Virco(US:VIRC)2025-12-08 21:15Financial Performance - Virco reported a net loss of $1.3 million in Q3 2025 on sales of $47.6 million, compared to a net profit of $8.4 million on sales of $82.6 million in Q3 2024[2] - Gross profit for Q3 2025 declined to $18.1 million, reflecting a gross margin of 38.0%, down from $36.7 million or 44.4% in the same period last year[2] - Year-to-date sales through nine months decreased by 27.0% to $173.5 million, with net income of $9.6 million compared to $27.4 million in the prior year[7] - Net sales for the three months ended October 31, 2025, were $47,636,000, a decrease of 42.3% compared to $82,620,000 for the same period in 2024[25] - Gross profit for the nine months ended October 31, 2025, was $74,986,000, down 30.0% from $107,243,000 in the prior year[25] - The company reported an operating loss of $1,693,000 for the three months ended October 31, 2025, compared to an operating income of $11,113,000 for the same period in 2024[25] - Net loss for the three months ended October 31, 2025, was $1,325,000, compared to a net income of $8,401,000 in the same quarter of 2024[25] - Basic and diluted net loss per common share for the three months ended October 31, 2025, was $(0.08), compared to earnings of $0.52 per share in the same quarter of 2024[25] Operational Metrics - The company's backlog nearly stabilized year-over-year, with "Shipments Plus Backlog" declining 25% from $265 million to $199 million[8] - Operating expenses (SG&A) decreased to $19.8 million or 41.5% of sales in Q3 2025, compared to $25.6 million or 30.9% of sales in Q3 2024[2] - Selling, general and administrative expenses for the nine months ended October 31, 2025, were $61,402,000, a decrease of 13.8% from $71,265,000 in the prior year[25] - Interest expense for the nine months ended October 31, 2025, was $305,000, down from $506,000 in the same period of 2024[25] Market Conditions - Management noted a significant downturn of approximately 30% in the market for moveable school furniture over the last two years, attributed to the expiration of pandemic recovery stimulus funds[5][6] - Management anticipates a potential recovery in demand similar to post-pandemic trends, although at a lower magnitude[12] - The company is actively exploring opportunities in adjacent public and private markets amid current challenges[15] Liquidity and Dividends - The current ratio improved to 3.98, indicating better liquidity and financial flexibility[10] - The board declared a quarterly cash dividend of $0.025 per share, payable on January 9, 2026[10] - Cash dividends declared per common share increased to $0.025 for the three months ended October 31, 2025, from $0.025 in the same period of 2024[25] Investment Performance - The company experienced an unrealized loss on investment in the trust account of $49,000 for the three months ended October 31, 2025, compared to a gain of $(246,000) in the same period of 2024[25]