Burnham Holdings, Inc. Reports First Quarter Results
LANCASTER, Pa., April 22, 2013 /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
financial results for the quarter ended March 31, 2013.
First quarter sales were $41.1
million, a 12% increase from 2012, and our highest first
quarter sales in the last five years. Net Income for the
first quarter was $623 thousand, or
$0.14 per share, compared to a loss
of $(947) thousand, or $(0.21) per share, reported for the same quarter
of 2012, and is our first profitable first quarter since 2004.
Cost of goods sold ("COGS") as a percentage of sales
for the current quarter was 76.4%, better than last year's first
quarter of 80.7%. This COGS percentage decline reflects our
efforts to continually and systematically match our product pricing
and our cost structure to remain competitive in the market, while
maintaining our gross profit margins, as well as a favorable
product mix. Selling, administrative, and general expenses
were higher in dollars from the prior year (mainly from the
increased sales volume), but 1.8% lower as a percentage of sales,
20.7% versus the prior year's 22.5%. Other income (expense)
was a net expense of $186 thousand
for the quarter, lower than the prior year's net of $302 thousand as interest expense declined from
the lower borrowing levels.
This strong first quarter versus last year was influenced by
carry-over demand for residential boilers resulting from the
October, 2012 Super Storm Sandy (discussed in the 2012 Annual
Report), and the ongoing recovery efforts in the impacted areas.
Our residential businesses were able to quickly respond to the
un-forecasted demand, and to maintain this level of support into
2013. While we believe this recovery effort will continue
throughout 2013, we do not believe that we will continue to see the
same level of demand as we saw in late 2012 and early 2013.
We therefore caution using the first quarter results as an
indicator of total year expectations as the impacts of the storm
may distort the normal seasonal nature of our businesses.
Although current general business conditions remain challenging
in many of our markets, we are optimistic about longer-term
prospects for the business. Existing boilers and furnaces
will continue to be replaced, and systems will be upgraded over
time due to age or operating costs. Our broad lineup of
high-efficiency residential and commercial products, offered
through our subsidiaries, positions us well in the market. We
are able to provide top-quality, high-value equipment for virtually
any application.
The Company's balance sheet has appropriate levels of working
capital consistent with current business activity. Our
long-term debt of $13.0 million was
comprised of $10.7 million of bank
debt ($6.5 million lower than last
year) and $2.3 million of the
mark-to-market of interest rate derivatives. The Statement of
Cash Flows presents net cash used in operations of $4.2 million compared to prior year's cash used
of $2.0 million. This increase in the
use of funds for the quarter results from the payment of higher
income taxes (from the strong 2012 results) and other normal
changes in working capital levels. Inventory levels have increased
from the prior year as we replenish stock from the high demand
incurred within the residential subsidiaries, combined with
optimizing manufacturing schedules in light of the current market
estimates, which are regularly evaluated and adjusted as
needed.
The Burnham Holdings, Inc. 2013 Annual Meeting of Stockholders
is being held today in Lancaster,
PA beginning at 11:30 a.m. An announcement regarding
the results of today's Stockholder voting and the Board of
Directors determination regarding declaration of a quarterly
dividend will be released later this afternoon.
Consolidated Statements of
Operations
|
|
|
|
(In thousands, except per
share data)
|
Three Months
Ended
|
(Data is unaudited (see
Notes))
|
March
31,
|
|
April 1,
|
|
|
|
2013
|
|
2012
|
Net sales
|
$
41,133
|
|
$
36,597
|
Cost of goods
sold
|
31,443
|
|
29,531
|
|
|
Gross profit
|
9,690
|
|
7,066
|
|
|
|
|
|
|
Selling, administrative and
general expenses
|
8,531
|
|
8,243
|
|
|
Operating income
(loss)
|
1,159
|
|
(1,177)
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
Mark-to-market
(5)
|
21
|
|
28
|
|
Interest and investment
income
|
50
|
|
15
|
|
Interest
expense
|
(257)
|
|
(345)
|
|
|
Other income
(expense)
|
(186)
|
|
(302)
|
|
|
|
|
|
|
Income (loss) before income
taxes
|
973
|
|
(1,479)
|
Income tax expense
(benefit)
|
350
|
|
(532)
|
|
|
NET INCOME
(LOSS)
|
$
623
|
|
$
(947)
|
|
|
|
|
|
|
|
|
Basic and Diluted income
(loss) per share
|
$
0.14
|
|
$
(0.21)
|
|
|
Dividends paid per
share
|
$
0.20
|
|
$
0.18
|
|
|
|
|
|
|
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, 2012. 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.
|
(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 March 31, 2013 includes 2,974,124 of Class A shares and
1,521,311 of Class B shares.
|
(4) In both 2013 and 2012, the
Company made voluntary pre-tax contributions of $1.3 million to its
defined benefit pension plan. These payments
increased the plan assets available for benefit payments (reducing
"Other postretirement liabilities") and did not
impact the Statement of Operations.
|
(5) 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.
|
(6) 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. For December 31, 2012 and
2011, 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 2012 Annual Report for more
details).
|
Consolidated Balance
Sheets
|
|
|
|
(in thousands and data is
unaudited (see Notes))
|
March
31,
|
|
April 1,
|
|
|
ASSETS
|
2013
|
|
2012
|
CURRENT ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
4,700
|
|
$
4,809
|
|
Trade accounts receivable,
less allowances
|
12,769
|
|
12,297
|
|
Inventories
|
51,671
|
|
49,834
|
|
Prepaid expenses and other
current assets
|
3,365
|
|
3,223
|
|
|
TOTAL CURRENT
ASSETS
|
72,505
|
|
70,163
|
PROPERTY, PLANT AND EQUIPMENT,
net
|
47,184
|
|
49,290
|
DEFERRED INCOME TAXES
(6)
|
3,624
|
|
3,222
|
OTHER ASSETS,
net
|
21,707
|
|
22,375
|
|
|
TOTAL ASSETS
|
$
145,020
|
|
$ 145,050
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
2013
|
|
2012
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts and taxes payable
& accrued expenses
|
$
26,408
|
|
$
24,647
|
|
Current portion of long-term
liabilities
|
303
|
|
356
|
|
|
TOTAL CURRENT
LIABILITIES
|
26,711
|
|
25,003
|
LONG-TERM DEBT
|
12,984
|
|
19,511
|
OTHER POSTRETIREMENT
LIABILITIES (4)(6)
|
36,486
|
|
37,787
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
Preferred Stock
|
530
|
|
530
|
|
Class A Common
Stock
|
3,423
|
|
3,405
|
|
Class B Convertible Common
Stock
|
1,521
|
|
1,523
|
|
Additional paid-in
capital
|
14,875
|
|
14,537
|
|
Retained
earnings
|
101,010
|
|
94,551
|
|
Accumulated other
comprehensive income (loss) (6)
|
(34,567)
|
|
(33,839)
|
|
Treasury stock, at
cost
|
(17,953)
|
|
(17,958)
|
|
|
TOTAL STOCKHOLDERS'
EQUITY
|
68,839
|
|
62,749
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
145,020
|
|
$ 145,050
|
|
|
|
|
|
|
Consolidated Statements of
Cash Flows
|
Three months
ended
|
(in thousands and data is
unaudited (see Notes))
|
March
31,
|
|
April 1,
|
|
|
|
2013
|
|
2012
|
|
Net income
(loss)
|
$
623
|
|
$
(947)
|
|
Depreciation and
amortization
|
1,170
|
|
1,174
|
|
Pension and postretirement
liabilities expense
|
413
|
|
306
|
|
Contributions to pension trust
(4)
|
(1,256)
|
|
(1,256)
|
|
Other net
adjustments
|
(496)
|
|
(1,484)
|
|
Changes in operating assets
and liabilities
|
(4,687)
|
|
163
|
NET CASH USED IN OPERATING
ACTIVITIES
|
(4,233)
|
|
(2,044)
|
|
Net cash used in the purchase
of assets
|
(565)
|
|
(334)
|
|
Proceeds from
borrowings
|
5,500
|
|
3,500
|
|
Proceeds from stock option
exercise
|
157
|
|
31
|
|
Principal payments on debt and
lease obligations
|
-
|
|
(28)
|
|
Dividends paid
|
(899)
|
|
(805)
|
(DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS
|
(40)
|
|
320
|
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD
|
4,740
|
|
4,489
|
CASH AND CASH EQUIVALENTS AT
END OF PERIOD
|
$
4,700
|
|
$
4,809
|
|
|
|
|
|
|
SOURCE Burnham Holdings, Inc.