1. VIRC reports 27% revenue decline; sales totaled $173.5 million. 2. Net income dropped from $27.4 million to $9.6 million over nine months. 3. Current ratio improved to 3.98, indicating strong liquidity. 4. Management anticipates stabilization in demand for educational furniture. 5. A quarterly dividend of $0.025 is declared, payable in January 2026.
FAQ
Why Bearish?
The significant revenue decline and net loss signal weakness in fundamentals, reminiscent of earlier crises.
How important is it?
The financial downturn and dividend announcement has a high relevance and potential impact on stock price.
Why Short Term?
Immediate impacts are felt from current financial results; recovery may take time.
Virco Reports Financial Results Amid Market Challenges
TORRANCE, Calif., Dec. 8, 2025 (GLOBE NEWSWIRE) - Virco Mfg. Corporation (NASDAQ: VIRC), a prominent manufacturer and supplier of movable educational furniture and equipment, has unveiled its financial results for the third quarter and nine months ending October 31, 2025. The company reported a net loss of $1.3 million during the third quarter, as it begins to navigate a cyclical decline, outpacing its previous year's profit of $8.4 million.
Quarterly and Year-to-Date Performance
In the third quarter, Virco achieved sales of $47.6 million, down from $82.6 million in the same period last year. The gross profit for the quarter was $18.1 million, resulting in a gross margin of 38.0%, a decrease from the prior year’s gross profit of $36.7 million or 44.4%.
For the nine months ending October 31, 2025, Virco reported:
- Sales: $173.5 million (down 27% from $237.8 million)
- Net Income: $9.6 million (down from $27.4 million)
- Gross Profit: $75.0 million (43.2% of sales)
- SG&A Expenses: $61.4 million (35.4% of sales)
Market Conditions Impacting Financial Metrics
The decline in operating metrics primarily stems from lower sales and production levels in both the company's factories and distribution functions. A significant contributing factor to this downturn has been the expiration of pandemic recovery stimulus funds, also known as the Elementary and Secondary School Emergency Relief (ESSER) funds. This, coupled with hesitancy among school administrators, has resulted in uncertainty impacting future orders.
Management has indicated that year-over-year comparisons are challenging due to a 30% downturn in the market for moveable school fixtures and equipment over the past two years. Despite these setbacks, incoming order rates have started to stabilize.
Key Financial Ratios and Future Outlook
As of the end of the third quarter, Virco’s Current Ratio, a critical measure of liquidity, stood at 3.98. This reflects the company's strategic decision to preserve income generated in recent years to navigate the present market challenges effectively.
Management is cautiously optimistic, suggesting that stabilization in demand could return to pre-pandemic levels. Their insights include:
- Long-term recovery potential similar to post-pandemic trends.
- Current manufacturing capabilities allow flexibility amid rising operational challenges.
- Continued focus on diversifying into adjacent markets for furniture and equipment.
Quarterly Dividend Declaration
On December 4, 2025, Virco's Board of Directors declared a cash dividend of $0.025 per share for its fourth fiscal quarter. This dividend is payable on January 9, 2026, to shareholders of record as of December 19, 2025. While the company aims to maintain quarterly dividends, future declarations remain subject to Board approval and covenants in its lending agreements.
Executive Commentary on Current Challenges
Commenting on the recent challenges, Chairman and CEO Robert Virtue noted, “It feels like COVID out here.” He emphasized the impact of reduced morale and project postponements following the expiration of federal stimulus funding and expressed hope for a catch-up in deferred projects as funding becomes available.
Virtue articulated a belief that the school FF&E market is seeking a new equilibrium, stating, “Education is an essential social function, and we are prepared to respond to new opportunities as they arise.”
About Virco Mfg. Corporation
Founded in 1950, Virco Mfg. Corporation is the largest U.S. manufacturer and supplier of movable educational furniture and equipment across all levels from preschool through 12th grade. The company offers a broad range of products, including mobile tables, storage solutions, desks, and chairs.