VIRCO MFG CORPORATION
virco.comAI Executive Summary
AI-powered analysis of 10-Q filing content
Virco's Q2 FY2027 results show declining profitability with net income down 15.7% and sales down 5.0% year-over-year, driven by weaker state/local government budgets and reduced demand for school furniture. Gross margins compressed significantly (40.0% vs 44.4%) due to lower production volumes and higher material/overhead costs, while six-month net income fell nearly 47%. Despite these headwinds, order backlog is up 13% YoY, suggesting a potential rebound in Q3, and the company recently expanded its credit facility.
Red Flags Detected (6)
Six-month net income declined ~47% ($5.8M vs $10.9M prior year)
Gross margin compressed 440 bps in Q2 (40.0% vs 44.4%) and 480 bps for six months (40.4% vs 45.2%)
COGS as % of sales rose sharply (60.0% vs 55.6% in Q2; 59.6% vs 54.8% for six months)
3 more red flags detected
Key Takeaways
Profitability metrics (net income, gross margin) deteriorated meaningfully year-over-year despite only modest revenue decline
Order backlog up 13% YoY signals potential recovery in Q3 shipments
3 more takeaways
Filing Overview
What This Means
Deteriorating Trend: Conditions are worsening compared to previous filings. This may create opportunities for service providers.
Quarterly Report: Interim filing with unaudited financial data for the quarter.