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 April 30, 2023 (first quarter of
fiscal 2024).
Net Sales were $34.9 million for the first quarter of fiscal
2024, an 8.7% increase from $32.1 million for the same period of
the prior fiscal year.
Operating Loss in the seasonally light first quarter declined
72.3% to $1.3 million from $4.7 million in the same period of the
prior year, reflecting the broad positive impacts of higher revenue
combined with higher margins. Selling, General, and
Administrative(SG&A) expenses were virtually flat at $14.5
million or 41.5% of sales, versus $14.5 million, or 45.0% of sales,
for the same period of the prior year. Interest expense for the
first quarter of fiscal 2024 was $0.7 million compared to $0.4
million in the prior year, reflecting both higher interest rates
and a modestly higher balance on the Company’s line of seasonal
working capital.
For investors unfamiliar with Virco’s seasonal business cycle,
the Company typically books orders and builds inventory during the
first and fourth quarters, corresponding to the months when public
schools are in session and thus unable to receive deliveries that
might interrupt student instruction. The Company then delivers
between 50-60% of total annual revenue in the second and third
quarters, which correspond to “summer vacation” in most public and
private schools.
Given this extreme seasonality, Management has developed several
internal, non-GAAP metrics to evaluate trends in the business cycle
during seasonally light quarters, when revenue alone may provide
incomplete information. Management believes that one of the most
helpful of these early-season metrics is “Shipments + Backlog”
(technically the sum of year-to-date shipments + unshipped orders
on the Company’s backlog) which is used for planning production
schedules, staffing, and borrowings under the Company's seasonal
credit revolver. Because the Company books orders primarily with
public and private schools under large-scale national public
procurement contracts, the backlog figure tends to be fairly
reliable, providing SKU-level detail that is useful for production
scheduling, staffing, and procurement of raw materials. “Shipments
+ Backlog” thus provides both a high-level measure of business
velocity as well as granular detail on product mix, sizes, colors
and finishes, as well as service levels and requested dates of
delivery. Management is able to compare current trends against a
detailed 22-year history of identical data, compiled since the
adoption of SAP as the Company’s Enterprise Resource Planning
system (ERP) in 2001. This data provides a reliable degree of
forward visibility and control in Virco’s highly seasonal market
for school furniture and equipment.
As of May 31, 2023, the latest date for which the Company has
complete data, “Shipments + Backlog” had reached a new record high
of $167.9 million, a 16.4% increase over last year’s record of
$144.3 million as of the same date.
Commenting on these trends, Virco Chairman and CEO Robert Virtue
said: “We are very pleased to be part of the robust recovery in
public and private education following the disruptions of the
pandemic. There seems to be a renewed appreciation for the
essential role of in-person schooling for healthy students and
communities. We are honored to do our part in supporting these
essential institutions, and we look forward to another busy summer
as we deliver this record backlog.”
Virco President Doug Virtue elaborated: “Virco’s long history as
a direct manufacturer/supplier gives us a unique perspective on
market trends for school furniture and equipment. We actively use
our detailed database of products, customers, service levels, and
prices to plan production, staffing and financing. We like to say
that we’re not guessing about future demand, and usually, by the
end of May, we have a pretty good idea of how the current year is
going to end up.
“The pandemic upset some of those traditional comparisons, but
even then we were able to use our data to minimize the impacts. Now
we’re using it to maximize our contributions. This summer has every
indication of being very busy and very good for Virco. We’re
thankful to have reached this positive inflection point both for
education in general and our Company in particular. We look forward
to sharing more of our progress with shareholders at this year’s
Annual Meeting in Torrance, California, on June 20, 2023.”
Contact:Virco Mfg. Corporation (310)
533-0474Robert A. Virtue, Chairman and Chief Executive OfficerDoug
Virtue, PresidentRobert Dose, Chief Financial Officer
Non-GAAP Financial Information
This press release includes a statement of shipments plus
unshipped backlog as of May 31, 2023 compared to the same date in
the prior fiscal year. 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. In addition, backlog estimates are subject to change as
a result of delay, suspension, termination or an increase or
reduction in scope of projects by customers. 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; 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.
Virco Mfg. Corporation |
Unaudited Condensed Consolidated Balance
Sheets |
|
|
4/30/2023 |
|
1/31/2023 |
|
4/30/2022 |
(In thousands, except share and par value
data) |
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash |
$ |
625 |
|
|
$ |
1,057 |
|
|
$ |
539 |
|
Trade accounts receivables,
net |
|
15,524 |
|
|
|
18,435 |
|
|
|
13,326 |
|
Other receivables |
|
35 |
|
|
|
68 |
|
|
|
85 |
|
Income tax receivable |
|
321 |
|
|
|
19 |
|
|
|
135 |
|
Inventories |
|
85,640 |
|
|
|
67,406 |
|
|
|
66,297 |
|
Prepaid expenses and other
current assets |
|
2,698 |
|
|
|
2,083 |
|
|
|
2,156 |
|
Total current assets |
|
104,843 |
|
|
|
89,068 |
|
|
|
82,538 |
|
Non-current assets |
|
|
|
|
|
|
|
Property, plant and
equipment |
|
|
|
|
|
|
|
Land |
|
3,731 |
|
|
|
3,731 |
|
|
|
3,731 |
|
Land improvements |
|
686 |
|
|
|
686 |
|
|
|
653 |
|
Buildings and building improvements |
|
51,391 |
|
|
|
51,310 |
|
|
|
51,375 |
|
Machinery and equipment |
|
114,655 |
|
|
|
113,662 |
|
|
|
113,901 |
|
Leasehold improvements |
|
983 |
|
|
|
983 |
|
|
|
1,009 |
|
Total property, plant and
equipment |
|
171,446 |
|
|
|
170,372 |
|
|
|
170,669 |
|
Less accumulated depreciation and amortization |
|
136,779 |
|
|
|
135,810 |
|
|
|
135,844 |
|
Net property, plant and
equipment |
|
34,667 |
|
|
|
34,562 |
|
|
|
34,825 |
|
Operating lease right-of-use
assets |
|
9,326 |
|
|
|
10,120 |
|
|
|
12,892 |
|
Deferred tax assets, net |
|
8,249 |
|
|
|
7,800 |
|
|
|
769 |
|
Other assets, net |
|
8,848 |
|
|
|
8,576 |
|
|
|
8,383 |
|
Total assets |
$ |
165,933 |
|
|
$ |
150,126 |
|
|
$ |
139,407 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
23,628 |
|
|
$ |
19,448 |
|
|
$ |
19,437 |
|
Accrued compensation and
employee benefits |
|
9,416 |
|
|
|
9,554 |
|
|
|
5,055 |
|
Current portion of long-term
debt |
|
20,362 |
|
|
|
7,360 |
|
|
|
18,905 |
|
Current portion operating
lease liability |
|
5,271 |
|
|
|
5,082 |
|
|
|
4,769 |
|
Other accrued liabilities |
|
7,868 |
|
|
|
7,081 |
|
|
|
6,049 |
|
Total current liabilities |
|
66,545 |
|
|
|
48,525 |
|
|
|
54,215 |
|
Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
|
Accrued self-insurance
retention |
|
1,251 |
|
|
|
1,050 |
|
|
|
1,533 |
|
Accrued pension expenses |
|
10,802 |
|
|
|
10,676 |
|
|
|
15,332 |
|
Income tax payable |
|
85 |
|
|
|
79 |
|
|
|
76 |
|
Long-term debt, less current
portion |
|
14,323 |
|
|
|
14,384 |
|
|
|
14,564 |
|
Operating lease liability,
less current portion |
|
5,648 |
|
|
|
6,796 |
|
|
|
10,297 |
|
Other long-term
liabilities |
|
557 |
|
|
|
555 |
|
|
|
640 |
|
Total non-current
liabilities |
|
32,666 |
|
|
|
33,540 |
|
|
|
42,442 |
|
Commitments and
contingencies |
|
— |
|
|
|
— |
|
|
|
— |
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
Preferred stock: |
|
|
|
|
|
|
|
|
|
|
|
Authorized 3,000,000 shares,
$0.01 par value; none issued or outstanding |
|
— |
|
|
|
— |
|
|
|
— |
|
Common stock: |
|
|
|
|
|
|
|
|
|
|
|
Authorized 25,000,000 shares,
$0.01 par value; issued and outstanding 16,210,985 shares at
4/30/2023 and 1/31/2023, and 16,102,023 at 4/30/202 |
|
162 |
|
|
|
162 |
|
|
|
161 |
|
Additional paid-in
capital |
|
120,993 |
|
|
|
120,890 |
|
|
|
120,745 |
|
Accumulated deficit |
|
(52,073 |
) |
|
|
(50,631 |
) |
|
|
(72,262 |
) |
Accumulated other
comprehensive loss |
|
(2,360 |
) |
|
|
(2,360 |
) |
|
|
(5,894 |
) |
Total stockholders’
equity |
|
66,722 |
|
|
|
68,061 |
|
|
|
42,750 |
|
Total liabilities and
stockholders’ equity |
$ |
165,933 |
|
|
$ |
150,126 |
|
|
$ |
139,407 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Virco Mfg. Corporation |
Unaudited Condensed Consolidated Statements of
Operations |
|
|
Three months ended |
|
4/30/2023 |
|
4/30/2022 |
|
(In thousands, except per share data) |
Net sales |
$ |
34,943 |
|
|
$ |
32,084 |
|
Costs of goods sold |
|
21,741 |
|
|
|
22,377 |
|
Gross profit |
|
13,202 |
|
|
|
9,707 |
|
Selling, general and
administrative expenses |
|
14,514 |
|
|
|
14,451 |
|
Operating loss |
|
(1,312 |
) |
|
|
(4,744 |
) |
Unrealized gain on investment
in trust account |
|
(299 |
) |
|
|
— |
|
Pension expense |
|
161 |
|
|
|
195 |
|
Interest expense |
|
712 |
|
|
|
427 |
|
Loss before income taxes |
|
(1,886 |
) |
|
|
(5,366 |
) |
Income tax benefits |
|
(444 |
) |
|
|
(282 |
) |
Net loss |
$ |
(1,442 |
) |
|
$ |
(5,084 |
) |
|
|
|
|
|
|
|
|
Net loss per common
share: |
|
|
|
Basic |
$ |
(0.09 |
) |
|
$ |
(0.32 |
) |
Diluted |
$ |
(0.09 |
) |
|
$ |
(0.32 |
) |
Weighted average shares of
common stock outstanding: |
|
|
|
Basic |
|
16,211 |
|
|
|
16,033 |
|
Diluted |
|
16,211 |
|
|
|
16,033 |
|
Virco Manufacturing (NASDAQ:VIRC)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Virco Manufacturing (NASDAQ:VIRC)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024