Virco Reports Record 3rd Quarter and YTD Results
- 29% increase in net income
- 9% growth in sales
- Regular quarterly dividend declared
- $5 million share repurchase program authorized
- Gross margin improved to 45.4%
- Operating income grew 67.1%
- Sales increased 17.8% for the nine months ended October 31, 2023
- YTD shipments + unshipped backlog reflected a 76% growth since the low point of the pandemic
- None.
- Net Income increased
29% on9% Growth in Sales compared to prior year - Company Declares Regular Quarterly Dividend
- Board Authorizes
$5 Million Share Repurchase
TORRANCE, Calif., Dec. 08, 2023 (GLOBE NEWSWIRE) -- Virco Mfg. Corporation (NASDAQ: VIRC) reported financial results for the third quarter ended October 31, 2023, as well as the reinstatement of a quarterly dividend of
For the third quarter ended October 31, 2023, sales increased to
For the nine months ended October 31, 2023, sales increased
For the three and nine month periods ended October 31, 2023 the effective tax rate increased materially due to the recording of a valuation allowance needed for federal deferred tax assets and certain state net operating loss carryforwards which commenced in the fourth quarter of fiscal year ended January 31, 2022 and continued through the period ended October 31, 2022. The increase in the effective tax rates was primarily due to the reversal of the valuation allowance at January 31, 2023.
Management’s preferred measure of business momentum: YTD shipments + the unshipped backlog (“Shipments + Backlog”), stood at
Thanks to these strong results, Virco’s Board of Directors has re-instated a quarterly dividend of
Support for in-person education is being reflected in robust funding across many domains, including state and local funding for public schools, federal support for particular earmarked activities such as pre-K programs and expanded foodservice, as well as continued growth in support for charter schools and private/parochial schools. Support is also well distributed geographically, with strong revenue growth in both California and Florida.
Commenting on the Company’s strong results, Virco CEO and Chairman Robert Virtue said: “I’m very happy that we are able restore a dividend and launch an open-market share repurchase program. This speaks to the strength of our recovery after the pandemic and speaks as well to the renewed appreciation many people have for in-person education. We take our role as a supplier of welcoming and supportive educational environments very seriously. To be able to share our success in this important work with our loyal shareholders is very gratifying.”
Virco President Doug Virtue elaborated: “The fact that we’ve been able to support a
Contact:
Virco Mfg. Corporation
(310) 533-0474
Robert A. Virtue, Chairman and Chief Executive Officer
Doug Virtue, President
Robert Dose, Chief Financial Officer
Non-GAAP Financial Information
This press release includes a statement of shipments plus unshipped backlog as of October 31, 2023 compared to the same date in the prior fiscal years. Shipments represent the dollar amount of net sales actually shipped during the period presented. Unshipped backlog represents the dollar amount of net sales that we expect to recognize in the future from sales orders that have been received from customers in the ordinary course of business. The Company considers shipments plus unshipped backlog a relevant and preferred supplemental measure for production and delivery planning. However, such measure has inherent limitations, is not required to be uniformly applied or audited and other companies may use methodologies to calculate similar measures that are not comparable. Readers should be aware of these limitations and should be cautious as to their use of such measure.
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; declaration of dividends in future periods; 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 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, 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. There can be no assurance that the Company will declare and pay dividends in future periods.
Repurchases of common stock under the share repurchase program may be made at management’s discretion from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The timing and total amount of stock repurchases will depend upon business, economic and market conditions, corporate, legal and regulatory requirements, prevailing stock prices, trading volume, and other considerations. The repurchase program has no time limit and may be suspended for periods or discontinued at any time. The Company expects to utilize its existing cash and cash equivalents to fund repurchases under the share repurchase program.
Financial Tables Follow
Virco Mfg. Corporation Unaudited Condensed Consolidated Balance Sheets | ||||||||
10/31/2023 | 1/31/2023 | 10/31/2022 | ||||||
(In thousands) | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash | $ | 4,887 | $ | 1,057 | $ | 2,175 | ||
Trade accounts receivables, net | 33,029 | 18,435 | 28,028 | |||||
Other receivables | 27 | 68 | 102 | |||||
Income tax receivable | — | 19 | 106 | |||||
Inventories | 58,931 | 67,406 | 57,465 | |||||
Prepaid expenses and other current assets | 1,961 | 2,083 | 1,671 | |||||
Total current assets | 98,835 | 89,068 | 89,547 | |||||
Non-current assets | ||||||||
Property, plant and equipment | ||||||||
Land | 3,731 | 3,731 | 3,731 | |||||
Land improvements | 694 | 686 | 686 | |||||
Buildings and building improvements | 51,498 | 51,310 | 51,459 | |||||
Machinery and equipment | 116,695 | 113,662 | 114,762 | |||||
Leasehold improvements | 976 | 983 | 1,012 | |||||
Total property, plant and equipment | 173,594 | 170,372 | 171,650 | |||||
Less accumulated depreciation and amortization | 138,650 | 135,810 | 136,998 | |||||
Net property, plant and equipment | 34,944 | 34,562 | 34,652 | |||||
Operating lease right-of-use assets | 7,156 | 10,120 | 11,116 | |||||
Deferred tax assets, net | 7,031 | 7,800 | 160 | |||||
Other assets, net | 9,073 | 8,576 | 8,245 | |||||
Total assets | $ | 157,039 | $ | 150,126 | $ | 143,720 | ||
Virco Mfg. Corporation Unaudited Condensed Consolidated Balance Sheets | |||||||||||
10/31/2023 | 1/31/2023 | 10/31/2022 | |||||||||
(In thousands, except share and par value data) | |||||||||||
Liabilities | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 14,351 | $ | 19,448 | $ | 18,926 | |||||
Accrued compensation and employee benefits | 11,102 | 9,554 | 9,084 | ||||||||
Income tax payable | 3,130 | — | — | ||||||||
Current portion of long-term debt | 245 | 7,360 | 2,457 | ||||||||
Current portion operating lease liability | 5,465 | 5,082 | 4,985 | ||||||||
Other accrued liabilities | 7,339 | 7,081 | 7,767 | ||||||||
Total current liabilities | 41,632 | 48,525 | 43,219 | ||||||||
Non-current liabilities | |||||||||||
Accrued self-insurance retention | 748 | 1,050 | 1,454 | ||||||||
Accrued pension expenses | 9,334 | 10,676 | 11,776 | ||||||||
Long-term debt, less current portion | 7,946 | 14,384 | 14,444 | ||||||||
Operating lease liability, less current portion | 2,933 | 6,796 | 8,028 | ||||||||
Other long-term liabilities | 657 | 634 | 771 | ||||||||
Total non-current liabilities | 21,618 | 33,540 | 36,473 | ||||||||
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 | 121,201 | 120,890 | 120,787 | ||||||||
Accumulated deficit | (26,379 | ) | (50,631 | ) | (54,707 | ) | |||||
Accumulated other comprehensive loss | (1,197 | ) | (2,360 | ) | (2,214 | ) | |||||
Total stockholders’ equity | 93,789 | 68,061 | 64,028 | ||||||||
Total liabilities and stockholders’ equity | $ | 157,039 | $ | 150,126 | $ | 143,720 | |||||
Virco Mfg. Corporation Unaudited Condensed Consolidated Statements of Income | ||||||
Three months ended | ||||||
10/31/2023 | 10/31/2022 | |||||
(In thousands, except per share data) | ||||||
Net sales | $ | 84,252 | $ | 77,395 | ||
Costs of goods sold | 46,041 | 46,618 | ||||
Gross profit | 38,211 | 30,777 | ||||
Selling, general and administrative expenses | 23,505 | 21,977 | ||||
Operating income | 14,706 | 8,800 | ||||
Unrealized loss (gain) on investment in trust account | 176 | (220 | ) | |||
Pension expense | 301 | 259 | ||||
Interest expense | 765 | 567 | ||||
Income before income taxes | 13,464 | 8,194 | ||||
Income tax expense | 3,304 | 319 | ||||
Net income | $ | 10,160 | $ | 7,875 | ||
Net income per common share: | ||||||
Basic | $ | 0.62 | $ | 0.49 | ||
Diluted | $ | 0.62 | $ | 0.48 | ||
Weighted average shares of common stock outstanding: | ||||||
Basic | 16,347 | 16,211 | ||||
Diluted | 16,428 | 16,249 | ||||
Virco Mfg. Corporation Unaudited Condensed Consolidated Statements of Income | |||||
Nine months ended | |||||
10/31/2023 | 10/31/2022 | ||||
(In thousands, except per share data) | |||||
Net sales | $ | 226,516 | $ | 192,276 | |
Costs of goods sold | 126,525 | 119,947 | |||
Gross profit | 99,991 | 72,329 | |||
Selling, general and administrative expenses | 65,343 | 57,099 | |||
Operating income | 34,648 | 15,230 | |||
Unrealized (gain) loss on investment in trust account | (448 | 85 | |||
Pension expense | 623 | 650 | |||
Interest expense | 2,560 | 1,692 | |||
Income before income taxes | 31,913 | 12,803 | |||
Income tax expense | 7,661 | 332 | |||
Net income | $ | 24,252 | $ | 12,471 | |
Net income per common share: | |||||
Basic | $ | 1.49 | $ | 0.77 | |
Diluted | $ | 1.48 | $ | 0.77 | |
Weighted average shares of common stock outstanding: | |||||
Basic | 16,277 | 16,118 | |||
Diluted | 16,334 | 16,136 |
FAQ
What is the net income increase reported by Virco Mfg. Corporation for the third quarter ended October 31, 2023?
What is the growth in sales reported by Virco Mfg. Corporation for the third quarter ended October 31, 2023?
What dividend did Virco Mfg. Corporation declare for the third quarter ended October 31, 2023?
What share repurchase program did Virco Mfg. Corporation authorize?
What was the gross margin improvement reported by Virco Mfg. Corporation?
What was the operating income growth reported by Virco Mfg. Corporation for the third quarter ended October 31, 2023?
What was the sales increase reported by Virco Mfg. Corporation for the nine months ended October 31, 2023?