Virco Mfg. (VIRC) 10-Q 12 Jun 23 2024 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Apr. 30, 2023	Jun. 04, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Apr. 30, 2023
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		16,210,985
Current Fiscal Year End Date	--01-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 31, 2023	Apr. 30, 2022
Current assets:
Cash	$ 625	$ 1,057	$ 539
Trade accounts receivables, net	15,524	18,435	13,326
Other receivables	35	68	85
Income tax receivable	321	19	135
Inventories	85,640	67,406	66,297
Prepaid expenses and other current assets	2,698	2,083	2,156
Total current assets	104,843	89,068	82,538
Property, plant and equipment:
Land	3,731	3,731	3,731
Land improvements	686	686	653
Buildings and building improvements	51,391	51,310	51,375
Machinery and equipment	114,655	113,662	113,901
Leasehold improvements	983	983	1,009
Total property, plant and equipment	171,446	170,372	170,669
Less accumulated depreciation and amortization	136,779	135,810	135,844
Net property, plant and equipment	34,667	34,562	34,825
Operating lease right-of-use assets	9,326	10,120	12,892
Deferred tax assets, net	8,249	7,800	769
Other assets, net	8,848	8,576	8,383
Total assets	165,933	150,126	139,407
Current liabilities:
Accounts payable	23,628	19,448	19,437
Accrued compensation and employee benefits	9,416	9,554	5,055
Current portion of long-term debt	20,362	7,360	18,905
Current portion operating lease liability	5,271	5,082	4,769
Other accrued liabilities	7,868	7,081	6,049
Total current liabilities	66,545	48,525	54,215
Non-current liabilities:
Accrued self-insurance retention	1,251	1,050	1,533
Accrued pension expenses	10,802	10,676	15,332
Income tax payable	85	79	76
Long-term debt, less current portion	14,323	14,384	14,564
Operating lease liability, less current portion	5,648	6,796	10,297
Other long-term liabilities	557	555	640
Total non-current liabilities	32,666	33,540	42,442
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 16,210,985 shares at 4/30/2023 and 1/31/2023, and 16,102,023 at 4/30/2022	162	162	161
Additional paid-in capital	120,993	120,890	120,745
Accumulated deficit	(52,073)	(50,631)	(72,262)
Accumulated other comprehensive loss	(2,360)	(2,360)	(5,894)
Total stockholders’ equity	66,722	68,061	42,750
Total liabilities and stockholders’ equity	$ 165,933	$ 150,126	$ 139,407

Unaudited Condensed Consolida_2

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Apr. 30, 2023	Jan. 31, 2023	Apr. 30, 2022
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)	16,210,985	16,210,985	16,102,023
Common stock, shares outstanding (shares)	16,210,985	16,210,985	16,102,023

Unaudited Condensed Consolida_3

Unaudited Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Income Statement [Abstract]
Net sales	$ 34,943	$ 32,084
Costs of goods sold	21,741	22,377
Gross profit	13,202	9,707
Selling, general and administrative expenses	14,514	14,451
Operating loss	(1,312)	(4,744)
Unrealized gain (loss) on investment in trust account	(299)	0
Pension expense	161	195
Interest expense	712	427
Loss before income taxes	(1,886)	(5,366)
Income tax benefit	(444)	(282)
Net loss	$ (1,442)	$ (5,084)
Net loss per common share:
Basic (usd per share)	$ (0.09)	$ (0.32)
Diluted (usd per share)	$ (0.09)	$ (0.32)
Weighted average shares of common stock outstanding:
Basic (shares)	16,211	16,033
Diluted (shares)	16,211	16,033

Unaudited Condensed Consolida_4

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Statement of Comprehensive Income [Abstract]
Net loss	$ (1,442)	$ (5,084)
Other comprehensive income:
Pension adjustments, net of tax effect	0	135
Net comprehensive loss	$ (1,442)	$ (4,949)

Unaudited Condensed Consolida_5

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Statement of Comprehensive Income [Abstract]
Pension adjustment, tax expense	$ 0	$ 0

Unaudited Condensed Consolida_6

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Operating activities
Net loss	$ (1,442)	$ (5,084)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,195	1,129
Non-cash lease benefits	(165)	(126)
Provision for doubtful accounts	15	15
Amortization of debt issuance costs	26	43
Deferred income taxes	(448)	(370)
Stock-based compensation	103	253
Amortization of net actuarial loss for pension plans	0	135
Non-cash unrealized gain on investment	(299)	0
Changes in operating assets and liabilities:
Trade accounts receivable	2,896	4,428
Other receivables	33	33
Inventories	(18,234)	(18,924)
Income taxes	(296)	22
Prepaid expenses and other current assets	(490)	(180)
Accounts payable and accrued liabilities	5,391	(340)
Net cash used in operating activities	(11,715)	(18,966)
Investing activities:
Capital expenditures	(1,533)	(609)
Net cash used in investing activities	(1,533)	(609)
Financing activities:
Borrowing from long-term debt	15,241	19,759
Repayment of long-term debt	(2,300)	(804)
Payment on deferred financing costs	(125)	(200)
Net cash provided by financing activities	12,816	18,755
Net decrease in cash	(432)	(820)
Cash at beginning of period	1,057	1,359
Cash at end of period	$ 625	$ 539

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, 2022		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
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)
Beginning balance (shares) at Jan. 31, 2023	16,210,985	16,210,985
Beginning balance at Jan. 31, 2023	$ 68,061	$ 162	120,890	(50,631)	(2,360)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(1,442)			(1,442)
Pension adjustments, net of tax effect	0				0
Stock compensation expense	$ 103		103
Ending balance (shares) at Apr. 30, 2023	16,210,985	16,210,985
Ending balance at Apr. 30, 2023	$ 66,722	$ 162	$ 120,993	$ (52,073)	$ (2,360)

Unaudited Consolidated Statem_2

Unaudited Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Statement of Stockholders' Equity [Abstract]
Pension adjustments, tax	$ 0	$ 0

Basis of Presentation

Basis of Presentation	3 Months Ended
	Apr. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of PresentationThe 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, 2023 (“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, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2024. The balance sheet at January 31, 2023 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.

Seasonality and Management Use

Seasonality and Management Use of Estimates	3 Months Ended
	Apr. 30, 2023
Seasonality [Abstract]
Seasonality and Management Use of Estimates	Seasonality and Management Use of EstimatesThe 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 an overall higher accounts receivable balance 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. Historically Virco ships approximately 50% of its annual revenue in the months of June, July, and August. In fiscal 2022, the seasonal peak was distorted due to severe supply chain interruptions, labor shortages, and COVID-19 related employee absences and the Company delivered less than 40% of sales during June, July, and August. In fiscal year ended January 31, 2023, the Company started to return to the traditional seasonality and delivered approximately 47% of annual sales in June, July, and August. 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 and self-insurance; and the accounts receivable allowance for doubtful accounts.

New Accounting Pronouncements

New Accounting Pronouncements	3 Months Ended
	Apr. 30, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]
New Accounting Pronouncements	The Company evaluates all Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board ("FASB") for consideration of their applicability to our condensed consolidated financial statements. We have assessed all ASUs issued but not yet adopted and concluded that those not disclosed are not relevant to the Company or are not expected to have a material impact.

Revenue Recognition

Revenue Recognition	3 Months Ended
	Apr. 30, 2023
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Revenue RecognitionThe 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, 2023
Inventory Disclosure [Abstract]
Inventories	Inventories Inventory is valued at the lower of cost or net realizable value (determined on a first-in, first-out basis) 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. The Company records the cost of excess capacity as a period expense, not as a component of capitalized inventory valuation. Inventory increased by $19,343,000 at April 30, 2023 compared to April 30, 2022. The entire increase in inventory was attributable to increased quantity. The cost and valuation of inventory was stable. The quantity of inventory was increased in response to a material increase in unshipped sales orders (backlog). The majority of the backlog is scheduled for delivery during the traditional seasonal peak from June through August. The increase in inventory was financed by increased borrowing under the Company’s line of credit with PNC Bank and increased vendor credit, which traditionally increases with increased purchases of materials. The following table presents a breakdown of the Company’s inventories as of April 30, 2023, January 31, 2023 and April 30, 2022: 4/30/2023 1/31/2023 4/30/2022 (in thousands) Finished goods $ 34,370 $ 25,740 $ 29,919 Work in process 32,918 25,303 21,719 Raw materials 18,352 16,363 14,659 Total inventories $ 85,640 $ 67,406 $ 66,297

Leases

Leases	3 Months Ended
	Apr. 30, 2023
Leases [Abstract]
Leases	Leases The Company has operating leases on real property, equipment, and automobiles, expiring at various dates through 2026. 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. Pursuant to ASC 842 - Leases , 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 Company has an operating lease for its corporate office, manufacturing and distribution facility located in Torrance, CA, currently with a remaining lease term through April 2025. The Company's lease terms include options to extend or terminate the lease only when it is reasonably certain that we exercise that option. The Company leases equipment under a 5-year operating lease arrangement. The Company has the option of buying the assets at the end of the lease period at a price that does not result in the Company being reasonably certain of exercising the option. In addition, the Company leases trucks and automobiles under operating leases that include certain fleet management and maintenance services. Certain of the leases contain renewal or purchase options and require payment for property taxes and insurance. The Company records lease expense on a straight-line basis based on the contractual lease payments. In accordance with ASC 842, the Company recognizes the present value of the future lease commitments as an operating lease liability, and a corresponding right-of-use asset (“ROU asset”), net of tenant allowances. Tenant improvements and related tenant allowances are recorded as a reduction to the ROU asset. The Company elected to account for leases with an original term of 12 months or less that do not contain a purchase option as short-term leases. Additionally, certain of the leases provide for variable payment for property taxes, insurance, and common area maintenance payments among others. The Company recognizes variable lease expenses for these leases in the period incurred. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. The quantitative information regarding our leases is as follows: Three Months Ended 4/30/2023 4/30/2022 (in thousands, except lease term and discount rate) Operating lease cost $ 1,269 $ 1,327 Short-term lease cost 108 97 Sublease income (10) (10) Variable lease cost 261 253 Total lease cost $ 1,628 $ 1,667 Other operating leases information: Cash paid for amounts included in the measurement of lease liabilities $ 1,433 $ 1,454 Right-of-use assets obtained in exchange for new lease liabilities $ 292 $ 98 Weighted-average remaining lease term (years) 2.2 2.9 Weighted-average discount rate 6.33 % 6.38 % Minimum future lease payments for operating leases in effect as of April 30, 2023, are as follows: Operating Lease For the year ending January 31, (in thousands) Remaining of 2024 $ 4,344 2025 5,794 2026 1,536 2027 2 2028 — Thereafter — Remaining balance of lease payments $ 11,676 Short-term lease liabilities $ 5,271 Long-term lease liabilities 5,648 Total lease liabilities $ 10,919 Difference between undiscounted cash flows and discounted cash flows $ 757

Debt

Debt	3 Months Ended
	Apr. 30, 2023
Debt Disclosure [Abstract]
Debt	Debt Outstanding balances for the Company’s long-term debt were as follows: 4/30/2023 1/31/2023 4/30/2022 (in thousands) Revolving credit line $ 30,121 $ 17,122 $ 28,674 Other 4,564 4,622 4,795 Total debt 34,685 21,744 33,469 Less current portion 20,362 7,360 18,905 Non-current portion $ 14,323 $ 14,384 $ 14,564 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 $3.0 million 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. In connection with the Restated Credit Agreement, the Company also agreed to pay to PNC Bank a non-refundable fee of $50,000. 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 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 $65.0 million 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 $15.0 million from January through July of each year, minus undrawn amounts of letters of credit and reserves and (ii) an equipment loan of $2.0 million. 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 $10.0 million 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 covenants requiring a minimum fixed charge coverage ratio and limits on capital expenditures. The Company was in compliance with its debt covenants as of April 30, 2023. The Company's revolving line of credit with PNC is structured to provide seasonal credit availability during the Company's peak summer season. Approximately $16.6 million was available for borrowing as of April 30, 2023. The interest rate range for outstanding loan balances during the quarter ended April 30, 2023 was 7.65% to 9.75%. The Company also incurs a fee on the unused portion of the revolving line of credit at a rate of 0.375%. In addition to the outstanding debt balance of $30.1 million on the Company's revolving credit line, the Company also carries a mortgage on a manufacturing building in Conway Arkansas. The original note was dated August 2017 for $5.8 million, at a fixed rate of 4% per year and 20 years term. The outstanding amount under this note was $4.6 million as of April 30, 2023. On May 19, 2023, the Company entered into Amendment No. 3 to Amended and Restated Revolving Credit and Security Agreement (“Amendment No. 3”) with PNC, with an effective date of May 5, 2023. Amendment No. 3 amended the Restated Credit Agreement and the secured revolving line of credit provided to the Company under the revolving credit facility to reflect the following material changes: i. Maximum size of the PNC line of credit has been increased to $72.5 million during the months of June through August of 2023, to provide additional availability for the Company’s forecast through the 2023 peak borrowing period; ii. Increase in the total inventory sublimit under the Credit Agreement to $35.0 million and increase in the Assemble-to-ship (ATS) inventory sublimit to $15.0 million during the months of May through August of 2023; iii. The Company agreed to pay an amendment fee of $50,000, which is 0.67% on the incremental line increase of $7.5 million; and iv. Increase in the Applicable Margin (as defined in the Credit Agreement) of 25 basis points. Management believes that the carrying value of debt approximated fair value at April 30, 2023, 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, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes In 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, to determine whether sufficient future taxable income will be generated to realize existing deferred tax assets. Valuation allowances of $575,000, $864,000 and $10,099,000 as of April 30, 2023, January 31, 2023 and April 30, 2022, 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 three months ended April 30, 2023 and 2022, the effective income tax rates were 23.5% and 5.3%, respectively. The change in effective tax rates for the three months ended April 30, 2023 was primarily due to the change in forecasted mix of income before federal and state income taxes and estimated permanent differences. The effective tax rate for the three months

Net loss per Share

Net loss per Share	3 Months Ended
	Apr. 30, 2023
Earnings Per Share [Abstract]
Net income (loss) per Share	Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding. The following table sets forth the computation of basic net loss per share: Three Months Ended 4/30/2023 4/30/2022 (In thousands, except per share data) Net loss $ (1,442) $ (5,084) Weighted average shares of common stock outstanding 16,211 16,033 Dilutive effect of common stock equivalents from equity incentive plans (a) — — Totals 16,211 16,033 Net loss per share - basic $ (0.09) $ (0.32) Net loss per share - diluted $ (0.09) $ (0.32) (a) At April 30, 2023 and 2022, approximately 85,000 and 169,000 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, 2023
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”). The 2011 Plan expired in 2021 and no new award may be made under the 2011 Plan. Under the 2019 Plan, the Company may grant an aggregate of up to 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, 2023, the Company granted 0 awards, vested 0 shares according to their terms and forfeited 0 shares under the 2019 Plan. As of April 30, 2023, there were approximately 608,435 shares available for future issuance under the 2019 Plan. The following table summarizes the stock-based compensation expense related to restricted stock awards recognized in the Company's statement of operations for the three months ended April 30, 2023 and 2022: Three Months Ended 4/30/2023 4/30/2022 (in thousands) Cost of goods sold $ 28 $ 55 Selling, general and administrative expenses 75 198 Total stock-based compensation expense $ 103 $ 253

Retirement Plans

Retirement Plans	3 Months Ended
	Apr. 30, 2023
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, 2023, benefit accruals under the VIP Plan were frozen since December 31, 2003. There is no service cost incurred under the VIP Plan. The following table summarizes the net periodic pension cost for the Pension Plan and the VIP Plan for the three months ended April 30, 2023 and 2022: Three Months Ended 4/30/2023 4/30/2022 (in thousands) Service cost $ — $ — Interest cost 360 298 Expected return on plan assets (199) (237) Plan settlement — — Amortization of prior service cost — — Recognized net actuarial loss — 134 Benefit cost $ 161 $ 195 401(k) Retirement Plan

Warranty Accrual

Warranty Accrual	3 Months Ended
	Apr. 30, 2023
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, 2023 and 2022: Three Months Ended 4/30/2023 4/30/2022 (in thousands) Beginning balance $ 600 $ 600 Provision 41 34 Costs incurred (41) (34) Ending balance $ 600 $ 600

Contingencies

Contingencies	3 Months Ended
	Apr. 30, 2023
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, 2023
Other Income and Expenses [Abstract]
Delivery Costs	Delivery CostsFor the three months ended April 30, 2023 and 2022, shipping and classroom delivery costs of approximately $3,343,000 and $3,254,000, 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, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On May 19, 2023, the Company executed Amendment No. 3 to the Restated Credit Agreement, with an effective date of May 5, 2023. See Note 7 .

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Apr. 30, 2023
Inventory Disclosure [Abstract]
Schedule of Inventory	The following table presents a breakdown of the Company’s inventories as of April 30, 2023, January 31, 2023 and April 30, 2022: 4/30/2023 1/31/2023 4/30/2022 (in thousands) Finished goods $ 34,370 $ 25,740 $ 29,919 Work in process 32,918 25,303 21,719 Raw materials 18,352 16,363 14,659 Total inventories $ 85,640 $ 67,406 $ 66,297

Leases (Tables)

Leases (Tables)	3 Months Ended
	Apr. 30, 2023
Leases [Abstract]
Quantitative Information of Leases	The quantitative information regarding our leases is as follows: Three Months Ended 4/30/2023 4/30/2022 (in thousands, except lease term and discount rate) Operating lease cost $ 1,269 $ 1,327 Short-term lease cost 108 97 Sublease income (10) (10) Variable lease cost 261 253 Total lease cost $ 1,628 $ 1,667 Other operating leases information: Cash paid for amounts included in the measurement of lease liabilities $ 1,433 $ 1,454 Right-of-use assets obtained in exchange for new lease liabilities $ 292 $ 98 Weighted-average remaining lease term (years) 2.2 2.9 Weighted-average discount rate 6.33 % 6.38 %
Schedule of Minimum Future Lease Payments	Minimum future lease payments for operating leases in effect as of April 30, 2023, are as follows: Operating Lease For the year ending January 31, (in thousands) Remaining of 2024 $ 4,344 2025 5,794 2026 1,536 2027 2 2028 — Thereafter — Remaining balance of lease payments $ 11,676 Short-term lease liabilities $ 5,271 Long-term lease liabilities 5,648 Total lease liabilities $ 10,919 Difference between undiscounted cash flows and discounted cash flows $ 757

Debt (Tables)

Debt (Tables)	3 Months Ended
	Apr. 30, 2023
Debt Disclosure [Abstract]
Outstanding balances of long-term debt	Outstanding balances for the Company’s long-term debt were as follows: 4/30/2023 1/31/2023 4/30/2022 (in thousands) Revolving credit line $ 30,121 $ 17,122 $ 28,674 Other 4,564 4,622 4,795 Total debt 34,685 21,744 33,469 Less current portion 20,362 7,360 18,905 Non-current portion $ 14,323 $ 14,384 $ 14,564

Net income (loss) per Share (Ta

Net income (loss) per Share (Tables)	3 Months Ended
	Apr. 30, 2023
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	Three Months Ended 4/30/2023 4/30/2022 (In thousands, except per share data) Net loss $ (1,442) $ (5,084) Weighted average shares of common stock outstanding 16,211 16,033 Dilutive effect of common stock equivalents from equity incentive plans (a) — — Totals 16,211 16,033 Net loss per share - basic $ (0.09) $ (0.32) Net loss per share - diluted $ (0.09) $ (0.32) (a) At April 30, 2023 and 2022, approximately 85,000 and 169,000 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 (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Apr. 30, 2023
Share-Based Payment Arrangement [Abstract]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount	The following table summarizes the stock-based compensation expense related to restricted stock awards recognized in the Company's statement of operations for the three months ended April 30, 2023 and 2022: Three Months Ended 4/30/2023 4/30/2022 (in thousands) Cost of goods sold $ 28 $ 55 Selling, general and administrative expenses 75 198 Total stock-based compensation expense $ 103 $ 253

Retirement Plans (Tables)

Retirement Plans (Tables)	3 Months Ended
	Apr. 30, 2023
Retirement Benefits [Abstract]
Schedule of Defined Benefit Plans Disclosures	he net periodic pension cost for the Pension Plan and the VIP Plan for the three months ended April 30, 2023 and 2022: Three Months Ended 4/30/2023 4/30/2022 (in thousands) Service cost $ — $ — Interest cost 360 298 Expected return on plan assets (199) (237) Plan settlement — — Amortization of prior service cost — — Recognized net actuarial loss — 134 Benefit cost $ 161 $ 195

Warranty Accrual (Tables)

Warranty Accrual (Tables)	3 Months Ended
	Apr. 30, 2023
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, 2023 and 2022: Three Months Ended 4/30/2023 4/30/2022 (in thousands) Beginning balance $ 600 $ 600 Provision 41 34 Costs incurred (41) (34) Ending balance $ 600 $ 600

Seasonality (Details)

Seasonality (Details)	3 Months Ended	12 Months Ended
	Apr. 30, 2023	Jan. 31, 2023	Jan. 31, 2022
Sales [Member]
Seasonality (Textual) [Abstract]
The market for educational furniture is marked by extreme seasonality	50%	47%	40%

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	Jan. 31, 2023	Apr. 30, 2022
Inventory Disclosure [Abstract]
Increase In Inventories	$ 19,343
Finished goods	34,370	$ 25,740	$ 29,919
Work in process	32,918	25,303	21,719
Raw materials	18,352	16,363	14,659
Total inventories	$ 85,640	$ 67,406	$ 66,297

Leases - ASC 842 Quantitative I

Leases - ASC 842 Quantitative Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Leases [Abstract]
Operating lease cost	$ 1,269	$ 1,327
Short-term lease cost	108	97
Sublease income	(10)	(10)
Variable lease cost	261	253
Total lease cost	1,628	1,667
Cash paid for amounts included in the measurement of lease liabilities	1,433	1,454
Right-of-use assets obtained in exchange for new lease liabilities	$ 292	$ 98
Weighted-average remaining lease term (years)	2 years 2 months 12 days	2 years 10 months 24 days
Weighted-average discount rate	6.33%	6.38%

Leases - ASC 842 Minimum Lease

Leases - ASC 842 Minimum Lease Payments (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 31, 2023	Apr. 30, 2022
Leases [Abstract]
Remaining of 2024	$ 4,344
2025	5,794
2026	1,536
2027	2
2028	0
Thereafter	0
Remaining balance of lease payments	11,676
Short-term lease liabilities	5,271	$ 5,082	$ 4,769
Long-term lease liabilities	5,648	$ 6,796	$ 10,297
Total lease liabilities	10,919
Difference between undiscounted cash flows and discounted cash flows	$ 757

Debt (Long-term Debt) (Details)

Debt (Long-term Debt) (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 31, 2023	Apr. 30, 2022
Debt Instrument [Line Items]
Long-term debt	$ 34,685	$ 21,744	$ 33,469
Less current portion	20,362	7,360	18,905
Non-current portion	14,323	14,384	14,564
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term debt	30,121	17,122	28,674
Other Debt [Member]
Debt Instrument [Line Items]
Long-term debt	$ 4,564	$ 4,622	$ 4,795

Debt (Narrative) (Details)

Debt (Narrative) (Details)		1 Months Ended	3 Months Ended
	May 19, 2023 USD ($) basisPoint	Aug. 31, 2017 USD ($)	Apr. 30, 2023 USD ($)	Jan. 31, 2023 USD ($)	Apr. 30, 2022 USD ($)	Sep. 28, 2021 USD ($)
Line of Credit Facility [Line Items]
Maximum dividend amount in fiscal year						$ 3,000,000
Line of credit facility, 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%
Long-term debt			$ 34,685,000	$ 21,744,000	$ 33,469,000
Subsequent Event [Member]
Line of Credit Facility [Line Items]
Waiver and amendment fee	$ 50,000
Increase in inventory sublimit under credit agreement	35,000,000
Increase in assemble to ship inventory sublimit under credit agreement	$ 15,000,000
Incremental credit line increase (decrease)	0.0067
Increase (decrease) applicable margin basis points | basisPoint	25
Incremental Credit Line Increase (Decrease)	$ 7,500,000
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Long-term debt			30,121,000	$ 17,122,000	$ 28,674,000
Original Mortgage Note
Line of Credit Facility [Line Items]
Interest rate		4%
Long-term debt			$ 4,600,000
Face amount		$ 5,800,000
Term		20 years
Inventory [Member]
Line of Credit Facility [Line Items]
Revolving credit facility borrowing base limitation			60%
Inventories [Member]
Line of Credit Facility [Line Items]
Revolving credit facility borrowing base limitation			85%
Maximum [Member] | Accounts receivable [Member]
Line of Credit Facility [Line Items]
Revolving credit facility borrowing base limitation			85%
Amended and Restated Credit Agreement | Consecutive Four Fiscal Quarters Ending July 31, 2020
Line of Credit Facility [Line Items]
Minimum fixed charge coverage ratio						1.2
Equipment Loan [Member] | Amended and Restated Credit Agreement
Line of Credit Facility [Line Items]
Line of credit facility, equipment financing			$ 2,000,000
PNC [Member] | Amended and Restated Credit Agreement
Line of Credit Facility [Line Items]
Non-refundable fee						$ 50,000
PNC [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Remaining borrowing capacity			16,600,000
PNC [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member]
Line of Credit Facility [Line Items]
Line of credit facility, net	$ 72,500,000
PNC [Member] | Revolving Credit Facility [Member] | Amended and Restated Credit Agreement
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity			65,000,000
PNC [Member] | Equipment Loan [Member] | Amended and Restated Credit Agreement
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity			$ 10,000,000
Alternate Base Rate Loans [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Interest rate			9.75%
Alternate Base Rate Loans [Member] | Minimum
Line of Credit Facility [Line Items]
Interest rate			7.65%

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022	Jan. 31, 2023
Income Tax Disclosure [Abstract]
Valuation allowance	$ 575	$ 10,099	$ 864
Effective tax rate	23.50%	5.30%

Net income (loss) per Share (De

Net income (loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Earnings Per Share [Abstract]
Net loss	$ (1,442)	$ (5,084)
Weighted average shares outstanding - basic (shares)	16,211	16,033
Net effect of dilutive share-based on the treasury stock method using average market price (shares)	0	0
Totals (shares)	16,211	16,033
Net income (loss) per share - basic (usd per share)	$ (0.09)	$ (0.32)
Net income (loss) per share - diluted (usd per share)	$ (0.09)	$ (0.32)
Incremental common shares excluded to dilutive effect	85	169

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 103	$ 253
Cost of Goods Sold [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	28	55
Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	75	$ 198
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 446
Unrecognized compensation expense, weighted average period to be recognized	1 year
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

Retirement Plans (Periodic Pens

Retirement Plans (Periodic Pension Cost) (Details) - Pension Plan [Member] - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Components of Net Cost
Service cost	$ 0	$ 0
Interest cost	360	298
Expected return on plan assets	(199)	(237)
Plan settlement	0	0
Amortization of prior service cost	0	0
Recognized net actuarial loss	0	134
Benefit cost	$ 161	$ 195

Retirement Plans (Narrative) (D

Retirement Plans (Narrative) (Details) - United States [Member] - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Minimum annual contributions per employee, percent	1%
Maximum annual contributions per employee, percent	75%
Number of common shares held	1,320,482	1,165,985
Contributions by employer	$ 403	$ 330

Warranty (Details)

Warranty (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	Apr. 30, 2022
Warranty claim activity
Beginning balance	$ 600	$ 600
Provision	41	34
Costs incurred	(41)	(34)
Ending balance	$ 600	$ 600
Maximum [Member]
Warranty [Line Items]
Product warranty period	10 years

Contingencies (Details)

Contingencies (Details) - Maximum	Apr. 30, 2023 USD ($)
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, 2023	Apr. 30, 2022
Other Income and Expenses [Abstract]
Shipping and classroom delivery costs	$ 3,343,000	$ 3,254,000