Virco Mfg. (VIRC) 10-Q 10 Jun 22 2023 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Apr. 30, 2022	Jun. 02, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Apr. 30, 2022
Document Transition Report	false
Entity File Number	1-8777
Entity Registrant Name	VIRCO MFG. CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	95-1613718
Entity Address, Address Line One	2027 Harpers Way
Entity Address, City or Town	Torrance
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90501
City Area Code	310
Local Phone Number	533-0474
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	VIRC
Security Exchange Name	NASDAQ
Entity Central Index Key	0000751365
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		16,102,023
Current Fiscal Year End Date	--01-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Apr. 30, 2022	Jan. 31, 2022	Apr. 30, 2021
Current assets:
Cash	$ 539	$ 1,359	$ 556
Trade accounts receivables, net	13,326	17,769	14,334
Other receivables	85	118	39
Income tax receivable	135	152	85
Inventories	66,297	47,373	42,875
Prepaid expenses and other current assets	2,156	2,076	2,099
Total current assets	82,538	68,847	59,988
Property, plant and equipment:
Land	3,731	3,731	3,731
Land improvements	653	653	734
Buildings and building improvements	51,375	51,334	51,262
Machinery and equipment	113,901	113,315	111,779
Leasehold improvements	1,009	1,009	989
Total property, plant and equipment	170,669	170,042	168,495
Less accumulated depreciation and amortization	135,844	134,715	132,392
Net property, plant and equipment	34,825	35,327	36,103
Operating lease right-of-use assets	12,892	13,870	16,682
Deferred tax assets, net	769	399	12,879
Other assets, net	8,383	8,002	8,020
Total assets	139,407	126,445	133,672
Current liabilities:
Accounts payable	19,437	19,785	12,976
Accrued compensation and employee benefits	5,055	5,596	4,597
Current portion of long-term debt	18,905	340	2,990
Current portion operating lease liability	4,769	4,734	4,715
Other accrued liabilities	6,049	5,829	4,364
Total current liabilities	54,215	36,284	29,642
Non-current liabilities:
Accrued self-insurance retention	1,533	965	1,530
Accrued pension expenses	15,332	15,430	21,520
Income tax payable	76	71	71
Long-term debt, less current portion	14,564	14,173	14,795
Operating lease liability, less current portion	10,297	11,437	14,573
Other long-term liabilities	640	639	683
Total non-current liabilities	42,442	42,715	53,172
Commitments and contingencies (Notes 6, 7 and 13)
Preferred stock:
Authorized 3,000,000 shares, $0.01 par value; none issued or outstanding	0	0	0
Common stock:
Authorized 25,000,000 shares, $0.01 par value; issued and outstanding 16,102,023 shares at 4/30/2022 and 1/31/2022 and 15,918,642 at 4/30/2021	161	161	159
Additional paid-in capital	120,745	120,492	119,908
Accumulated deficit	(72,262)	(67,178)	(55,951)
Accumulated other comprehensive loss	(5,894)	(6,029)	(13,258)
Total stockholders’ equity	42,750	47,446	50,858
Total liabilities and stockholders’ equity	$ 139,407	$ 126,445	$ 133,672

Unaudited Condensed Consolida_2

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Apr. 30, 2022	Jan. 31, 2022	Apr. 30, 2021
Statement of Financial Position [Abstract]
Preferred stock, shares authorized (shares)	3,000,000	3,000,000	3,000,000
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares issued (shares)	0	0	0
Preferred stock, shares outstanding (shares)	0	0	0
Common stock, shares authorized (shares)	25,000,000	25,000,000	25,000,000
Common stock, par value (usd per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares issued (shares)	16,102,023	16,102,023	15,918,642
Common stock, shares outstanding (shares)	16,102,023	16,102,023	15,918,642

Unaudited Condensed Consolida_3

Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Income Statement [Abstract]
Net sales	$ 32,084	$ 28,367
Costs of goods sold	22,377	20,679
Gross profit	9,707	7,688
Selling, general and administrative expenses	14,451	11,983
Operating loss	(4,744)	(4,295)
Pension expense	195	506
Interest expense	427	293
Loss before income taxes	(5,366)	(5,094)
Income tax benefits	(282)	(1,185)
Net loss	$ (5,084)	$ (3,909)
Net loss per common share:
Basic (usd per share)	$ (0.32)	$ (0.25)
Diluted (usd per share)	$ (0.32)	$ (0.25)
Weighted average shares of common stock outstanding:
Basic (shares)	16,033	15,824
Diluted (shares)	16,033	15,824

Unaudited Condensed Consolida_4

Unaudited Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Statement of Comprehensive Income [Abstract]
Net loss	$ (5,084)	$ (3,909)
Other comprehensive income:
Pension adjustments, net of tax effect	135	327
Net comprehensive loss	$ (4,949)	$ (3,582)

Unaudited Condensed Consolida_5

Unaudited Condensed Consolidated Statements of Comprehensive Loss (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Statement of Comprehensive Income [Abstract]
Pension adjustments, tax	$ 0	$ 116

Unaudited Condensed Consolida_6

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Operating activities
Net loss	$ (5,084)	$ (3,909)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,129	1,151
Non-cash lease expense	(126)	(90)
Provision for doubtful accounts	15	15
Amortization of debt issuance costs	43	0
Deferred income taxes	(370)	(1,279)
Stock-based compensation	253	253
Amortization of net actuarial loss for pension plans	135	443
Changes in operating assets and liabilities:
Trade accounts receivable	4,428	(4,590)
Other receivables	33	(13)
Inventories	(18,924)	(4,605)
Income taxes	22	120
Prepaid expenses and other current assets	(180)	124
Accounts payable and accrued liabilities	(340)	5,422
Net cash used in operating activities	(18,966)	(6,958)
Investing activities:
Capital expenditures	(609)	(233)
Net cash used in investing activities	(609)	(233)
Financing activities:
Borrowing from long-term debt	19,759	8,505
Repayment of long-term debt	(804)	(1,160)
Payment on deferred financing costs	(200)	0
Net cash provided by financing activities	18,755	7,345
Net (decrease) increase in cash	(820)	154
Cash at beginning of period	1,359	402
Cash at end of period	$ 539	$ 556

Unaudited Consolidated Statemen

Unaudited Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Beginning balance (shares) at Jan. 31, 2021		15,918,642
Beginning balance at Jan. 31, 2021	$ 54,187	$ 159	$ 119,655	$ (52,042)	$ (13,585)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(3,909)			(3,909)
Pension adjustments, net of tax effect	327				327
Shares vested and others (shares)		0
Shares vested and others	0	$ 0	0
Stock compensation expense	$ 253		253
Ending balance (shares) at Apr. 30, 2021	15,918,642	15,918,642
Ending balance at Apr. 30, 2021	$ 50,858	$ 159	119,908	(55,951)	(13,258)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Pension adjustments, tax	$ 116
Beginning balance (shares) at Jan. 31, 2022	16,102,023	16,102,023
Beginning balance at Jan. 31, 2022	$ 47,446	$ 161	120,492	(67,178)	(6,029)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(5,084)			(5,084)
Pension adjustments, net of tax effect	135				135
Shares vested and others (shares)		0
Shares vested and others	0	$ 0	0
Stock compensation expense	$ 253		253
Ending balance (shares) at Apr. 30, 2022	16,102,023	16,102,023
Ending balance at Apr. 30, 2022	$ 42,750	$ 161	$ 120,745	$ (72,262)	$ (5,894)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Pension adjustments, tax	$ 0

Unaudited Consolidated Statem_2

Unaudited Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Statement of Stockholders' Equity [Abstract]
Pension adjustments, tax	$ 0	$ 116

Basis of Presentation

Basis of Presentation	3 Months Ended
	Apr. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements and are presented in accordance with the requirements of Form 10-Q and Rule 10-01 of Regulation S-X. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2022 (“Form 10-K”). In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three months ended April 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2023. The balance sheet at January 31, 2022 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. All references to the “Company” refer to Virco Mfg. Corporation and its subsidiaries. Liquidity

Seasonality and Management Use

Seasonality and Management Use of Estimates	3 Months Ended
	Apr. 30, 2022
Seasonality [Abstract]
Seasonality and Management Use of Estimates	The market for educational furniture is marked by extreme seasonality, with approximately 50% of the Company’s total sales typically occurring from June to August each year, the Company’s peak season. Hence, the Company typically builds and carries significant amounts of inventory during and in anticipation of this peak summer season to facilitate the rapid delivery requirements of customers in the educational market. This requires a large up-front investment in inventory, labor, storage and related costs as inventory is built in anticipation of peak sales during the summer months. As the capital required for this build-up generally exceeds cash available from operations, the Company has generally relied on third-party bank financing to meet cash flow requirements during the build-up period immediately preceding the peak season. In addition, the Company typically is faced with a large balance of accounts receivable during the peak season. This occurs for two primary reasons. First, accounts receivable balances typically increase during the peak season as shipments of products increase. Second, many customers during this period are educational institutions and government entities, which tend to pay accounts receivable slower than commercial customers. For the three months ended April 30, 2022, management believes that the traditional peak season has been and will continue to be impacted by economic conditions related to supply chain disruption and COVID 19. The Company is experiencing supply chain disruptions for raw materials. In addition, the Company's customers are experiencing supply chain disruption impacting the completion of new school construction and renovation.The Company’s working capital requirements during and in anticipation of the peak summer season require management to make estimates and judgments that affect assets, liabilities, revenues and expenses, and related contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to market demand, labor costs and stocking inventory. Significant estimates made by management include, but are not limited to, valuation of inventory; deferred tax assets and liabilities; useful lives of property, plant and equipment; liabilities under pension, warranty, self-insurance and environmental claims; and the accounts receivable allowance for doubtful accounts. Due to the inherent uncertainty involved in making assumptions and estimates, events and changes in circumstances arising after April 30, 2022, including those resulting from the continuing impacts of the COVID-19 pandemic and supply chain disruption, may result in actual outcomes that differ from those contemplated by our assumptions and estimates.

New Accounting Pronouncements

New Accounting Pronouncements	3 Months Ended
	Apr. 30, 2022
Accounting Standards Update and Change in Accounting Principle [Abstract]
New Accounting Pronouncements	New Accounting PronouncementsRecently Issued Accounting Updates In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaces the incurred loss impairment methodology for measuring and recognizing credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The adoption date, as modified by the recently issued ASU 2019-10, will be for the fiscal year beginning after December 15, 2022 and interim periods therein. The Company is currently evaluating the effect the standard will have on the consolidated financial statements and related disclosures. Other recently issued accounting updates are not expected to have a material impact on the Company’s consolidated financial statements.

Revenue Recognition

Revenue Recognition	3 Months Ended
	Apr. 30, 2022
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Revenue Recognition The Company manufactures, markets and distributes a wide variety of school and office furniture to wholesalers, distributors, educational institutions and governmental entities. Revenue is recorded for promised goods or services when control is transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company's sales generally involve a single performance obligation to deliver goods pursuant to customer purchase orders. Prices for our products are based on published price lists and customer agreements. The Company has determined that the performance obligations are satisfied at a point in time when the Company completes delivery per the customer contract. The majority of sales are free on board ("FOB") destination where the destination is specified per the customer contract and may include delivering the furniture into the classroom, school site or warehouse. Sales of furniture that are sold FOB factory are typically made to resellers of our product who in turn provide logistics to the ultimate customer. Once a product has been delivered per the shipping terms, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from the asset. The Company considers control to have transferred upon shipment or delivery in accordance with shipping terms because the Company has a present right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset, and the customer has significant risks and rewards of ownership of the asset. Sales are recorded net of discounts, sales incentives and rebates, sales taxes and estimated returns and allowances. The Company offers sales incentives and discounts through various regional and national programs to our customers. These programs include product rebates, product returns allowances and trade promotions. Variable consideration for these programs is estimated in the transaction price at contract inception based on current sales levels and historical experience using the expected value method, subject to constraint. The Company generates revenue primarily by manufacturing and distributing products through resellers and direct-to-customers. Control transfers to both resellers and direct customers at a point in time when the delivery process is complete as determined by the corresponding shipping terms. Therefore, we do not consider them to be meaningfully different revenue streams given similarities in the nature of the products, performance obligation and distribution processes. Sales are predominately in the United States and to a similar class of customer. We do not manage or evaluate the business based on product line or any other discernable category.

Inventories

Inventories	3 Months Ended
	Apr. 30, 2022
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories are valued at the lower of cost (determined on a first-in, first-out basis) or net realizable value and includes material, labor and factory overhead. The Company records valuation adjustments for the excess cost of the inventory over its estimated net realizable value. Valuation adjustments for slow-moving and obsolete inventory are calculated using an estimated percentage applied to inventories based on a physical inspection of the product in connection with a physical inventory, a review of slow-moving products and component stage, inventory category, historical and forecasted consumption of sales, and consideration of active marketing programs. The market for education furniture is traditionally driven by value, not style, and the Company has not typically incurred material obsolescence expenses. If market conditions are less favorable than those anticipated by management, additional valuation adjustments may be required. Due to reductions in sales volume in the past years, the Company’s manufacturing facilities are operating at reduced levels of capacity. The Company records the cost of excess capacity as a period expense, not as a component of capitalized inventory valuation. The following table presents a breakdown of the Company’s inventories as of April 30, 2022, January 31, 2022 and April 30, 2021: 4/30/2022 1/31/2022 4/30/2021 (in thousands) Finished goods $ 29,919 $ 16,731 $ 16,887 Work in process 21,719 14,732 14,630 Raw materials 14,659 15,910 11,358 Total inventories $ 66,297 $ 47,373 $ 42,875

Leases

Leases	3 Months Ended
	Apr. 30, 2022
Leases [Abstract]
Leases	Leases The Company has operating leases on real property, equipment, and automobiles that expire at various dates. The Company determines if an arrangement is a lease at inception and assesses classification of the lease at commencement. All of the Company’s leases are classified as operating leases, as a lessee. The Company uses the implicit rate when readily determinable, or the incremental borrowing rate. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments using company specific credit spreads. The Company’s lease terms include options to extend or terminate the lease only when it is reasonably certain that we will exercise that option. Lease expense for our operating leases is recognized on a straight-line basis over the lease term. The quantitative information regarding our leases is as follows: Three-Months Ended 4/30/2022 4/30/2021 (in thousands, except lease term and discount rate) Operating lease cost $ 1,327 $ 1,238 Short-term lease cost 97 96 Sublease income (10) (10) Variable lease cost 253 530 Total lease cost $ 1,667 $ 1,854 Other operating leases information: Cash paid for amounts included in the measurement of lease liabilities $ 1,454 $ 1,328 Right-of-use assets obtained in exchange for new lease liabilities $ 98 $ 165 Weighted-average remaining lease term (years) 2.9 3.8 Weighted-average discount rate 6.38 % 6.40 % Minimum future lease payments for operating leases in effect as of April 30, 2022, are as follows: Operating Lease For the year ending January 31, (in thousands) 2023 $ 4,194 2024 5,511 2025 5,508 2026 1,382 2027 — Thereafter — Remaining balance of lease payments $ 16,595 Short-term lease liabilities $ 4,769 Long-term lease liabilities 10,297 Total lease liabilities $ 15,066 Difference between undiscounted cash flows and discounted cash flows $ 1,529

Debt

Debt	3 Months Ended
	Apr. 30, 2022
Debt Disclosure [Abstract]
Debt	Debt Outstanding balances for the Company’s long-term debt were as follows: 4/30/2022 1/31/2022 4/30/2021 (in thousands) Revolving credit line $ 28,674 $ 9,551 $ 12,157 Other 4,795 4,962 5,628 Total debt 33,469 14,513 17,785 Less current portion 18,905 340 2,990 Non-current portion $ 14,564 $ 14,173 $ 14,795 The Company and Virco Inc., its wholly-owned subsidiary (the “Borrowers”) have a Revolving Credit and Security Agreement (the “Credit Agreement”) with PNC Bank, National Association, as administrative agent and lender (“PNC”). The Credit Agreement was amended numerous times since its origination in December 2011. On September 28, 2021, the Borrowers entered into an Amended and Restated Revolving Credit and Security Agreement (the “Restated Credit Agreement”) with PNC Bank, which amended and restated the prior Credit Agreement and effectively incorporated all of the prior amendments into an amended and restated form of agreement. The Restated Credit Agreement permits the Company to issue dividends or make payments with respect to the Company’s capital stock in an aggregate amount up to $3,000,000 during any fiscal year, provided that no default shall have occurred or is continuing or would result from any such payment, and the Company must demonstrate pro forma compliance with a 12-month trailing fixed charge coverage ratio of not less than 1.20:1.00 as of the fiscal quarter immediately preceding the date of any such dividend or payment. The Restated Credit Agreement also requires the Company to maintain a minimum fixed charge coverage ratio, and contains numerous other covenants that limit under certain circumstances the ability of the Borrowers and their subsidiaries to, among other things, merge with or acquire other entities, incur new liens, incur additional indebtedness, sell assets outside of the ordinary course of business, enter into transactions with affiliates, or substantially change the general nature of the business of the Borrowers. The other material terms of the Restated Credit Agreement are substantially the same as those of the original Credit Agreement, consisting of (i) a revolving line of credit with a Maximum Revolving Advance Amount of $65,000,000 that is subject to a borrowing base limitation and generally provides for advances of up to 85% of eligible accounts receivable, plus a percentage equal to the lesser of 60% of the value of eligible inventory or 85% of the liquidation value of eligible inventory, plus $15,000,000 from January through July of each year, minus undrawn amounts of letters of credit and reserves. The Restated Credit Agreement is secured by substantially all of the Borrowers’ personal property and certain of the Borrowers’ real property. The Restated Credit Agreement is subject to certain prepayment penalties upon early termination of the Restated Credit Agreement. Prior to the maturity date, principal amounts outstanding under the Restated Credit Agreement may be repaid and reborrowed at the option of the Borrowers without premium or penalty, subject to borrowing base limitations, seasonal adjustments and certain other conditions, including reduced borrowings under the revolving line to less than or equal $10,000,000 for a period of 30 consecutive days during the fourth quarter of each fiscal year. The Restated Credit Agreement also contains certain financial covenants, including a fixed charge coverage ratio and limits on capital expenditures. The Company was in violation of its financial covenants under the Restated Credit Agreement as of January 31, 2022, due to an increase in the Company’s net loss primarily attributable to the effects of supply chain disruptions and labor shortages. On April 15, 2022, the Company entered into Amendment No. 2 to the Credit Agreement (“Amendment No. 2”), which implemented the following changes to the Credit Agreement and Revolving Credit Facility: i. extended the final maturity date of the Revolving Credit Facility from March 19, 2023 to April 15, 2027; ii. increased the borrowing limit from $65,000,000 to $70,000,000 in July 2022 and August 2022, and increased the borrowing limit from $40,000,000 to $45,000,000 in October 2022; iii. waived the Company’s violation of the covenant to maintain a fixed charge coverage ratio of at least 1.00 for the period ended January 31, 2022; iv. for the first and second quarters of fiscal year ending January 31, 2023, implemented a temporary year-to-date adjusted EBITDA covenant in lieu of testing the fixed charge coverage ratio covenant as of such quarters, with quarterly testing of the fixed charge coverage ratio to resume for the third fiscal quarter and thereafter; v. permits a sale and leaseback transaction of the Company’s property at 1655 Amity Road and release of the lender’s pledge on the property, with the net proceeds to be used for a proposed share repurchase; vi. retired LIBOR pricing on the Revolving Credit Facility and replaced with BSBY index, with pricing tiers and spreads to remain the same; vii. extended the P-card, ACH Credit, and ACH debit facilities for an additional year beyond their current maturities; and viii. Borrowers to pay a $250,000 extension fee and $75,000 waiver and amendment fee, with $200,000 due at closing and $125,000 due on the first anniversary of closing. Based on the Company’s current projections, including COVID-19 related costs, raw material costs and its ability to introduce price increases, management believes it will maintain compliance with the financial covenants within Amendment No. 2, although there are uncertainties there within, such as raw material costs and supply chain challenges. The Company was in compliance with its debt covenants as of April 30, 2022. In addition to the financial covenants, the Restated Credit Agreement provides for customary events of default, subject to certain cure periods and other limitations. Substantially all of the Borrowers' accounts receivable are automatically and promptly swept to repay amounts outstanding under the Restated Credit Agreement upon receipt by the Borrowers. Due to this automatic liquidating nature of the Restated Credit Agreement, if the Borrowers breach any covenant, violate any representation or warranty or suffer a deterioration in their ability to borrow pursuant to the borrowing base calculation, the Borrowers may not have access to cash liquidity unless provided by PNC at its discretion. The Company's revolving line of credit with PNC is structured to provide seasonal credit availability during the Company's peak summer season. Approximately $11,699,000 was available for borrowing as of April 30, 2022. The interest rate as of April 30, 2022 was 5.25%. The Company also incurs a fee on the unused portion of the revolving line of credit at a rate of 0.375%. Management believes that the carrying value of debt approximated fair value at April 30, 2022, as all of the long-term debt bears interest at variable rates based on prevailing market conditions.

Income Taxes

Income Taxes	3 Months Ended
	Apr. 30, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesIn assessing the realizability of deferred tax assets, the Company considers whether it is more-likely-than-not that some portion or all of its deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income or reversal of deferred tax liabilities during the periods in which those temporary differences become deductible. As a part of this evaluation, the Company assesses all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, the availability of tax carry backs, tax-planning strategies, and results of recent operations (including cumulative losses in recent years), to determine whether sufficient future taxable income will be generated to realize existing deferred tax assets. The Company incurred operating losses for fiscal years ended January 31, 2022 and 2021 and when combined with operating results from fiscal year ended January 31, 2020, the Company had incurred a cumulative operating loss for the last three fiscal years. As a result, the Company identified objective and verifiable negative evidence in the form of cumulative losses in the U.S. and in certain state jurisdictions over the preceding twelve quarters ended January 31, 2022. While the Company has taken significant measures to return to profitability, and order rates at the beginning of the year are favorable, the short-term outlook for the school furniture market is challenging, particularly relating to ongoing supply chain difficulties. During the fourth quarter of the year ended January 31, 2022, based on this evaluation, and after considering future reversals of existing taxable temporary differences and the effects of seasonality on the Company’s business, the Company determined the realization of a majority of the net deferred tax assets no longer met the more likely than not criteria and a valuation allowance was recorded against the majority of the net deferred tax assets. Valuation allowances of $10,099,000, $11,412,000 and $996,000 as of April 30, 2022, January 31, 2022 and April 30, 2021, respectively, are needed for federal deferred tax assets and certain state net operating loss carryforwards to reduce the carrying amount of deferred tax assets to an amount that is more-likely-than-not to be realized. For the first quarter ended April 30, 2022 and 2021, the effective tax rates were 5.3% and 23.3%, respectively. The change in effective tax rates for the three months ended April 30, 2022 was primarily due to the recording of a valuation allowance needed for federal deferred tax assets and certain state net operating loss carryforwards which commenced in the fourth quarter of fiscal year ended January 31, 2022 and continued through the period ended April 30, 2022. Effective tax rate for the first quarter ended April 30, 2021 was primarily due to the change in forecasted mix of income before taxes in various jurisdictions, estimated permanent differences and the recording of a partial valuation allowance on net deferred tax assets.

Net loss per Share

Net loss per Share	3 Months Ended
	Apr. 30, 2022
Earnings Per Share [Abstract]
Net loss per Share	Net loss per Share Three Months Ended 4/30/2022 4/30/2021 (In thousands, except per share data) Net loss $ (5,084) $ (3,909) Weighted average shares of common stock outstanding 16,033 15,824 Dilutive effect of common stock equivalents from equity incentive plans — — Totals 16,033 15,824 Net loss per share - basic $ (0.32) $ (0.25) Net loss per share - diluted (a) $ (0.32) $ (0.25) (a) At April 30, 2022 and 2021, approximately 169,000 and 155,000 shares of common stock equivalents were excluded from the computation of diluted net loss per share, as the effect would be anti-dilutive since the Company reported a net loss.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Apr. 30, 2022
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation Stock Incentive Plan The Company's two stock incentive plans are the 2019 Omnibus Equity Incentive Plan (the “2019 Plan”) and the 2011 Stock Incentive Plan (the “2011 Plan”). Under the 2019 Plan, the Company may grant an aggregate of 1,000,000 shares to its employees in the form of restricted stock units and non-employee directors in the form of restricted stock awards. Restricted stock units and awards granted under the 2019 Plan are expensed ratably over the vesting period of the awards. The Company determines the fair value of its restricted stock units or awards and related compensation expense as the difference between the market value of the units or awards on the date of grant less the exercise price of the units or awards granted. During the three-month period ended April 30, 2022, the Company granted 0 awards, vested 0 shares according to their terms and forfeited 0 shares under the 2019 Plan. As of April 30, 2022, there were approximately 608,435 shares available for future issuance under the 2019 Plan. The Board of Directors has approved an increase in the number of shares available for grant under the 2019 Plan from 1,000,000 to 2,000,000 shares, which increase is subject to approval of the Company’s stockholders at the upcoming 2022 Annual Meeting of Stockholders. Under the 2011 Plan, the Company may grant an aggregate of 2,000,000 shares to its employees in the form of restricted stock units and non-employee directors in the form of restricted stock awards. Restricted stock units and awards granted under the 2011 Plan are expensed ratably over the vesting period of the awards. The Company determines the fair value of its restricted stock units or awards and related compensation expense as the difference between the market value of the units or awards on the date of grant less the exercise price of the units or awards granted. The 2011 Plan expired in 2021 and no new awards may be made under the 2011 Plan, although existing awards will remain outstanding in accordance with their terms. There were no restricted stock awards granted or vested under the 2011 Plan during the three-month period ended April 30, 2022. During the three months ended April 30, 2022 and 2021, stock-based compensation expense related to restricted stock units and/or awards recognized in cost of goods sold and selling, general and administrative expenses was $55,000 and $198,000, respectively.

Retirement Plans

Retirement Plans	3 Months Ended
	Apr. 30, 2022
Retirement Benefits [Abstract]
Retirement Plans	Retirement Plans The Company and its subsidiaries cover certain employees under a noncontributory defined benefit retirement plan, entitled the Virco Employees’ Retirement Plan (the “Pension Plan”). As more fully described in the Annual Report on Form 10-K, benefit accruals under the Employees Retirement Plan were frozen effective December 31, 2003. There is no service cost incurred under this plan. The Company also provides a supplementary retirement plan for certain key employees, the VIP Retirement Plan (the “VIP Plan”). As more fully described in the Annual Report on Form 10-K for the year ended January 31, 2022, benefit accruals under this plan were frozen since December 31, 2003. The net periodic pension cost for the Pension Plan and the VIP Plan for the three months ended April 30, 2022 and 2021 were as follows: Combined Employee Retirement Plans Three Months Ended 4/30/2022 4/30/2021 (in thousands) Service cost $ — $ — Interest cost 298 281 Expected return on plan assets (237) (218) Plan settlement — — Amortization of prior service cost — — Recognized net actuarial loss 134 443 Benefit cost $ 195 $ 506 401(k) Retirement Plan

Warranty Accrual

Warranty Accrual	3 Months Ended
	Apr. 30, 2022
Product Warranties Disclosures [Abstract]
Warranty Accrual	Warranty Accrual The Company provides a warranty against all substantial defects in material and workmanship. The standard warranty offered on products sold through January 31, 2013 is ten years. Effective February 1, 2014 the Company modified its warranty to a limited lifetime warranty. The warranty effective February 1, 2014 is not anticipated to have a significant effect on warranty expense. Effective January 1, 2017, the Company modified the standard warranty offered on products sold after January 1, 2017 to provide specific warranty periods by product component, with no warranty period longer than ten years. The Company’s warranty is not a guarantee of service life, which depends upon events outside the Company’s control and may be different from the warranty period. The Company accrues an estimate of its exposure to warranty claims based upon both product sales data and an analysis of actual warranty claims incurred. The following is a summary of the Company’s warranty-claim activity for the three months ended April 30, 2022 and 2021: Three Months Ended 4/30/2022 4/30/2021 (in thousands) Beginning balance $ 600 $ 700 Provision 34 43 Costs incurred (34) (43) Ending balance $ 600 $ 700

Contingencies

Contingencies	3 Months Ended
	Apr. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Contingencies	Contingencies The Company has a self-insured retention for product losses up to $250,000 per occurrence, workers’ compensation liability losses up to $250,000 per occurrence, general liability losses up to $50,000 per occurrence and automobile liability losses up to $50,000 per occurrence. The Company has purchased insurance to cover losses in excess of the self-insurance retention or deductible up to a limit of $30,000,000. The Company has obtained an actuarial estimate of its total expected future losses for liability claims and recorded a liability equal to the net present value. The Company and its subsidiaries are defendants in various legal proceedings resulting from operations in the normal course of business. It is the opinion of management, in consultation with legal counsel, that the ultimate outcome of all such matters will not materially affect the Company’s financial position, results of operations or cash flows.

Delivery Costs

Delivery Costs	3 Months Ended
	Apr. 30, 2022
Other Income and Expenses [Abstract]
Delivery Costs	Delivery CostsFor the three months ended April 30, 2022 and 2021, shipping and classroom delivery costs of approximately $3,254,000 and $2,921,000, respectively, were included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Subsequent Events

Subsequent Events	3 Months Ended
	Apr. 30, 2022
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsNone.

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Apr. 30, 2022
Inventory Disclosure [Abstract]
Schedule of Inventory	The following table presents a breakdown of the Company’s inventories as of April 30, 2022, January 31, 2022 and April 30, 2021: 4/30/2022 1/31/2022 4/30/2021 (in thousands) Finished goods $ 29,919 $ 16,731 $ 16,887 Work in process 21,719 14,732 14,630 Raw materials 14,659 15,910 11,358 Total inventories $ 66,297 $ 47,373 $ 42,875

Leases (Tables)

Leases (Tables)	3 Months Ended
	Apr. 30, 2022
Leases [Abstract]
Quantitative Information of Leases	The quantitative information regarding our leases is as follows: Three-Months Ended 4/30/2022 4/30/2021 (in thousands, except lease term and discount rate) Operating lease cost $ 1,327 $ 1,238 Short-term lease cost 97 96 Sublease income (10) (10) Variable lease cost 253 530 Total lease cost $ 1,667 $ 1,854 Other operating leases information: Cash paid for amounts included in the measurement of lease liabilities $ 1,454 $ 1,328 Right-of-use assets obtained in exchange for new lease liabilities $ 98 $ 165 Weighted-average remaining lease term (years) 2.9 3.8 Weighted-average discount rate 6.38 % 6.40 %
Schedule of Minimum Future Lease Payments	Minimum future lease payments for operating leases in effect as of April 30, 2022, are as follows: Operating Lease For the year ending January 31, (in thousands) 2023 $ 4,194 2024 5,511 2025 5,508 2026 1,382 2027 — Thereafter — Remaining balance of lease payments $ 16,595 Short-term lease liabilities $ 4,769 Long-term lease liabilities 10,297 Total lease liabilities $ 15,066 Difference between undiscounted cash flows and discounted cash flows $ 1,529

Debt (Tables)

Debt (Tables)	3 Months Ended
	Apr. 30, 2022
Debt Disclosure [Abstract]
Outstanding balances of long-term debt	Outstanding balances for the Company’s long-term debt were as follows: 4/30/2022 1/31/2022 4/30/2021 (in thousands) Revolving credit line $ 28,674 $ 9,551 $ 12,157 Other 4,795 4,962 5,628 Total debt 33,469 14,513 17,785 Less current portion 18,905 340 2,990 Non-current portion $ 14,564 $ 14,173 $ 14,795

Net loss per Share (Tables)

Net loss per Share (Tables)	3 Months Ended
	Apr. 30, 2022
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	Three Months Ended 4/30/2022 4/30/2021 (In thousands, except per share data) Net loss $ (5,084) $ (3,909) Weighted average shares of common stock outstanding 16,033 15,824 Dilutive effect of common stock equivalents from equity incentive plans — — Totals 16,033 15,824 Net loss per share - basic $ (0.32) $ (0.25) Net loss per share - diluted (a) $ (0.32) $ (0.25) (a) At April 30, 2022 and 2021, approximately 169,000 and 155,000 shares of common stock equivalents were excluded from the computation of diluted net loss per share, as the effect would be anti-dilutive since the Company reported a net loss.

Retirement Plans (Tables)

Retirement Plans (Tables)	3 Months Ended
	Apr. 30, 2022
Retirement Benefits [Abstract]
Schedule of Defined Benefit Plans Disclosures	The net periodic pension cost for the Pension Plan and the VIP Plan for the three months ended April 30, 2022 and 2021 were as follows: Combined Employee Retirement Plans Three Months Ended 4/30/2022 4/30/2021 (in thousands) Service cost $ — $ — Interest cost 298 281 Expected return on plan assets (237) (218) Plan settlement — — Amortization of prior service cost — — Recognized net actuarial loss 134 443 Benefit cost $ 195 $ 506

Warranty Accrual (Tables)

Warranty Accrual (Tables)	3 Months Ended
	Apr. 30, 2022
Product Warranties Disclosures [Abstract]
Schedule of Product Warranty Liability	The following is a summary of the Company’s warranty-claim activity for the three months ended April 30, 2022 and 2021: Three Months Ended 4/30/2022 4/30/2021 (in thousands) Beginning balance $ 600 $ 700 Provision 34 43 Costs incurred (34) (43) Ending balance $ 600 $ 700

Seasonality (Details)

Seasonality (Details)	3 Months Ended
	Apr. 30, 2022
Sales [Member]
Seasonality (Textual) [Abstract]
The market for educational furniture is marked by extreme seasonality	50.00%

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Apr. 30, 2022	Jan. 31, 2022	Apr. 30, 2021
Inventory Disclosure [Abstract]
Finished goods	$ 29,919	$ 16,731	$ 16,887
Work in process	21,719	14,732	14,630
Raw materials	14,659	15,910	11,358
Total inventories	$ 66,297	$ 47,373	$ 42,875

Leases - ASC 842 Quantitative I

Leases - ASC 842 Quantitative Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Leases [Abstract]
Operating lease cost	$ 1,327	$ 1,238
Short-term lease cost	97	96
Sublease income	(10)	(10)
Variable lease cost	253	530
Total lease cost	1,667	1,854
Cash paid for amounts included in the measurement of lease liabilities	1,454	1,328
Right-of-use assets obtained in exchange for new lease liabilities	$ 98	$ 165
Weighted-average remaining lease term (years)	2 years 10 months 24 days	3 years 9 months 18 days
Weighted-average discount rate	6.38%	6.40%

Leases - ASC 842 Minimum Lease

Leases - ASC 842 Minimum Lease Payments (Details) - USD ($) $ in Thousands	Apr. 30, 2022	Jan. 31, 2022	Apr. 30, 2021
Leases [Abstract]
2023	$ 4,194
2024	5,511
2025	5,508
2026	1,382
2027	0
Thereafter	0
Remaining balance of lease payments	16,595
Short-term lease liabilities	4,769	$ 4,734	$ 4,715
Long-term lease liabilities	10,297	$ 11,437	$ 14,573
Total lease liabilities	15,066
Difference between undiscounted cash flows and discounted cash flows	$ 1,529

Debt (Long-term Debt) (Details)

Debt (Long-term Debt) (Details) - USD ($) $ in Thousands	Apr. 30, 2022	Jan. 31, 2022	Apr. 30, 2021
Debt Instrument [Line Items]
Long-term debt	$ 33,469	$ 14,513	$ 17,785
Less current portion	18,905	340	2,990
Non-current portion	14,564	14,173	14,795
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term debt	28,674	9,551	12,157
Other Debt [Member]
Debt Instrument [Line Items]
Long-term debt	$ 4,795	$ 4,962	$ 5,628

Debt (Narrative) (Details)

Debt (Narrative) (Details)	3 Months Ended
	Apr. 30, 2022USD ($)	Oct. 31, 2022USD ($)	Sep. 30, 2022USD ($)	Aug. 31, 2022USD ($)	Jul. 31, 2022USD ($)	Apr. 15, 2022USD ($)	Dec. 07, 2021	Sep. 28, 2021
Line of Credit Facility [Line Items]
Line of credit facility, maximum amount outstanding during period	$ 3,000,000
Line Of Credit Facility, Borrowing Capacity, Term	$ 15,000,000
Line of credit facility, period for reduced borrowings during fourth quarter of each fiscal year (consecutive days)	30 days
Unused portion fee rate	0.375%
Inventory [Member]
Line of Credit Facility [Line Items]
Revolving credit facility borrowing base limitation	60.00%
Inventories [Member]
Line of Credit Facility [Line Items]
Revolving credit facility borrowing base limitation	85.00%
Maximum [Member] | Accounts receivable [Member]
Line of Credit Facility [Line Items]
Revolving credit facility borrowing base limitation	85.00%
Amendment No. 21 To Credit Facility [Member] | Consecutive Four Fiscal Quarters Ending July 31, 2020
Line of Credit Facility [Line Items]
Minimum fixed charge coverage ratio								1.2
Amended And Restated Revolving Credit And Security Agreement, Number 2
Line of Credit Facility [Line Items]
Extension fee						$ 250,000
Waiver and amendment fee						75,000
Extension fee and waiver and amendment fee due at closing						200,000
Extension fee and waiver and amendment fee due at first anniversary of closing						$ 125,000
Amended And Restated Revolving Credit And Security Agreement, Number 2 | Consecutive Four Fiscal Quarters Ending July 31, 2020
Line of Credit Facility [Line Items]
Minimum fixed charge coverage ratio							1
Revolving Credit Facility [Member] | Amended And Restated Revolving Credit And Security Agreement, Number 2 | Forecast
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 45,000,000	$ 40,000,000	$ 70,000,000	$ 65,000,000
PNC [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Remaining borrowing capacity	$ 11,699,000
PNC [Member] | Revolving Credit Facility [Member] | Amendment No. 19 to Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	65,000,000
PNC [Member] | Equipment Loan [Member] | Amendment No. 19 to Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 10,000,000
Alternate Base Rate Loans [Member]
Line of Credit Facility [Line Items]
Interest rate	5.25%

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021	Jan. 31, 2022
Income Tax Disclosure [Abstract]
Valuation allowance	$ 10,099	$ 996	$ 11,412
Effective tax rate	5.30%	23.30%

Net loss per Share (Details)

Net loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Earnings Per Share [Abstract]
Net loss	$ (5,084)	$ (3,909)
Weighted average shares outstanding - basic (shares)	16,033,000	15,824,000
Net effect of dilutive share-based on the treasury stock method using average market price (shares)	0	0
Totals (shares)	16,033,000	15,824,000
Net income (loss) per share - basic (usd per share)	$ (0.32)	$ (0.25)
Net income (loss) per share - diluted (usd per share)	$ (0.32)	$ (0.25)
Antidilutive shares (shares)	169,000	155,000

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($)	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Cost of Goods Sold [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 55,000
Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 198,000
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 908,000
Unrecognized compensation expense, weighted average period to be recognized	3 years
Restricted Stock Units (RSUs) [Member] | 2019 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards authorized (shares)	1,000,000
Granted in the period (shares)	0
Vested in period (shares)	0
Forfeited in period (shares)	0
Awards available for future issuance (shares)	608,435
Restricted Stock Units (RSUs) [Member] | 2011 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards authorized (shares)	2,000,000

Retirement Plans (Narrative) (D

Retirement Plans (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Pension Plan [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Plan settlement	$ 0	$ 0
United States [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Minimum annual contributions per employee, percent	1.00%
Maximum annual contributions per employee, percent	75.00%
Number of common shares held	1,165,985	970,632
Contributions by employer	$ 330	$ 184

Retirement Plans (Periodic Pens

Retirement Plans (Periodic Pension Cost) (Details) - Pension Plan [Member] - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Components of Net Cost
Service cost	$ 0	$ 0
Interest cost	298	281
Expected return on plan assets	(237)	(218)
Plan settlement	0	0
Amortization of prior service cost	0	0
Recognized net actuarial loss	134	443
Benefit cost	$ 195	$ 506

Warranty (Details)

Warranty (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Warranty claim activity
Beginning balance	$ 600	$ 700
Provision	34	43
Costs incurred	(34)	(43)
Ending balance	$ 600	$ 700
Maximum [Member]
Warranty [Line Items]
Product warranty period	10 years

Contingencies (Details)

Contingencies (Details) - Maximum	Apr. 30, 2022USD ($)
Product Liability [Member]
Loss Contingencies [Line Items]
Self insurance retention	$ 250,000
Workers compensation Liability Insurance [Member]
Loss Contingencies [Line Items]
Self insurance retention	250,000
General Liability Loss
Loss Contingencies [Line Items]
Self insurance retention	50,000
Automobile Liability Loss [Member]
Loss Contingencies [Line Items]
Self insurance retention	50,000
Loss Liability [Member]
Loss Contingencies [Line Items]
Self insurance retention	$ 30,000,000

Delivery Costs (Details)

Delivery Costs (Details) - USD ($)	3 Months Ended
	Apr. 30, 2022	Apr. 30, 2021
Other Income and Expenses [Abstract]
Shipping and classroom delivery costs	$ 3,254,000	$ 2,921,000