SEC Filing
Year end Jan. 31.
(All years below are fiscal year)
Jan. 2011
Q3 2011 data
Jan. 2011
Q3 2011 data
Check list:
1.Major Business.
Furnitures for schools(k-12), colleges, hotels, governments, etc. Founded by Julian A. Virtue at 1950. Now run by his son Robert Virtue(77, CEO) and his grandson Douglas Virtue(52, VP).
Sales are highly seasonal. Q2 Q3. June July August sale count > 50% of annual revenue.
It has more than 50 patents
Sales are highly seasonal. Q2 Q3. June July August sale count > 50% of annual revenue.
It has more than 50 patents
2.Price, Book value, Share outstanding, Market Cap.
Recent price: $2.68. Book value: $4.41. Shares: 14.2m. Market Cap: $38m.
Properties:
Conway AR: 1.2m sq ft manufacture, warehouse, office. + 375k sq ft for fabricated steel and injection-molded plastic components + leased 175k sq ft for fabricate and store compression-molded components.
Torrance CA: leased 560k sq ft manufacture, warehouse2004: sold 160k sq ft factory in Los Angeles, CA for $5.8m.
2009: sold 150k sq ft warehouse in Conway, AR for $2.4m
3.Current ratio. Debt/Current Asset ratio. Debt maturity and interest. Inventory level. Cash level.
Current ratio Q2: 1.6, Q3 Q4>2. Total debt at Q2: $30m, Q3: $2.2m. Cash 1 to 2m. Inventory Q2 $40m Q3 $27m
Maximum Credit for summer time: $45m. Winter time: $20m.
Maximum Credit for summer time: $45m. Winter time: $20m.
4.Revenue, Earning, Deficit check. FCF, Dividend history, Dividend policy, Revenue/Price ratio.
2011 2010 2009 2008 2007 2006 2005 2004 Ave*
Revenue $181m $191m $212m $230 $223m $214m $200m $192m
Income -$0.61 $0.02 $0.08 $1.54 $0.56 -$0.73 -$1.07 -$1.68 $0
FCF $0.17 -$0.57 $0.60 $0.84 $0.50 -$0.21 0.09 0.33 $0.25
FCF-WC -$0.40 $0.10 $0.24 $0.94 $0.88 -$0.13 -$0.42 -$1.57 $0.18
Dividend $0.10 $0.10 $0.10 $0.03 $0.025 $0 $0
*Exclude 2004 since it has big restructure cost. 2011 exclude $9.8m income tax write off.
Latest 5 years average: income: $0.38, FCF: $0.38, FCF-WC: $0.49.
4 years from 2004 to 2008, revenue grow from $192m to $230m. 2 years after at 2010, revenue go back to $191m. Compare 2004 to 2010 and 2006 to 2009, 2009 and 2010 were doing better.
Revenue $181m $191m $212m $230 $223m $214m $200m $192m
Income -$0.61 $0.02 $0.08 $1.54 $0.56 -$0.73 -$1.07 -$1.68 $0
FCF $0.17 -$0.57 $0.60 $0.84 $0.50 -$0.21 0.09 0.33 $0.25
FCF-WC -$0.40 $0.10 $0.24 $0.94 $0.88 -$0.13 -$0.42 -$1.57 $0.18
Dividend $0.10 $0.10 $0.10 $0.03 $0.025 $0 $0
*Exclude 2004 since it has big restructure cost. 2011 exclude $9.8m income tax write off.
Latest 5 years average: income: $0.38, FCF: $0.38, FCF-WC: $0.49.
4 years from 2004 to 2008, revenue grow from $192m to $230m. 2 years after at 2010, revenue go back to $191m. Compare 2004 to 2010 and 2006 to 2009, 2009 and 2010 were doing better.
5.SG&A, R&D expense.
No big hike on SG&A number. Is there any future leasing obligations? Flexible cost structure is preferred.
For tech company, R&D expense decreased or increased?
6.Insider holding. Management compensation. Options.
The Virtue family hold 5.6m shares(40%). However, Robert and Douglas only have 930k(6.6%).
Top 5 2010-2007: $1.4m, $1.8m, $1.5m, $2.5m.
Top 5 2010-2007: $1.4m, $1.8m, $1.5m, $2.5m.
7. Insider trading info, stock buy back.
Bought back: 2010: 652k, 2009: 950k, 3Q 2011: 100k
Bought back: 2010: 652k, 2009: 950k, 3Q 2011: 100k
10.Employee numbers. Revenue/Employee. Compensation/Employee.
at Jan. 2010: 1100 regular employees = 900 workers + 125 sales + 75 admin.
2004: Reduced from 2000 to 1200
2009: Reduced from 1200 to 1100
Not unionized.
11.Industry comparison.manufacturers:
KI Inc.: Private, sell to school too. However, products seems different. revenue $600m(2008).
Royal:
Bretford
Smith System
Columbia
Scholarcraft
VS America
distributor:
School Specialty (SCHS): $1.0B. Partner of U.S. Communities. Furniture around $250-$300m. Decreased 20% in 2010.
Falcon Products, Inc.
KI Inc.
MTS
Mity Enterprises, Inc
Herman Miller: $2.0B(2008). Partner of U.S. Communities. Not listed in the company's report as competitor.
All the big companies seems suffered big revenue decrease worse than Virco in recent years.
12.Major events.
2. Revenue highly depended on government funding for K-12 school.
3. The family holding is high, however, CEO and VP hold just small part of it.
4. Lost quite a lot from 2004 to 2006.
5. Cut employee number from peak 2950 (year 2000) to 1100 now while revenue is down from $287m(year 2000) to $190m.
6. Insist made in U.S. in stead of importing from China which I view it not that bad.
7. If take 10 years average, it is not good. If take the latest 5 years average, it is good for current price.
Feb. 14. 2011
Bought at $3.04.
11.Industry comparison.
Sagus International LLC: 800 employees. Private and not a partner of us communities. Sales $130m(2008). Mainly sell to K-12 too.
Hon (HNI): annual sales > 1.5b. Seems in different category. KI Inc.: Private, sell to school too. However, products seems different. revenue $600m(2008).
Royal:
Bretford
Smith System
Columbia
Scholarcraft
VS America
distributor:
School Specialty (SCHS): $1.0B. Partner of U.S. Communities. Furniture around $250-$300m. Decreased 20% in 2010.
Falcon Products, Inc.
KI Inc.
MTS
Mity Enterprises, Inc
Herman Miller: $2.0B(2008). Partner of U.S. Communities. Not listed in the company's report as competitor.
All the big companies seems suffered big revenue decrease worse than Virco in recent years.
12.Major events.
13.Concerns.
1. 40% of revenue generated for one contract to a nationwide purchasing organization( I guess it is U.S. Communities). Contract at Aug. 2008 to Dec. 31. 2011. Extended 3 years to 20142. Revenue highly depended on government funding for K-12 school.
3. The family holding is high, however, CEO and VP hold just small part of it.
4. Lost quite a lot from 2004 to 2006.
5. Cut employee number from peak 2950 (year 2000) to 1100 now while revenue is down from $287m(year 2000) to $190m.
6. Insist made in U.S. in stead of importing from China which I view it not that bad.
7. If take 10 years average, it is not good. If take the latest 5 years average, it is good for current price.
Feb. 14. 2011
Bought at $3.04.
