EXHIBIT 99.1
FOR IMMEDIATE RELEASE Contact:
Robert A. Virtue, President
Douglas A. Virtue, Executive Vice President
Robert E. Dose, Chief Financial Officer
Virco Mfg. Corporation
(310) 533-0474
Virco Announces First Quarter Results
Torrance, California, June 04, 2004 - Virco Mfg. Corporation (AMEX: VIR) today
released its first quarter results in the following letter to shareholders from
Robert A. Virtue, President and CEO.
Neither market conditions nor internal operations have changed significantly
since the release of our Annual Report. Incoming orders and shipments are both
essentially even with last year, further confirming that we have reached the
bottom of this particular recession.
Here are the numbers for the first quarter:
Three Months Ended
04/30/2004 04/30/2003
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(In thousands, except per share data)
Sales $ 30,321 $ 31,180
Cost of sales 20,004 20,769
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Gross margin 10,317 10,411
Selling, general, & administrative 14,541 16,596
Interest expense 377 394
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Loss before income taxes (4,601) (6,579)
Income tax benefit -- (2,566)
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Net loss $ (4,601) $ (4,013)
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Net loss per share $ (0.35) $ (0.31)
Weighted average shares outstanding-basic (a) 13,096 13,110
(a) Net losses per share were calculated based on basic shares outstanding at
April 30, 2004 and 2003 due to the anti-dilutive effect on the inclusion of
common stock equivalent shares.
04/30/2004 01/31/2004
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(In thousands, except per share data)
Current assets $63,613 $51,386
Non-current assets 73,083 74,882
Current liabilities 37,084 25,982
Non-current liabilities 41,861 37,934
Stockholders' equity 57,751 62,352
Operating costs are down 11%, consistent with our projections from last autumn's
downsizing. Higher steel prices have offset about half of these operating
savings. Due to fixed-price annual contracts with a number of our public school
customers, we will only be able to pass on a portion of these higher raw
material costs in fiscal 2004. We are raising prices on contracts for 2005
delivery, even though not all of our competitors are following suit.
Pricing in our market continues to be erratic, with extreme highs and lows being
reported from all regions. We believe this erratic pricing reflects financial
pressures, sometimes at the dealer level, as opposed to improved operating
efficiencies among manufacturing competitors. We continue to benchmark the cost
of imports and we don't think they're responsible for the volatility.
Among our other initiatives, new product development continues to head the list.
We'll be unveiling Zuma(TM), an elegant and affordable line of ergonomic
classroom furniture, on June 14 at NeoCon in Chicago. Several other major
projects are following close behind, with release dates planned by spring of
next year. Together, this current crop of new products is intended to fill gaps
in our product offering as well as supporting new trends in classroom
instruction.
This news release contains "forward-looking statements" as defined by the
Private Securities Litigation Reform Act of 1995. These statements include, but
are not limited to, statements regarding: new business strategies, our ability
to continue to control costs and inventory levels, the potential impact of our
Assemble-to-Ship program on earnings, market demand, pricing and seasonality.
Forward-looking statements are based on current expectations and beliefs about
future events or circumstances, and you should not place undue reliance on these
statements. Such statements involve known and unknown risks, uncertainties,
assumptions and other factors, many of which are out of our control and
difficult to forecast, that may cause actual results to differ materially from
those which are anticipated. Such factors include, but are not limited to,
changes in general economic conditions, the markets for school and office
furniture generally and specifically in areas and with customers with which we
conduct our principal business activities, customer confidence, and competition.
See our Annual Report on Form-10K for year ended January 31, 2004, and other
materials filed with the Securities and Exchange Commission for further
description of these and other risks and uncertainties applicable to our
business. We assume no, and hereby disclaim any, obligation to update any of our
forward-looking statements. We nonetheless reserve the right to make such
updates from time to time by press release, periodic reports or other methods of
public disclosure without the need for specific reference to this press release.
No such update shall be deemed to indicate that other statements which are not
addressed by such an update remain correct or create an obligation to provide
any other updates.
END OF FILING