Virco Mfg. Corporation (VIRC) | Investment Case

1. Company Snapshot

1.a. Company Description

Virco Mfg.Corporation engages in the design, production, and distribution of furniture in the United States.It offers seating products, including 4-leg chairs, cantilever chairs, tablet armchairs with work surfaces and compact footprints, steel-frame and floor rockers, stools, series chairs, stack and folding chairs, hard plastic seating, upholstered stack and ergonomic chairs, and plastic stack chairs.

The company also provides folding, activity, office, computer, and mobile tables; and computer furniture, such as keyboard mouse trays, CPU holders, support columns, desks and workstations, specialty tables, instructor media stations and towers, and other products.In addition, it offers chair desks, combo units, and tablet arm and caster units, as well as a returns and credenzas.Further, the company provides administrative office furniture, including desks, bookcases, storage cabinets, and other items, as well as wardrobe tower cabinets, file credenzas, and mobile pedestals; laboratory furniture comprising steel-based science tables, table bases, lab stools, and wood-frame science tables; mobile furniture, such as mobile tables for cafeterias, mobile cabinets, and mobile task chairs for school settings and offices; and handling and storage equipment, as well as manufactures stackable storage trucks.

It serves educational institutions, convention centers and arenas, hospitality providers, government facilities, and places of worship through its sales and support teams, and dealer network.The company was incorporated in 1950 and is headquartered in Torrance, California.

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1.b. Last Insights on VIRC

Virco Mfg. Corporation's recent performance was negatively impacted by a downturn in demand for educational furniture and equipment. The company's Q2 earnings missed estimates, with a significant reduction in revenue, dropping to $92.1 million from $108.4 million a year ago. Operating income also declined to $15.4 million from $21.9 million. Despite this, the company reported strong profitability, with a focus on moveable furniture and equipment for educational environments and public spaces. A generalized slump in demand appears to be a key challenge.

1.c. Company Highlights

Last Price	7.36
Change Percentage	-1.08%
Open	7.39
Previous Close	7.44
Market Cap ( Millions)	116
Volume	33974
Year High	16.38
Year Low	6.42
M A 50	7.15
M A 200	8.37

FCF Yield	1.83%
Dividend Yield	1.36%
ROE	12.18%
Debt / Equity	36.31%
Net Debt / EBIDTA	157.90%
Price To Book	1.0
Price Earnings Ratio	8.53
Price To FCF	54.74
Price To sales	0.49
EV / EBITDA	6.23

2. Transcript Summary

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3. NewsRoom

D.A. Davidson & CO. Trims Stake in Virco Manufacturing Corporation $VIRC

Oct -31

Source: defenseworld.net

Virco Manufacturing Corporation (VIRC) Q2 Earnings and Revenues Miss Estimates

Sep -05

Source: zacks.com

Virco Reports Solid Operating and Net Income for Second Quarter and First Six Months, Despite Significant Reduction in Revenue

Sep -05

Source: globenewswire.com

2 Furniture Stocks to Buy From Promising Industry Landscape

Jun -26

Source: zacks.com

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Jun -23

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Virco's Financials Are Starting To Reflect Its Competitive Reality

Jun -11

Source: seekingalpha.com

Virco Manufacturing Corporation (VIRC) Reports Q1 Loss, Misses Revenue Estimates

Jun -06

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.00%)

6. Segments

Furniture

Expected Growth: 10.0%

Virco Mfg. Corporation's 10.0% growth in furniture segment is driven by increasing demand for educational furniture, expansion in e-commerce channels, and strategic partnerships with schools and universities. Additionally, the company's focus on sustainability and innovative products has contributed to its growth.

7. Detailed Products

Classroom Furniture

Virco Mfg. Corporation offers a wide range of classroom furniture, including student desks, teacher desks, chairs, and tables designed for comfort, durability, and functionality.

Library Furniture

Virco's library furniture collection includes bookshelves, study tables, and comfortable seating options, designed to create a welcoming and organized space for readers and researchers.

Cafeteria and Food Service Furniture

Virco's cafeteria and food service furniture includes tables, chairs, and benches designed for durability and ease of maintenance, perfect for high-traffic areas.

Administrative and Office Furniture

Virco's administrative and office furniture collection includes desks, chairs, and storage solutions designed for comfort, functionality, and style.

Early Childhood Furniture

Virco's early childhood furniture includes tables, chairs, and storage solutions designed for young children, promoting learning and development in a safe and engaging environment.

8. Virco Mfg. Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Virco Mfg. Corporation is medium due to the availability of alternative products in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the presence of large and established customers who can negotiate prices and terms.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants is medium due to the moderate barriers to entry and the presence of established players in the market.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the market, leading to intense competition.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	10.00%
Debt Cost	7.38%
Equity Weight	90.00%
Equity Cost	7.38%
WACC	7.38%
Leverage	11.11%

11. Quality Control: Virco Mfg. Corporation passed 9 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Flexsteel

A-Score: 5.8/10

Value: 8.4

Growth: 7.1

Quality: 6.0

Yield: 4.0

Momentum: 6.5

Volatility: 2.7

1-Year Total Return ->

Bassett Furniture

A-Score: 5.4/10

Value: 5.9

Growth: 1.3

Quality: 4.4

Yield: 9.0

Momentum: 7.0

Volatility: 5.0

1-Year Total Return ->

Hooker Furnishings

A-Score: 4.9/10

Value: 9.8

Growth: 1.0

Quality: 5.0

Yield: 9.0

Momentum: 1.5

Volatility: 3.3

1-Year Total Return ->

Virco Mfg

A-Score: 4.2/10

Value: 6.7

Growth: 8.3

Quality: 5.5

Yield: 1.0

Momentum: 0.0

Volatility: 3.7

1-Year Total Return ->

American Woodmark

A-Score: 4.0/10

Value: 7.0

Growth: 6.0

Quality: 4.9

Yield: 0.0

Momentum: 1.5

Volatility: 4.7

1-Year Total Return ->

MasterBrand

A-Score: 3.6/10

Value: 6.8

Growth: 4.7

Quality: 4.4

Yield: 0.0

Momentum: 1.5

Volatility: 4.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-5.42%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.38%

Virco Mfg. Corporation - US9276511097

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on VIRC

1.c. Company Highlights

Strong Momentum

Better Quality

Higher Growth

Earnings Miss

Revenues Beats

Earnings Beats

Lower Growth

Revenues Miss

Fairly Valued

More Volatile

Medium Volatility

Weak Momentum

Average Quality

Average Yield

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.00%)

6. Segments

Furniture

Expected Growth: 10.0%

7. Detailed Products

Classroom Furniture

Library Furniture

Cafeteria and Food Service Furniture

Administrative and Office Furniture

Early Childhood Furniture

8. Virco Mfg. Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Virco Mfg. Corporation passed 9 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.36$

Current Price

7.36$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA