VIRCO MFG CORPORATION

Small domestic school-furniture maker had a sharp down year as non-recurring disaster-recovery orders rolled off, leaving thin returns and negative FCF.

Strengths

• Conservative balance sheet: debt/equity 0.03 (low) and interest coverage 12x (85th); current ratio 3.1
• Domestic manufacturing footprint is a genuine competitive edge versus import-reliant rivals

Risks

• Revenue -25% (8th pct) and net income -88% (16th); FCF margin -3.4% and ROE just 2.4%
• Heavy reliance on volatile state/local education funding and extreme seasonality

Notable findings

• Cash burnNegative free cash flow (-6.7M)
• Customer concentration~85% of revenue from one customer/distributor — Virco is one of the few domestic manufacturers of school furniture that call on and sell direct to school customers, with approximately 75% to 85% of sales being direct to customers
• Insider buyingInsider buying — 13 open-market buy(s) by 4 insider(s) (cluster of 4 insiders, ~$210,209, last 6mo) Form 4 ↗