0000751365FALSE00007513652024-12-092024-12-09

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of Report: December 9, 2024
VIRCO MFG. CORPORATION
(Exact name of registrant as specified in its charter)
 
 
Delaware 001-8777 95-1613718
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
   
2027 Harpers Way  
TorranceCalifornia 90501
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (310) 533-0474

Not Applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value per share
VIRC
The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter). Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]


TABLE OF CONTENTS

Item 2.02 - Results of Operations and Financial Condition
Item 9.01 - Financial Statements and Exhibits
SIGNATURES




Item 2.02 Results of Operations and Financial Condition.

On December 9, 2024, Virco Mfg. Corporation (“Virco”) issued a press release announcing its financial results for the third quarter ended October 31, 2024. A copy of the press release is attached hereto as Exhibit 99.1.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 and Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Item 7.01 Regulation FD Disclosure.

On December 5, 2024, the Company’s Board of Directors declared a cash dividend for the Company’s third fiscal quarter of
$0.025 on each outstanding share of common stock. The dividend is payable on January 10, 2025 to stockholders of record of the common stock as of the close of business on December 20, 2024. While the Company currently intends to pay future dividends on a quarterly basis, following review and approval by the Board of Directors, the declaration and payment of future dividends, as well as the amounts thereof, are subject to the discretion of the Board as well as restrictive covenants in the Company’s lending agreements. There can be no assurance that the Company will declare and pay dividends in future periods.


Item 9.01 Financial Statements and Exhibits.
Exhibit
No.		  Description

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
VIRCO MFG. CORPORATION
(Registrant)
 
Date: December 9, 2024/s/ Robert A. Virtue
 (Signature)  
 Name:  Robert A. Virtue
 Title:  Chief Executive Officer and Chairman of the Board of Directors




Exhibit 99.1


Virco Reports Third Quarter Results: Robust Balance Sheet and Strengthening Cash Flows as School Furniture Market Returns to pre-Pandemic Seasonal Patterns

•Capital Efficiencies Improved
•Growth and Shareholder Returns Funded by Operating Cash Flows
•Quarterly Dividend of $0.025 per Share Declared
•Traditional Seasonality Returns to Shipments, Orders, Backlog

TORRANCE, CALIFORNIA: December 9, 2024 (Globe Newswire)—Virco Mfg. Corporation (NASDAQ:VIRC) a leading manufacturer and supplier of movable furniture and equipment for educational environments and public spaces, announced results for the Company’s Third Quarter and first Nine Months ended October 31, 2024:

For the Third Quarter, including the months of August, September, and October, revenue declined slightly to $82,620,000 from $84,252,000 in the same quarter of the prior year. For the first nine months, revenue grew 5.0% to $237,774,000 from $226,516,000 in the first nine months of last year.

Gross Profit for the Third Quarter declined 4.0% to $36,678,000 compared to $38,211,000 in last year’s Third Quarter. Through nine months, Gross Profit increased 7.3% to $107,243,000 compared to $99,991,000 last year. Gross Margin in the Third Quarter was 44.4% compared to 45.4% in the prior year. Through nine months, Gross Margin was 45.1% vs. 44.1% in the prior year.

Selling, General, and Administrative Expenses (SG&A) in the Third Quarter increased 8.8% to $25,565,000, or 30.9% of revenue, from $23,505,000, or 27.9% of revenue, in the same period of the prior year, primarily due to higher freight and installation costs. Through nine months, SG&A increased 9.1% to $71,265,000, or 30.0% of revenue, from $65,343,000, or 28.8% of revenue, driven by higher freight and installation costs as well as a proportionate increase in revenue. Inflation in services such as freight and installation are not reflected in the broader Consumer Price Index of inflation, but these expenses can be very impactful on a direct supplier such as Virco. Management anticipates a continuation of this trend in the short- to mid-term.

Operating Income for the Third Quarter declined to $11,113,000 or 13.5% of sales, compared to $14,706,000, or 17.5% of sales in the Third Quarter of the prior year. Through nine months, Operating Income is up 3.8% to $35,978,000 or 15.1% of sales, compared to $34,648,000, or 15.3% of sales, in the same period last year.

Net interest income in the Third Quarter was $24,000, compared to net interest expense of $765,000 in the same quarter of the prior year. This swing to net interest income reflects the fact that the Company was effectively debt-free during the bulk of the Third Quarter, and was not utilizing its seasonal line of credit to finance operations. Through nine months, net interest expense was $506,000 compared to $2,560,000 last year.

Net income for the Third Quarter was $8,401,000, down from $10,160,000 in the same period of the prior year. Through nine months, net income was $27,374,000, up from $24,252,000 in the first nine months of last year.

The Company has recently seen order rates and timing return to a more traditional seasonal pattern. Management’s preferred measure of business velocity is “Shipments plus Backlog,” a non-GAAP metric that combines actual shipments with the unshipped backlog. As of this press release (December 9, 2024), Shipments plus Backlog is approximately 1% higher than on the same date last year. This reflects both a moderation in the rate of order growth as well as a return to more traditional seasonal patterns, during which orders and related production peak in spring, followed by heavy shipments in summer when schools are out of session. The return to this pattern continued in the Third Quarter, with the bulk of the metric being concentrated in actual year-to-date shipments with a relatively smaller component of unshipped backlog.

The Company’s overall financial position continued to improve in the Third Quarter. As of October 31, 2024, all major activities including operations, regular maintenance capital expenditures, and shareholder returns were being funded by free cash from operations. As of October 31, 2024, the Company had $38,858,000 of cash on hand and was not utilizing any of its available credit under its seasonal revolver with PNC Bank. Management anticipates







that this positive condition will persist through much of the coming year, with only modest borrowings under its seasonal revolver during peak delivery season in summer.

Other elements of the Balance Sheet are similarly strong. Inventories have been appropriately matched to shippable orders and were down 16.9% to $48,948,000 compared to $58,931,000 at the end of last year’s Third Quarter. The Company’s domestic factories and early upstream visibility of product specifications and installation details—provided by its proprietary PlanSCAPE project management service—has supported a gradual shift toward Make-to-Order versus Make-to-Stock. This shift has had a similar financial benefit for Virco as “Just-in-Time” used to have for importers before the supply chain disruptions of a few years ago. Virco is currently able to tailor all levels of inventory—from raw materials, through work-in-process, to final finished goods—to match actual customer demand. Management believes this efficiency is reflected not only in financial results but also in customer satisfaction, especially with complex projects and highly customized products, both of which have recently become a larger part of the Company’s revenue mix.

At the end of the Third Quarter, Accounts Receivable had declined 14.7% to $28,168,000 from $33,029,000 at the same period last year. Management views this decline as favorable, since it reflects faster collections on overall higher annual revenue, further reflecting the Company’s strong on-time and complete-delivery performance during this year’s peak summer season.

Stockholder’s Equity was $115,859,000 at the end of the Third Quarter, an increase of 23.5% from $93,789,000 at the same period last year. The Company’s strong financial position will allow it to continue its record of customer support and service, as well as its generous and fair benefits and compensation for its U.S. workers. In addition, Management continues to make strategic investments in new manufacturing processes and platforms, while also remaining open to opportunistic acquisitions that would expand the Company’s current product and service offerings or allow extensions into adjacent markets with characteristics that match Virco’s skills and capabilities.

On December 5, 2024, The Company’s Board of Directors declared a quarterly dividend of $0.025 per share, payable on January 10, 2025 to shareholders of record as of December 20, 2024. Additionally, the Company has $3.5 million remaining under its current authorization for open-market share repurchases. Management continues to believe the Company’s shares represent an attractive investment and will balance planned repurchases with other capital projects, including investments in major manufacturing platforms as well as potential acquisitions.

Commenting on recent developments, Virco Chairman and CEO Robert Virtue said: “I’m proud of the Virco team, including our direct sales force, our customer service staff, our highly skilled manufacturing and engineering personnel, our incredible warehousing and logistics team, and our steady, experienced executives who have collectively guided us through the last several challenging years.

“I attribute our success to Virco’s dedicated American workforce, as well as the resilience and social importance of education, which is the market we serve. I also must recognize Virco’s shareholders, who collectively supported Management’s very-long-term strategy that allowed us not just to keep our domestic U.S. factories open, but to continue investing in them and our employees, so that we are globally competitive in all facets of operations, including automation, quality control, speed of execution, customization, project management, and field services.

“There is also a high value to the innovation that happens inside factories, where proximity to tangible materials and processes inspires tinkering and creativity. Many of our very best ideas—and not just for products— have originated on the factory floor. This also includes our warehouses, where innovations in the storage and handling of very heavy, bulky, and highly seasonal products can have equal or greater impacts on customer satisfaction and financial performance.

“We have never offered guidance despite being asked quite often to do so. We prefer instead to focus on preparedness. We have prudently reinforced our balance sheet thanks to the success we’ve enjoyed in the last two years. We have also continued to invest in what we think of as “operating annuities:” new equipment, processes, and software for our factories and operating systems. Given the skill and experience of our maintenance teams we can often extend the useful life of these investments far beyond traditional depreciation schedules. For example, Virco’s very first tubemill, a machine that makes the steel tubing used in school furniture, was purchased in 1950, the year Virco was founded. That same tubemill, maintained with multiple upgrades and repairs, continues to operate today in our Torrance, California factory.

“I’d say we’ve gotten our money out of that one. But we’re not done with it yet. We see more opportunities on the horizon, both for our company and for the students, families, and educators that we serve. We look forward to those opportunities. And we thank our shareholders for supporting us in this important work.”










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

10/31/2024
1/31/2024
10/31/2023
(In thousands)
Assets
Current assets
Cash
$38,858 $5,286 $4,887 
Trade accounts receivables, net
28,168 23,161 33,029 
Inventories
48,948 58,371 58,931 
Prepaid expenses and other current assets
3,479 2,208 1,988 
Total current assets
119,453 89,026 98,835 
Non-current assets
Property, plant and equipment
Land
3,731 3,731 3,731 
Land improvements
697
694
694
Buildings and building improvements
51,950 51,576 51,498 
Machinery and equipment
118,324 114,400 116,695 
Leasehold improvements
523
523
976
Total property, plant and equipment
175,225 170,924 173,594 
Less accumulated depreciation and amortization
139,604 136,356 138,650 
Net property, plant and equipment
35,621 34,568 34,944 
Operating lease right-of-use assets
36,876 6,508 7,156 
Deferred tax assets, net
6,550 6,634 7,031 
Other assets, net
11,645 9,709 9,073 
Total assets
$210,145 $146,445 $157,039 













Virco Mfg. Corporation

Unaudited Condensed Consolidated Balance Sheets
10/31/2024
1/31/2024
10/31/2023
(In thousands, except share and par value data)
Liabilities
Current liabilities
Accounts payable
$15,381 $12,945 $14,351 
Accrued compensation and employee benefits
12,439 10,880 11,102 
Income tax payable
1,463 
145
3,130 
Current portion of long-term debt
256
248
245
Current portion of operating lease liability
863
5,744 5,465 
Other accrued liabilities
11,142 8,570 7,339 
Total current liabilities
41,544 38,532 41,632 
Non-current liabilities
Accrued self-insurance retention
1,033 
650
748
Accrued pension expenses
9,345 9,429 9,334 
Income tax payable, less current portion
261
128
— 
Long-term debt, less current portion
3,943 4,136 7,946 
Operating lease liability, less current portion
37,380 1,829 2,933 
Other long-term liabilities
780
562
657
Total non-current liabilities
52,742 16,734 21,618 
Commitments and contingencies (Notes 6, 7 and 13)
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 16,289,406 shares at 10/31/2024, and 16,347,314 at 1/31/2024 and 10/31/2023
163
164
164
Additional paid-in capital
119,796 121,373 121,201 
Accumulated deficit
(2,734)(29,048)(26,379)
Accumulated other comprehensive loss
(1,366)(1,310)(1,197)
Total stockholders’ equity
115,859 91,179 93,789 
Total liabilities and stockholders’ equity
$210,145 $146,445 $157,039 










Virco Mfg. Corporation

Unaudited Condensed Consolidated Statements of Income



Three months ended
10/31/2024
10/31/2023
(In thousands, except per share data)
Net sales
$82,620 $84,252 
Costs of goods sold
45,942 46,041 
Gross profit
36,678 38,211 
Selling, general and administrative expenses
25,565 23,505 
Operating income
11,113 14,706 
Unrealized (gain) loss on investment in trust account
(246)
176
Pension expense
106
301
Interest (income) expense
(24)
765
Income before income taxes
11,277 13,464 
Income tax expense
2,876 3,304 
Net income
$8,401 $10,160 
Cash dividends declared per common share:
$0.025 $— 
Net income per common share:
Basic
$0.52 $0.62 
Diluted
$0.52 $0.62 
Weighted average shares of common stock outstanding:
Basic
16,289 16,347 
Diluted
16,296 16,428 








Virco Mfg. Corporation
Unaudited Condensed Consolidated Statements of Income

Nine months ended
10/31/2024
10/31/2023
(In thousands, except per share data)
Net sales
$237,774 $226,516 
Costs of goods sold
130,531 126,525 
Gross profit
107,243 99,991 
Selling, general and administrative expenses
71,265 65,343 
Operating income
35,978 34,648 
Unrealized gain on investment in trust account
(1,058)(448)
Pension expense
320
623
Interest expense
506
2,560 
Income before income taxes
36,210 31,913 
Income tax expense
8,836 7,661 
Net income
$27,374 $24,252 
Cash dividends declared per common share:
$0.065 $— 
Net income per common share:
Basic
$1.67 $1.49 
Diluted
$1.67 $1.48 
Weighted average shares of common stock outstanding:
Basic
16,379 16,277 
Diluted
16,382 16,334 





v3.24.3
Cover
Dec. 09, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Dec. 09, 2024
Entity Registrant Name VIRCO MFG. CORPORATION
City Area Code 310
Local Phone Number 533-0474
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0000751365
Amendment Flag false
Entity Incorporation, State or Country Code DE
Entity File Number 001-8777
Entity Tax Identification Number 95-1613718
Entity Address, Address Line One 2027 Harpers Way
Entity Address, Postal Zip Code 90501
Entity Address, City or Town Torrance
Entity Address, State or Province CA
Title of 12(b) Security Common Stock, $0.01 par value per share
Trading Symbol VIRC
Security Exchange Name NASDAQ
Virco Manufacturing (NASDAQ:VIRC)
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