TORRANCE, CA -- Virco Mfg. Corporation , a manufacturer of school furniture, posted second quarter sales of $72.4 million, representing a 3% decline from the same period in 2009.
In his letter to stockholders, Robert Virtue, president and CEO, said, he was pleased with the results considering the weakness of the market and added that the near-term future will continue to present challenges for the company's business.
"Despite the worst recession in our 60-year corporate history, we made solid progress this summer in building market share among our core K-12 educational customers both nationally and internationally. Against an overall backdrop of double-digit declines in school construction starts and renovations, our revenue in the second quarter slipped only 3% from the second quarter of 2009 and 4.4% in the six months ended July 31, 2010, compared to the corresponding period in 2009.
"We have, however, experienced intense price competition as suppliers to our market struggle to generate sufficient revenue to cover operating expenses. In response, we aggressively lowered our own prices, resulting in lower gross and net margins for the second quarter and first half of the year. We expect prices to remain low for the balance of the year and perhaps well into next year.
"As we warned in our first quarter report, until the private sector recovers fully and begins pumping tax receipts into state and local coffers, we believe spending for new schools and new school furniture will remain below the levels of a few years ago. The continuing slow recovery of the private sector and consequent slow recovery of tax receipts is what causes us to remain cautious about the near term."
Virtue added, "We are proud that our business model of domestic design, fabrication, direct sales and customer service continues to support an American workforce that today totals over 1,100 employees. We have also been able to maintain full benefits and 40-hour work-weeks, although next year we will be introducing 4 unpaid furlough days that correspond with federal holidays when our customers are not in their offices or available to take deliveries of furniture."
Read Virco Manufacturing Corporation's press release.
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