Stocks I Own: June 12, 2023

Today’s blog post covers the recent financial results of some of the stocks I own. From a strong Q2 report by Concrete Pumping Holdings to record-breaking Q1 performances by Dave & Buster’s and ECARX, there’s a lot to cover. Additionally, we’ll take a look at the revenue growth and shipment increase reported by Virco, as well as the unaudited financial results by NIO Inc. Let’s dive in!

Virco Mfg. Corporation achieves record shipment and backlog, driving revenue growth and improved margins

Virco Mfg. Corporation (NASDAQ: VIRC), the largest educational furniture and equipment manufacturer and supplier in the United States, reported record shipments and backlog on May 31, 2023. The company’s revenue growth and improved margins were key drivers of their recent financial success. Operating loss in the first quarter of fiscal 2024 declined by 72.3%, reflecting the broad positive impacts of higher revenue and higher margins.

The company’s net sales for Q1 FY2024 were $34.9 million, an 8.7% increase from $32.1 million for the same period in the previous year. Even though SG&A expenses were virtually flat, higher interest rates and a moderately higher balance on the Company’s line of seasonal working capital led to a higher interest expense of $0.7 million compared to $0.4 million in the prior year.

Virco’s extreme seasonality, characterized by a booking of orders and build-up of inventory in the first and fourth quarters and delivery of 50-60% of their total annual revenue in Q2 and Q3, makes it challenging to evaluate trends in their business cycle during seasonally light quarters.

As an investor, I am impressed by Virco’s financial performance despite the difficult trading conditions for the education sector in the United States. The company’s record shipments and backlog, combined with their higher revenue growth and margins, highlight the continued trust customers have in the brand. The 72.3% decline in operating loss, relative to the same period last year, is a significant improvement and shows Management is managing costs effectively.

Given the positive outlook for the company, I recommend buying VIRC stock. Virco’s dominance in the educational furniture and equipment market in America, coupled with improved margins, simply means the company is poised to perform better in the future.

ECARX Holdings, Inc. (Nasdaq: ECX) reports strong Q1 2023 results

ECARX Holdings, a global mobility tech provider, has released their financial results for the first quarter ending March 31, 2023. The company reported a total revenue of RMB762.9 million (US$111.1 million) which is up by 16% year over year.

The sales of goods revenue increased by 19% year over year, driven by the company’s new digital cockpit sales volumes and portfolio revenue mix shift from Infotainment Head Unit (IHU) to Digital Cockpit, which has a higher total revenue per unit. The software license revenue increased by 140% year over year, mostly as a result of a new procurement framework agreement for intellectual property licenses with a customer.

However, the service revenue declined by 42% year over year, primarily as a result of lower volumes of contracts completed during the quarter compared with the same period last year. The total cost of revenue was RMB552.1 million (US$80.4 million), up 7% year over year. The gross profit of RMB210.8 million (US$30.7 million), up 52% year over year.

ECARX continues to innovate and revolutionize mobility, setting new benchmarks for the in-car experience, and unlocking significant growth opportunities. The company’s recently announced suite of products is already driving change and moving the world forward, demonstrating their commitment to shaping the future of transportation.

Based on their strong Q1 2023 results and commitment to innovation, I recommend buying the ECX stock. The company’s growth prospects look bright, and their dedication to shaping the future of transportation sets them apart from their competitors.

NIO Reports Quarterly Vehicle Deliveries and Total Revenues

NIO Inc, a leading pioneer in the premium smart electric vehicle market, announced its financial results for the first quarter ending March 31, 2023. The company reported a total revenue of RMB10,676.5 million (US$1,554.6 million), representing a 7.7% increase from the same quarter in 2022. Vehicle sales were RMB9,224.5 million (US$1,343.2 million), a decrease of 0.2% from the first quarter of 2022. The company delivered 31,041 vehicles in the quarter, comprising 10,430 premium smart electric SUVs and 20,611 premium smart electric sedans. Their vehicle margin was 5.1%, compared with 18.1% in Q1 2022. Their gross profit and margin also decreased in the first quarter of 2023.

As a shareholder, I am disappointed in the decrease in vehicle margin, gross profit, and margin. However, I believe that NIO is still a strong player in the electric vehicle market with their innovative technology and design. Therefore, I recommend holding onto the stock and possibly buying more if the price is right for long-term growth.

Concrete Pumping Holdings, Inc. Reports Strong Q2 2023 Financial Results

Concrete Pumping Holdings, Inc. (Nasdaq: BBCP) announced its financial results for the second quarter ending on April 30, 2023, reporting strong growth across its business segments. The company specializes in providing concrete pumping and waste management services in the U.S. and U.K. Its Q2 revenue surged by 12% to $107.8 million compared to $96.5 million in the prior year period. Additionally, gross profit increased by 12% to $43.5 million from $38.9 million, while income from operations surged by 27% to $13.2 million from $10.4 million. However, the company’s net income declined to $5.6 million compared to $6.0 million in the previous year.

Despite the challenging weather conditions in some of its regions, the company witnessed a double-digit rise across its business segments, particularly in its U.K. operations and Eco-Pan services. Eco-Pan saw its revenue surge by 26%, as the company leveraged organic growth in its operations network and expanded salesforce, achieving another quarter of exceptional growth. The demand for infrastructure and commercial projects grew, as evidenced by the company’s expanded footprint and momentum with heavy commercial projects.

In my opinion, Concrete Pumping Holdings, Inc.’s Q2 results demonstrate its resilience in a challenging market environment. The steady revenue growth and increased profitability for the second consecutive quarter, solidifies its position as a vital player in the industry. The ongoing growth in its infrastructure and commercial end markets bodes well for the future. Based on these positive indicators, I recommend buying BBCP’s stock.

This press release did not contain any negative news or events that could prompt a sell recommendation. Therefore, shareholders are advised to hold on to their shares in the company. Looking ahead, the company’s strategic expansion plans and consistent growth in all its segments could provide opportunities for long-term gains.

Dave & Buster’s Crushes Q1 2023 Earnings Estimates

Dave & Buster’s Entertainment Inc. (NASDAQ: PLAY) announced its Q1 2023 financial results, reporting record revenue of $597.3 million, a 32.4% YoY increase from Q1 2022. The company also reported solid net income of $70.1 million, or $1.45 per diluted share compared to $67.0 million, or $1.35 per diluted share in Q1 2022.

Though the pro forma combined comparable store sales declined 4.1% YoY, the results were better compared to 2019. Additionally, adjusted EBITDA grew by 29.8%, and the company repurchased 5.7 million shares at a total cost of $200.0 million.

Dave & Buster’s ended Q1 2023 with $581.7 million in liquidity ($91.5 million in cash and $490.2 million available under its $500 million revolving credit facility) and expanded its presence with four new store openings. The company has also signed franchise agreements for up to 15 stores in India and five stores in Australia.

Overall, Dave & Buster’s has delivered an impressive Q1 2023 result, leaving investors optimistic about its future growth projections. Therefore, for those who already own or plan to purchase the company’s shares, we recommend holding or buying the stock.