Virco Operating Income Nearly Doubles as Second Quarter Revenue Jumps 30%
- Revenue up 30% YoY to $107.3 million
- Operating income nearly doubled to $21.3 million
- Year-to-date revenue increased 23.8% to $142.3 million
- Gross margin improved from 38.5% to 45.3%
- None.
- Exemplary Performance by U.S. Factories and Delivery Teams convert record backlog to on-time deliveries for Back-to-School
- Year-to Date Revenue up
24% to$142 million - Year-to-Date Operating Income improves to
$20 million
TORRANCE, Calif., Sept. 11, 2023 (GLOBE NEWSWIRE) -- Virco Mfg. Corporation (NASDAQ: VIRC), the largest manufacturer and supplier of movable furniture and equipment for educational environments in the United States, today reported financial results for the quarterly period ended July 31, 2023 (second quarter of fiscal 2024).
Virco Mfg. Corporation today reported that revenue for the second quarter ended July 31 grew
Year-to-date, revenue increased
Gross Margin for the second quarter improved from
Interest expense on the Company’s seasonal credit facility was
Commenting on the strong second quarter and first six months, Virco CEO and Chairman Robert Virtue said: “We performed exceptionally well in this year’s back-to-school season. We had a record backlog of deliveries to make, and we made them. This ability to execute is directly tied to our domestic U.S. factories and logistics teams. As schools have extended their instruction calendar to make up for pandemic-related learning loss, our summer delivery window has effectively been narrowed. We have the physical footprint and the operating know-how to make and deliver millions of pounds of furniture in what is now a six- to eight-week delivery season. This environment has been increasingly challenging for import-based competitors. We are seeing a meaningful gain in new customers in this new competitive landscape.”
Virco President Doug Virtue offered these additional comments: “We consider ourselves fortunate to have come out of the pandemic stronger than we went in. We are uniquely positioned to help schools as they modify their calendars and curricula to address the learning challenges faced by today’s students. Our vertical model has proven highly adaptable to these accelerations. We have good control over inventories, delivery performance, and the entire order-to-cash cycle. Ultimately, this allows us to better serve educators and students as they seek creative solutions to the challenges of the last few years.”
Contact:
Virco Mfg. Corporation
(310) 533-0474
Robert A. Virtue, Chairman and Chief Executive Officer
Doug Virtue, President
Robert Dose, Chief Financial Officer
Statement Concerning Forward-Looking Information
This news release contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding: our future financial results and growth in our business; business strategies; market demand and product development; estimates of unshipped backlog; order rates and trends in seasonality; product relevance; economic conditions and patterns; the educational furniture industry generally, including the domestic market for classroom furniture; cost control initiatives; absorption rates; and supply chain challenges. Forward-looking statements are based on current expectations and beliefs about future events or circumstances, and you should not place undue reliance on these statements. Such statements involve known and unknown risks, uncertainties, assumptions and other factors, many of which are out of our control and difficult to forecast. These factors may cause actual results to differ materially from those that are anticipated. Such factors include, but are not limited to: uncertainties surrounding the severity, duration and effects of the COVID-19 pandemic; changes in general economic conditions including raw material, energy and freight costs; state and municipal bond funding; state, local, and municipal tax receipts; order rates; the seasonality of our markets; the markets for school and office furniture generally, the specific markets and customers with which we conduct our principal business; the impact of cost-saving initiatives on our business; the competitive landscape, including responses of our competitors and customers to changes in our prices; demographics; and the terms and conditions of available funding sources. See our Annual Report on Form 10-K for the year ended January 31, 2023, our Quarterly Reports on Form 10-Q, and other reports and material that we file with the Securities and Exchange Commission for a further description of these and other risks and uncertainties applicable to our business. We assume no, and hereby disclaim any, obligation to update any of our forward-looking statements. We nonetheless reserve the right to make such updates from time to time by press release, periodic reports, or other methods of public disclosure without the need for specific reference to this press release. No such update shall be deemed to indicate that other statements which are not addressed by such an update remain correct or create an obligation to provide any other updates.
Financial Tables Follow
Virco Mfg. Corporation
Unaudited Condensed Consolidated Balance Sheets
7/31/2023 | 1/31/2023 | 7/31/2022 | |||||||||
(In thousands) | |||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash | $ | 1,600 | $ | 1,057 | $ | 2,179 | |||||
Trade accounts receivables, net | 68,592 | 18,435 | 44,286 | ||||||||
Other receivables | 58 | 68 | 95 | ||||||||
Income tax receivable | — | 19 | 111 | ||||||||
Inventories | 71,853 | 67,406 | 61,228 | ||||||||
Prepaid expenses and other current assets | 2,228 | 2,083 | 2,068 | ||||||||
Total current assets | 144,331 | 89,068 | 109,967 | ||||||||
Non-current assets | |||||||||||
Property, plant and equipment | |||||||||||
Land | 3,731 | 3,731 | 3,731 | ||||||||
Land improvements | 686 | 686 | 653 | ||||||||
Buildings and building improvements | 51,441 | 51,310 | 51,456 | ||||||||
Machinery and equipment | 115,899 | 113,662 | 115,029 | ||||||||
Leasehold improvements | 977 | 983 | 1,012 | ||||||||
Total property, plant and equipment | 172,734 | 170,372 | 171,881 | ||||||||
Less accumulated depreciation and amortization | 137,392 | 135,810 | 136,973 | ||||||||
Net property, plant and equipment | 35,342 | 34,562 | 34,908 | ||||||||
Operating lease right-of-use assets | 8,285 | 10,120 | 12,115 | ||||||||
Deferred tax assets, net | 7,100 | 7,800 | 488 | ||||||||
Other assets, net | 9,279 | 8,576 | 8,051 | ||||||||
Total assets | $ | 204,337 | $ | 150,126 | $ | 165,529 | |||||
Virco Mfg. Corporation
Unaudited Condensed Consolidated Balance Sheets
7/31/2023 | 1/31/2023 | 7/31/2022 | |||||||||
(In thousands, except share and par value data) | |||||||||||
Liabilities | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 27,854 | $ | 19,448 | $ | 27,290 | |||||
Accrued compensation and employee benefits | 10,983 | 9,554 | 6,873 | ||||||||
Income tax payable | 3,325 | — | — | ||||||||
Current portion of long-term debt | 32,256 | 7,360 | 22,736 | ||||||||
Current portion operating lease liability | 5,386 | 5,082 | 4,909 | ||||||||
Other accrued liabilities | 11,259 | 7,081 | 10,057 | ||||||||
Total current liabilities | 91,063 | 48,525 | 71,865 | ||||||||
Non-current liabilities | |||||||||||
Accrued self-insurance retention | 934 | 1,050 | 1,436 | ||||||||
Accrued pension expenses | 10,827 | 10,676 | 15,238 | ||||||||
Income tax payable | 81 | 79 | 73 | ||||||||
Long-term debt, less current portion | 14,261 | 14,384 | 14,504 | ||||||||
Operating lease liability, less current portion | 4,317 | 6,796 | 9,241 | ||||||||
Other long-term liabilities | 559 | 555 | 667 | ||||||||
Total non-current liabilities | 30,979 | 33,540 | 41,159 | ||||||||
Commitments and contingencies (Notes 6, 7 and 13) | |||||||||||
Stockholders’ equity | |||||||||||
Preferred stock: | |||||||||||
Authorized 3,000,000 shares, | — | — | — | ||||||||
Common stock: | |||||||||||
Authorized 25,000,000 shares, | 164 | 162 | 162 | ||||||||
Additional paid-in capital | 121,030 | 120,890 | 120,684 | ||||||||
Accumulated deficit | (36,539 | ) | (50,631 | ) | (62,582 | ) | |||||
Accumulated other comprehensive loss | (2,360 | ) | (2,360 | ) | (5,759 | ) | |||||
Total stockholders’ equity | 82,295 | 68,061 | 52,505 | ||||||||
Total liabilities and stockholders’ equity | $ | 204,337 | $ | 150,126 | $ | 165,529 | |||||
Virco Mfg. Corporation
Unaudited Condensed Consolidated Statements of Income
Three months ended | |||||||
7/31/2023 | 7/31/2022 | ||||||
(In thousands, except per share data) | |||||||
Net sales | $ | 107,321 | $ | 82,797 | |||
Costs of goods sold | 58,743 | 50,952 | |||||
Gross profit | 48,578 | 31,845 | |||||
Selling, general and administrative expenses | 27,324 | 20,671 | |||||
Operating income | 21,254 | 11,174 | |||||
Unrealized (gain) loss on investment in trust account | (325 | ) | 305 | ||||
Pension expense | 161 | 196 | |||||
Interest expense | 1,083 | 698 | |||||
Income before income taxes | 20,335 | 9,975 | |||||
Income tax expense | 4,801 | 295 | |||||
Net income | $ | 15,534 | $ | 9,680 | |||
Net income per common share: | |||||||
Basic | $ | 0.95 | $ | 0.60 | |||
Diluted | $ | 0.95 | $ | 0.60 | |||
Weighted average shares of common stock outstanding: | |||||||
Basic | 16,272 | 16,108 | |||||
Diluted | 16,294 | 16,108 | |||||
Virco Mfg. Corporation
Unaudited Condensed Consolidated Statements of Income
Six months ended | |||||||
7/31/2023 | 7/31/2022 | ||||||
(In thousands, except per share data) | |||||||
Net sales | $ | 142,264 | $ | 114,881 | |||
Costs of goods sold | 80,484 | 73,329 | |||||
Gross profit | 61,780 | 41,552 | |||||
Selling, general and administrative expenses | 41,838 | 35,122 | |||||
Operating income | 19,942 | 6,430 | |||||
Unrealized (gain) loss on investment in trust account | (624 | ) | 305 | ||||
Pension expense | 322 | 391 | |||||
Interest expense | 1,795 | 1,125 | |||||
Income before income taxes | 18,449 | 4,609 | |||||
Income tax expense | 4,357 | 13 | |||||
Net income | $ | 14,092 | $ | 4,596 | |||
Net income per common share: | |||||||
Basic | $ | 0.87 | $ | 0.29 | |||
Diluted | $ | 0.87 | $ | 0.29 | |||
Weighted average shares of common stock outstanding: | |||||||
Basic | 16,242 | 16,071 | |||||
Diluted | 16,257 | 16,071 | |||||