After doing some stock screens for potential investments (as opposed to my usual chart-based trades), I came across Virco Mfg. Corp., a company that designs, produces and distributes movable education furniture equipment for the pre-k through 12th grade market in the United States.
For the years 2001-2005, Virco took some serious blows to their net income. In ‘01 and ‘02, Virco barely had a positive net income and then Virco had 3 years of negative net income. In ‘03 it was negative 22 million, in ‘04 it was negative 14, and in ‘05 it was negative 9.6. Then in 2006, after what seems to me like seriously hard work, perseverance and dedication, Virco emerged once again with a positive net income, a $17 million turnaround. 2006 was a year filled with accomplishments for Virco.
Virco’s 2006 annual report was highly readable and told an excellent story of the past decade for the company. The letter to the shareholders explained how they were positioned in the early 90s and the factors for the decline in profitability. The letter also explained management’s reasoning behind the general steps deemed necessary to return to profitability and also the more specific product lines and goals to capture more sales.
Overall, this was an excellent read. I think anyone can appreciate how an individual or company can experience hard times and emerge successful and strong once again. I also enjoyed reading about a company that probably made the chairs and desks and tables I used throughout grade school.
For more info, visit the Virco website or download the 2006 annual report detailing their turnaround.
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