Virco(US:VIRC)2024-09-09 18:09Financial Performance - Net sales for the three months ended July 31, 2024, increased to $108,419,000, 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, 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, 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, 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, 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 $16,814,000 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 $1.04 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 $155.2 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, an increase from $89,026,000 as of January 31, 2024, showing a significant rise of 40.5%[6]. - Total liabilities decreased to $55,506,000 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 $253,000 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 $107,812,000 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 $107,812,000 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 $4,261,000 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 $7,963,000 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, significantly higher than $1,600,000 at the end of July 2023[17]. - Cash dividends declared per common share increased to $0.04 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 $0.025 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) 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 $61.3 million at July 31, 2024, down from $74.0 million in the prior year[66]. - Selling, general and administrative expenses increased by approximately $3.9 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 $3,232,000 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 $2,886,000 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 $23,288,000 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 $98,000 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 $218,000 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 $10.0 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].