Virco Q4 Loss Wider-Than-Expected, Sales Miss Estimates, Stock Down

Core Viewpoint - Virco Manufacturing Corporation reported an adjusted loss in Q4 of fiscal 2024, leading to a 2.6% decline in its shares, with net sales missing expectations and showing a year-over-year decline [1][3]. Financial Performance - The company reported an adjusted loss of $0.35 per share, which was 133.3% worse than the Zacks Consensus Estimate of a loss of $0.15 [3]. - Net sales were $28.5 million, missing the consensus estimate of $43 million by 33.8% and declining 33.2% from the previous year's quarter [3]. - The net loss for the quarter was $5.7 million, an increase from a net loss of $2.3 million in the same quarter last year [6]. Operational Highlights - Shipments plus backlog decreased by 0.6% year over year to $316.4 million as of January 31, 2024 [4]. - The gross margin contracted by 1,150 basis points to 26.2% compared to 37.7% a year ago, primarily due to lower revenues and increased costs [5]. - Selling, general, and administrative expenses as a percentage of sales increased by 1,050 basis points to 54.7% from 44.2% reported a year ago [5]. Market Conditions - The company's performance was negatively impacted by unfavorable weather conditions, lower volumes, uncertainties in the global trade market, and ongoing inflationary pressures [2]. - Despite the challenges, Virco's long-term strategy of investing in domestic manufacturing and services is expected to positively influence its market prospects [2]. Financial Position - At the end of fiscal 2024, Virco had cash reserves of $26.9 million, significantly up from $5.3 million at the end of fiscal 2023 [7]. - Long-term debt (less current portion) was $3.9 million, down from $4.1 million at the end of fiscal 2023 [7].