Virco Manufacturing Corporation (NASDAQ: VIRC) shares experienced a notable uptick of 21.40%, reaching a closing price of $8.51 at the conclusion of Friday’s trading session. This surge in Virco’s stock value was precipitated by the release of its latest financial performance data.
On Friday, Virco (VIRC) disclosed its financial results for the third quarter concluding on October 31, 2023. Concurrently, VIRC has revived a four-times-a-year payout of $0.02 for each stock and launched a $5,000,000 plan to buy back shares on the open market. In the disclosed period, Virco’s revenue surged to $84.25 million, surpassing the prior year’s $77.40 million.
Also, VIRC reported a notable boost in gross margin, climbing 5.6% to 45.4%, compared to the former 39.8%. However, VIRC’s Selling, General, and Administrative (SG&A) costs related to sales dipped slightly to 27.9% from 28.4% of that in last year’s quarter. Net income showed a 29% improvement, reaching $10,160,000 from $7,875,000.
The management’s preferred metric for gauging business momentum, namely Year-to-Date (YTD) shipments combined with the unshipped backlog (“Shipments + Backlog”), concluded the quarter at $268,067,000. This represents a significant increase from the low point of $151,905,000 observed on October 31, 2020, during the pandemic.
Notably, the Shipments + Backlog metric has witnessed a remarkable 76% growth since that low point, achieved without resorting to additional borrowing or capital infusion. Management attributes this robust, organically-funded growth to the inherent efficiencies of the company’s domestically-rooted, vertically-integrated business model, along with the resilience of the markets for both public and private school furniture.
Stronger results made Virco able to restore a quarterly dividend of $0.02 per share, to be payable on January 10, 2024 to shareholders on record as of December 22, 2023. Furthermore, VIRC also unveiled a share repurchase program of buying $5 million worth of its shares from in the open market.
Collectively, with the appreciation in share price, these strategic actions aim to re-establish a balanced portfolio of shareholder returns, offering individual shareholders the flexibility to choose returns that combine current income with capital appreciation.
These commendable results underscore the resilience of VIRC’s recovery post-pandemic, reflecting a renewed appreciation for in-person education in the broader community.
