Virco(VIRC) - 2024 Q4 - Annual Results

Financial and Operational Highlights Overall Performance Virco reported significant fiscal year 2024 growth, with revenue up 16.5% to $269.1 million and net income rising 32.4% Fiscal Year 2024 vs. 2023 Key Financials | Metric | FYE Jan 31, 2024 (in millions) | FYE Jan 31, 2023 (in millions) | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $269.1 | $231.1 | +16.5% | | Gross Margin | 43.1% | 36.9% | +6.2 p.p. | | Operating Income | $31.9 | $10.6 | +200.2% | | Income Before Taxes | $29.2 | $8.0 | +264.0% | | Net Income | $21.9 | $16.5 | +32.4% | | Diluted EPS | $1.34 | $1.02 | +31.4% | Q4 Fiscal Year 2024 vs. 2023 Performance | Metric | Q4 FY 2024 (in millions) | Q4 FY 2023 (in millions) | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $42.6 | $38.8 | +9.8% | | Gross Margin | 37.7% | 33.5% | +4.2 p.p. | - Management believes Income Before Taxes is the most accurate year-over-year comparison of operating performance, due to an $8.5 million valuation allowance reversal for NOL tax credits in the prior year[10] Business Model and Operational Efficiency Virco's 74-year-old vertically integrated business model enhances operational control, improving efficiency and reducing SG&A expenses - The company's vertically integrated model and experienced workforce (40% with over 20 years of service) are key to managing seasonal demand and ensuring timely delivery[4] - Selling, General, and Administrative (SG&A) expenses improved, declining to 31.3% of revenue from 32.3% in the prior year[6] - Enhanced services, such as PlanSCAPE project management and full-service delivery, now constitute over two-thirds of the company's revenue[6] Financial Position and Outlook Virco achieved a robust financial position, becoming effectively debt-free with strong cash flow and record 'Shipments + Backlog' - The company is effectively debt-free at year-end, with only a small mortgage remaining on an Arkansas facility[7][9] Key Financial Position and Outlook Metrics | Metric | FYE Jan 31, 2024 (in millions) | FYE Jan 31, 2023 (in millions) | | :--- | :--- | :--- | | Cash flow from operations | $27.0 | $(3.8) | | Shipments + Backlog | $317.6 | $289.6 | - The "Shipments + Backlog" non-GAAP metric is used internally to plan production, staffing, and financing ahead of the busy summer delivery season[11] Management Commentary and Company Overview Management Commentary Chairman and CEO Robert Virtue expressed satisfaction with fiscal year results, attributing success to discipline and optimism - The CEO emphasized the company's commitment to its strategy of supporting "Good jobs and good schools"[12] About Virco Mfg. Corporation Founded in 1950, Virco is the largest U.S. manufacturer of K-12 educational furniture, with all operations in the U.S. - Virco is the leading U.S. manufacturer for the preschool through 12th-grade educational furniture market[13] - The company's product line includes tables, desks, chairs, and storage equipment for various markets beyond education[13] Consolidated Financial Statements Consolidated Balance Sheets Virco's balance sheet as of January 31, 2024, showed total assets of $146.4 million and significantly reduced liabilities Balance Sheet Summary (in thousands) | Account | Jan 31, 2024 | Jan 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $89,026 | $89,068 | | Total Assets | $146,445 | $150,126 | | Total Current Liabilities | $38,532 | $48,525 | | Total Liabilities | $55,266 | $82,065 | | Total Stockholders' Equity | $91,179 | $68,061 | - Long-term debt, including the current portion, was significantly reduced from $21.7 million in 2023 to $4.4 million in 2024[21] Consolidated Statements of Income For fiscal year 2024, Virco's net sales increased 16.5% to $269.1 million, with operating income surging Income Statement Summary (in thousands, except per share data) | Account | Year ended Jan 31, 2024 | Year ended Jan 31, 2023 | | :--- | :--- | :--- | | Net sales | $269,117 | $231,064 | | Gross profit | $116,058 | $85,341 | | Operating income | $31,877 | $10,644 | | Net income | $21,910 | $16,547 | | Diluted EPS | $1.34 | $1.02 | - A cash dividend of $0.02 per common share was declared for the fiscal year 2024; no dividend was declared in the prior year[23] Important Disclosures Non-GAAP Financial Information The company utilizes 'shipments plus unshipped backlog' as a non-GAAP measure for internal planning - The non-GAAP measure of "shipments plus unshipped backlog" is considered a relevant and preferred supplemental tool for internal planning purposes[15] Forward-Looking Statements This press release contains forward-looking statements subject to risks and uncertainties, including economic conditions - Forward-looking statements involve known and unknown risks, and the company disclaims any obligation to update them. Key risk factors include economic conditions, raw material costs, and state and municipal funding[16]