NYSE:BRN
BARNWELL INDUSTRIES INC
A manufacturing firm facing declining revenues and expanding losses with significant non-cash adjustments and lease liabilities.
Key Metrics
Investment Thesis
Bull Case
Potential turnaround scenario if operational efficiencies can reduce the massive general and administrative expense burden relative to shrinking revenue streams. The asset-heavy balance sheet with $20.8M in total assets may offer restructuring opportunities or strategic repositioning for new market entry.
Bear Case
Investors should avoid due to consistent deepening losses, negative operating cash flow of -$1.9M, and a declining revenue trajectory over the last five years. The company carries significant debt-like obligations with $9.1M in long-term liabilities and a retained earnings deficit of -$6.5M limiting financial flexibility.
About BARNWELL INDUSTRIES INC
Barnwell Industries Inc. operates as a manufacturing entity with significant capital expenditures, generating revenue primarily through product sales to diverse markets. The company maintains substantial long-term assets and liabilities while reporting consistent net losses driven by high operating expenses relative to revenue. Key financial metrics indicate a shrinking cash position and widening deficit in recent fiscal years.
Analysis
Management Discussion
The company experienced a sharp deterioration in profitability with net profit falling to -$7.1M in 2025 compared to -$5.3M the prior year, while revenue contracted significantly from $21.7M to $13.7M. Operating expenses matched gross profit at $13.7M resulting in minimal operating profit of only $30,000 and a substantial cash outflow from operations.
Industry Overview
The manufacturing sector is currently characterized by margin compression where operating expenses frequently match gross profit margins, leading to minimal operating profitability for asset-heavy firms. Companies in this space face intense pressure to optimize cost structures as revenue growth stagnates or declines.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $25.3M | $21.7M | $13.7M |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $25.3M | $21.7M | $13.7M |
| Operating Expenses | $20.1M | $22.4M | $13.7M |
| Operating Income | $5.2M | $-687.0K | $30.0K |
| G&A | $7.0M | $5.6M | $6.9M |
| Stock-Based Comp | $263.0K | $208.0K | $372.0K |
| D&A | $4.5M | $5.1M | $3.1M |
| Other OpEx | $13.1M | $16.8M | $6.7M |
| Non-Operating Income | $-6.0M | $-4.4M | $-7.1M |
| Interest Expense | $2.0K | $2.0K | $7.0K |
| Interest Income | $87.0K | $88.0K | $54.0K |
| Pre-Tax Income | $-864.0K | $-5.1M | $-7.1M |
| Income Tax | $-53.0K | $213.0K | $71.0K |
| Continuing Ops | $-811.0K | $-5.3M | $-7.1M |
| Discontinued Ops | $0 | $0 | $12.0K |
| Net Income | $-811.0K | $-5.3M | $-7.1M |
| Minority Interest | $150.0K | $234.0K | $-8.0K |
| Net to Common | $-961.0K | $-5.6M | $-7.1M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $9.1M | $8.9M | $5.2M |
| Cash & Equivalents | $2.8M | $4.5M | $2.9M |
| Accounts Receivable | $2.9M | $2.0M | $913.0K |
| Other Current Assets | $3.3M | $2.3M | $1.4M |
| Long-Term Assets | $26.3M | $21.8M | $15.6M |
| PP&E (Net) | $21.8M | $16.8M | $9.2M |
| Operating Leases | $54.0K | $39.0K | $145.0K |
| Other LT Assets | $4.5M | $4.9M | $6.3M |
| Total Assets | $35.4M | $30.7M | $20.8M |
| Current Liabilities | $6.6M | $7.8M | $4.7M |
| Accounts Payable | $881.0K | $1.8M | $2.2M |
| Current Leases | $71.0K | $68.0K | $78.0K |
| Deferred Revenue | $377.0K | $0 | — |
| Other Current Liab | $5.3M | $5.9M | $2.5M |
| Long-Term Liabilities | $10.1M | $9.8M | $9.1M |
| Long-Term Debt | $0 | — | — |
| LT Operating Leases | $47.0K | $7.0K | $93.0K |
| Other LT Liab | $10.0M | $9.8M | $9.0M |
| Total Liabilities | $16.7M | $17.6M | $13.8M |
| Shareholders' Equity | $18.8M | $13.1M | $7.0M |
| Retained Earnings | $6.2M | $595.0K | $-6.5M |
| AOCI | $2.1M | $1.9M | $2.6M |
| Treasury Stock | $2.3M | $2.3M | $2.3M |
| Total L&E | $35.4M | $30.7M | $20.8M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $-811.0K | $-5.3M | $-7.1M |
| Non-Cash Adjustments | $3.4M | $12.3M | $4.5M |
| Working Capital Changes | $-680.0K | $-2.3M | $746.0K |
| Cash from Operations | $1.9M | $4.7M | $-1.9M |
| Cash from Investing | $-11.2M | $-2.8M | $773.0K |
| Debt Repayments | $30.0K | $0 | — |
| Dividends Paid | $599.0K | $0 | — |
| Cash from Financing | $-786.0K | $-226.0K | $-418.0K |
| FX Effect | $49.0K | $23.0K | $-106.0K |
| Net Change in Cash | $-10.0M | $1.7M | $-1.6M |
| Beginning Cash | $12.8M | $2.8M | $4.3M |
| Ending Cash | $2.8M | $4.5M | $2.9M |
Frequently Asked Questions
How does BARNWELL INDUSTRIES INC make money?
Product sales generating the bulk of revenue, capital investment activities reflected in investing cash flows, and operations burdened by substantial general and administrative expenses plus depreciation.
What are the main risks for BRN?
Severe and widening net losses increasing from -$0.8M to -$7.1M over the last three years, declining revenue trend dropping from $25.3M to $13.7M, negative cash flow from operations of -$1.9M, and significant accumulated retained earnings deficit.
What is BRN's competitive advantage?
Substantial long-term asset base of $15.6M indicating established production capacity, diversified liability structure with operating leases, and ability to generate interest income despite profitability challenges.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.