cash equivalents	1,340	(105)
Cash and cash equivalents, end of period	$ 6,994	$ 5,654