Stock Update: Seneca Foods, SeaChange, Virco, NIO Inc., and Concrete Pumping Holdings – June 14, 2023

Welcome back to my daily blog post about the stocks I own. Today, we’ll be taking a closer look at some major updates from Seneca Foods, SeaChange, Virco, NIO Inc., and Concrete Pumping Holdings. These companies have recently reported their sales, earnings, and overall financial performance for the latest quarter and beyond. Let’s dive in and see how they’re doing!

Seneca Foods Corporation Announces Record Sales for Fiscal Year 2023

Seneca Foods Corporation has reported record sales in their financial results for the fourth quarter and twelve months ended March 31, 2023. The company, one of North America’s leading providers of packaged fruits and vegetables, recorded net sales of $1,509.4 million for the twelve months ended March 31, 2023 – a $124.1 million increase from the previous year. The year-over-year increase in sales was due to higher selling prices, partially offset by lower sales volumes.

Despite continued cost pressures for labor and raw materials, the Seneca Foods Corporation delivered record sales and FIFO EBITDA. CEO Paul Palmby stated that investments in operating facilities paid off, and the supply chain operated well during a challenging environment.

The fourth quarter of fiscal 2023 saw a slight decrease in net sales, totaling $331.1 million compared to $332.4 million in the previous year’s fourth quarter. However, higher selling prices partially offset lower sales volumes.

Gross margin as a percentage of net sales for the twelve months ended March 31, 2023, was 9.0%, compared to 10.7% in the prior year. The decrease in gross margin was mainly due to a $64.2 million increase in the LIFO charge. Gross margin as a percentage of net sales for the fourth quarter of fiscal 2023 was 5.3%, compared to 8.0% in the prior year. The decrease was mainly due to the $15.6 million increase in the LIFO charge.

Overall, Seneca Foods Corporation had an excellent fiscal year, with record sales and positive outlook heading into the next fiscal year. As an investor, I recommend holding onto this stock and potentially buying more shares as the company continues to perform well in a challenging environment.

SeaChange International Reports Q1 Revenue of $7.0M, Sees Expected Profit in 2024

SeaChange International (NASDAQ: SEAC) announced its Q1 fiscal results, revealing a total revenue increase of 4% YoY to $7.0 million. The increase was attributed to a 40% surge in recurring service revenue. The company also recorded a significant margin expansion and cost control, leading to a YoY net income loss reduction of $2.3 million. SeaChange’s adjusted EBITDA almost broke even with a loss of $0.2 million, indicating a positive outlook for fiscal 2024.

Apart from securing two major customer renewals in the first quarter, the video delivery and advertising company launched two new StreamVid customers: a premium subscription service for a major content owner based in the Middle East and an event-based streaming service for a US sports event organizer. SeaChange expanded its partnerships with Source Digital and Fox Sports Mexico, with Source Digital’s interactive metaverse experience launched and Fox Sports Mexico rolled out onto the Roku platform.

SeaChange aims to further expand and enhance its product with personalization options for FAST channels, improved ad targeting, and cost optimizations for FAST bouquet customers. The company’s gross margin expanded from 48% in Q1 fiscal 2023 to 59% this year.

My personal thoughts on SeaChange’s Q1 report are positive as the company is showing growth in several areas. The surge in recurring service revenue and expansion of partnerships reflect an increase in demand for SeaChange’s products and services. The significant margin expansion and cost controls are also promising. With a positive outlook for fiscal 2024, I recommend considering SeaChange as a viable stock to invest in.

Virco Mfg. Corporation reports Q1 Revenue Growth and Margin Expansion

Virco Mfg. Corporation (NASDAQ: VIRC) has reported its financial results for the first quarter of fiscal year 2024 ending April 30, 2023. The company is the largest supplier of moveable furniture and equipment for educational environments in the United States, and its net sales for Q1 2024 were $34.9 million, marking an 8.7% increase compared to $32.1 million from the previous fiscal year.

The operating loss for the first quarter of 2024 decreased by 72.3% to $1.3 million from $4.7 million compared from the same quarter of last year. The company’s selling, general and administrative (SG&A) expenses remained almost unchanged from last year. Interest expenses rose to $0.7 million from $0.4 million in the prior year.

Virco’s internal metrics are used to evaluate its trends during seasonal off-business quarters. The company starts booking orders and building inventory from the first quarter of the fiscal year, during which public schools are in session and cannot receive deliveries. The second and third quarters contribute between 50-60% of total annual revenue when schools go on summer vacation.

This is positive news for Virco’s shareholders. Greater margins and revenue growth helped the company achieve a new record of shipments and backlog on May 31, 2023. As a result, I recommend investors hold onto their shares.

NIO Reports First Quarter Results: High Vehicle Deliveries, But Decrease in Revenue and Gross Profit

NIO, a premium smart electric vehicle company, has released its unaudited financial results for Q1 2023, reporting 31,041 vehicle deliveries, representing a 20.5% increase from Q1 2022 but a concerning 22.5% decrease from Q4 2022.

Despite a lower vehicle margin, vehicle sales were RMB9,224.5 million (US$1,343.2 million), and total revenues were RMB10,676.5 million (US$1,554.6 million), showing a 7.7% increase from Q1 2022. However, there is a noticeable decline in revenue and gross profit from Q4 2022 which may give investors a reason to pause. The gross margin was at 1.5%, a stark contrast from 14.6% in Q1 2022. Gross profit also experienced a dip of 73.9% from Q4 2022, with RMB162.3 million (US$23.6 million). Additionally, loss from operations was RMB5,111.8 million (US$744.3 million), which is a significant increase of 133.6% from the same quarter in 2022.

As an investor in NIO, I’m becoming increasingly concerned given the financial results of the first quarter. A decrease in vehicle deliveries from Q4 2022 may indicate that consumer demand is slowing down, while the decline in revenue and gross profit raises concerns over production and operational efficiencies.

Therefore, because of these factors, I recommend selling the stock. It’s always a tough call to part ways with a stock that once held promise, but it’s important to act in the best interest of your portfolio and investments. I believe that there are better opportunities in the market for growth that might offset some losses from selling NIO.

Concrete Pumping Holdings, Inc. Reports Strong Q2 results

Concrete Pumping Holdings, Inc. (Nasdaq: BBCP), a leading provider of concrete pumping and waste management services in the U.S. and U.K., has reported financial results for the second quarter ended April 30, 2023. The revenue increased to $107.8 million compared to $96.5 million for the same period for the previous year. Gross profit and income from operations also showed an increase of 12% and 27%, respectively. Adjusted EBITDA increased 7% to $28.8 million and net income was $5.6 million. CPH CEO Bruce Young highlighted the growth in every segment, especially in Eco-Pan, which experienced a 26% increase in revenue. Despite above-average precipitation and colder temperatures that affected sales and profitability in some regions west of the Rockies and in Colorado, the U.S. concrete pumping business continued to improve in commercial and infrastructure projects.

My personal thoughts are that CPH’s financial results show positive momentum in the company. Although the net income was lower than the previous year, the growth in revenue and gross profit proves their continued success. The CEO’s comments on ongoing growth in infrastructure and commercial end markets are encouraging. Therefore, I would recommend holding on to the stock and monitoring future updates on its performance.