Virco Manufacturing Corp. has seen its stock price fluctuate over the past few months.

Since announcing its fiscal second quarter earnings on Sept. 9, the Torrance manufacturer of school desks, chairs, tables and storage products has seen its share price bounce around without any other major announcements from the company.

The company saw its share price decrease by 9.2% between the close of $14.46 on Sept. 6 and the close of $13.12 on Sept. 9, the day the company reported its financials. It then went up another 4% from the close of $14.80 on Sept. 12 and a close of $15.45 on the following day.

The stock price then dipped into the $13 to $14 range for the next month or so, until it skyrocketed with a nearly 14% increase in early November.

Shares in Virco have gained nearly 39% since the beginning of the year when the price closed at $11.18 on Jan. 2 and the close of $15.53 on Nov. 20. 

The stock closed at $16.11 on Nov. 21.

The company reported on Sept. 9 net income of $16.8 million ($1.04 a share) for the quarter ending July 31, compared with net income of $15.5 million (95 cents) in the same period of the previous year. Revenue grew 1% from the second quarter of the prior year to $108 million.

Options for capital

Virco Chief Executive Robert Virtue said that given the strength of its current position, the company is actively reviewing its options for capital allocation.

Among these are returns to shareholders in the form of dividends, share repurchases and potential share price appreciation, he said.

The company still has $3.5 million in funds already authorized by the board of directors for the stock repurchases, he added.

“We are also reviewing possible acquisitions, although as always we are quite careful in assessing the risks as well as the likely net contributions of such actions,” Virtue said in a statement. “Finally, we continue to invest in capital equipment, especially in processes and systems that expand the scope of our present capabilities and give us access to new and/or adjacent markets.”

Virtue said that he wanted to personally recognize and thank the company’s shareholders for their support.

“We look forward to using our financial strength to continue serving students and educators as well as providing a well-deserved return to the partners who have made our continuity of service possible,” he added.

During the second quarter, the company said it received a large, counter-seasonal disaster recovery order from an unnamed customer. The order is currently still being filled and is blending into its normal seasonal delivery pattern, which peaks in the second and third quarters when schools are out of session.

“This particular customer was able to take delivery earlier than usual, which had the highly visible effect of boosting revenue and cash flow in the seasonally light first quarter, contributing to a modest profit,” the company said in a release. “Management cautions that this unusual timing is unlikely to repeat itself, and that the post-pandemic recovery of the school furniture market may yet hold additional surprises – both positive and negative – that are hard to predict.”

Also in the second quarter, the company completed a five-year lease renewal on its Torrance headquarters, factory and distribution center.

Virco has occupied the facility which encompasses 560,000 square feet, since 1994. It also owns over 1.75 million square feet of combined factory and distribution space in Conway, Arkansas, where it has operated since 1954.

“These strategic geographies provide (it) with significant logistical advantages in the highly seasonal market for bulky school furniture,” the company said in its release. “California remains Virco’s single largest state by revenue, while states in the Southeast, serviced out of Arkansas, comprise the fastest-growing region.”