Virco Manufacturing Corp. (VIRC, Financial) filed Quarterly Report for the period ended 2009-10-31.
Virco Mfg. Corporation designs, produces, and distributes quality furniture for the contract and education markets worldwide. Examples of facilities served by Virco include public and private schools, colleges and universities, convention centers, federal and state institutions, churches and other businesses. They also sell to wholesalers, distributors, retailers and catalog retailers. In order to divide the workload into manageable amounts, Virco has divided the sales force into two groups: Education and Commercial. Virco Manufacturing Corp. has a market cap of $47.7 million; its shares were traded at around $3.35 with a P/E ratio of 30.4 and P/S ratio of 0.2. The dividend yield of Virco Manufacturing Corp. stocks is 3%.
Selling, general and administrative expense for the three months ended October 31, 2009 decreased by approximately $1,664,000 to $17,204,000 compared to $18,868,000 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 expenses for freight and field service expenses. In the prior year, the Company benefited from a $1,131,000 gain on sale of real estate in the third quarter. The third quarter ended October 31, 2009 did not include a comparable gain. Interest expense decreased by approximately $74,000 compared to the same period last year as a result of reduced interest rates and reduced levels of borrowing.
For the nine months ended October 31, 2009, the Company earned a pre-tax profit of $5,751,000 on sales of $164,592,000 compared to a pre-tax profit of $7,554,000 on sales of $184,276,000 in the same period last year.
As a result of seasonally high shipments in the three months ended October 31, 2009, accounts and notes receivable increased by approximately $5.3 million at October 31, 2009 compared to January 31, 2009. When compared to receivables at October 31, 2008, receivables, however, decreased by approximately $6,092,000. This decrease was due to the decline in sales in the three months ended October 31, 2009 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, 2009, inventories were higher than the prior year by approximately $1,600,000. The seasonal increases in receivables and inventory during the first summer months of fiscal 2009 was financed through the Companys credit facility with Wells Fargo Bank, National Association (Wells Fargo). At October 31, 2009 and at October 31, 2008, 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 2009, which is slightly less than anticipated depreciation expense. The Company may modestly exceed the $5,000,000 target during the current year. Current year expenditures will include approximately $600,000 of landlord financed tenant improvements at the Torrance, CA facility in addition to an expansion of certain manufacturing processes to support new product offerings and to bring production of certain products in house. Capital spending for the nine months ended October 31, 2009 was $3,675,000 compared to $3,185,000 for the same period last year. Capital
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, 2009, the Company repurchased 455,000 shares of stock for $1,474,000. During the three months ended October 31, 2009 the Company purchased 41,000 shares for $126,000.
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Virco Mfg. Corporation designs, produces, and distributes quality furniture for the contract and education markets worldwide. Examples of facilities served by Virco include public and private schools, colleges and universities, convention centers, federal and state institutions, churches and other businesses. They also sell to wholesalers, distributors, retailers and catalog retailers. In order to divide the workload into manageable amounts, Virco has divided the sales force into two groups: Education and Commercial. Virco Manufacturing Corp. has a market cap of $47.7 million; its shares were traded at around $3.35 with a P/E ratio of 30.4 and P/S ratio of 0.2. The dividend yield of Virco Manufacturing Corp. stocks is 3%.
Highlight of Business Operations:
For the three months ended October 31, 2009, the Company earned a pre-tax profit of $3,545,000 on sales of $62,920,000 compared to a pre-tax profit of $6,387,000 on sales of $74,866,000 in the same period last year.Selling, general and administrative expense for the three months ended October 31, 2009 decreased by approximately $1,664,000 to $17,204,000 compared to $18,868,000 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 expenses for freight and field service expenses. In the prior year, the Company benefited from a $1,131,000 gain on sale of real estate in the third quarter. The third quarter ended October 31, 2009 did not include a comparable gain. Interest expense decreased by approximately $74,000 compared to the same period last year as a result of reduced interest rates and reduced levels of borrowing.
For the nine months ended October 31, 2009, the Company earned a pre-tax profit of $5,751,000 on sales of $164,592,000 compared to a pre-tax profit of $7,554,000 on sales of $184,276,000 in the same period last year.
As a result of seasonally high shipments in the three months ended October 31, 2009, accounts and notes receivable increased by approximately $5.3 million at October 31, 2009 compared to January 31, 2009. When compared to receivables at October 31, 2008, receivables, however, decreased by approximately $6,092,000. This decrease was due to the decline in sales in the three months ended October 31, 2009 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, 2009, inventories were higher than the prior year by approximately $1,600,000. The seasonal increases in receivables and inventory during the first summer months of fiscal 2009 was financed through the Companys credit facility with Wells Fargo Bank, National Association (Wells Fargo). At October 31, 2009 and at October 31, 2008, 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 2009, which is slightly less than anticipated depreciation expense. The Company may modestly exceed the $5,000,000 target during the current year. Current year expenditures will include approximately $600,000 of landlord financed tenant improvements at the Torrance, CA facility in addition to an expansion of certain manufacturing processes to support new product offerings and to bring production of certain products in house. Capital spending for the nine months ended October 31, 2009 was $3,675,000 compared to $3,185,000 for the same period last year. Capital
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, 2009, the Company repurchased 455,000 shares of stock for $1,474,000. During the three months ended October 31, 2009 the Company purchased 41,000 shares for $126,000.
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