Virco Reports Improved Financial Position Following Record Second Quarter and First Half Results
Virco Mfg. (NASDAQ: VIRC) reported improved financial results for Q2 and H1 2024. Key highlights include:
- Q2 revenue up 1.0% to $108.4M; H1 revenue up 9.1% to $155.2M
- Q2 EPS improved 9.5%; H1 EPS up 33.3% to record $1.16 per share
- Q2 operating income reached 20.2% of revenue; H1 at 16.0%
- Company is effectively debt-free, financing growth through cash flow
- Quarterly dividend increased to $0.025 per share
The company noted strong order rates but signs of slowing post-pandemic recovery. Virco completed a 5-year lease renewal for its Torrance, CA headquarters and owns significant space in Conway, AR, providing logistical advantages in the seasonal school furniture market.
Virco Mfg. (NASDAQ: VIRC) ha riportato risultati finanziari migliorati per il secondo trimestre e il primo semestre del 2024. I punti salienti includono:
- Fatturato del Q2 aumentato dell'1,0% a $108,4M; fatturato dell'H1 aumentato del 9,1% a $155,2M
- EPS del Q2 migliorato del 9,5%; EPS dell'H1 aumentato del 33,3% a un record di $1,16 per azione
- Reddito operativo del Q2 raggiunto al 20,2% del fatturato; H1 al 16,0%
- L'azienda è praticamente senza debiti, finanzia la crescita attraverso il flusso di cassa
- Dividendo trimestrale aumentato a $0,025 per azione
L'azienda ha notato tassi di ordinazione solidi ma segnali di rallentamento nella ripresa post-pandemia. Virco ha completato un rinnovo di lease di 5 anni per la sua sede a Torrance, CA, e possiede uno spazio significativo a Conway, AR, offrendo vantaggi logistici nel mercato stagionale dei mobili scolastici.
Virco Mfg. (NASDAQ: VIRC) reportó resultados financieros mejorados para el segundo trimestre y el primer semestre de 2024. Los aspectos destacados incluyen:
- Ingresos del Q2 aumentados en un 1.0% a $108.4M; ingresos del H1 aumentados en un 9.1% a $155.2M
- EPS del Q2 mejorado en un 9.5%; EPS del H1 aumentado en un 33.3% a un récord de $1.16 por acción
- Ingreso operativo del Q2 alcanzado al 20.2% de los ingresos; H1 al 16.0%
- La empresa está prácticamente libre de deudas, financiando el crecimiento a través del flujo de efectivo
- Dividendo trimestral aumentado a $0.025 por acción
La empresa notó tasas de pedidos sólidas pero signos de desaceleración en la recuperación post-pandemia. Virco completó una renovación de arrendamiento de 5 años para su sede en Torrance, CA, y posee un espacio significativo en Conway, AR, proporcionando ventajas logísticas en el mercado estacional de muebles escolares.
Virco Mfg. (NASDAQ: VIRC)는 2024년 2분기 및 상반기 재무 결과가 개선되었다고 보고했습니다. 주요 내용은 다음과 같습니다:
- 2분기 수익 1.0% 증가하여 $108.4M; 상반기 수익 9.1% 증가하여 $155.2M
- 2분기 EPS 9.5% 개선; 상반기 EPS 33.3% 증가하여 사상 최대인 $1.16 per 주
- 2분기 운영 수익이 매출의 20.2%에 도달; 상반기는 16.0%
- 회사는 사실상 부채가 없으며, 현금 흐름을 통해 성장을 자금 조달하고 있음
- 분기 배당금이 주당 $0.025로 증가하였습니다.
회사는 강력한 주문률을 보였으나 팬데믹 이후 회복의 둔화 조짐을 나타냈습니다. Virco는 캘리포니아주 토런스에 있는 본사의 5년 임대 갱신을 완료하였으며, 아칸소주 콘웨이에 상당한 공간을 소유하고 있어 계절성 학교 가구 시장에서 물류적 장점을 제공하고 있습니다.
Virco Mfg. (NASDAQ: VIRC) a annoncé des résultats financiers améliorés pour le deuxième trimestre et le premier semestre de 2024. Les points saillants comprennent :
- Chiffre d'affaires du Q2 en hausse de 1,0 % à 108,4 millions de dollars ; chiffre d'affaires du H1 en hausse de 9,1 % à 155,2 millions de dollars
- BPA du Q2 amélioré de 9,5 % ; BPA du H1 en hausse de 33,3 % à un record de 1,16 $ par action
- Le bénéfice d'exploitation du Q2 a atteint 20,2 % du chiffre d'affaires ; H1 à 16,0 %
- L'entreprise est pratiquement sans dettes, finançant sa croissance par le biais du flux de trésorerie
- Dividende trimestriel augmenté à 0,025 $ par action
L'entreprise a noté de solides taux de commande mais des signes de ralentissement dans la reprise post-pandémique. Virco a finalisé un renouvellement de bail de 5 ans pour son siège social à Torrance, en Californie, et possède un espace important à Conway, en Arkansas, offrant des avantages logistiques sur le marché saisonnier des meubles scolaires.
Virco Mfg. (NASDAQ: VIRC) hat verbesserte Finanzergebnisse für das zweite Quartal und das erste Halbjahr 2024 gemeldet. Zu den wichtigsten Punkten gehören:
- Umsatz im Q2 um 1,0% auf $108,4M gestiegen; Umsatz im H1 um 9,1% auf $155,2M gestiegen
- EPS im Q2 um 9,5% verbessert; EPS im H1 um 33,3% auf Rekordhöhe von $1,16 pro Aktie gestiegen
- Betriebseinkommen im Q2 erreichte 20,2% des Umsatzes; H1 bei 16,0%
- Das Unternehmen ist praktisch schuldenfrei und finanziert das Wachstum durch Cashflow
- Quartalsdividende auf $0,025 pro Aktie erhöht
Das Unternehmen verzeichnete starke Bestellraten, aber Anzeichen einer langsamen Erholung nach der Pandemie. Virco hat eine 5-jährige Mietverlängerung für seinen Hauptsitz in Torrance, CA, abgeschlossen und besitzt erheblichen Raum in Conway, AR, was logistische Vorteile im saisonalen Schulmöbelmarkt bietet.
- Revenue increased 1.0% in Q2 and 9.1% in H1 2024
- EPS improved 9.5% in Q2 and 33.3% YTD to record $1.16 per share
- Q2 operating income reached 20.2% of revenue; 16.0% for H1
- Company is effectively debt-free, financing growth through cash flow
- Quarterly dividend increased to $0.025 per share
- Gross profit for Q2 improved to $50.2M with gross margin of 46.3%
- Interest expenses decreased significantly YoY
- Completed 5-year lease renewal for Torrance, CA headquarters
- Slight increase in Selling, General, and Administrative expenses as a percentage of revenue
- Noted slight softening in order rates as summer progressed
- Management cautions that unusual timing of a large counter-seasonal order is unlikely to repeat
- Signs of slowing post-pandemic recovery in the school furniture market
Insights
Virco's Q2 results showcase impressive financial improvements. Revenue grew 1.0% to
The company's debt-free status during peak season is unprecedented, indicating robust cash flow management. The increased quarterly dividend to
Virco's performance reflects the evolving educational furniture market post-pandemic. The company benefited from school reopenings and federal stimulus, but the landscape is shifting. With over
The ongoing disaster recovery order boosted counter-seasonal performance, but this is likely a one-time event. The slight softening in order rates as summer progressed suggests a potential market normalization. Investors should monitor how Virco adapts to changing demand patterns and leverages its strategic geographic advantages to maintain its strong market position.
Virco's strategic facility locations in California and Arkansas provide significant logistical advantages in the seasonal school furniture market. The renewed lease for the Torrance facility and ownership of extensive space in Conway demonstrate a commitment to operational efficiency.
The company's ability to manage a large counter-seasonal disaster recovery order while maintaining normal operations highlights supply chain flexibility. However, the slight increase in SG&A expenses due to more full-service orders suggests potential challenges in scaling logistics. As the market potentially normalizes, Virco's ability to optimize its supply chain will be important for maintaining its impressive operating margins.
- EPS Improves
9.5% in Quarter,33.3% YTD to Record$1.16 per Share - Operating Income reaches
20.2% in Second Quarter;16.0% YTD - Company is Effectively Debt Free; Growth is being Financed by Cash Flow from Operations
- Company Increases Quarterly Dividend to
$0.02 5 per share, Payable October 11 to Shareholders of Record as of September 20 - Order Rates Remain Strong but Recent Trends Suggest Post-Pandemic Recovery May Be Slowing
TORRANCE, Calif., Sept. 09, 2024 (GLOBE NEWSWIRE) -- Virco Mfg. Corporation (NASDAQ: VIRC), a leading manufacturer and supplier of movable furniture and equipment for educational environments, announced results for the Company’s Second Quarter and first six months ended July 31, 2024.
For the Second Quarter, including the months of May through July, revenue increased
Gross profit for the second quarter improved to
Interest expenses for the second quarter were
Operating Income for the second quarter improved to a record
In the Second Quarter the Company also completed a 5-year lease renewal on its Torrance, California headquarters, factory, and distribution center. The Company has occupied this facility, which totals 560,000 square feet, since 1994. The Company also owns over 1,750,000 square feet of combined factory and distribution space in Conway, Arkansas, where it has operations dating back to 1954. These strategic geographies provide the Company with significant logistical advantages in the highly seasonal market for bulky school furniture. California remains the Company’s single largest state by revenue, while states in the Southeast, serviced out of Arkansas, comprise the fastest-growing region.
Following the pandemic there was a flurry of school reopening, boosted somewhat by federal stimulus. Although most of that stimulus was designated for personnel to address learning loss, a small portion was directed to building improvements, including new furniture. Management points out that over
Commenting on the strong quarter and year-to-date results, Virco Chairman and CEO Robert Virtue said: “I’m very proud of our performance, not just this summer, but over the last four years. These years included the first-ever school closures in Virco’s history, as well as an unprecedented surge in re-openings. The fact that we could respond so effectively to challenges both up and down is a testament to our staff and their dedication to serving America’s students and educators.
“Next year will mark Virco’s 75th year in business, and the 99th year that our family has been making furniture. We’ve experienced some real surprises during those years, from the Great Depression (1929-1939) and World War II (1940-1945), to The Baby Boom (1946-1964) and its “Echo” (1976-2001), followed by the dot.com stock market collapse (2001-2002) and the subsequent crisis in public school funding (2002-2007). Also, at about the same time as the Dot.com crisis, China was admitted to the World Trade Organization, launching a twenty-year period of outsourcing when American factories and their workers came to be seen as liabilities, not assets.
“During all of these ups and downs we stayed committed to our vision of service, quality, frugality, and loyalty to our employees. We also continued investing in our U.S. factories and warehouses, even as the “smart money” told us to stop manufacturing here and relocate to Asia.
“Our view of the school furniture business is very long-term. This applies to our customers, who are ultimately the American taxpayers and their children, our long-term employees, our supplier partners, and the communities where we’ve been privileged to operate. It also applies to our conception of ourselves as owner/managers.
“To be able to see all the pieces coming together after the recent years of uncertainty is very gratifying. Many Americans now fully appreciate that school really matters. We never lost sight of this, nor our commitment to do whatever it took to remain a trusted partner for educators and the families they serve. Our approach has proven resilient through many different cycles and trends, and we believe it will prove equally successful with whatever challenges and opportunities lie ahead.
"Given the strength of our current position, we are actively reviewing our options for capital allocation. Among these are fair and equitable returns to shareholders in the form of dividends, share repurchases—we still have
“I also want to personally recognize the support we’ve received from our shareholders, many of whom share the same owner/manager vision that we do. We look forward to using our financial strength to continue serving students and educators as well as providing a well-deserved return to the partners who have made our continuity of service possible.”
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 ongoing and long-term 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, 2024, 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 | |||||||||||
7/31/2024 | 1/31/2024 | 7/31/2023 | |||||||||
(In thousands) | |||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash | $ | 7,771 | $ | 5,286 | $ | 1,600 | |||||
Trade accounts receivables, net | 56,065 | 23,161 | 68,592 | ||||||||
Inventories | 58,574 | 58,371 | 71,853 | ||||||||
Prepaid expenses and other current assets | 2,921 | 2,208 | 2,286 | ||||||||
Total current assets | 125,331 | 89,026 | 144,331 | ||||||||
Non-current assets | |||||||||||
Property, plant and equipment | |||||||||||
Land | 3,731 | 3,731 | 3,731 | ||||||||
Land improvements | 697 | 694 | 686 | ||||||||
Buildings and building improvements | 51,899 | 51,576 | 51,441 | ||||||||
Machinery and equipment | 116,284 | 114,400 | 115,899 | ||||||||
Leasehold improvements | 523 | 523 | 977 | ||||||||
Total property, plant and equipment | 173,134 | 170,924 | 172,734 | ||||||||
Less accumulated depreciation and amortization | 138,154 | 136,356 | 137,392 | ||||||||
Net property, plant and equipment | 34,980 | 34,568 | 35,342 | ||||||||
Operating lease right-of-use assets | 37,988 | 6,508 | 8,285 | ||||||||
Deferred tax assets, net | 6,682 | 6,634 | 7,100 | ||||||||
Other assets, net | 11,367 | 9,709 | 9,279 | ||||||||
Total assets | $ | 216,348 | $ | 146,445 | $ | 204,337 |
Virco Mfg. Corporation Unaudited Condensed Consolidated Balance Sheets | |||||||||||
7/31/2024 | 1/31/2024 | 7/31/2023 | |||||||||
(In thousands, except share and par value data) | |||||||||||
Liabilities | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 26,085 | $ | 12,945 | $ | 27,854 | |||||
Accrued compensation and employee benefits | 11,572 | 10,880 | 10,983 | ||||||||
Income tax payable | 3,648 | 145 | 3,325 | ||||||||
Current portion of long-term debt | 253 | 248 | 32,256 | ||||||||
Current portion of operating lease liability | 1,431 | 5,744 | 5,386 | ||||||||
Other accrued liabilities | 12,517 | 8,570 | 11,259 | ||||||||
Total current liabilities | 55,506 | 38,532 | 91,063 | ||||||||
Non-current liabilities | |||||||||||
Accrued self-insurance retention | 1,285 | 650 | 934 | ||||||||
Accrued pension expenses | 9,536 | 9,429 | 10,827 | ||||||||
Income tax payable, less current portion | 232 | 128 | — | ||||||||
Long-term debt, less current portion | 4,008 | 4,136 | 14,261 | ||||||||
Operating lease liability, less current portion | 37,204 | 1,829 | 4,317 | ||||||||
Other long-term liabilities | 765 | 562 | 640 | ||||||||
Total non-current liabilities | 53,030 | 16,734 | 30,979 | ||||||||
Commitments and contingencies (Notes 6, 7 and 13) | |||||||||||
Stockholders’ equity | |||||||||||
Preferred stock: | |||||||||||
Authorized 3,000,000 shares, | — | — | — | ||||||||
Common stock: | |||||||||||
Authorized 25,000,000 shares, | 163 | 164 | 164 | ||||||||
Additional paid-in capital | 119,734 | 121,373 | 121,030 | ||||||||
Accumulated deficit | (10,728 | ) | (29,048 | ) | (36,539 | ) | |||||
Accumulated other comprehensive loss | (1,357 | ) | (1,310 | ) | (2,360 | ) | |||||
Total stockholders’ equity | 107,812 | 91,179 | 82,295 | ||||||||
Total liabilities and stockholders’ equity | $ | 216,348 | $ | 146,445 | $ | 204,337 |
Virco Mfg. Corporation Unaudited Condensed Consolidated Statements of Income | |||||||
Three months ended | |||||||
7/31/2024 | 7/31/2023 | ||||||
(In thousands, except per share data) | |||||||
Net sales | $ | 108,419 | $ | 107,321 | |||
Costs of goods sold | 58,201 | 58,743 | |||||
Gross profit | 50,218 | 48,578 | |||||
Selling, general and administrative expenses | 28,324 | 27,324 | |||||
Operating income | 21,894 | 21,254 | |||||
Unrealized gain on investment in trust account | (597 | ) | (325 | ) | |||
Pension expense | 107 | 161 | |||||
Interest expense | 322 | 1,083 | |||||
Income before income taxes | 22,062 | 20,335 | |||||
Income tax expense | 5,229 | 4,801 | |||||
Net income | $ | 16,833 | $ | 15,534 | |||
Cash dividends declared per common share: | $ | 0.02 | $ | — | |||
Net income per common share: | |||||||
Basic | $ | 1.04 | $ | 0.95 | |||
Diluted | $ | 1.04 | $ | 0.95 | |||
Weighted average shares of common stock outstanding: | |||||||
Basic | 16,214 | 16,272 | |||||
Diluted | 16,215 | 16,294 |
Virco Mfg. Corporation Unaudited Condensed Consolidated Statements of Income | |||||||
Six months ended | |||||||
7/31/2024 | 7/31/2023 | ||||||
(In thousands, except per share data) | |||||||
Net sales | $ | 155,154 | $ | 142,264 | |||
Costs of goods sold | 84,589 | 80,484 | |||||
Gross profit | 70,565 | 61,780 | |||||
Selling, general and administrative expenses | 45,700 | 41,838 | |||||
Operating income | 24,865 | 19,942 | |||||
Unrealized gain on investment in trust account | (812 | ) | (624 | ) | |||
Pension expense | 214 | 322 | |||||
Interest expense | 530 | 1,795 | |||||
Income before income taxes | 24,933 | 18,449 | |||||
Income tax expense | 5,960 | 4,357 | |||||
Net income | $ | 18,973 | $ | 14,092 | |||
Cash dividends declared per common share: | $ | 0.04 | $ | — | |||
Net income per common share: | |||||||
Basic | $ | 1.16 | $ | 0.87 | |||
Diluted | $ | 1.16 | $ | 0.87 | |||
Weighted average shares of common stock outstanding: | |||||||
Basic | 16,305 | 16,242 | |||||
Diluted | 16,305 | 16,257 |
FAQ
What were Virco's (VIRC) Q2 2024 financial results?
How did Virco's (VIRC) first half 2024 performance compare to the previous year?
What is Virco's (VIRC) current debt situation as of Q2 2024?