LANCASTER, Pa., Oct 8 /PRNewswire-FirstCall/ -- Burnham Holdings, Inc., (Pink Sheets: BURCA), a leading domestic manufacturer of boilers, and related HVAC products and accessories for residential, commercial and industrial applications, today reported its financial results for the period ended September 27, 2009.

Third quarter and year-to-date sales were $48.9 million and $120.5 million, respectively. Prior year third quarter and year-to-date sales were $62.9 million and $149.8 million, respectively. Sales for the quarter and nine months have declined approximately 20% compared to the same periods from a year ago, and are consistent with the weakness in the industry. The decline has occurred for both residential and commercial products. We expect market conditions to be challenging until the economy eventually recovers, and credit availability, housing, real estate activity, and consumer confidence return to a more normal level. Although current business conditions remain difficult, we are optimistic about longer-term prospects for the business. With a firm foundation based on our core principles and philosophy, Burnham is financially and operationally strong. Existing boilers will continue to be replaced over time due to age or operating costs, and the powerful lineup of high-efficiency residential and commercial products sold through our subsidiary companies, position them well in the market. These products are top-quality, high-value equipment for virtually any application.

The income for the third quarter and year-to-date was $1.4 million or $0.31 per share, and $65 thousand or $0.01 per share, respectively. This compares to 2008 third quarter and year-to-date income of $2.5 million or $0.56 per share, and $277 thousand or $0.06 per share, respectively. The lower sales levels discussed above have negatively impacted the 2009 results through both the loss of the gross profits on this volume, and through lower production requirements throughout the subsidiary companies. During the third quarter, manufacturing facilities scaled back production in order to balance inventory levels with the downturn in sales volume. While this reduction was essential to maintain the correct working capital levels, it had a negative impact through lower coverage of fixed costs. Favorably offsetting the loss in sales has been the continuous and systematic reduction to our cost structure during this economic recession to remain cost competitive in the market. Results for the nine months are indicative of those efforts, as despite the $29.3 million lower sales, we achieved a breakeven through this period. Cost of goods sold as a percentage of sales for the nine months was 78.5%, an improvement from the 2008 level of 79.9% reflecting the results of product pricing actions combined with stabilization of raw material costs and control of manufacturing overhead expenses. Selling, administrative, and general expenses for the nine months were down $3.5 million versus 2008 ($24.9 million compared with $28.4 million shown last year). Other income (expense) was favorable compared to both the prior year''s quarter and nine months from gains in the mark-to-market of interest rate agreements and lower interest expense because of reduced borrowing rates.

The Company''s balance sheet remains strong with working capital at a level consistent with the business activity and adequately positioned for the heating season. Bank and state financed debt was $45.7 million at September 27, 2009, $3.4 million higher than the $42.3 million at September 28, 2008, however cash, cash equivalents, and marketable securities were higher by $525 thousand for a "net" higher debt of $2.9 million. The majority of this $2.9 million can be explained by the Company''s contributions to its pension trust, $4.2 million (pre-tax) in the nine months of 2009 as compared to only $1.0 million (pre-tax) last year (see the Consolidated Statements of Cash Flows). In the fourth quarter of 2008, the Company contributed an additional $1.8 million (pre-tax) to the pension trust while no further deposits are planned for 2009. This reduced use of funds for the 2009 fourth quarter combined with plans to further reduce working capital prior to year-end, results in forecasted borrowing levels at (or below) 2008 year-end balances.

For many years, the Company has followed the practice of paying quarterly common stock dividends generally in March, June, September and December, subject to the Board''s evaluation of the Company''s financial performance. The Board believes that it is more prudent to evaluate the dividend declaration at its regular Board meeting scheduled as close as practical to the dividend payment date. Therefore, with respect to the December 2009 and future dividends, it is the Board''s intention to evaluate declaration of a December dividend at its December meeting, a March dividend at its February meeting, a June dividend at its April meeting, and a September dividend at its July meeting. Semi-annual preferred dividends will be declared at the April and December meetings.

Consolidated Balance Sheets (In thousands and data is unaudited September 27, September 28, (see Notes)) 2009 2008 ASSETS Current Assets Cash, cash equivalents, and marketable securities $3,895 $3,370 Trade and other accounts receivable, net 29,644 38,678 Inventories 53,541 53,988 Prepayments and other current assets 3,400 3,543 Total current assets 90,480 99,579 Property, plant and equipment, net 46,539 47,778 Deferred income taxes (6) 2,718 --- Other assets, net (6) 21,674 32,447 Total Assets $161,411 $179,804 LIABILITIES AND STOCKHOLDERS'' EQUITY Current Liabilities Accounts and taxes payable & accrued expenses $23,789 $34,816 Current portion of long-term liabilities 400 404 Total current liabilities 24,189 35,220 Long-term liabilities 47,354 43,231 Other postretirement liabilities (4)(6) 20,167 3,457 Deferred income taxes (6) --- 9,323 Stockholders'' equity Preferred stock 530 530 Class A common stock 3,267 3,255 Class B convertible common stock 1,643 1,655 Additional paid-in capital 14,308 14,308 Retained earnings 86,605 84,059 Accumulated other comprehensive income (loss) (6) (18,694) 2,718 Treasury stock, at cost (17,958) (17,952) Total stockholders'' equity 69,701 88,573 Total Liabilities and Stockholders'' Equity $161,411 $179,804 Consolidated Statements of Cash Flows September 27, September 28, (In thousands and data is unaudited) 2009 2008 Net income $65 $277 Depreciation and amortization 3,467 3,814 Other net adjustments (1,556) (362) Pension and postretirement liabilities expense 891 1,340 Contributions to pension trust (4) (4,200) (1,000) Changes in operating assets and liabilities (12,549) (15,002) Net cash used in operating activities (13,882) (10,933) Net cash used in the purchase of assets (1,705) (1,879) Proceeds from borrowings 18,235 15,049 Principal payments on debt and lease obligations (75) (83) Purchase of treasury stock (6) --- Dividends paid (2,280) (2,280) Cash, cash equivalents, and marketable Securities Increase (decrease) for period 287 (126) Beginning of year 3,608 3,496 End of period $3,895 $3,370 Consolidated Statements of Operations Three months ended Nine months ended Sept. 27, Sept. 28, Sept. 27, Sept. 28, In thousands, 2009 2008 2009 2008 except per share data) (Data is unaudited (see Notes)) Net sales $48,854 $62,904 $120,510 $149,802 Cost of goods sold 37,722 48,381 94,630 119,743 Gross profit 11,132 14,523 25,880 30,059 Selling, adminis- trative and general expense 8,504 10,143 24,882 28,403 Operating income 2,628 4,380 998 1,656 Other income (expense) Mark-to-market gain (5) 26 --- 264 21 Interest income 1 18 3 62 Interest Expense (477) (489) (1,163) (1,306) Other income (expense) (450) (471) (896) (1,223) Income before taxes 2,178 3,909 102 433 Income tax expense 784 1,407 37 156 Net income $1,394 $2,502 $65 $277 Per Share Data: Basic & Diluted income $0.31 $0.56 $0.01 $0.06 Dividends paid $0.17 $0.17 $0.51 $0.51 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, 2008. 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. We undertake no duty to update or revise these forward-looking statements. 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 as of September 27, 2009 includes 2,808,828 of Class A shares and 1,643,061 of Class B shares. 4. In 2009, the Company made pre-tax contributions of $4.2 million to its defined pension plan ($1.6 million in the third quarter) compared to $1.0 million contributed in 2008. These payments increased the trust 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 of the Company. In 2008, pension plan assets declined as a result of the dramatic downturn in the stock market. The resulting non-cash impact to the balance sheet was a decline in "Other assets" of $10.7 million (the reversal of the 2007 established balance), an increase to the "Other postretirement liability" of $20.4 million (projected benefit obligations exceeded plan assets), and an after tax charge of $21.1 million to "Accumulated other comprehensive income (loss)", a non-cash sub-section of "Stockholders'' Equity" (see Note 9 of the 2008 Annual Report for more details).

Burnham Holdings, Inc.

CONTACT: Douglas B. Springer, Vice President and CFO of Burnham
Holdings, Inc., +1-717-293-5811, or Fax: +1-717-293-5816

Web Site: http://www.burnham.com/