Burnham Holdings, Inc. Announces First Half Results And Declares Dividend

LANCASTER, Pa., July 15, 2021

Highlights of our second quarter and year-to-date (YTD) operating performance include the following:

• 2021 Net sales were higher than last year; up $11.2 million (34.7%) for the second quarter and $18.2 million (26.3%) for the first half. 2021 First half sales of $87.6 million were comparable to pre-COVID first half sales in 2019 of $87.4 million; which represented our highest first half sales in over 10 years.
• Residential product sales increased by 65.9% in the second quarter and 44.9% in the first half; while commercial product sales were down by 7.8% in the second quarter and 8.6% in the first half.
• Gross profit as a percentage of sales was lower at 13.0% in the first half of 2021 versus 18.1% in 2020, due to significant raw material cost inflation, particularly steel products, and staffing and production inefficiencies at one of our operating subsidiaries.
• Net loss for the second quarter was $(2.48) million versus a net loss of $(368) thousand in 2020. The first half total net loss was $(3.06) million versus $(1.44) million last year.
• Capital spending in the first half of 2021 was higher by $4.1 million due to the purchase of a previously leased manufacturing facility by one of our subsidiaries.

Net sales in the second quarter and YTD were $43.6 million and $87.6 million, respectively, compared to $32.3 million and $69.3 million in 2020 as our businesses continued to recover from the impacts of the COVID-19 pandemic.  Residential sales in the first half were significantly above last year (up 44.9%) and have returned to pre-pandemic levels ($65.5 million in the first half of 2021 versus $62.6 million in the first half of 2019).  Commercial product sales continue to feel the impacts of the dramatic slowdown in non-residential construction design engineering work and job site closures that occurred during the pandemic.  As expected, first half sales were down 8.6% below last year and 10.9% below the 2019 first half total.  However, while shipments lag, strong Q2 bookings are driving up the commercial product backlog. The overall backlog was up $4.1 million at the end of the 2021first half compared to last year, as delayed projects began to resume.

Cost of goods sold ("COGS") as a percentage of sales for the second quarter and YTD in 2021 was 90.0% and 87.0%, respectively, compared to 81.2% and 81.9% in 2020.  All of our subsidiaries continued to experience   cost inflation on a wide range of raw materials during the second quarter, which accounted for a significant portion of the increase in the COGS percentage. Multiple pricing actions have been taken by the subsidiaries to offset these component and raw material price increases and additional pricing actions will be taken as necessary. Supply chain issues are abundant and our supply chain teams have worked tirelessly to manage any number of material shortages and deliver delays.  In addition to dealing with material cost inflation, our subsidiaries (along with a number of other manufacturing companies) have experienced difficulty in finding and retaining qualified employees to fully staff our manufacturing operations.  This issue was particularly impactful at one of our subsidiaries, resulting in a significant increase in costs during the first half due to productivity and operational inefficiencies.  Efforts have intensified to improve the attraction, training and retention of employees at all of our manufacturing operations.  

Net loss in the second quarter of 2021 was $(2.48) million compared to $(368) thousand in 2020.  In the first half, 2021 results were a net loss of $(3.06) million compared to a net loss of $(1.44) million in 2020, a decline of $(1.62) million.  Loss per share was $(0.67) in the first half of 2020 compared to $(0.32) in 2020.

At its meeting on July 15, 2021, the Burnham Holdings, Inc. Board of Directors declared a regular quarterly common stock dividend of $0.22 per share payable August 18, 2021, with a record date of August 11, 2021.