Virco Mfg. Corporation Reports 27.8% Decline in Net Sales for Quarter Ended April 30, 2025

Virco Mfg. Corporation reported a significant decline in financial performance for the three months ended April 30, 2025, with net sales of $33.8 million, a decrease of approximately 27.8% compared to $46.7 million in the same period last year. The decline was attributed to the absence of large disaster recovery orders that had positively impacted the previous year's results, contributing around $9 million in additional shipments. The company's net income for the quarter was $732,000, down from $2.1 million in the prior year, reflecting the challenges faced in the current fiscal environment.

The company's gross profit margin improved to 47.5% from 43.5% year-over-year, primarily due to a higher proportion of orders delivered with full service, which typically carry better margins. Selling, general, and administrative expenses decreased slightly to $16.1 million from $17.4 million, driven by lower variable selling expenses linked to reduced revenue. Additionally, net interest expense fell to $60,000 from $208,000, reflecting decreased demand for seasonal working capital.

Operationally, Virco's backlog as of April 30, 2025, stood at $70.4 million, down from $88.5 million a year earlier. The company has moderated production levels in response to the current order rates, aiming to balance timely summer deliveries with inventory investment. The company’s inventory increased by $2.7 million compared to the previous year, attributed to rising material costs. Accounts receivable also decreased by $7.5 million, indicating improved collections amid lower shipments.

In terms of strategic developments, Virco repurchased 348,944 shares of its common stock for $4 million during the quarter, with $7.2 million remaining authorized for future repurchases. The company continues to navigate uncertainties in the market, including potential impacts from trade policies and economic conditions. Management remains focused on reinvesting in operational capabilities and customer relationships to adapt to these challenges. Looking ahead, Virco anticipates that the majority of its current backlog will be recognized as revenue during the peak summer months, although future growth rates may not match those of previous years due to ongoing market volatility.