Virco Manufacturing Corporation (VIRC) research, news, and more from GeoInvesting

Company description

Tue, 13 Sep 2022 13:57:01 GMT

Virco Mfg. Corporation engages in the design, production, and distribution of furniture in the United States. It offers seating products, including 4-leg chairs, cantilever chairs, tablet armchairs with work surfaces and compact footprints, steel-frame and floor rockers, stools, series chairs, stack and folding chairs, hard plastic seating, upholstered stack and ergonomic chairs, and plastic stack chairs. The company also provides folding, activity, office, computer, and mobile tables; and computer furniture, such as keyboard mouse trays, CPU holders, support columns, desks and workstations, specialty tables, instructor media stations and towers, and other products. In addition, it offers chair desks, combo units, and tablet arm and caster units, as well as a returns and credenzas. Further, the company provides administrative office furniture, including desks, bookcases, storage cabinets, and other items, as well as wardrobe tower cabinets, file credenzas, and mobile pedestals; laboratory furniture comprising steel-based science tables, table bases, lab stools, and wood-frame science tables; mobile furniture, such as mobile tables for cafeterias, mobile cabinets, and mobile task chairs for school settings and offices; and handling and storage equipment, as well as manufactures stackable storage trucks. It serves educational institutions, convention centers and arenas, hospitality providers, government facilities, and places of worship through its sales and support teams, and dealer network. The company was incorporated in 1950 and is headquartered in Torrance, California.

Research

Fri, 07 Jun 2024 14:28:19 GMT

Virco Mfg. Corporation (NASDAQ:VIRC)($10.86; $177.5m Market cap), reported Q1 2025 results:

Sales of $46.7 million vs $34.9 million in the prior year; beat analyst estimate of $37.7 million
EPS of $0.13 vs a loss of $0.09 in the prior year and ahead of analyst estimate of a loss of $0.13
Seasonally Light Quarter Swings to Profit on Strong Shipments, Steady Margins
Company Completes First Round of Open Market Share Repurchases Totaling $1.5 million; Current Authorization Includes Additional $3.5 Million for Future Repurchases

“Our large disaster recovery order allowed our factories to run at high volume while simultaneously generating strong shipments, a pattern that we rarely see during our normal annual cycle. While this exact pattern may not repeat itself in the future, it is reflective of the kinds of large opportunities supported by the flexibility of our U.S. factories and the underlying strength of our balance sheet. In the past we’ve described two competitive “moats” around our core market of school furniture and equipment. These are 1) extreme seasonality; and 2) the price/cube threshold, which makes bulky school furniture more costly to import. We may be seeing the development of a third moat—financial strength— that allows us to take advantage of seasonal, complex, logistically intensive opportunities that may be increasingly difficult for import-based models to finance. We are also actively evaluating potential acquisitions that would expand and strengthen our current capabilities. These including major equipment purchases, as well as bolt-on acquisitions of smaller companies or suppliers who might appreciate and contribute to our strong operating culture.”

VIRC, a past Model Portfolio holding, is trading at forward P/E of 6.7 on full year 2025 analyst estimates of $1.60, which may need to be adjusted since they crushed Q1.

VIRC is the largest manufacturer and supplier of movable furniture and equipment for educational environments in the US.

Research

Mon, 01 Apr 2024 16:52:29 GMT

Virco Mfg. Corporation (NASDAQ:VIRC) ($10.93; $178.6 market cap) provided an updated investor presentation with preliminary results for the fiscal year ending January 31, 2024. The preliminary full year sales of $269.1 million is slightly ahead of current analyst estimates of $267.3 million.

As of January 31, 2024, the Company’s fiscal year end, shipments plus backlog had reached an all-time Company record of $317.6 million. Preliminary, unaudited cash flow and net income for fiscal 2024 also set records not achieved in the last 20 plus years.

VIRC is the largest manufacturer and supplier of movable furniture and equipment for educational environments in the US

Research

Mon, 11 Sep 2023 18:26:18 GMT

Virco Mfg. Corporation (NASDAQ:VIRC), the largest manufacturer and supplier of movable furniture and equipment for educational environments in the US, reported Q2 2024 results:

Sales of $107.3 million vs $82.7 million in the prior year; beat analyst estimate of $95.2 million
EPS of $0.95 vs EPS of $0.60 in the prior year and ahead of analyst estimate of a EPS of $0.64

“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.”

PodClips

Thu, 29 Jun 2023 14:19:48 GMT

Virco Mfg. Corporation (NASDAQ:VIRC) ($4.01; $65.0 market cap), the largest manufacturer and supplier of movable furniture and equipment for educational environments in the US, provided a new investor presentation.

Please listen to this PodClip from Maj where he discusses some of the details included in the presentation.

The most important takeaway is that management is aware that they need to find a way to reduce the seasonality of the business, which has been our biggest concern.

Again, you can listen to the PodClip here.

Research

Thu, 15 Jun 2023 12:42:28 GMT

Virco Mfg. Corporation (NASDAQ:VIRC), the largest manufacturer and supplier of movable furniture and equipment for educational environments in the US, reported Q1 2024 results:

Sales of $34.9 million vs $32.0 million in the prior year; beat analyst estimate of $33.7 million
Loss of $0.09 vs a loss of $0.32 in the prior year and ahead of analyst estimate of a loss of $0.17

“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.”

We recently removed the stock from our model portfolios. Our lack of visibility for the company to consistently grow revenue and profitability prompted our decision to do so.

However, at a PE of 5.7, the stock is still cheap. We will continue to track the story to see if the outlook for those matters above becomes more clear and consistent. We are still trying to lock in a site visit to the company's facility in California.

Research

Fri, 28 Apr 2023 14:27:11 GMT

Removing VIRC From Our Select Long Model Portfolio

Virco Mfg. Corporation (NASDAQ:VIRC) ($3.88; $63.1 market cap), the largest manufacturer and supplier of movable furniture and equipment for educational environments in the US, reported Q4 2023 results:

Sales of $38.8 million vs $40.1 million in the prior year; below the one analyst estimate of $46.1 million
Loss of $0.30 vs a loss of $0.32 in the prior year and missed analyst estimate of a loss of $0.05

“Our domestic factories and integrated support and service teams collaborated to deliver and install a record number of projects, both large and small, during last year’s busy summer delivery period. We continue to prepare for an even more successful summer this year. While nothing is guaranteed, I am hopeful that we have returned to a solid level of revenue and margin that will allow continued profitability.”

While the commentary has some positive tones to it, there’s still uncertainty about management’s ability to improve upon the levels of profitability it achieved in fiscal 2022.

It is worth noting that the backlog is up 25.7% from the prior year and at an all time high of $106.9 million. The company will likely lose money in its seasonally weak Q1, before returning to profitability in Q2 and Q3. The stock is currently trading at a trailing non-GAAP tax adjusted P/E of about 10. We think it is prudent to remove the stock from our model portfolio holdings and will revisit the story as the year progresses

Research

Mon, 12 Dec 2022 14:39:47 GMT

Virco Mfg. Corporation (NASDAQ:VIRC) ($4.85; $78.0 market cap), the largest manufacturer and supplier of movable furniture and equipment for educational environments in the US, reported strong Q3 2023 results:

Sales of $77.3 million vs $57.3 million in the prior year; below the one analyst estimate of $80.3 million
EPS of $0.48 vs $0.08 in the prior year and ahead of analyst estimate of $0.47

“We devoted a lot of energy to enhancing the capabilities of our U.S. operations. These enhancements continued even during the COVID pandemic, when many of our school customers were closed. We always believed that in-person schooling was essential—not just for students—but for parents, teachers, communities, and our shared aspirations as people.

I was inspired by the activity in our factories and shipping docks during this year’s summer season. Thanks to the optimism and resolve of our staff, we proved there is dignity in a job well done. I am thankful to our employees for their heroic efforts, and to our shareholders whose patience supported this performance. I also look forward to supporting the renaissance in public and private education. The last few years were hard, but the future looks bright.”

The company mentions a new investor presentation in the press release, we do not see it published yet, but will review to determine if there is any forward looking guidance in the presentation once available.

Research

Wed, 21 Sep 2022 13:16:00 GMT

Virco Mfg. Corporation (NASDAQ:VIRC) ($4.79; $77.6 market cap) - Director Agnieszka Winkler filed a form 4 adding 2,000 shares of VIRC on the open market at an average price of $4.76 bringing total shares to 57,701. VIRC is the largest manufacturer and supplier of movable furniture and equipment for educational environments in the United States.

In related news, Wedbush maintained VIRC with an “Outperform” rating and raised the price target to $9.00 (prior was 8). Analyst EPS estimates has been raised to $0.71 for fiscal 2023 from $0.39.

Research

Tue, 13 Sep 2022 19:13:37 GMT

Virco Mfg. Corporation (NASDAQ:VIRC) ($4.85; $78.0 market cap) is the largest manufacturer and supplier of movable furniture and equipment for educational environments in the United States. The company reported strong Q2 2023 results at the open today.

Sales of $82.8 million vs $59.0 million in the prior year; below the one analyst estimate of $91.5 million
EPS of $0.60 vs $0.24 in the prior year and ahead of analyst estimate of $0.43. Q2 23 was at a lower tax rate, taxing at a similar rate to last year would equate to $0.47 EPS.
Actual Year-to-Date Shipments plus the unshipped backlog (“Shipments plus Backlog”)— stood at $194.7 million, compared to $154.6 million on the same date in the prior year.

“Our second quarter results reflect the positive impact of the actions we took entering this year to improve our ability to manage through the challenges of supply chain disruption and increases in raw material costs, while capitalizing on the strong increase we have seen in demand as more schools shift back to the reliability we offer through our vertically integrated, U.S.-based production and distribution facilities. In June and July, we increased shipments by more than $21 million over the prior year, largely due to our successful efforts to increase factory output and continue to deliver high quality, innovative equipment and furniture to schools across the United States. The higher level of revenue enabled us to realize greater operating leverage, which contributed to our increased profitability. I would like to thank our dedicated, immensely skilled employees whose outstanding efforts during an extremely busy and productive second quarter enabled us to continue fulfilling our mission to support students, schools and communities at the beginning of the new school year.”

Although VIRC missed top line analyst estimates, the quarter was still strong with great year over year growth for the top and bottom line, beating analyst EPS estimates of $0.43 by reporting $0.60 in EPS ($0.47 tax adjusted). Furthermore, EPS should continue to get a lift due to price increases just implemented that should positively impact future quarters.

One of our highlights in our reasons for tracking note from September 2, 2022 was that the company has implemented new pricing modifications that allows it to combat inflationary pressures better. Comments from management on this topic:

“While the Company implemented a price increase earlier in the year, the higher pricing failed to fully offset the inflationary impact of higher raw material costs. An additional pricing adjustment has been implemented for orders shipping during the fourth quarter of fiscal 2023 that management believes will enable the Company to fully recover the significant increase in raw material costs experienced this year.”

This morning, shares were up almost 18% near a new 52 week high of $5.

Reasons For Tracking

Fri, 02 Sep 2022 14:42:33 GMT

Call To Action: Adding VIRC to Our Select Long Disclosure

Virco Mfg. Corporation (NASDAQ:VIRC) ($4.25; $68.4 market cap) is the largest manufacturer and supplier of movable furniture and equipment for educational environments in the United States. The stock has recently hit a new 52 week high of $5.00 On the heels of its Q1 2023 earnings report.

On June 10, 2022 the company reported its Q1 2023 results. While on the surface the numbers are not impressive, comments from management are what caught our eye. Furthermore, we had a brief interview discussion with management and plan to bring them on our platform to present their story to all of us. I also plan on hopefully doing a site visit at their headquarters in Torrance, California. We plan to accompany this RFT (reasons for tracking) outline with a podclip.

Q1 2023 results:

Sales of $32.1 million vs $28.4 million in the prior year
Loss per share of $0.32 vs. loss of $0.25 in the prior year

Our brief reasons for tracking:

Stock hitting new highs
Shipments + Backlog at record highs
Orders impacted by inflation have cleared through the backlog
Increased factory output by 45% over first quarter of last year
New pricing modifications protect against inflation moving forward.
Ability to modify pricing with its suppliers on a more routine basis than in the past
The company is the leading player in its industry in the United States and is going to benefit greatly due to competing products from China that left the space over the last 18 months. That frees up about 20% to 50% of the market for domestic competitors to fight over.
Bullish comments from management include:

“We continue to see very strong order flow driven by increased funding for schools and many customers returning to Virco after years of using foreign suppliers who can no longer reliably provide quality furniture and equipment at a competitive price...The new pricing and ability to implement more frequent price adjustments should enable us to better manage the impact of inflationary pressures on our operating margins and deliver improved profitability in the future.”

“After twenty years of competitive headwinds, we now have the wind at our back. And as more schools invest in the future of American students, who are literally the future of the country, we believe we are ideally positioned to support those investments and provide a long overdue reward to our patient shareholders.”

In May 2021, the Board of directors hired a special committee to review an unsolicited acquisition proposal, which the company was advised to reject as it was not in the best interest of shareholders. This implies to us that the company believes it can increase shareholder value by execution of its goals. While It is unclear what the bid was for, we will attempt to determine if possible.
Analyst estimates call for nice growth in fiscal 2023 with Sales and EPS of $252.8 million and $0.39 up strongly from the prior year of $184.8 and a loss of $0.95.
Valuation: at this point we think the stock can trade at a P/E of 15 on the 2023 analyst estimate $0.39, translating to about $6.00 per share. Longer-term valuation targets will depend on our analysis of the company's earnings potential over the next few years.

Caveats:

Low cash on balance sheet; but funds operations from cash flow and claims to have no major capital requirement needs
Large seasonality between quarters 2 and 3 (strongest) and 1 and 4 (weaker)
Stock has been range-bound for a decade
Analyst coverage is minimal, with only 1 analyst covering the stock
There is risk adding the stock to the Long Disclosure Model Portfolio ahead of the company’s Q2 earnings due anytime now.

Comments & Business Outlook

Wed, 10 Dec 2014 05:00:00 GMT

Third Quarter 2014 Results

Revenue for the third quarter of 2014 totaled $62,652,000, an increase of 5.4% compared to last year's $59,454,000.
Q3 2014 EPS of $0.31 vs $0.23 in the prior year

Multiple indicators suggest that the Company's core market for public school furniture is finally experiencing a more evenly distributed recovery. A surge of late summer fill-in orders pushed more revenues into the third quarter and drove backlogs higher as the Company heads into its traditionally slower fourth quarter. These types of orders are typically purchased from tax-funded operating budgets as opposed to bond-funded construction budgets, which tend to be more volatile. Management believes fill-in orders are indicative of overall industry health because they reflect school districts' confidence in budgeting. Management also believes that the Company's large installed base positions it to take advantage of this recovering demand, since schools often mirror their existing furniture with matching replacements.

Perhaps most encouraging is the Company's overall trend on incoming orders. For seven of this year's nine months, incoming orders were higher than the low ebb of the recession cycle, which stretches back six years. This is a more sustained upward trend than at any time since the onset of the recession. Most importantly, incoming orders were substantially higher during the peak summer months, which with their higher volume have a disproportionate impact on full-year results. Through November (as of this writing) incoming orders have increased by 7.8% compared to last year.

Taken as a group, these industry indicators drawn from Company results suggest a general upward trend of about 4-5%. They also highlight the Company's ability to respond efficiently to last-minute demand through a combination of extensive sales history, forecasting, and nimble domestic fabrication. While no single one of these measures should be taken as the most accurate indicator of industry health, Management believes that together they provide evidence of economic conditions at the state and local level finally improving enough to translate into stronger public school funding and a long-anticipated upgrading of moveable furniture and equipment.

Virco has enjoyed a continuity of management and strategic focus since its founding in 1950 by Julian Virtue. As Virco's core public school market begins to recover and the Company expands its strategic possibilities for growth, the Company's Board of Directors has adopted a formal succession plan to support growth. As part of this plan, Douglas Virtue has been named President and Chief Operating Officer. Robert Virtue will continue as Chairman of the Board and CEO.