Virco Manufacturing Corp. has a market cap of $38.1 million; its shares were traded at around $2.68 with and P/S ratio of 0.2. The dividend yield of Virco Manufacturing Corp. stocks is 3.7%.VIRC is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:For the three months ended October 31, 2010, the Company incurred a pre-tax loss of $123,000 on sales of $60,779,000 compared to a pre-tax profit of $3,545,000 on sales of $62,920,000 in the same period last year.
Selling, general and administrative expense for the three months ended October 31, 2010 decreased by approximately $141,000 to $17,063,000 compared to $17,204,000 in the same period last year, but increased as a percentage of sales. The decrease in selling, general and administrative expense was primarily attributable to decreased variable selling expenses. Interest expense decreased by approximately $43,000 compared to the same period last year as a result of reduced interest rates.
For the nine months ended October 31, 2010, the Company incurred a pre-tax loss of $1,639,000 on sales of $158,002,000 compared to a pre-tax profit of $5,751,000 on sales of $164,592,000 in the same period last year.
As a result of seasonally high shipments in the three months ended October 31, 2010, accounts and notes receivable increased by approximately $5.3 million at October 31, 2010 compared to January 31, 2010. When compared to receivables at October 31, 2009, receivables, however, decreased by approximately $80,000. This decrease was due to the decline in sales in the three months ended October 31, 2010 compared to the same period last year. The Company traditionally builds large quantities of component inventory during the first quarter in anticipation of seasonally high summer shipments. During the second and third quarters, the Company reduces levels of component production and assembles components to a finished goods state as customer orders are received. At October 31, 2010, inventories were lower than the prior year by approximately $1,915,000. The seasonal increases in receivables and inventory during the first? summer months of fiscal 2010 was financed through the Companys credit facility with Wells Fargo Bank, National Association (Wells Fargo). At October 31, 2010, the Company had approximately $2,200,000 million outstanding under the line. At October 31, 2009 the Company did not have any outstanding borrowings under the line.
The Company has established a goal of limiting capital spending to approximately $5,000,000 for fiscal 2010, which is slightly less than anticipated depreciation expense. Capital spending for the nine months ended October 31, 2010 was $1,878,000 compared to $3,675,000 for the same period last year. Capital expenditures are being financed through the Companys credit facility with Wells Fargo and operating cash flow. Approximately $18,048,000 was available for borrowing under the Companys credit facility as of October 31, 2010.
On June 5, 2008, the Company announced that its Board of Directors authorized a stock repurchase program under which the Company may acquire up to $3 million of the Companys common stock. Such repurchases may be made pursuant to open market or privately negotiated transactions. This $3 million common stock repurchase program includes any unused amounts previously authorized for repurchase by Company such that the maximum aggregate amount of common stock that the Company may repurchase is $3 million of the Companys common stock. Actual repurchases will be made after due consideration of stock price, projected cash flows and alternative uses of capital. Through October 31, 2010, the Company repurchased 100,000 shares of stock for $344,000. During the three months ended October 31, 2010 the Company did not purchase any stock.
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