BURNHAM HOLDINGS, INC. REPORTS FIRST QUARTER RESULTS

LANCASTER, Pa., April 25, 2022

Burnham Holdings, Inc.'s financial performance in the first quarter of 2022 included the following:

• Net sales were $52.4 million, up $8.4 million, or 19.2%, versus 2021, as demand for residential and commercial heating equipment continues to remain strong.
• Gross profit as a percentage of sales was 15.9% for both the first quarter of 2022 and 2021, primarily as the result of pricing actions to offset material price inflation.
• 2022 Q1 net loss was ($0.8) million compared to ($0.6) in Q1 2021. 2022 was affected by higher interest expense as a result of both rising interest rates and higher debt levels due to inflationary pressures affecting working capital, material price inflation and production efficiency challenges driven by intermittent supply chain issues.
• Total debt of $30.9 million was $11.2 million higher versus the prior year primarily as a result of material cost inflation in inventories.

Sales of residential products increased by 17.6% compared to last year, as strong demand continued throughout our primary trading areas.  Sales of commercial products increased by 25.1% as numerous COVID-19-delayed projects restarted in several key markets (schools, healthcare, industrial).  Although not quite yet back to pre-pandemic levels, incoming orders for commercial products have increased significantly over the past 60-90 days and are approximately 62% higher versus the first quarter of 2021. 

As noted in our full year 2021 results, profitability continues to be pressured by significant difficulties in hiring and retaining qualified employees and multiple supply chain issues negatively impacting production.  Price inflation on purchased materials remains a headwind, particularly metals, freight costs and resin-based materials such as plastics, paint and glue.  Each of our subsidiaries raised their selling prices in Q1 to recover costs and maintain profitability and are prepared to take additional actions as appropriate for the remainder of the year. 

The Company's balance sheet continues to be strong, with adequate levels of working capital to support current and future business opportunities.  Long-term debt of $30.9 million was $11.2 million higher than last year, with the increase mostly attributable to a $7.1 million increase in inventories.  Approximately half of the inventory increase was due to material cost inflation, with the remainder due to higher inventory levels necessary to support the increased sales volume.

Due to the seasonal nature of the sales made by our subsidiary companies, the first quarter provides the lowest quarterly sales of our fiscal year (normally 20% or less of full year sales).  Combined with continued uncertainty in the macro-economic environment, we therefore advise caution when using the financial results from the first quarter as an indicator of full year results. 

The Burnham Holdings, Inc. 2022 Annual Meeting of Stockholders is being held today in Lancaster, PA beginning at 11:30 a.m.  A press release regarding today's stockholder voting and the Board of Directors determination regarding declaration of a quarterly dividend will be released later this afternoon.