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Virco(VIRC) - 2025 Q2 - Quarterly Report
VIRCVirco(VIRC)2024-09-09 18:09

Financial Performance - Net sales for the three months ended July 31, 2024, increased to 108,419,000,comparedto108,419,000, compared to 107,321,000 for the same period in 2023, representing a growth of 1.02%[10]. - Gross profit for the three months ended July 31, 2024, was 50,218,000,upfrom50,218,000, up from 48,578,000 in the prior year, indicating an increase of 3.38%[10]. - Net income for the three months ended July 31, 2024, reached 16,833,000,comparedto16,833,000, compared to 15,534,000 for the same period in 2023, reflecting a growth of 8.35%[10]. - Operating income for the six months ended July 31, 2024, was 24,865,000,comparedto24,865,000, compared to 19,942,000 for the same period in 2023, marking an increase of 24.4%[11]. - Net income for the six months ended July 31, 2024, was 18,973,000,comparedto18,973,000, compared to 14,092,000 for the same period in 2023, representing a 34.1% increase[17]. - The company reported a net comprehensive income of 16,814,000forthethreemonthsendedJuly31,2024,comparedto16,814,000 for the three months ended July 31, 2024, compared to 15,534,000 in the prior year, an increase of 8.2%[13]. - Basic net income per share increased to 1.04forthethreemonthsendedJuly31,2024,from1.04 for the three months ended July 31, 2024, from 0.95 for the same period in 2023, reflecting a growth of 9.5%[50]. - The Company experienced a 9.1% increase in sales for the six-month period ended July 31, 2024, totaling 155.2millioncomparedto155.2 million compared to 142.3 million in the prior year[71]. Assets and Liabilities - Total current assets as of July 31, 2024, were 125,331,000,anincreasefrom125,331,000, an increase from 89,026,000 as of January 31, 2024, showing a significant rise of 40.5%[6]. - Total liabilities decreased to 55,506,000asofJuly31,2024,from55,506,000 as of July 31, 2024, from 91,063,000 as of July 31, 2023, a reduction of 39.0%[8]. - The current portion of long-term debt decreased to 253,000asofJuly31,2024,from253,000 as of July 31, 2024, from 32,256,000 as of July 31, 2023, a significant decline of 99.2%[8]. - Total stockholders' equity rose to 107,812,000asofJuly31,2024,upfrom107,812,000 as of July 31, 2024, up from 82,295,000 as of July 31, 2023, representing an increase of 31.2%[8]. - Total stockholders' equity increased to 107,812,000asofJuly31,2024,upfrom107,812,000 as of July 31, 2024, up from 82,295,000 a year earlier, reflecting a 30.9% growth[19]. - The Company’s long-term debt stood at 4,261,000asofJuly31,2024,adecreasefrom4,261,000 as of July 31, 2024, a decrease from 46,517,000 reported on July 31, 2023[40]. Cash Flow and Dividends - Net cash provided by operating activities was 7,963,000forthesixmonthsendedJuly31,2024,comparedtoanetcashusedof7,963,000 for the six months ended July 31, 2024, compared to a net cash used of (21,150,000) in the prior year[17]. - Cash at the end of the period was 7,771,000,significantlyhigherthan7,771,000, significantly higher than 1,600,000 at the end of July 2023[17]. - Cash dividends declared per common share increased to 0.04forthesixmonthsendedJuly31,2024,comparedtonodividendsdeclaredinthesameperiodlastyear[11].−Thecompany’scashdividendspaidduringthesixmonthsendedJuly31,2024,totaled0.04 for the six months ended July 31, 2024, compared to no dividends declared in the same period last year[11]. - The company’s cash dividends paid during the six months ended July 31, 2024, totaled 653,000, compared to no dividends paid in the same period of 2023[17]. - The Company declared a cash dividend of 0.025pershareforthethirdfiscalquarter,payableonOctober11,2024[15].OperationalMetrics−TheCompanyreportedadecreaseintradeaccountsreceivableby0.025 per share for the third fiscal quarter, payable on October 11, 2024[15]. Operational Metrics - The Company reported a decrease in trade accounts receivable by 32,934,000 for the six months ended July 31, 2024, compared to a decrease of (50,187,000)inthesameperiodof2023[17].−Accountsreceivabledecreasedby(50,187,000) in the same period of 2023[17]. - Accounts receivable decreased by 12.5 million at July 31, 2024, due to improved collections and earlier shipments[73]. - The sales order backlog declined to approximately 61.3millionatJuly31,2024,downfrom61.3 million at July 31, 2024, down from 74.0 million in the prior year[66]. - Selling, general and administrative expenses increased by approximately 3.9millionforthesixmonthsendedJuly31,2024,primarilyduetoincreasedvariablesellingandserviceexpenses[72].LeaseandDebtManagement−TheCompanyhasaremainingbalanceofleasepaymentstotaling3.9 million for the six months ended July 31, 2024, primarily due to increased variable selling and service expenses[72]. Lease and Debt Management - The Company has a remaining balance of lease payments totaling 53,356,000 as of July 31, 2024[39]. - The Company’s incremental borrowing rate for leases is estimated at 9.78% as of July 31, 2024, compared to 6.36% in the previous year[37]. - The Company has a minimum future lease payment of 3,232,000fortheyearendingJanuary31,2025[39].−A5−yearleaserenewalfortheCompany′sfacilityinTorrance,CAresultedinanincreaseinROUAssetsofapproximately3,232,000 for the year ending January 31, 2025[39]. - A 5-year lease renewal for the Company's facility in Torrance, CA resulted in an increase in ROU Assets of approximately 33.0 million[68]. - The Company incurred 2,886,000inpurchasesofproperty,plant,andequipmentduringthesixmonthsendedJuly31,2024[17].−Long−termdebtborrowingamountedto2,886,000 in purchases of property, plant, and equipment during the six months ended July 31, 2024[17]. - Long-term debt borrowing amounted to 23,165,000, while repayment of long-term debt was 23,288,000duringthesameperiod[17].−TheCompanyhadnoborrowingsunderitslineofcreditasofJuly31,2024,afirstinits74−yearhistory,comparedto23,288,000 during the same period[17]. - The Company had no borrowings under its line of credit as of July 31, 2024, a first in its 74-year history, compared to 42.0 million borrowed at the same date in 2023[67]. Compliance and Governance - The Company is in compliance with its debt covenants as of July 31, 2024[44]. - The Company does not expect the recently issued accounting standards to have a material impact on its consolidated financial statements and disclosures[28]. Miscellaneous - Approximately 50% of annual sales occur in June, July, and August, indicating a highly seasonal sales cycle[63]. - The effective income tax rate for the three months ended July 31, 2024, was 23.7%, slightly higher than 23.6% for the same period in 2023[49]. - The Company recognized total stock-based compensation expense of 98,000forthethreemonthsendedJuly31,2024,downfrom98,000 for the three months ended July 31, 2024, down from 149,000 in the same period of 2023[53]. - The Company had a valuation allowance of 218,000fordeferredtaxassetsasofJuly31,2024,indicatinganeedtoreducethecarryingamountofdeferredtaxassets[48].−ShippingandclassroomdeliverycostsforthethreemonthsendedJuly31,2024,wereapproximately218,000 for deferred tax assets as of July 31, 2024, indicating a need to reduce the carrying amount of deferred tax assets[48]. - Shipping and classroom delivery costs for the three months ended July 31, 2024, were approximately 10.1 million, compared to 10.0millionforthesameperiodin2023[60].−TheCompanyhasauthorizedarepurchaseprogramofupto10.0 million for the same period in 2023[60]. - The Company has authorized a repurchase program of up to 5.0 million for its common stock, announced on December 8, 2023[86]. - As of July 31, 2024, the maximum number of shares that may yet be purchased under the program is 3,501,551[86]. - No shares were purchased in May, June, or July 2024 under the repurchase program[86].