Virco Marks 75th Anniversary with Strong Earnings Results, Positive Cash Flow, Higher Shareholder Returns, and Strategic Re-Investment

Core Viewpoint - Virco Mfg. Corporation reported a decline in revenue for the fiscal year ended January 31, 2025, alongside a significant drop in fourth-quarter revenue, attributed to the absence of a prior year's disaster recovery order. Despite these challenges, the company maintains a strong balance sheet and continues to invest in its operations, emphasizing its long-term commitment to the educational furniture market [1][2][5][9]. Financial Performance - Full-year revenue decreased by 1.1% to $266.24 million from $269.12 million in the previous year [2]. - Fourth-quarter revenue fell by 33.2% to $28.47 million compared to $42.60 million in the prior year [2]. - Gross margin for the full year remained stable at 43.1%, while it declined to 26.2% in the fourth quarter from 37.7% in the same period last year [3]. - Operating income for the full year was $27.86 million (10.5% of sales), down from $31.88 million (11.8% of sales) the previous year [5]. - The company reported a net income of $21.64 million for the full year, slightly down from $21.91 million in the prior year [5]. Cash Flow and Investments - Operating cash flow exceeded $33 million, with dividends and share repurchases exceeding $5 million and capital expenditures growing to over $6 million [9]. - Cash at year-end was $26.87 million, a significant increase from $5.29 million the previous year [6]. Strategic Outlook - Management highlighted the importance of the "Shipments plus Backlog" metric, which totaled $316.42 million as of January 31, 2025, down from $318.40 million the previous year [7]. - The company is focusing on domestic manufacturing to mitigate risks associated with global trade volatility and potential tariff impacts [12]. - Management expressed confidence in the long-term demand for educational furniture, indicating a willingness to invest in capabilities despite short-term uncertainties [12][15]. Market Position and Customer Base - Virco is the largest manufacturer and supplier of moveable educational furniture in the U.S., serving a diverse customer base that includes public and private schools, colleges, and various government and commercial entities [17]. - The company operates entirely within the U.S., with manufacturing facilities in California and Arkansas [17].