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Previous: BROADWAY STORES INC, 10-Q, 1995-06-13 |
Next: UST MASTER TAX EXEMPT FUNDS INC, NSAR-B, 1995-06-13 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
FORM 10-Q
For Quarter Ended April 30, 1995 Commission File Number 1-8777
VIRCO MFG. CORPORATION
- - ------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 95-1613718
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2027 Harpers Way, Torrance, CA 90501
------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 533-0474
No change
- - ------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ----
The number of shares outstanding of each of the issuer's classes of
common stock, as of June 2, 1995.
Common Stock 4,873,236 Shares*
* Adjusted for Stock Dividend declared August 16, 1994, date of record
September 19, 1994, payable October 17, 1994.
<PAGE> 2
VIRCO MFG. CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Part I. Financial Information
<S> <C>
Item 1. Financial Statements (unaudited)
Condensed consolidated balance sheets - April 30, 1995 and January 31, 1995.
Condensed consolidated statements of income - Three months ended April 30, 1995 and 1994.
Condensed consolidated statements of cash flows - Three months ended April 30, 1995 and 1994.
Notes to condensed consolidated financial statements - April 30, 1995.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Part II. Other Information
Item 4. Submission of matters to a vote of Security Holders.
Item 6. Exhibits and Reports on Form 8-K
Signatures
</TABLE>
<PAGE> 3
PART 1
Item 1. Financial Statements
VIRCO MFG. CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited (Note 1)
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
ASSETS 4/30/95 1/31/95
------- -------
<S> <C> <C>
Current Assets
Cash $ 161 $ 585
Accounts and Notes Receivable 23,423 27,468
Less Allowance for Doubtful Accounts (235) (100)
-------- --------
Net Accounts and Notes Receivable 23,188 27,368
Income Taxes Receivable 1,271 -
Inventories (Note 2)
Finished Goods 30,229 21,689
Work in Process 7,827 6,113
Raw Materials and Supplies 12,919 11,418
-------- --------
Total Inventories 50,975 39,220
Prepaid Expenses and Deferred Income Tax 4,163 2,659
-------- --------
Total Current Assets 79,758 69,832
Restricted Short-term Investment 3,689 8,937
Property, Plant & Equipment
Cost 68,964 65,727
Less Accumulated Depreciation (35,436) (34,409)
-------- --------
Net Property, Plant & Equipment 33,528 31,318
Other Assets 4,864 4,921
-------- --------
$121,839 $115,008
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE> 4
VIRCO MFG. CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited (Note 1)
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY 4/30/95 1/31/95
------------------------------------ ------- -------
<S> <C> <C>
Current Liabilities
Checks Released But Not Yet Cleared Bank $ 3,744 $ 2,898
Accounts Payable 12,029 11,768
Income Taxes Payable - 1,372
Current Maturities on Long-Term Debt 873 874
Other Current Liabilities 10,014 10,140
-------- --------
Total Current Liabilities 26,660 27,052
Non-current Liabilities
Long Term Debt (Less Current Portion) 41,205 32,577
Other Non-Current Liabilities 4,851 4,851
-------- --------
Total Non-Current Liabilities 46,056 37,428
Deferred Income Taxes 62 62
Shareholders' Equity
Preferred Stock:
Authorized 3,000,000 Shares, $.01 Par Value; None Issued or
Outstanding - -
Common Stock:
Authorized 10,000,000 Shares, $.01 Par Value; 4,903,625 Shares
issued in 1995 and 4,460,604 in 1994 49 49
Additional Paid-In Capital 36,992 36,992
Retained Earnings 12,272 13,787
Less treasury stock at cost (30,389 Shares) (234) (234)
Loan to ESOP Trust (18) (128)
-------- --------
Total Shareholders' Equity 49,061 50,466
-------- --------
$121,839 $115,008
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE> 5
VIRCO MFG. CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited (Note 1)
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
3 Months Ended
-------------------------------
4/30/95 4/30/94
--------- ---------
<S> <C> <C>
Net Sales $ 36,925 $ 36,414
Cost of Goods Sold 27,468 27,863
--------- ---------
Gross Profit 9,457 8,551
Shipping, Selling, General and Administrative Expense 11,055 9,960
Provision for Doubtful Accounts 110 107
Interest Expense 776 497
--------- ---------
11,941 10,564
--------- ---------
Income/(Loss) Before Taxes on Income (2,484) (2,013)
Taxes on Income/(Loss) (969) (785)
--------- ---------
Net Income/(Loss) $ (1,515) $ (1,228)
========= ==========
Earnings/(Loss) Per Share
(.31) (.25)
==== ====
Weighted Average Shares Outstanding
(Adjusted for 10% Stock Dividends
Declared August 16, 1994) 4,919,611 4,903,723
========= =========
Dividend Declared
Cash (Per Share) - -
========= =========
Stock - -
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE> 6
VIRCO MFG. CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited (Note 1)
<TABLE>
<CAPTION>
(Dollar Amounts in Thousands) 3 Months Ended
------------------------------
4/30/95 4/30/94
-------- -------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income (Loss) $ (1,515) $(1,228)
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 1,044 907
Provision for doubtful accounts 100 97
(Gain)/Loss on sales of fixed assets - -
Change in assets and liabilities:
Accounts and notes receivable 4,081 9,432
Inventories (11,755) (7,183)
Prepaid expenses and deposits (1,504) (136)
Income taxes receivable/payable (2,643) (2,399)
Other assets 882 42
Accounts payable and accrued expenses 135 257
-------- -------
Net Cash Provided By Operating Activities (11,175) (211)
-------- -------
Cash Flows From Investing Activities
Capital expenditures (3,254) (1,193)
Proceeds from sale of assets - 0
Net investment in life insurance 21 956
Restricted short term investments 5,248 -
-------- -------
Net Cash Used in Investing Activities 2,015 (237)
-------- -------
Cash Flows From Financing Activities
Issuance of long-term debt 8,736 2,293
Repayment of long-term debt (110) (1,951)
Loans to ESOP 110 50
-------- -------
Net Cash Provided by Financing Activities 8,736 392
-------- -------
Net Change in Cash (424) (56)
Cash at Beginning of Quarter 585 383
-------- -------
Cash at End of Quarter $ 161 $ 327
======== =======
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE> 7
VIRCO MFG. CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1995 and April 30, 1994
Note 1: The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three month period
ended April 30, 1995 are not necessarily indicative of the results
that may be expected for the year ended January 31, 1996. For
further information, refer to the consolidated financial
statements and footnotes thereto included in the Registrant
Company and Subsidiaries' annual report on Form 10-K for the year
ended January 31, 1995.
Note 2. Inventory
Year end financial statements reflect inventories verified by
physical counts with the material content valued by the LIFO
method. At this interim date, there has been no physical
verification and the precise adjustment to LIFO values has not
been calculated.
Note 3. Income Taxes
The Company adopted Statement of Financial Accounting Standards
(SFAS) No 109 effective February 1, 1993. Income taxes for the
three month period ended April 30, 1995 were computed using the
effective tax rate estimated to be applicable for the full fiscal
year, which is subject to ongoing review and evaluation by
management.
<PAGE> 8
PART II
VIRCO MFG. CORPORATION SUBSIDIARIES
Other Information
Item 4. Submission of matters to a vote of Security Holders
None
Item 6. Exhibits and Reports on Form 8-K
None
<PAGE> 9
VIRCO MFG. CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations:
For the first quarter of 1995, the Company incurred a net loss from continuing
operations of $1,515,000 on sales of $36,925,000 compared to a net loss from
continuing operations of $1,225,000 on sales of $36,414,000 in the same period
last year.
The first quarter results are consistent with Virco's seasonal business cycle
which produces diminished first quarter sales. The increase in net loss is
attributable to increases in sales, marketing, general and administrative
expense, offset in part by decreases in manufacturing costs.
Previously announced plans to consolidate the Los Angeles operations into one
manufacturing and distribution facility have been substantially completed. Los
Angeles manufacturing operations were transferred to the new Torrance facility
the end of the first quarter 1995. Western region distribution operations had
previously been transferred to the new facility in the third quarter of 1994.
The final work to be performed at the new facility consists of installing
certain pieces of new equipment which are being delivered or installed in the
second quarter of 1995. Negotiations to lease the vacated Los Angeles
manufacturing plant have progressed but are not yet complete. The Company is
continuing to assess the rest of its manufacturing and distribution facilities
for opportunities to reduce costs and streamline operations.
Financial Condition:
As a result of seasonally low deliveries in the first quarter, accounts
receivable decreased by approximately $3,550,000. In anticipation of strong
summer deliveries and to buffer against any disruptions in production resulting
from moving the Los Angeles factory, inventory was increased by more than
$11,750,000. The increase in inventory was financed through the credit
facility with Wells Fargo.
Proceeds from the issuance of an industrial revenue bond were held in trust and
reflected as restricted short term investments on the January 31, 1995 balance
sheet. The Company withdrew $5,248,000 from the trust to fund capital
improvements made at the new Torrance facility during the fourth quarter of
1994 and the first quarter of 1995. In addition, the capital spending at the
Torrance facility was supplemented by leasing approximately $450,000 of new
equipment from GECC. The Company intends to lease an additional $950,000 of
equipment from GECC during the second quarter of 1995.
<PAGE> 10
VIRCO MFG. CORPORATION AND SUBSIDIARIES
Exhibit (11) - Statement Re: Computation of Earnings Per Share
<TABLE>
<CAPTION>
Three Months Ended
April 30
---------------------------
1995 1994
---------- ---------
<S> <C> <C>
Primary:
Average Shares Outstanding 4,873,236 4,873,236
Net effect of dilutive stock options - based on the
treasury stock method using average market price. 46,375 30,487
---------- ---------
Totals 4,919,611 4,903,723
========== ==========
Net Loss (1,515,000) (1,228,000)
========== ==========
Per Share Amount (.31) (25)
========== ==========
</TABLE>
Weighted average shares outstanding are adjusted for 10% stock dividend
declared August 16, 1994.
<PAGE> 11
VIRCO MFG. CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
VIRCO MFG. CORPORATION
<TABLE>
<S> <C>
Date: 6/8/95 By: /s/ James R. Braam
---------------------------------- ------------------------
James R. Braam
Vice President - Finance
Date: 6/6/95 By: /s/ Robert E. Dose
---------------------------------- ------------------------
Robert E. Dose
Corporate Controller
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED STATEMENTS OF INCOME, AND CONSOLIDATED BALANCE SHEETS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-START> FEB-01-1995
<PERIOD-END> APR-30-1995
<CASH> 161,000
<SECURITIES> 0
<RECEIVABLES> 23,423,000
<ALLOWANCES> (235,000)
<INVENTORY> 50,975,000
<CURRENT-ASSETS> 79,758,000
<PP&E> 68,964,000
<DEPRECIATION> (35,436,000)
<TOTAL-ASSETS> 121,839,000
<CURRENT-LIABILITIES> 26,660,000
<BONDS> 0
<COMMON> 37,041
0
0
<OTHER-SE> 12,020
<TOTAL-LIABILITY-AND-EQUITY> 121,839,000
<SALES> 36,925,000
<TOTAL-REVENUES> 36,925,000
<CGS> 27,468,000
<TOTAL-COSTS> 27,468,000
<OTHER-EXPENSES> 11,941,000
<LOSS-PROVISION> 110,000
<INTEREST-EXPENSE> 776,000
<INCOME-PRETAX> (2,484,000)
<INCOME-TAX> (969,000)
<INCOME-CONTINUING> (1,515,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,515,000)
<EPS-PRIMARY> (.31)
<EPS-DILUTED> 0
</TABLE>
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