LANCASTER, PA — In a year marked by economic volatility, Burnham Holdings, Inc. (OTC-Pink: BURCA), a leading manufacturer of boilers and related HVAC products and accessories, has clocked its most profitable year since 2004.
The company recently released its consolidated financial results for the year ending December 31, 2023, revealing exceptional growth in net income, gross profit margin, and net sales. This performance has seen the highest net sales in the company’s history, reaching $253.0 million. This figure trumps the previous record set back in 2004, amounting to $251.7 million.
Burnham’s decision to adjust their pricing to offset inflation was a significant driver for this achievement, alongside increased operational efficiency. The gross profit margin rose from 19.2% in 2022 to 23.6% in 2023, a robust increase of 4.4 percentage points. It’s worth noting that the cost of goods sold dropped by $1.2 million from the previous year, despite a 5.2% boost in net sales – a clear testament to the company’s effective cost management strategies.
However, the year wasn’t without its challenges. Burnham noted a $6.7 million increase in its Selling, General, and Administrative (SG&A) expenses. This growth was driven by the company’s return to pre-Covid staffing levels, along with increased spending on travel and administration. The company also had to acknowledge a $2.3 million impairment on its investment in EnviroPower.
Despite these hurdles, Burnham’s net income for 2023 rose to a healthy $9.4 million, up from $5.4 million in 2022 – the highest reported net income since 2004. Moreover, diluted earnings per share displayed a proportionate rise, climbing from $1.18 in 2022 to $2.02 in 2023.
Sales figures also added a positive note to Burnham’s performance, with residential product sales growing by 5.0% and commercial product sales rising by 1.4% in 2023. Furthermore, the new Service and Rentals businesses have contributed an additional $2.6 million in net sales.
These results reflect the success of the pricing actions and tight inventory controls applied during 2022 and 2023, along with reduced volatility in raw material costs. The company’s improved financial standing has also been aided by a keen focus on overhead expenses and spending.
Despite higher average debt levels and increasing borrowing costs throughout 2023, the total year-end debt was actually $6.3 million lower than the previous year. This was possible due to new lending facilities that provided Burnham with up to $92.0 million in capacity. The company has also entered into a $10.0 million equipment financing line for further financial flexibility.
In line with these positive results, Burnham’s Board of Directors declared a quarterly common stock dividend of $0.23 per share, marking a 4.5% increase. This dividend will be payable on March 28, 2024, to shareholders of record as of March 21, 2024.
To add to this, Burnham’s Annual Meeting will be held on April 22, 2024, on a secure virtual platform, allowing shareholders to partake safely and conveniently.
In summary, Burnham Holdings, Inc. has proven its financial agility amidst uncertain economic conditions, leveraging strategic pricing actions and operational efficiency, to deliver a promising outlook for 2024.
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