Burnham Holdings, Inc. Announces Year 2012 Financial Results and
Announces a Dividend Increase
LANCASTER, Pa., Feb. 20, 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 for residential,
commercial and industrial applications, today reported its
financial results for the year ended December 31, 2012.
We are pleased to report a year of strong financial performance.
Earnings for 2012 were $1.83
per share, our highest earnings since the height of the housing
boom and a 61.9% increase from 2011. Sales and margins were
up for the third straight year. The balance sheet ended the
year with almost no debt and high liquidity. We paid common
stock dividends of $0.72 per share
during 2012, a 5.9% increase over the 2011 rate, which had remained
constant at $0.68 per share since
2007. Details of results mentioned in this release are
discussed fully in the Company's audited Annual Report, which will
be available on or about March 15,
2013.
Net sales for 2012 were $204.8
million, up 3.0% from $198.8
million in 2011. The residential portion of the
business experienced the third straight year of improvement after
the market low in 2009. The decline in the 2009 market was the
result of an economic cycle that not only impacted Burnham Holdings
but also the entire industry. We feel our growth in the residential
business over the last three years has been accomplished through
our focus on satisfying the needs of the consumer through the
continual introduction of new equipment and controls (including
highly efficient, energy saving products), commitment to our
long-term distribution channels, and the aggressive pursuit of new
opportunities. The commercial portion of our business provides
heating applications for large commercial, institutional, and
industrial facilities such as hospitals, factories, hotels, and
schools. Commercial revenue experienced a modest improvement
in 2011 and the trend in business activity through the first half
of 2012, while still below past levels, was encouraging for this
portion of our business. Activity slowed down in the third quarter
however, as we believe the United
States political elections, fiscal cliff implications, and
economic uncertainty abroad led to a lowering of consumer
confidence, which tends to delay replacements or upgrades to
equipment for both commercial and residential customers.
Demand for residential boiler products significantly
increased in the fourth quarter as a result of Super Storm Sandy,
which devastated coastal areas of the metro-New York City area, a core geographic area for
hydronic heating equipment. Our subsidiaries reacted
immediately by providing increased volumes of replacement equipment
to the impacted regions, while still providing high levels of
service to other market areas.
Operating income for 2012 was $13.8
million, up 56.8% from the $8.8
million reported in 2011. Recent efforts by our
subsidiaries to consolidate and streamline operations have enabled
them to improve quality and productivity, reduce material handling,
and control inventory levels while providing a very high level of
customer service. Actual cost of goods sold as a percentage of
sales was 75.9% in 2012 versus 77.3% in 2011, the lowest in over
five years. Selling, administrative and general expenses, in
addition to interest expense, have declined in both dollars and as
a percentage of sales compared to 2011. Actions taken at
Burnham Holdings and its subsidiaries over the last several years
have lowered our cost structure and thereby increased our
competitiveness. Net income for 2012 was $8.2 million, or $1.83 per share compared to 2011 results of
$5.1 million, or $1.13 per share
The balance sheet is sound, with appropriate levels of working
capital and our lowest debt level in over fifteen years. Cash
flow from operations, 2012 was the second highest amount in the
last ten years, provides the ability to fund operating expenses
while also providing the funds to develop new products, make
necessary investments in capital assets, make principal repayments,
and pay dividends to our stockholders.
At its meeting on February 20,
2013, the Burnham Holdings, Inc. Board of Directors declared
a regular quarterly common stock dividend of $0.20 per share payable March 12, 2013 with a record date of March 5, 2013. This would be an annual
dividend rate of $0.80 per share, a
11.1% increase over 2012 and the second straight year of increased
dividends. These increases reflect the financial strength and
improved profitability of the Company. The annual dividend
rate for preferred stock is $3.00 per
share.
The Company's directors have scheduled the 2013 Annual Meeting
for Monday, April 22nd. The meeting will be held at the Eden
Resort and Suites in Lancaster
beginning at 11:30 a.m.
Consolidated Statements of
Income
|
|
|
|
(In thousands, except per
share data)
|
Years Ended December
31,
|
(Data is unaudited (see
Notes))
|
2012
|
|
2011
|
Net sales
|
$
204,762
|
|
$
198,842
|
Cost of goods
sold
|
155,510
|
|
153,751
|
|
|
Gross profit
|
49,252
|
|
45,091
|
|
|
|
|
|
|
Selling, administrative and
general expenses
|
35,478
|
|
36,282
|
|
|
Operating
income
|
13,774
|
|
8,809
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
Gain on sale of
property
|
170
|
|
162
|
|
Mark-to-market
(5)
|
143
|
|
207
|
|
Interest and investment
income
|
278
|
|
70
|
|
Interest
expense
|
(1,569)
|
|
(1,592)
|
|
|
Other income
(expense)
|
(978)
|
|
(1,153)
|
|
|
|
|
|
|
Income before income
taxes
|
12,796
|
|
7,656
|
Income tax
expense
|
4,569
|
|
2,573
|
|
|
NET INCOME
|
$
8,227
|
|
$
5,083
|
|
|
BASIC & DILUTED EARNINGS
PER SHARE
|
$
1.83
|
|
$
1.13
|
|
|
|
|
|
|
Other Financial
Highlights:
|
|
|
|
|
Preferred dividends per
share
|
$
3.00
|
|
$
3.00
|
|
Common stock dividends per
share
|
$
0.72
|
|
$
0.68
|
|
Book value per common
share
|
$
15.29
|
|
$
14.34
|
|
ProForma book value per share
(see note 7)
|
$
23.01
|
|
$
21.93
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
(1) The accompanying unaudited
financial statements contain all adjustments that are necessary for
a fair presentation of results for such periods and
are consistent with policies and procedures employed in the audited
year-end financial statements. These
consolidated financial statements should be read in conjunction
with the Annual Report for the period December
31, 2012, which will be available on or about March 15, 2013.
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 December 31, 2012 includes 2,964,508 of Class A shares and
1,521,311 of Class B shares.
|
(4) In 2012 and 2011, the
Company made voluntary pre-tax contributions of $3.4 million and
$2.5 million, respectively, to its defined
benefit pension plan. These payments increased the plan
assets available for benefit payments and did not
impact the Statement of
Income.
|
(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 2012, the pension
non-cash impact was a decrease in Other Postretirement
Liability of $600 thousand (projected benefit obligations exceeded
plan assets by less than the previous year) and
an increase in of $1.1 million to Accumulated Other Comprehensive
Income (Loss)("AOCI"), a non-cash sub-section of
Stockholders' Equity. For 2011, the pension impact was an
increase in Other Postretirement Liability of $15.2 million
(projected benefit obligations
exceeded plan assets by more than the previous year) and an
increase of $11.0 million to AOCI.
|
(7) ProForma book value per
share excludes AOCI, a non-cash subsection of Stockholders' Equity,
which has been dramatically impacted by pension and
postretirement benefit adjustments described in Note 6 above and in
more detail in the Annual Report.
|
Consolidated Balance
Sheets
|
|
|
|
(in thousands and data is
unaudited (see Notes))
|
December 31,
|
|
|
ASSETS
|
2012
|
|
2011
|
CURRENT ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
4,740
|
|
$
4,489
|
|
Trade accounts receivable,
less allowances
|
25,966
|
|
21,837
|
|
Inventories
|
40,697
|
|
41,385
|
|
Prepaid expenses and other
current assets
|
3,358
|
|
3,340
|
|
|
TOTAL CURRENT
ASSETS
|
74,761
|
|
71,051
|
PROPERTY, PLANT AND EQUIPMENT,
net
|
47,785
|
|
50,122
|
DEFERRED INCOME
TAXES
|
3,663
|
|
3,273
|
OTHER ASSETS,
net
|
22,865
|
|
22,394
|
|
|
TOTAL ASSETS
|
$
149,074
|
|
$ 146,840
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
2012
|
|
2011
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts and taxes payable
& accrued expenses
|
$
33,741
|
|
$
27,141
|
|
Current portion of long-term
liabilities
|
279
|
|
355
|
|
|
TOTAL CURRENT
LIABILITIES
|
34,020
|
|
27,496
|
LONG-TERM DEBT
|
7,680
|
|
16,204
|
OTHER POSTRETIREMENT
LIABILITIES (6)
|
38,483
|
|
38,748
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
Preferred Stock
|
530
|
|
530
|
|
Class A Common
Stock
|
3,423
|
|
3,403
|
|
Class B Convertible Common
Stock
|
1,521
|
|
1,523
|
|
Additional paid-in
capital
|
14,727
|
|
14,508
|
|
Retained
earnings
|
101,286
|
|
96,303
|
|
Accumulated other
comprehensive income (loss) (5)(6)
|
(34,634)
|
|
(33,917)
|
|
Treasury stock, at
cost
|
(17,962)
|
|
(17,958)
|
|
|
TOTAL STOCKHOLDERS'
EQUITY
|
68,891
|
|
64,392
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
149,074
|
|
$ 146,840
|
|
|
|
|
|
|
Consolidated Statements of
Cash Flows
|
Years Ended December
31,
|
(in thousands and data is
unaudited (see Notes))
|
2012
|
|
2011
|
|
Net income
|
$
8,227
|
|
$
5,083
|
|
Gain on sale of
property
|
(170)
|
|
(162)
|
|
Depreciation and
amortization
|
4,659
|
|
4,355
|
|
Pension and postretirement
liabilities expense
|
1,545
|
|
1,233
|
|
Contributions to pension trust
(4)
|
(3,350)
|
|
(2,500)
|
|
Other net
adjustments
|
(283)
|
|
1,550
|
|
Changes in operating assets
and liabilities
|
3,371
|
|
(3,061)
|
NET CASH PROVIDED BY OPERATING
ACTIVITIES
|
13,999
|
|
6,498
|
|
Net cash used in the purchase
of assets
|
(2,289)
|
|
(4,420)
|
|
Proceeds from
borrowings
|
-
|
|
1,387
|
|
Proceeds from stock option
exercise and (purchase) of Treasury stock
|
233
|
|
170
|
|
Principal payments on debt and
lease obligations
|
(8,448)
|
|
(56)
|
|
Dividends paid
|
(3,244)
|
|
(3,055)
|
INCREASE IN CASH
AND CASH EQUIVALENTS
|
251
|
|
524
|
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR
|
4,489
|
|
3,965
|
CASH AND CASH EQUIVALENTS AT
END OF YEAR
|
$
4,740
|
|
$
4,489
|
|
|
|
|
|
|
SOURCE Burnham Holdings, Inc.