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
http://www.globenewswire.com/newsroom/prs/?pkgid=521 
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
 
 
Press spacebar to pause and continue. Press esc to stop.