Burnham Holdings, Inc. Announces First Half Results And Declares Dividend

LANCASTER, Pa., July 19, 2012 /PRNewswire/ -- Burnham Holdings, Inc., (Pink Sheets: BURCA), the parent company of fourteen 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 consolidated financial results for the period ended July 1, 2012, and announced a common stock dividend.

Second quarter and year-to-date ("YTD") sales were $41.4 million and $78.0 million, respectively; as compared to 2011 second quarter and YTD sales of $40.0 million and $76.3 million, respectively.  These improved 2012 results continue the upward year on year sales trend Burnham Holdings experienced in the first quarter.  This is encouraging in light of the current weak and unsettled economic conditions that have impacted the overall boiler and furnace industry. With a firm foundation based on our core principles and philosophy, Burnham Holdings is financially and operationally strong.  Existing boilers will continue to be replaced over time due to age or operating costs, and our powerful lineup of high-efficiency residential and commercial products positions us well in the market.  We produce top-quality, high-value equipment for virtually any application.  As we approach the upcoming heating season, we are scheduling our manufacturing facilities for the normal pattern of higher demand in the second half. 

We are reporting a second quarter gain of $181 thousand or $0.04 per share, and a YTD loss of $(766) thousand or $(0.17) per share (both results are the best for the Company since 2007).  These results compare favorably to 2011 quarter and YTD losses of $(31) thousand or $(0.01) per share, and $(1,015) thousand or $(0.23) per share, respectively.  YTD cost of goods sold ("COGS") as a percentage of sales for 2012 was 79.7%, better than last year's first half of 79.9% (the percentages for the second quarters were identical at 78.8%).  This COGS percentage improvement reflects our efforts to continually and systematically match our product pricing and cost structure to remain competitive in the market, while maintaining our gross profit margins.  YTD selling, administrative, and general ("SG&A") expenses were slightly higher than the prior year in dollars, $16.4 million versus $16.3 million in 2011, but were lower as a percentage of sales (21.0% compared to 21.3%).  For the quarter, 2012 SG&A was lower in both dollars and as a percentage.  Our interest expense for the quarter and YTD was basically equal to the prior year.

The Company's balance sheet has appropriate levels of working capital consistent with current business activity.  Our long-term debt of $31.7 million was comprised of $29.0 million of bank debt ($3.5 million lower than last year with Cash also being $500 thousand higher than last year) and $2.7 million of interest rate derivatives.  The Statement of Cash Flows presents less net cash being used in operations at $12.7 million compared to prior year's cash used of $15.7 million, reflecting the Company's stable balance sheet and spending directives.

At its meeting on July 19, 2012, Burnham Holdings, Inc.'s Board of Directors declared a quarterly common stock dividend of $0.18 per share payable August 28, 2012, with a record date of August 21, 2012.  

Notes:

1)  The accompanying unaudited financial statements contain adjustments that are necessary for a fair presentation of the interim results, and these adjustments are applied consistently for the periods presented.  The results for any interim period are not necessarily indicative of results for the full year.  These consolidated financial statements should be read in conjunction with the Annual Report for the period ended December 31, 2011.  Statements other than historical facts included or referenced in this Report are forward-looking statements subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected.  We undertake no duty to update or revise these forward-looking statements. 

2)  Basic earnings per share are based upon weighted average shares outstanding for the period. Diluted earnings per share assume the conversion of outstanding rights into common stock. 

3)  Common stock outstanding at July 1, 2012 includes 2,959,575 of Class A shares and 1,522,959 of Class B shares.

4)  Mark-to-market adjustments are a result of changes (non-cash) in the fair value of interest rate agreements.  These agreements are used to exchange the interest rate stream on variable rate debt for payments indexed to a fixed interest rate.  These non-operational, non-cash charges reverse themselves over the term of the agreements.

5)  Accounting rules require that the funded status of pension and other postretirement benefits be recognized as a non-cash asset or liability, as the case may be, on the balance sheet of the Company.  For December 31, 2011 and 2010, projected benefit obligations exceeded plan assets.  The resulting non-cash presentation on the balance sheet is reflected in "Deferred income taxes",  "Other postretirement liabilities", and "Accumulated other comprehensive income (loss)", a non-cash sub-section of "Stockholders' Equity" (see Note 10 of the 2011 Annual Report for more details).

6)  In the first half of 2012 and 2011, the Company made voluntary pre-tax contributions of $2.5 million and $1.9 million, respectively, to its defined pension plan.  These payments increased the trust assets available for benefit payments (reducing "Other postretirement liabilities") and did not impact the Statement of Operations.

SOURCE Burnham Holdings, Inc.