Burnham Holdings, Inc. Announces Third Quarter 2024 Financial Results
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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