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Virco Announces Second Quarter Results

Stocks in this article: VIRC

TORRANCE, Calif., Sept. 13, 2013 (GLOBE NEWSWIRE) -- Virco Mfg. Corporation (Nasdaq:VIRC) today announced second quarter results in the following letter to stockholders from Robert A. Virtue, President and CEO:

The uneven recovery of our core K-12 furniture business continued during the second quarter of 2013. Despite this continued volatility, we were able to generate profits during this quarter. We believe this is largely a result of the operational flexibility we have achieved due to our restructuring efforts over the past several years.

Revenues for the three months ended July 31, 2013 declined 5.7% from $60,392,000 for the three months ended July 31, 2012 to $56,933,000 this year. Gross profit as a percentage of sales was flat at 37.9% for the three months ended July 31, 2013 and the comparable period last year. For the six months ended July 31, 2013, revenues declined 8.6% from $84,060,000 for the six months ended July 31, 2012 to $76,823,000 this year. Gross profit as a percentage of sales improved in the first half of fiscal 2013, from 35.5% in the first half of fiscal 2012 to 36.4% this year. We believe this improvement is attributable to the efficiencies resulting from our recent restructurings, including from our employee headcount reductions in May 2013.

To further illustrate the volatility we are facing, order rates for the first three months of 2013 were 24.1% below the comparable period last year. However, in the second quarter, order rates improved and ended 5.6% higher than the comparable period in 2012. Given the heavy seasonality of our annual cycle, this strong uptick resulted in a higher backlog heading into the summer of 2013 than the summer of 2012. As a result, our backlog at July 31, 2013 was 11.5% higher than at July 31, 2012. As of the date of this release, daily order rates are still trending slightly ahead of 2012, giving us some hope that we might make up the early season revenue shortfall by year end.

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