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Virco Manufacturing Corporation’s VIRC shares tumbled 2.6% during Monday’s trading hours after it reported an adjusted loss in the fourth quarter of fiscal 2024 (ended Jan. 31, 2025), with the net sales missing the Zacks Consensus Estimate. On a year-over-year basis, the top and the bottom lines declined.
The quarter’s performance was primarily hurt by the return of unfavorable weather conditions, resulting in lower volumes, and the ongoing uncertainties in the global trade market. Furthermore, the ongoing inflationary conditions added to the headwinds with the company’s cost and expense structure elevating during the quarter.
Nonetheless, Virco’s long-term strategy of investing in domestic manufacturing and services bodes well for its upcoming market prospects.
Delving Deeper Into Virco’s Q4 Numbers
The company reported an adjusted loss of 35 cents per share, which was broader than the Zacks Consensus Estimate of a loss of 15 cents by 133.3%. In the last reported quarter, it reported a loss of 14 cents per share. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
Net sales of $28.5 million also missed the consensus mark of $43 million by 33.8% and declined 33.2% from the prior-year quarter’s level. The downtrend reflects the absence of an unusual counter-seasonal disaster recovery order that started to ship during last year’s winter season.
Virco Manufacturing Corporation Price, Consensus and EPS Surprise
Virco Manufacturing Corporation price-consensus-eps-surprise-chart | Virco Manufacturing Corporation Quote
As of Jan. 31, 2024, Shipments plus Backlog (a non-GAAP metric that combines actual shipments with the unshipped backlog) inched down 0.6% year over year to $316.4 million.
VIRC’s Operating Highlights
The gross margin contracted significantly by 1,150 basis points (bps) to 26.2% compared with the year-ago value of 37.7%. The downturn was due to the adverse impact of lower revenues and increased costs and expenses.
Selling, general and administrative expenses – as a percentage of sales – expanded 1,050 bps to 54.7% from 44.2% reported a year ago. The increase was primarily attributable to the continuous work focused on the company’s PlanSCAPE full-service project management.
The company incurred a net loss of $5.7 million during the quarter, up from a net loss of $2.3 million incurred in the prior year’s quarter.
Virco’s Financials
At the fiscal 2024-end, Virco had cash of $26.9 million, significantly up from $5.3 million at the fiscal 2023-end. As of Oct. 30, 2024, long-term debt (less current portion) was $3.9 million, down from $4.1 million at fiscal 2023-end.