Virco Announces Fourth Quarter Results and Cash Dividend

          Virco Announces Fourth Quarter Results and Cash Dividend  TORRANCE, Calif., April 16, 2009 (GLOBE NEWSWIRE) -- Virco Mfg. Corporation (Nasdaq:VIRC) today announced fourth quarter and year-end results for the period ended January 31, 2009, as well as the declaration of a quarterly cash dividend in the following letter to stockholders from Robert A. Virtue, President and CEO:  Under the best of circumstances it's a challenge to achieve the proper balance between profit, cash flows, a healthy balance sheet, appropriate strategic investment, and corporate citizenship. Maximizing one requires trade-offs with some or all of the others, and market conditions rarely provide an unconstrained set of options. Under difficult conditions such choices become even more crucial because operating cushions are thin or non-existent.  Confronted with historically difficult conditions in 2008, we chose to maximize our strategic investments and the strength of our balance sheet. As a consequence profit and cash flows were reduced. Looking forward, we believe we made the correct choices. Conditions in our market seem likely to favor suppliers with high liquidity, broad product assortments, a reliable track record, and the proven ability to develop new products organically.  As this report goes to press we may also have passed the bottom of our own trough, with incoming orders through the first 8 weeks of fiscal 2009 up 5% compared to the same period last year. Having recently extended our $65,000,000 credit facility with Wells Fargo Bank through March of 2011, we have the liquidity to pursue our long-term strategic objectives. Our globally-competitive domestic factories continue to gain market share with a combination of price, performance and quality. Most importantly, we're gratified that achieving this position required neither layoffs nor restructuring charges, and that we were able to continue our cash dividend and share repurchase programs through a very challenging period.  Here are the numbers for the 4th quarter and the full year:     ---------------------------------------------------------------------                                      Three Months      Twelve Months                                          Ended             Ended                                     1/31/09  1/31/08  1/31/09  1/31/08                                    ----------------- -----------------                                     (In thousands, except share data)      Sales                             $ 27,727 $ 32,535 $212,003 $229,565  Cost of sales                       19,062   22,076  143,402  145,901                                    ----------------- -----------------  Gross margin                         8,665   10,459   68,601   83,664    Selling, general administrative &   others                             14,710   13,894   67,092   71,472                                    ----------------- -----------------    Income (loss) before taxes          (6,045)  (3,435)   1,509   12,192  Income tax provision (benefit)      (2,819)    (285)     299  (10,027)                                    ----------------- -----------------  Net income (loss)                 $ (3,226)$ (3,150)$  1,210 $ 22,219                                    ================= =================    Cash dividend declared            $  0.025 $  0.025 $   0.10 $  0.025    Net income (loss) per share -   basic (a)                        $  (0.23)$  (0.22)$   0.08 $   1.54  Net income (loss) per share -   diluted (a)                      $  (0.23)$  (0.22)$   0.08 $   1.53    Weighted average shares   outstanding - basic                14,242   14,416   14,390   14,401  Weighted average shares   outstanding - diluted              14,296   14,562   14,434   14,539                                    ----------------- -----------------    (a) Net loss per share was calculated based on basic shares  outstanding due to the anti-dilutive effect on the inclusion of  common stock equivalent shares.  ---------------------------------------------------------------------                                                         1/31/09  1/31/08                                                      -----------------  Current assets                                      $ 57,799 $ 66,664  Non-current assets                                    60,276   60,521  Current liabilities                                   27,664   33,908  Non-current liabilities                               24,248   21,129  Stockholders' equity                                  66,163   72,148  ---------------------------------------------------------------------  Six years ago we embarked on a new strategic course called Equipment for Educators(tm). This strategy envisioned transforming Virco from a pure manufacturer of moveable classroom furniture (estimated market size $400,000,000) to a more diversified manufacturer and distributor of the full product assortment of educational furniture, fixtures and equipment (estimated market size $800,000,000 - $1,000,000,000).  This transformation continues to be a successful work in progress. As stated in our interim press release of February 13, 2009, four major elements of our business -- balance sheet, order rates, operating costs and customer relationships -- remain gratifyingly stable despite the present recession. Perhaps most importantly, we believe our Equipment for Educators business model is appropriately aligned with the evolving needs of our public and private school customers, and that our cost structure is properly scaled to current demand while providing sufficient scope for expansion as the economy improves. We required neither layoffs nor restructuring charges to achieve this balance, and we don't anticipate any such actions in fiscal 2009.  Since the February 13 press release, our financial condition has remained strong. In terms of financing, we:     --  Ended fiscal 2008 with no bank debt;  --  Extended our $65,000,000 credit facility with Wells Fargo Bank      through March of 2011, giving us sufficient liquidity to pursue      strategic initiatives and take advantage of attractive      opportunities;  --  Used our domestically-centered supply chain to reduce year-end      inventories by over $10,000,000 without depriving our customers      of choice or reliability;  --  Returned $2,395,000 to stockholders through cash dividends and      share repurchases despite the recession; and  --  Invested $5,000,000 in new products, services and partnerships to      better serve public and private educators at every grade level.  Order rates have also improved since their low ebb in mid-winter. Highlights from our market include:     --  Incoming orders through 8 weeks of fiscal 2009 are up 5%;  --  Backlog is up 15%;  --  Shipments-plus-backlog (our most accurate early-season metric for      full-year results) is up 6%;  --  Market response to our new products continues to be strong, with      recent releases such as Metaphor(R) and Telos(R) seating and      Text(TM) tables all exceeding forecasts;  --  We extended our nationwide U.S. Communities purchasing contract      through 2011;  --  We welcomed Wenger(R) and Interior Concepts(tm) to our growing      team of contract partners; and  --  The popularity of our PlanSCAPE(R) project management service      continued to grow as more educators in more regions of the      country benefited from its combination of professional expertise,      product assortment, and competitive pricing.  Operating costs remain appropriately matched to order rates. As anticipated in February, we are now running voluntary overtime in all of our domestic factories. Highlights from operations include:     --  Our response to the early signs of recession allowed us to      balance output, inventory and staffing levels without the need      for layoffs or restructuring charges;  --  Last summer's spike in raw material costs seems unlikely to      recur, offering potential margin improvement in 2009;  --  The current upturn in order rates and a related increase in      factory output offer further potential for improved overhead      absorption in 2009;  --  Our experienced workforce remains intact and highly motivated;      and  --  Our domestic factories are operating at global standards while      reducing risk and offering fast, flexible customer response.  Finally, we remain strongly focused on serving the furniture and equipment needs of educators as they manage their own budgetary challenges. In particular, we are:     --  Passing on lower raw material costs in the form of lower product      pricing;  --  Expanding our recycling and Take Back stewardship programs to      help "close the loop" when furniture reaches the end of its      service life;  --  Taking a proactive role in conforming with new safety and quality      regulations such as the Consumer Product Safety Improvement Act      of 2008 (CPSIA);  --  Continuing our support of professional organizations such as: the      Association of School Business Officials (ASBO); the National      Association of Elementary School Principals (NAESP); the National      Association of Secondary School Principals (NASSP); and the U.S.      Communities Government Purchasing Alliance; and  --  Aggressively developing new products and services to support the      full array of traditional and evolving educational environments.  Given these positive trends, and following a review of our current financial position and estimated future cash requirements, I am also pleased to announce a quarterly cash dividend of $0.025 per share, payable on June 2, 2009 to stockholders of record on May 2, 2009.  As always we thank our stockholders, employees, customers and many partners for your support during 2008. It may be that we took our recession hits early. If so, we look forward to delivering better results in 2009. If not, we will continue balancing our strict operating controls with strategic investments in the long-term belief that America will always see education as the surest path to a better future.  The Virco company logo is available at  This news release contains "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding: new business strategies; the cost and availability of steel and other raw materials; the costs of utilities and freight; the continuing impact of our Assemble-to-Ship and Equipment for Educators(TM) programs on earnings; market demand and acceptance of new products; development of new distribution channels; pricing; and seasonality. Forward-looking statements are based on current expectations and beliefs about future events or circumstances, and you should not place undue reliance on these statements. Such statements involve known and unknown risks, uncertainties, assumptions and other factors, many of which are out of our control and difficult to forecast. These factors may cause actual results to differ materially from those which are anticipated. Such factors include, but are not limited to: changes in general economic conditions including raw material, energy and freight costs; the seasonality of our markets; the markets for school and office furniture generally; the specific markets and customers with which we conduct our principal business; and the response of competitors to our price increases. See our materials filed with the Securities and Exchange Commission, including our Report on Form 10K for the year ended January 31, 2009 being filed today, for a further description of these and other risks and uncertainties applicable to our business. We assume no, and hereby disclaim any, obligation to update any of our forward-looking statements. We nonetheless reserve the right to make such updates from time to time by press release, periodic reports or other methods of public disclosure without the need for specific reference to this press release. No such update shall be deemed to indicate that other statements which are not addressed by such an update remain correct or create an obligation to provide any other updates.    CONTACT:  Virco Mfg. Corporation           Robert A. Virtue, President           Douglas A. Virtue, Executive Vice President           Robert E. Dose, Chief Financial Officer           (310) 533-0474     Provider ID: 00163243 -0- Apr/16/2009 21:33 GMT    
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