Virco Manufacturing Corporation · NASDAQ:VIRC
Virco Manufacturing — Virco Mfg. — Investor Presentation (December 2022)
25 slides from Virco Manufacturing's investor presentation, December 2022
Slide 1: VIRCO Investor Presentation
VIRCO Investor Presentation December, 2022 Investor Presentation - December 2022 Virco Mfg. Corporation: VIRC 1
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding: our future financial results and growth in our business; the educatio
Slide 3: Corporate Overview
Business Dynamics and Key Trends Virco Mfg. Corporation (NASDAQ:VIRC) Corporate Overview • Largest manufacturer and supplier of movable furniture and equipment for the education market in the United States • Founded in 1950 by Julian Virtue • Founding family still owns over 30% of outstanding shares
Slide 4: Investment Highlights
Business Dynamics and Key Trends Investment Highlights • Exceptional brand awareness with reputation for safety, reliability and quality earned over 70+ years of serving the education market • Well positioned to benefit from ongoing rationalization of extended supply chains • Economic barriers to en
Slide 5: Virco Timeline – 1965 to 2023
Business Dynamics and Key Trends Virco Timeline – 1965 to 2023 China enters the WTO putting pressure on U.S. manufacturers $300,000 Conway “Plant II” Restructuring, “ZUMA”, “Equipment for Educators” $275,000 “Great Recession” COVID closes schools Industry $250,000 consolidation Supply chain collapse
Slide 6: Timeline
Business Dynamics and Key Trends Timeline • Virco founded in 1950 • Virco goes public in 1965 and releases “9000” series, possibly the world’s largest-selling chair with over 60,000,000 units sold. • Virco prospers through the long Baby Boom and its “echo.” • 2000: Investment of over $60mm in Conway
Slide 7: Seasonal Impact of Education Market
Business Dynamics and Key Trends Seasonal Impact of Education Market • Schools typically place orders in late Spring or early Summer for delivery prior to the start of the upcoming 4 weeks school year Peak Orders Peak Deliveries • Approximately 50% of Virco’s annual sales are recognized in the month
Slide 8: Virco Shipments + Backlog vs. Year-Ending Revenue: 2001-2023
Business Dynamics and Key Trends Virco Shipments + Backlog at May 31 vs. Year-Ending Revenue: 2001-2023 • Shipments + Backlog is a non- 280 GAAP internal metric used by 260 management to plan production, staffing, inventories, and seasonal 240 working capital 220 • The metric is especially valuable
Slide 9: Shift in Price/Cube Threshold Creating Additional Opportunities for Virco
Business Dynamics and Key Trends Shift in Price/Cube Threshold Creating Additional Opportunities for Virco $30 • Following China’s entry into the WTO, many furniture and equipment markets shifted to Chinese suppliers to take advantage of lower cost labor and production • Education market was less im
Slide 10: Main Product Categories
Business Overview Main Product Categories Chairs Desks Tables Investor Presentation - December 2022 Virco Mfg. Corporation: VIRC 10
Slide 11: “Education” Encompasses A Diverse Number Of Venues
Business Overview “Education” Encompasses A Diverse Number Of Venues Virco supplies furniture and equipment for all of these venues, many of which offer growth opportunities into adjacent markets with similar characteristics. • Classrooms • Break Rooms • Administration • Seminar • Cafeterias and Foo
Slide 12: Business Overview
Business Overview CLASSROOMS CAFETERIAS AND FOOD-SERVICE ADMINISTRATION SCIENCE LABS Investor Presentation - December 2022 Virco Mfg. Corporation: VIRC 12
Slide 13: Business Overview
Business Overview LIBRARIES & MEDIA CENTERS PERFORMING ARTS CLINICS BREAK ROOMS Investor Presentation - December 2022 Virco Mfg. Corporation: VIRC 13
Slide 14: Business Overview
Business Overview SEMINAR HOSPITALITY CAREER TRAINING AND TECHNOLOGY PLACES OF WORSHIP Investor Presentation - December 2022 Virco Mfg. Corporation: VIRC 14
Slide 15: Virco’s Vertical Business Model Offers Visibility And Control Of The Order-To-Cash Cycle
Business Overview Virco’s Vertical Business Model Offers Visibility And Control Of The Order-To-Cash Cycle. • Virco sales managers work directly with educators to specify products, provide layout and design, establish service and delivery expectations. • Pricing is confirmed with the nation’s leadin
Slide 16: Proprietary PlanSCAPE Software & Project Management
Business Overview Proprietary PlanSCAPE® Software & Project Management Virco’s Direct Sales Force Uses PlanSCAPE to Help Schools Design and Plan Projects Representative PlanSCAPE Project Comprehensive Project Management Process DESIGN PROCUREMENT INSTALLATION CLOSING PHASE PHASE PHASE PHASE Define t
Slide 17: Significant Competitive Advantages
Business Overview Significant Competitive Advantages One-stop shop • Product line expansion has enabled Virco to provide all furniture and equipment needs for schools and meet the desire for one vendor relationship Full-service capability • Layout planning, delivery and installation services differe
Slide 18: Virco Has Substantial Manufacturing And Logistical Strength
Business Overview Virco Has Substantial Manufacturing And Logistical Strength • Facilities are designed, operated, and strategically positioned to support extreme throughput during peak summer season. • Torrance, California operation is 10 miles from Port of L.A./Long Beach and serves the western U.
Slide 19: Long-Term Value of Customer Base
Business Overview Long-Term Value of Customer Base • Largest installed base of furniture in U.S. education market creates significant annuity stream resulting from reorders • End users are 55,000,000 public and private school students plus 7,000,000 teachers and support staff • Reorders driven by ne
Slide 20: Recent Trends appear to have Restored Revenue and Operating Margins to Historic Levels
Financial Review and Growth Opportunities Recent Trends appear to have Restored Revenue and Operating Margins to Historic Levels of Profitability Financial Results of nine-month period ended October 31, 2022 compared to the same period in the prior year (Unaudited) • Net sales increased 32.9% to $19
Slide 21: Quarterly Revenue & Pre-Tax Income (Loss), FYE 2018-FYE 2023
Financial Review and Growth Opportunities Quarterly Revenue & Pre-Tax Income (Loss), FYE 2018-FYE 2023 (Unaudited) $100,000 $75,000 * Net Sales (in thousands) $ 12,000 Pre-Tax Income (Loss) - (in thousands) $50,000 $ 10,000 $ 8,000 $ 6,000 $ 4,000 $ 2,000 $25,000 $ 0 $ (2,000) $ (4,000) $ (6,000) $
Slide 22: Strong Balance Sheet
Financial Review and Growth Opportunities Strong Balance Sheet As of As of As of (Dollars in Thousands) 10/31/2022 1/31/2022 10/31/2021 Trade Accounts Receivable, Net $28,028 $17,769 $24,824 Inventories $57,465 $47,373 $40,483 Current Assets $89,547 $68,847 $69,056 Total Property, Plant & Equipment
Slide 23: Near-Term Growth Opportunities
Financial Review and Growth Opportunities Near-Term Growth Opportunities • Total addressable education market increasing to as much as $1 billion due to stimulus funding(1) • Stimulus funding driving long-delayed refurbishment projects among aging schools • Rising costs and increased delivery times
Slide 24: Long-Term Strategies for Improving Financial Performance and Enhancing Shareholder Value
Financial Review and Growth Opportunities Long-Term Strategies for Improving Financial Performance and Enhancing Shareholder Value • Penetrate legacy markets over next 3-5 years - Prior to China entering WTO, furniture for retail market accounted for ~$40 million in annual sales (major customers inc
Slide 25: Summary
Financial Review and Growth Opportunities Summary Market leading company with seasoned leadership, strong balance sheet, and valuable infrastructure Favorably positioned to capitalize on multiple positive catalysts and generate near-term growth in revenue and earnings Longer-term opportunities to ex