Virco (VIRC) Issues Initiatives to Cut Costs: Offering Early Retirement, Voluntary Separation to Certain Employees
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Price: $10.68 +3.19%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 1.2%
Revenue Growth %: +5.2%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 1.2%
Revenue Growth %: +5.2%
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Virco Mfg. Corporation (Nasdaq: VIRC) today announced cost savings measures in the following letter to stockholders from Robert Virtue, President and CEO:
Virco announced today that in an effort to bring its cost structure in line with decreased revenues resulting from lower levels of school furniture purchases by school districts facing ongoing budgetary challenges, it was offering early retirement and voluntary separation packages to its employees in Arkansas and California, with the ability to participate in this program subject to the discretion of Virco. The Company also indicated that if it is able to secure sufficient savings through this offering it may be able to avoid more widespread employee reductions. In addition, the Company has implemented several other cost saving measures, including scheduling two additional weeks of employee furloughs during the fall and winter months, which are traditionally very slow months in the intensely seasonal school furniture business. Robert Virtue, Virco's President and CEO, said "our track record in preserving American manufacturing jobs has been excellent. As far as we know, we are the only publicly traded American furniture manufacturer that hasn't had layoffs since the Great Recession began in 2008. Unfortunately, the after effects of this recession and continuing economic volatility have cut deeper into the funding and budget reserves of our public school customers than at any time we can recall since our Company's founding in 1950. These lingering impacts have resulted in lower expenditures for educational furniture and equipment. We're proud of the many innovative ways our employees have adapted to this challenge so far. We're also proud that substantially all of our products, both in terms of units and dollar volume, continue to be made here in our United States factories. Unfortunately, the contraction in our market means we simply need less output than before the recession. We hope this moderate approach to lowering costs will provide us the savings we need while also keeping valuable community-building manufacturing jobs in our two home states of Arkansas and California."
Virco announced today that in an effort to bring its cost structure in line with decreased revenues resulting from lower levels of school furniture purchases by school districts facing ongoing budgetary challenges, it was offering early retirement and voluntary separation packages to its employees in Arkansas and California, with the ability to participate in this program subject to the discretion of Virco. The Company also indicated that if it is able to secure sufficient savings through this offering it may be able to avoid more widespread employee reductions. In addition, the Company has implemented several other cost saving measures, including scheduling two additional weeks of employee furloughs during the fall and winter months, which are traditionally very slow months in the intensely seasonal school furniture business. Robert Virtue, Virco's President and CEO, said "our track record in preserving American manufacturing jobs has been excellent. As far as we know, we are the only publicly traded American furniture manufacturer that hasn't had layoffs since the Great Recession began in 2008. Unfortunately, the after effects of this recession and continuing economic volatility have cut deeper into the funding and budget reserves of our public school customers than at any time we can recall since our Company's founding in 1950. These lingering impacts have resulted in lower expenditures for educational furniture and equipment. We're proud of the many innovative ways our employees have adapted to this challenge so far. We're also proud that substantially all of our products, both in terms of units and dollar volume, continue to be made here in our United States factories. Unfortunately, the contraction in our market means we simply need less output than before the recession. We hope this moderate approach to lowering costs will provide us the savings we need while also keeping valuable community-building manufacturing jobs in our two home states of Arkansas and California."
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