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
