Virco Reports Revenue Grew 9% in 2017 (FYE ’18)
May 02 2018 - 9:12AM
Virco Mfg. Corporation (Nasdaq:VIRC) today announced quarterly
and full-year results for its fiscal year ended January 31, 2018.
For the full year ended January 31, 2018, revenue grew 9.2% to
$189,287,000 from $173,417,000 the prior year. For the fourth
quarter ended the same date, revenue was up a more modest 5% to
$24,622,000 from $23,441,000. Operating income declined 33%
for the full year due to a strategic decision early in the year not
to raise prices. For the quarter, operating income declined
11.6%. Downward revaluation of deferred tax assets due to the
recent tax law revision resulted in a one-time, non-operating,
non-cash reversal of $4,438,000. This resulted in a net loss
of $3,209,000 for the year and $8,550,000 for the quarter. As
with last year’s recognition of the value of these deferred tax
assets which resulted in a one-time, non-operating, non-cash
increase to reported earnings of $17,962,000, management does not
consider these fluctuations in tax law as indicative of underlying
operations.
More relevant is the strong organic growth in demand for the
Company’s products and services. This demand has continued
into the early months of the new year, with order rates, backlog,
and margins all suggesting further improvement is possible for the
full year. As always, management cautions against using early
trends—whether favorable or unfavorable—as the primary basis for
evaluating Company progress. Nonetheless, after a number of
years attempting to balance the scale of operations with market
demand, the recent multi-year pattern of profitable revenue growth
suggests the rebalancing has succeeded.
As the year progressed, it became apparent that higher costs for
certain services and materials were not being captured by headline
inflation figures but were nonetheless having an impact on Company
margins. The strategic decision not to raise prices thus had
a notable negative impact on earnings. Management believes
this has been addressed with a moderate but appropriate price
increase for the coming year. Recognizing the inherent
tension between higher prices—a cost ultimately born by working
families whose children use Virco furniture at school—and higher
returns, management considers the balance between costs and prices
just as carefully as the balance between capacity and demand.
Ongoing shifts in the logic of global sourcing have so far been
favorable for the Company, validating prior decisions to maintain
robust domestic capabilities in product development, fabrication,
assembly and distribution. Improvements in these operations
were masked by the decision not to raise prices.
However, management believes they provide a more reliable
foundation for bottom-line realization of this year’s price
increase.
Commenting on this year’s results, Chairman and CEO Robert
Virtue said:
“This marks our fourth consecutive year of profitable revenue
growth. As a result, we were able to resume our traditional
annual cycle of fabrication and assembly, which has proven over
many years to be the most efficient operating model for our highly
seasonal business. Despite a decision not to raise prices,
the efficiencies generated by our American factory and distribution
teams were sufficient to allow the resumption of a regular
quarterly dividend.
“For many years Virco was one of the most reliable
dividend-paying public companies. After eliminating the
dividend due to serious economic and global challenges, it was
always our goal to restore it and return to the reliability that is
a such a proud part of our history. Among our many
accomplishments last year, which included meaningful growth and
raises for all of our workers, I’m most pleased about having been
able to reinstate the dividend.”
President Doug Virtue commented on Virco’s goals for the
future:
“As we look forward to the continued evolution of public
education, we want to make sure we remain relevant in key areas of
mutual concern: inclusion, dignity, and leadership. We will
continue developing furniture that encourages students of all
learning styles to participate actively in the classroom. We
will build our products with care and quality because that’s what
every student deserves. We will continue to innovate new
platforms that support new curricula, especially experiential
leaning such as technical, craft, and professional services
training.”
|
Three Months Ended |
Twelve Months Ended |
|
1/31/2018 |
1/31/2017 |
1/31/2018 |
1/31/2017 |
|
(In thousands, except per share data) |
|
|
|
|
|
Net sales |
$ |
24,622 |
|
$ |
23,441 |
|
$ |
189,287 |
|
$ |
173,417 |
|
Cost of sales |
|
18,728 |
|
|
17,010 |
|
|
123,816 |
|
|
110,874 |
|
Gross profit |
|
5,894 |
|
|
6,431 |
|
|
65,471 |
|
|
62,543 |
|
Selling, general administrative & other expense |
|
11,760 |
|
|
11,686 |
|
|
61,512 |
|
|
56,599 |
|
Operating income (loss) |
|
(5,866 |
) |
|
(5,255 |
) |
|
3,959 |
|
|
5,944 |
|
Interest expense, net |
|
265 |
|
|
141 |
|
|
1,545 |
|
|
1,217 |
|
Income (loss) before income taxes |
|
(6,131 |
) |
|
(5,396 |
) |
|
2,414 |
|
|
4,727 |
|
Income tax expense (benefit) |
|
2,419 |
|
|
(411 |
) |
|
5,623 |
|
|
(18,033 |
) |
Net income (loss) |
$ |
(8,550 |
) |
$ |
(4,985 |
) |
$ |
(3,209 |
) |
$ |
22,760 |
|
|
|
|
|
|
Net income (loss) per share - basic (a) |
$ |
(0.56 |
) |
$ |
(0.33 |
) |
$ |
(0.21 |
) |
$ |
1.51 |
|
Net income (loss) per share - diluted |
$ |
(0.56 |
) |
$ |
(0.33 |
) |
$ |
(0.21 |
) |
$ |
1.49 |
|
|
|
|
|
|
Weighted average shares outstanding - basic (a) |
|
15,317 |
|
|
15,128 |
|
|
15,244 |
|
|
15,067 |
|
Weighted average shares outstanding - diluted |
|
15,317 |
|
|
15,128 |
|
|
15,244 |
|
|
15,266 |
|
(a) Net loss per share was calculated based on
basic shares outstanding due to the anti-dilutive effect on the
inclusion of common stock equivalent shares. |
|
|
|
1/31/2018 |
1/31/2017 |
Current assets |
|
|
$ |
55,713 |
|
$ |
48,493 |
|
Non-current assets |
|
|
|
60,910 |
|
|
59,694 |
|
Current liabilities |
|
|
|
27,723 |
|
|
21,585 |
|
Non-current liabilities |
|
|
|
30,188 |
|
|
27,248 |
|
Stockholders' equity |
|
|
|
58,712 |
|
|
59,354 |
|
|
|
|
|
|
|
|
|
|
Contact:
Virco Mfg. Corporation (310) 533-0474Robert A. Virtue, Chairman
and Chief Executive OfficerDoug Virtue, PresidentRobert Dose, Chief
Financial Officer
This news release contains “forward-looking statements” as
defined by the Private Securities Reform Act of 1995. These
statements include, but are not limited to, statements
regarding: business strategies; market demand and product
development; order rates and trends in seasonality; product
relevance; economic conditions and patterns; the educational
furniture industry including the domestic market for classroom
furniture; state and municipal bond and/or tax funding; the rate of
completion of bond funded construction projects; cost control
initiatives; absorption rates; the relative competitiveness of
domestic vs. international supply chains; trends in shipping costs;
use of temporary workers; marketing initiatives; and international
or non K-12 markets. 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:
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,
2018 and other material filed 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 Manufacturing (NASDAQ:VIRC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Virco Manufacturing (NASDAQ:VIRC)
Historical Stock Chart
From Apr 2023 to Apr 2024