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Virco Manufacturing Q2 revenue down

Staff writer ▼ | September 15, 2014
Virco Manufacturing Corporation announced financial results for its fiscal 2014 second quarter and YTD results for the six months ended July 31, 2014.
Virco Manufacturing
Quarterly results   Revenue for H1 almost flat
Revenue for the six months ended July 31, 2014 was virtually flat at $76,722,000 compared to $76,823,000 last year. Gross margins continued to improve reaching 37.8% through six months compared to 36.4% in the first half of 2013.

However, net income declined from $1,763,000 to $1,348,000, due largely to a later-than-normal delivery season and a larger provision for state income taxes, which had the effect of moving more revenue and associated earnings into the month of August, which is part of the Company's third quarter. The underlying improvement in operating efficiencies is the cumulative result of management initiatives over the past several years.

Revenue for the three months ended July 31 declined by 6.6% to $53,192,000 as a result of timing of orders received in July that shipped in August. The Company's peak shipping months are June, July and August, which collectively account for more than half of its annual revenue.

These are the months when public schools are out of session and furniture can be delivered without interrupting the educational calendar.

This summer season was the busiest of the past few years. In addition, incoming orders peaked later in the season, with July bookings exceeding June, which is normally the Company's busiest month for orders. This year, July's incoming orders totaled $26,544,000, compared to $22,836,000 for July of 2013, an increase of over 16%.

By the end of July, this late summer surge had lifted YTD incoming orders 5.5% ahead of last year.

By the end of August most of these orders had moved completely through the delivery cycle, boosting August, 2014 revenues to $35,739,000 vs. $32,165,000 for August of 2013. YTD revenue at the end of August, 2014 was $112,461,000 vs. $108,988,000 last year, an increase of 3.2%.

The mix of orders also appeared to shift back towards historical norms, with a majority of small- to mid-sized replacement, fill-in, and upgrade orders. Based on historic trends, management believes this order mix may signal a modest recovery in local and state funding for the general operating budgets of its core public school customers.