Burnham Holdings, Inc. Announces Third Quarter 2024 Financial Results

News provided by

Burnham Holdings, Inc.

Oct 24, 2024, 14:00 ET

LANCASTER, Pa., Oct. 24, 2024 /PRNewswire/ -- Burnham Holdings, Inc. (OTC-Pink: BURCA) ("BHI", the "Company", "we" or "our") today reported its consolidated financial results for the third quarter of 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. 

  • Net sales were $64.7 million for the third quarter of 2024, an increase of $5.0 million, or 8.3%, versus the third quarter of 2023. Year to date net sales were $176.1 million compared to $171.4 for the first nine months of 2023.
  • Gross profit margin was 19.3% and 20.5% for the third quarters of 2024 and 2023, respectively. Year to date gross profit margins were 21.6% for 2024 versus 22.0% for 2023. Product mix and temporary inefficiencies from unplanned downtime adversely impacted third quarter 2024 gross profit margins.
  • Selling, general, and administrative expenses (SG&A) were higher by $1.4 million and $2.0 million for the third quarter 2024 and the first nine months of 2024, respectively, versus the same periods last year. The primary driver in the increase in SG&A expenses was an adjustment to reserves related to uninsured litigation settlements and fees. Excluding these impacts, adjusted SG&A as a percentage of sales in the third quarter of 2024 was 15.6% compared to 17.1% for the third quarter of 2023.
  • Adjusted EBITDA was $12.8 million, or 7.3%, for the nine months of 2024 versus $12.0 million, or 7.0%, for the first nine months of 2023. Adjusted EBITDA excludes the impact of the reserve adjustments noted above.
  • Adjusted net income, excluding reserve adjustments, for the third quarter of 2024 was $1.7 million versus net income of $0.8 million for the third quarter of 2023.
  • Adjusted diluted earnings per share were $0.37 and $0.17 for the third quarters of 2024 and 2023, respectively. For the first nine months of 2024 and 2023, adjusted diluted earnings per share were $1.18 and $1.03, respectively. Adjusted diluted earnings per share excludes $0.25 per share related to the reserve adjustments noted above for both the three months and nine months ended September 29, 2024.

For the third quarter of 2024, sales of residential products were higher by 2.2% versus the same period in 2023, while sales of commercial products were up 20.8% in 2024 versus 2023.  For the nine months of 2024, residential sales were lower by 5.1% versus the prior year while commercial sales were higher by 13.0% versus the nine months of 2023.  Thermal InMotion continues to expand BHI's capabilities into previously unserved segments of the HVAC industry, and we are pleased with the results.  The service and rentals businesses contributed $1.8 million of net sales in the third quarter of 2024 and $6.3 million for the nine months of 2024.  Overall, we continue to believe order flow and our current backlogs are in line with seasonal operating patterns. 

Average debt levels of the Company's revolving credit facility for the third quarter of 2024 were approximately $10.6 million lower than the third quarter of 2023.  On a year over year basis, the average debt levels on the revolving credit facility were approximately $9.6 million lower.  We continue to evaluate our working capital needs, including inventory levels, to ensure we can appropriately meet production volumes and fund future growth initiatives.

About Burnham Holdings, Inc.: BHI is 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.  BHI is listed on the OTC Exchange under the ticker symbol "BURCA".  For more information, please visit www.burnhamholdings.com.

Non-GAAP Financial Information: This press release contains certain non-GAAP financial measures, including adjusted SG&A, EBITDA, Adjusted EBITDA, Adjusted Net Income and adjusted diluted earnings per share.  These non-GAAP financial measures do not provide investors with an accurate measure of, and should not be used as a substitute for, the comparable financial measures as determined in accordance with accounting principles generally accepted in the United States ("GAAP").  The Company believes these non-GAAP financial measures, when read in conjunction with the comparable GAAP financial measures, give investors a useful tool to assess and understand the Company's overall financial performance, because they exclude items of income or expense that the Company believes are not reflective of its ongoing operating performance, allowing for a better period-to-period comparison of operations of the Company.  The Company acknowledges that there are many items that impact a company's reported results, and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results.  In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.

Burnham Holdings, Inc.

Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)



Three Months Ended

Nine Months Ended


September 29,

October 1,

September 29,

October 1,


2024

2023

2024

2023

Net sales 

$       64,689

$       59,705

$     176,083

$     171,406

Cost of goods sold

52,217

47,489

138,035

133,613

  Gross profit

12,472

12,216

38,048

37,793

Selling, general and administrative expenses

11,605

10,182

32,115

30,164

  Operating income

867

2,034

5,933

7,629

Other (expense) / income:








  Non-service related pension credit

124

137

374

412

  Interest and investment gain

423

(222)

912

267

  Interest expense

(697)

(921)

(1,526)

(2,107)

    Other expense

(150)

(1,006)

(240)

(1,428)

Income before income taxes

717

1,028

5,693

6,201

Income tax expense

165

236

1,309

1,426

  Net income

$            552

$            792

$         4,384

$         4,775










Earnings per share:








  Basic

$           0.12

$           0.17

$           0.94

$           1.03

  Diluted

$           0.12

$           0.17

$           0.93

$           1.03

Cash dividends per share

$           0.23

$           0.22

$           0.69

$           0.66

Burnham Holdings, Inc.

Consolidated Balance Sheets

(In thousands)





(Unaudited)


(Unaudited)




September 29,

December 31,

October 1,

ASSETS

2024

2023

2023

Current Assets






Cash and cash equivalents

$             6,280

$             5,880

$             6,638

Trade accounts receivable, net

29,573

31,023

27,704

Inventories, net

70,158

58,017

72,043

Costs in Excess of Billings

1,425

621

544

Prepaid expenses and other current assets

3,038

1,954

3,130


 Total Current Assets

110,474

97,495

110,059

Property, plant and equipment, net

70,040

64,437

63,728

Lease assets

6,410

4,119

4,171

Other long-term assets

18,592

18,620

17,831


 Total Assets

$         205,516

$         184,671

$         195,789









LIABILITIES AND SHAREHOLDERS' EQUITY





Current Liabilities






Accounts payable & accrued expenses

$           29,663

$           35,365

$           26,620

Billings in excess of costs

3,497

137

-

Current portion of:






    Long-term liabilities

71

1,171

1,252

    Lease liabilities

1,175

1,051

1,036

    Long-term debt 

184

184

-


    Total Current Liabilities

34,590

37,908

28,908

Long-term debt

48,390

27,232

53,713

Lease liabilities

5,235

3,068

3,135

Other long-term liabilities

5,847

5,933

6,726

Deferred income taxes

9,039

9,095

8,423

Shareholders' Equity






Preferred Stock

530

530

530

Class A Common Stock 

3,633

3,633

3,630

Class B Convertible Common Stock

1,311

1,311

1,314

Additional paid-in capital

10,625

11,769

11,549

Retained earnings

122,397

121,291

117,667

Accumulated other comprehensive loss

(25,023)

(24,668)

(27,331)

Treasury stock, at cost 

(11,058)

(12,431)

(12,475)


  Total Shareholders' Equity

102,415

101,435

94,884


  Total Liabilities and Shareholders' Equity

$         205,516

$         184,671

$         195,789

Burnham Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



Nine Months Ended


September 29,

October 1,


2024

2023

Cash flows from operating activities:



  Net income

$             4,384

$             4,775

  Adjustments to reconcile net income to net cash related



    to operating activities:



    Depreciation and amortization

4,031

3,730

    Deferred income taxes

50

162

    Provision for long-term employee benefits

(375)

(375)

    Share-based compensation expense

300

482

    Other reserves and allowances

(33)

977

    Changes in current assets and liabilities, net of acquisition:



      Decrease in accounts receivable, net

947

1,491

      Increase in inventories, net

(12,141)

(10,495)

      Decrease / (increase) in other current assets

1,954

(891)

      Decrease in accounts payable and accrued expenses

(6,889)

(7,681)

        Net cash used by operating activities

(7,772)

(7,825)





Cash flows from investing activities:



    Capital expenditures

(9,638)

(7,614)

    Purchase of CSI

-

(1,750)

    Other investing activities

-

(8)

        Net cash used by investing activities

(9,638)

(9,372)





Cash flows from financing activities:



    Net proceeds from revolver

21,251

19,992

    Repayment of term loan

(92)

-

    Share-based compensation activity

(71)

(44)

    Dividends paid

(3,278)

(3,107)

        Net cash provided by financing activities

17,810

16,841





Net increase (decrease) in cash and cash equivalents

$                400

$              (356)





Cash and cash equivalents, beginning of period

$             5,880

$             6,994

Net increase (decrease) in cash and cash equivalents

400

(356)

Cash and cash equivalents, end of period

$             6,280

$             6,638

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

















Net income

-

-

-

-

841

-

-

841

Other comprehensive income,















     net of tax

-

-

-

-

-

(27)

-

(27)

Cash dividends declared:















    Preferred stock - 6%

-

-

-

-

(9)

-

-

(9)

    Common stock - ($0.88 per share)

-

-

-

-

(1,132)

-

-

(1,132)

Share-based compensation:















    Expense recognition

-

-

-

100

-

-

-

100

    Issuance of vested shares

-

-

-

(1,444)

-

-

1,373

(71)

















Balance at June 30, 2024

$       530

$     3,633

$     1,311

$   10,525

$ 122,917

$          (24,442)

$ (11,058)

$      103,416

















Net income

-

-

-

-

552

-

-

552

Other comprehensive income,















     net of tax

-

-

-

-

-

(581)

-

(581)

Cash dividends declared:















    Common stock - ($0.88 per share)

-

-

-

-

(1,072)

-

-

(1,072)

Share-based compensation:















    Expense recognition

-

-

-

100

-

-

-

100

















Balance at September 29, 2024

$       530

$     3,633

$     1,311

$   10,625

$ 122,397

$          (25,023)

$ (11,058)

$      102,415








































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 income,















     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

















Net income

-

-

-

-

1,014

-

-

1,014

Other comprehensive income,















     net of tax

-

-

-

-

-

316

-

316

Cash dividends declared:















    Preferred stock - 6%

-

-

-

-

(9)

-

-

(9)

    Common stock - ($0.88 per share)

-

-

-

-

(1,068)

-

-

(1,068)

Share-based compensation:















    Expense recognition

-

-

-

357

-

-

-

357

    Issuance of vested shares

-

-

-

(861)

-

-

817

(44)

















Balance at July 2, 2023

$       530

$     3,626

$     1,318

$   11,499

$ 117,893

$          (27,529)

$ (12,475)

$        94,862

















Net income

-

-

-

-

792

-

-

792

Other comprehensive income,















     net of tax

-

-

-

-

-

198

-

198

Cash dividends declared:















    Common stock - ($0.88 per share)

-

-

-

-

(1,018)

-

-

(1,018)

Share-based compensation:















    Expense recognition

-

-

-

50

-

-

-

50

Conversion of common stock

-

4

(4)

-

-

-

-

-

















Balance at October 1, 2023

$       530

$     3,630

$     1,314

$   11,549

$ 117,667

$          (27,331)

$ (12,475)

$        94,884

Burnham Holdings, Inc.

Non-GAAP Reconciliations

(In thousands, except per share amounts)

(Unaudited)















Three Months Ended,

Nine Months Ended,


September 29,

September 29,


2024

2024


GAAP

Adjustments

Adjusted

GAAP

Adjustments

Adjusted

Selling, general and administrative expenses

$       11,605

$        (1,536)

$       10,069

$       32,115

$        (1,536)

$       30,579

Net sales

$       64,689

$                 -

$       64,689

$     176,083

$                 -

$     176,083













  SG&A as percent of sales

17.9 %


15.6 %

18.2 %


17.4 %




























Three Months Ended

Nine Months Ended





September 29,

October 1,

September 29,

October 1,





2024

2023

2024

2023



Net sales

$       64,689

$       59,705

$     176,083

$     171,406
















Net income

$            552

$            792

$         4,384

$         4,775



Exclude:











  Income tax expense

165

236

1,309

1,426



  Interest expense

697

921

1,526

2,107



  Depreciation and amortization

1,322

1,219

4,031

3,730



    EBITDA

$         2,736

$         3,168

$       11,250

$       12,038
















    EBITDA as a percent of net sales

4.2 %

5.3 %

6.4 %

7.0 %
















EBITDA

$         2,736

$         3,168

$       11,250

$       12,038



Adjustments

1,536

-

1,536

-



  Adjusted EBITDA

$         4,272

$         3,168

$       12,786

$       12,038
















  Adjusted EBITDA as a percent of net sales

6.6 %

5.3 %

7.3 %

7.0 %































Three Months Ended

Nine Months Ended





September 29,

October 1,

September 29,

October 1,





2024

2023

2024

2023



Net income

$            552

$            792

$         4,384

$         4,775



Adjustments, net of tax

1,183

-

1,183

-



  Adjusted net income

$         1,735

$            792

$         5,567

$         4,775
















Diluted weighted-average shares outstanding

4,718

4,629

4,713

4,618
















Diluted earnings per share

$           0.12

$           0.17

$           0.93

$           1.03



Adjusted diluted earnings per share

$           0.37

$           0.17

$           1.18

$           1.03



SOURCE Burnham Holdings, Inc.

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