Press Releases

Virco Reports Third Quarter Revenue Increased 35%, Driving Improved Financial Performance Across Multiple Metrics

  • Strong Execution by U.S. Factories and Logistics Provide Timely Delivery to Public and Private Schools
  • YTD Revenue up 32.9% to $192.3 million
  • YTD Gross Margin Improves to 37.6% vs. 34.8% in Prior Year
  • YTD SG&A Declines from 31.8% to 29.7%
  • YTD Operating Income Up Over 3X, from $4.3 million to $15.2 million
  • Company Releases Updated Investor Presentation and Corporate Governance Guidelines at

TORRANCE, Calif., Dec. 12, 2022 (GLOBE NEWSWIRE) — Virco Mfg. Corporation (Nasdaq: VIRC) reported today that net revenue for the Company’s third quarter ended October 31, 2022 increased 35.0% to $77.4 million compared to $57.3 million in the same period of the prior year. While last year’s operations were constrained by supply chain and staffing challenges, the conclusion of this year’s summer delivery season was notable for improved efficiencies across most levels of the Company’s vertical business model. Gross margin for the third quarter was 39.8%, up from 35.4% in the same period of the prior year. The improvement in gross margin was due to a combination of higher volume and previously implemented price increases, which partially offset the ongoing impacts of inflation. SG&A declined to 28.4% from 31.0% in the prior year. Operating income improved proportionately to $8.8 million from $2.5 million in the prior year. After interest and taxes, total net income for the third quarter was $7.9 million vs. $1.3 million for the same period in the prior year.

Through nine months, net revenue increased 32.9% to $192.3 million from $144.7 million last year. Gross margin improved to 37.6% from 34.8%. SG&A through nine months declined to 29.7% from 31.8%. Operating income through nine months was up 3.6 times, from $4.3 million last year to $15.2 million this year. Interest expense through nine months was $1.7 million vs. $1.0 million in the prior year, due to a combination of higher revenue and higher interest rates. As a percent of sales, interest was 0.9% through nine months vs. 0.7% in the same period last year. For the nine months ended October 31, 2022 and 2021, the effective income tax rates were 2.6% and 22.2%, respectively. The change in effective tax rates for the nine months ended October 31, 2022, was primarily due to the recording of a valuation allowance needed for federal deferred tax assets and certain state net operating loss carryforwards which commenced in the fourth quarter of fiscal year ended January 31, 2022 and continued through the period ended October 31, 2022. Through nine months, earnings per share are $0.77 vs. $0.07 last year.

The Company has also released an updated Investor Presentation on its website This presentation addresses the unique characteristics of Virco’s domestically-based vertical model and how it relates to the highly seasonal market for school furniture and equipment, as well as the Company’s favorable position in regard to “re-shoring.” Virco currently operates over 2.3 million square feet of highly automated manufacturing and distribution infrastructure at its facilities in Torrance, California (strategically located ten miles from the Ports of Los Angeles and Long Beach), and Conway, Arkansas, which services the eastern two-thirds of the U.S. market.

Robert Virtue, Virco’s Chairman and CEO, commented on this year’s strong summer performance: “The COVID pandemic subjected many companies and institutions to a stress test. This was especially true for Virco, where for the past two years many of our public school customers were literally closed for business. But the diversity of our customer base is significant, and includes private schools, international schools, and public schools in regions of the U.S. where in-person schooling continued during the pandemic. This diversity demanded that Virco stay open to support students in those schools that were able to function. We maintained globally competitive costs, outputs, and deliveries despite the interruptions that characterized import-based models. I believe the stresses of the pandemic validated our efforts to preserve and enhance our domestic capacity. We are especially proud that our dedicated workforce came to work every day and delivered material improvements to efficiency, despite the many distractions of the pandemic.

“What we do as a Company depends on what they do as individuals. Every chair or desk has to get made. Every chair or desk has to get delivered and installed. Our people delivered and installed over 21,000,000 pounds of school furniture in the months of June, July, and August. This level of operational strength may be un-equaled in our market. We look forward to building on this strength to support students, educators, and communities, and to delivering a well-deserved return to our loyal shareholders who have supported these efforts.”

Doug Virtue, Virco’s President, elaborated: “We devoted a lot of energy to enhancing the capabilities of our U.S. operations. These enhancements continued even during the COVID pandemic, when many of our school customers were closed. We always believed that in-person schooling was essential—not just for students—but for parents, teachers, communities, and our shared aspirations as people.

“I was inspired by the activity in our factories and shipping docks during this year’s summer season. Thanks to the optimism and resolve of our staff, we proved there is dignity in a job well done. I am thankful to our employees for their heroic efforts, and to our shareholders whose patience supported this performance. I also look forward to supporting the renaissance in public and private education. The last few years were hard, but the future looks bright.”

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 severity, duration and 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, 2022, 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.

Virco Mfg. Corporation

Unaudited Condensed Consolidated Balance Sheets

  10/31/2022   1/31/2022   10/31/2021
(In thousands)
Current assets          
Cash $         2,175   $         1,359   $         1,742
Trade accounts receivables, net   28,028     17,769     24,824
Other receivables   102     118     60
Income tax receivable   106     152     108
Inventories   57,465     47,373     40,483
Prepaid expenses and other current assets   1,671     2,076     1,839
Total current assets   89,547     68,847     69,056
Non-current assets          
Property, plant and equipment          
Land   3,731     3,731     3,731
Land improvements   686     653     734
Buildings and building improvements   51,459     51,334     51,308
Machinery and equipment   114,762     113,315     113,816
Leasehold improvements   1,012     1,009     1,017
Total property, plant and equipment   171,650     170,042     170,606
Less accumulated depreciation and amortization   136,998     134,715     134,659
Net property, plant and equipment   34,652     35,327     35,947
Operating lease right-of-use assets   11,116     13,870     14,685
Deferred tax assets, net   160     399     10,364
Other assets, net   8,245     8,002     8,034
Total assets $         143,720   $         126,445   $         138,086

Virco Mfg. Corporation

Unaudited Condensed Consolidated Balance Sheets

  10/31/2022   1/31/2022   10/31/2021
  (In thousands, except share and par value data)
Current liabilities          
Accounts payable $         18,926     $         19,785     $         15,786  
Accrued compensation and employee benefits   9,084       5,596       5,547  
Current portion of long-term debt   2,457       340       504  
Current portion operating lease liability   4,985       4,734       4,686  
Other accrued liabilities   7,767       5,829       6,983  
Total current liabilities   43,219       36,284       33,506  
Non-current liabilities          
Accrued self-insurance retention   1,454       965       1,121  
Accrued pension expenses   11,776       15,430       18,654  
Income tax payable   77       71       68  
Long-term debt, less current portion   14,444       14,173       12,547  
Operating lease liability, less current portion   8,028       11,437       12,402  
Other long-term liabilities   694       639       687  
Total non-current liabilities   36,473       42,715       45,479  
Commitments and contingencies          
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 16,210,985 shares at 10/31/2022 and 16,102,023 at 1/31/2022 and 10/31/202   162       161       161  
Additional paid-in capital   120,787       120,492       120,238  
Accumulated deficit   (54,707 )     (67,178 )     (50,866 )
Accumulated other comprehensive loss   (2,214 )     (6,029 )     (10,432 )
Total stockholders’ equity   64,028       47,446       59,101  
Total liabilities and stockholders’ equity $         143,720     $         126,445       $         138,086  

Virco Mfg. Corporation

Unaudited Condensed Consolidated Statements of Income

  Three months ended
  10/31/2022   10/31/2021
  (In thousands, except per share data)

Net sales $         77,395     $         57,331
Costs of goods sold   46,618       37,032
Gross profit   30,777       20,299
Selling, general and administrative expenses   21,977       17,782
Operating income   8,800       2,517
Unrealized gain on investment in trust account   (220 )    
Pension expense   259       570
Interest expense   567       327
Income before income taxes   8,194       1,620
Income tax expense   319       295
Net income $         7,875     $         1,325
Net income per common share:      
Basic $         0.49     $         0.08
Diluted $         0.48     $         0.08
Weighted average shares of common stock outstanding:      
Basic   16,211       16,033
Diluted   16,249       16,082

Virco Mfg. Corporation

Unaudited Condensed Consolidated Statements of Income

  Nine months ended
  10/31/2022   10/31/2021
  (In thousands, except per share data)

Net sales $         192,276    $         144,720
Costs of goods sold   119,947     94,414
Gross profit   72,329     50,306
Selling, general and administrative expenses   57,099     46,016
Operating income   15,230     4,290
Unrealized loss on investment in trust account   85    
Pension expense   650     1,800
Interest expense   1,692     979
Income before income taxes   12,803     1,511
Income tax expense   332     335
Net income $         12,471    $         1,176
Net income per common share:      
Basic $         0.77   $         0.07
Diluted $         0.77   $         0.07
Weighted average shares of common stock outstanding:      
Basic   16,118     15,927
Diluted   16,136     15,963

Virco Mfg. Corporation
(310) 533-0474
Robert A. Virtue, Chairman and Chief Executive Officer
Doug Virtue, President
Robert Dose, Chief Financial Officer

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