Virco Manufacturing Corp Reports Record Q3 and YTD Financials; Initiates Dividend and Share Buyback
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Virco Manufacturing Corp (NASDAQ:VIRC) announces a 29% increase in net income and a 9% increase in sales for Q3.
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Year-to-date sales surge by 17.8%, with operating income more than doubling compared to the previous year.
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The company declares a quarterly dividend and authorizes a $5 million share repurchase program.
On December 8, 2023, Virco Manufacturing Corp (NASDAQ:VIRC) released its 8-K filing, showcasing a record third quarter and year-to-date (YTD) financial results. The company's strategic initiatives and operational efficiencies have culminated in significant growth, with a notable increase in net income and sales.
Financial Highlights and Management Commentary
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For the third quarter ended October 31, 2023, VIRC reported a sales increase to $84,252,000, up from $77,395,000 in the prior year. Gross margin saw a significant improvement to 45.4% from 39.8%, while selling, general and administrative expenses (SG&A) as a percent of sales decreased slightly to 27.9%. This led to a 67.1% growth in operating income, reaching $14,706,000. Net income for the quarter rose by 29% to $10,160,000.
The nine-month period showed even more robust growth, with sales climbing 17.8% to $226,516,000. Year-to-date gross margin improved to 44.1%, and SG&A as a percent of sales declined to 28.8%. Operating income for the first nine months more than doubled to $34,648,000. Interest expense increased, reflecting higher interest rates and slightly higher financing of inventories and accounts receivable.
Virco's CEO and Chairman, Robert Virtue, expressed satisfaction with the ability to restore dividends and launch a share repurchase program, attributing this success to the company's recovery post-pandemic and the appreciation for in-person education. President Doug Virtue highlighted the 76% expansion in business activity since the pandemic's low point, achieved without additional debt or capital, as a testament to the company's efficient business model.
Dividend Declaration and Share Repurchase Program
In light of these strong results, VIRC's Board of Directors has reinstated a quarterly dividend of $0.02 per share, payable on January 10, 2024, to shareholders of record as of December 22, 2023. Additionally, the Board authorized an open-market share repurchase program of up to $5,000,000, aiming to balance shareholder returns through current income and capital appreciation.