Virco Mfg. (VIRC) 10-Q 7 Jun 24 2025 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Apr. 30, 2024	Jun. 07, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Apr. 30, 2024
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		16,207,612
Current Fiscal Year End Date	--01-31
Document Fiscal Year Focus	2025
Document Fiscal Period Focus	Q1
Amendment Flag	false

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Apr. 30, 2024	Jan. 31, 2024	Apr. 30, 2023
Current assets:
Cash	$ 644	$ 5,286	$ 625
Trade accounts receivables, net	19,772	23,161	15,524
Income tax receivable	66	0	321
Inventories	71,333	58,371	85,640
Prepaid expenses and other current assets	3,974	2,208	2,733
Total current assets	95,789	89,026	104,843
Property, plant and equipment:
Land	3,731	3,731	3,731
Land improvements	694	694	686
Buildings and building improvements	51,575	51,576	51,391
Machinery and equipment	115,215	114,400	114,655
Leasehold improvements	523	523	983
Total property, plant and equipment	171,738	170,924	171,446
Less accumulated depreciation and amortization	137,664	136,356	136,779
Net property, plant and equipment	34,074	34,568	34,667
Operating lease right-of-use assets	6,274	6,508	9,326
Deferred tax assets, net	6,705	6,634	8,249
Other assets, net	9,631	9,709	8,848
Total assets	152,473	146,445	165,933
Current liabilities:
Accounts payable	19,202	12,945	23,628
Accrued compensation and employee benefits	5,626	10,880	9,416
Income tax payable	0	145	0
Current portion of long-term debt	250	248	20,362
Current portion operating lease liability	6,221	5,744	5,271
Other accrued liabilities	10,362	8,570	7,868
Total current liabilities	41,661	38,532	66,545
Non-current liabilities:
Accrued self-insurance retention	1,244	650	1,251
Accrued pension expenses	9,480	9,429	10,802
Income tax payable, less current portion	206	128	85
Long-term debt, less current portion	6,766	4,136	14,323
Operating lease liability, less current portion	915	1,829	5,648
Other long-term liabilities	564	562	557
Total non-current liabilities	19,175	16,734	32,666
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 16,207,612 shares at 4/30/2024, 16,347,314 at 1/31/2024, and 16,210,985 at 4/30/2023	162	164	162
Additional paid-in capital	120,048	121,373	120,993
Accumulated deficit	(27,235)	(29,048)	(52,073)
Accumulated other comprehensive loss	(1,338)	(1,310)	(2,360)
Total stockholders’ equity	91,637	91,179	66,722
Total liabilities and stockholders’ equity	$ 152,473	$ 146,445	$ 165,933

Unaudited Condensed Consolida_2

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Apr. 30, 2024	Jan. 31, 2024	Apr. 30, 2023
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)	16,207,612	16,347,314	16,210,985
Common stock, shares outstanding (shares)	16,207,612	16,347,314	16,210,985

Unaudited Condensed Consolida_3

Unaudited Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Income Statement [Abstract]
Net sales	$ 46,735	$ 34,943
Costs of goods sold	26,388	21,741
Gross profit	20,347	13,202
Selling, general and administrative expenses	17,376	14,514
Operating income (loss)	2,971	(1,312)
Unrealized (gain) loss on investment in trust account	(215)	(299)
Pension expense	107	161
Interest expense	208	712
Income (loss) before income taxes	2,871	(1,886)
Income tax expense (benefit)	731	(444)
Net income (loss)	$ 2,140	$ (1,442)
Cash dividends declared per common share (usd per share)	$ 0.02	$ 0
Net income (loss) per common share:
Basic (usd per share)	0.13	(0.09)
Diluted (usd per share)	$ 0.13	$ (0.09)
Weighted average shares of common stock outstanding:
Basic (shares)	16,264	16,211
Diluted (shares)	16,393	16,211

Unaudited Condensed Consolida_4

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 2,140	$ (1,442)
Other comprehensive loss:
Pension adjustments, net of tax effect	(28)	0
Net comprehensive income (loss)	$ 2,112	$ (1,442)

Unaudited Condensed Consolida_5

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Statement of Comprehensive Income [Abstract]
Pension adjustment, tax expense	$ 10	$ 0

Unaudited Condensed Consolida_6

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Operating activities
Net income (loss)	$ 2,140	$ (1,442)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	1,334	1,195
Non-cash lease benefits	(203)	(165)
Provision for credit losses	15	15
Amortization of debt issuance costs	30	26
Loss on sale of property, plant and equipment	1	0
Deferred income taxes	(62)	(448)
Stock-based compensation	172	103
Amortization of net actuarial gain for pension plans	(38)	0
Non-cash unrealized gain on investment	(215)	(299)
Changes in operating assets and liabilities:
Trade accounts receivable	3,374	2,896
Other receivables	(27)	33
Inventories	(12,962)	(18,234)
Income taxes	(133)	(296)
Prepaid expenses and other current assets	(1,620)	(490)
Accounts payable and accrued liabilities	3,687	5,391
Net cash used in operating activities	(4,507)	(11,715)
Investing activities:
Purchases of property, plant and equipment	(1,088)	(1,533)
Proceeds from sale of property, plant and equipment	2	0
Proceeds from surrendering life insurance policies	145	0
Net cash used in investing activities	(941)	(1,533)
Financing activities:
Borrowing from long-term debt	15,737	15,241
Repayment of long-term debt	(13,105)	(2,300)
Common stock repurchased	(1,499)	0
Payment of deferred financing costs	0	(125)
Cash dividends paid	(327)	0
Net cash provided by financing activities	806	12,816
Net decrease in cash	(4,642)	(432)
Cash at beginning of period	5,286	1,057
Cash at end of period	644	625
Property, plant and equipment acquired and not yet paid at end of period	248	402
Cash paid during the year for interest	208	712
Cash paid during the year for income taxes, net of refunds	$ 971	$ 344

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, 2023		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
Shares vested and others (shares)		0
Shares vested and others	0	$ 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)
Beginning balance (shares) at Jan. 31, 2024	16,347,314	16,347,314
Beginning balance at Jan. 31, 2024	$ 91,179	$ 164	121,373	(29,048)	(1,310)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	2,140			2,140
Cash dividends	(327)			(327)
Pension adjustments, net of tax effect	(28)				(28)
Shares vested and others (shares)		0
Shares vested and others	0	$ 0	0
Stock compensation expense	172		172
Stock repurchase (shares)		(139,702)
Stock repurchase	$ (1,499)	$ (2)	(1,497)
Ending balance (shares) at Apr. 30, 2024	16,207,612	16,207,612
Ending balance at Apr. 30, 2024	$ 91,637	$ 162	$ 120,048	$ (27,235)	$ (1,338)

Basis of Presentation

Basis of Presentation	3 Months Ended
	Apr. 30, 2024
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, 2024 (“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, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2025. The balance sheet at January 31, 2024 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, 2024
Seasonality [Abstract]
Seasonality and Management Use of Estimates	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 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.

Recently Issued Accounting Stan

Recently Issued Accounting Standards	3 Months Ended
	Apr. 30, 2024
Accounting Standards Update and Change in Accounting Principle [Abstract]
Recently Issued Accounting Standards	Recently Issued Accounting Standards Accounting Standards Updates ("ASUs") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. In November 2023, the FASB issued this ASU to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We do not expect that this guidance will have a material impact on our consolidated financial statements and disclosures. ASU 2023-09, Income Taxes (Topic 740): Improvements to Tax Disclosures. In December 2023, the FASB issued this ASU which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. We do not expect that this guidance will have a material impact on our consolidated financial statements and disclosures. The Company evaluates all 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, 2024
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, 2024
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 (“FIFO”)) 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 involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the Company's financial condition or results of operations. 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 educational 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. The following table presents a breakdown of the Company’s inventories as of April 30, 2024, January 31, 2024 and April 30, 2023: 4/30/2024 1/31/2024 4/30/2023 (In thousands) Finished goods $ 28,183 $ 18,861 $ 34,370 Work in process 27,588 25,047 32,918 Raw materials 15,562 14,463 18,352 Total inventories 71,333 $ 58,371 $ 85,640

Leases

Leases	3 Months Ended
	Apr. 30, 2024
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. The Company's lease terms include options to extend or terminate the lease only when it is reasonably certain that we exercise that option. All of the Company’s leases are classified as operating 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 and manufacturing and distribution facility located in Torrance, California, currently with a remaining lease term through April 2025. 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. 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 4/30/2024 4/30/2023 (In thousands, except lease term and discount rate) Operating lease cost $ 1,419 $ 1,269 Short-term lease cost 104 108 Sublease income (10) (10) Variable lease (benefit) cost (72) 261 Total lease cost $ 1,441 $ 1,628 Other operating leases information: Cash paid for amounts included in the measurement of lease liabilities $ 1,621 $ 1,433 Right-of-use assets obtained in exchange for new lease liabilities $ 954 $ 292 Weighted-average remaining lease term (years) 1.2 2.2 Weighted-average discount rate 6.36 % 6.33 % Minimum future lease payments for operating leases in effect as of April 30, 2024, are as follows: Operating Lease For the year ending January 31, (In thousands) Remaining of 2025 $ 4,862 2026 2,194 2027 441 2028 6 2029 — Thereafter — Remaining balance of lease payments 7,503 Short-term lease liabilities 6,221 Long-term lease liabilities 915 Total lease liabilities 7,136 Difference between undiscounted cash flows and discounted cash flows $ 367

Debt

Debt	3 Months Ended
	Apr. 30, 2024
Debt Disclosure [Abstract]
Debt	Debt Outstanding balances for the Company’s long-term debt were as follows: 4/30/2024 1/31/2024 4/30/2023 (In thousands) Revolving credit line $ 2,693 $ — $ 30,121 Other 4,323 4,384 4,564 Total debt 7,016 4,384 34,685 Less current portion 250 248 20,362 Non-current portion $ 6,766 $ 4,136 $ 14,323 The Company and Virco Inc., its wholly-owned subsidiary (the “Borrowers”) has 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, most recently on April 29, 2024. The Credit Agreement as currently in effect permits the Company to issue dividends or make payments with respect to the Company’s capital stock in an aggregate amount up to $5.0 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 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 addition to the financial covenants, the 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 Credit Agreement upon receipt by the Borrowers. Due to this automatic liquidating nature of the 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 Credit Agreement as currently in effect include the following: (i) a revolving line of credit with a Maximum Revolving Advance Amount of $65.0 million (increasing to $70.0 million during the months of June through August 2024) 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; (ii) inventory sublimit of $35.0 million and assemble-to-ship (ATS) inventory sublimit of $15.0 million during the months of May through August 2024; and (iii) an equipment loan of $2.0 million. The Credit Agreement is secured by substantially all of the Borrowers’ personal property and certain of the Borrowers’ real property. The Credit Agreement is subject to certain prepayment penalties upon early termination of the Credit Agreement. Prior to the maturity date, principal amounts outstanding under the 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 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, 2024. The Company's revolving line of credit with PNC is structured to provide seasonal credit availability during the Company's peak summer season. Approximately $42.4 million was available for borrowing as of April 30, 2024. The interest rate is determined as a sum of the applicable margin rate, which is 3.00% from January through July and 2.50% from August through December, plus the Secured Overnight Financing Rate (SOFR). The interest rate for outstanding loan balances during the quarter ended April 30, 2024 was 10.50%. 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 $2.7 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 4.0% per year and 20-year term. The outstanding amount under this note was $4.3 million as of April 30, 2024. On April 29, 2024, the Company entered into Amendment No. 4 to the Credit Agreement ("Amendment No. 4") with PNC. Amendment No.4 amended the Credit Agreement to reflect the following material changes: i. Maximum size of the PNC line of credit has been lowered from $72.5 million to $70.0 million during the months of June through August, and ii. Maximum amount allowed for the Company to issue dividends or repurchase stock has been increased from $3.0 million to $5.0 million in the aggregate during any fiscal year. Management believes that the carrying value of debt approximated fair value at April 30, 2024, as all of the long-term debt bears interest at variable rates based on prevailing market conditions, except mortgage on a manufacturing building in Conway Arkansas at a fixed rate of 4.0% per year.

Income Taxes

Income Taxes	3 Months Ended
	Apr. 30, 2024
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 $217,000, $251,000 and $575,000 as of April 30, 2024, January 31, 2024 and April 30, 2023, 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, 2024 and 2023, the effective income tax rates were 25.5% and 23.5%, respectively. Our effective tax rate varies from the 21% federal statutory rate primarily due to state taxes.

Net Income (Loss) per Share

Net Income (Loss) per Share	3 Months Ended
	Apr. 30, 2024
Earnings Per Share [Abstract]
Net Income (Loss) per Share	Net Income (Loss) per Share The following table sets forth the computation of basic and diluted net income (loss) per share: Three Months Ended 4/30/2024 4/30/2023 (In thousands, except per share data) Net income (loss) $ 2,140 $ (1,442) Weighted average shares of common stock outstanding - basic 16,264 16,211 Dilutive effect of common stock equivalents from equity incentive plans 129 — Weighted average shares of common stock outstanding - diluted 16,393 16,211 Net income (loss) per share - basic $ 0.13 $ (0.09) Net income (loss) per share - diluted $ 0.13 $ (0.09)

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Apr. 30, 2024
Share-Based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation Stock Incentive Plan Under the Company's 2019 Omnibus Equity Incentive Plan (the “2019 Plan”), the Company may grant an aggregate of up to 1,000,000 shares to its employees and non-employee directors in the form of restricted stock units, restricted stock awards and stock options. Restricted stock units and awards granted under the 2019 Plan are expensed ratably over the vesting period of the units and 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, 2024, the Company granted 0 awards, vested 0 shares according to their terms and forfeited 0 shares under the 2019 Plan. As of April 30, 2024, there were approximately 537,925 shares available for future issuance under the 2019 Plan. The following table summarizes the stock-based compensation expense related to restricted stock units and awards recognized in the Company's statements of operations for the three months ended April 30, 2024 and 2023: Three Months Ended 4/30/2024 4/30/2023 (In thousands) Cost of goods sold $ 28 $ 28 Selling, general and administrative expenses 144 75 Total stock-based compensation expense $ 172 $ 103

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 the Pension 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, 2024, 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, 2024 and 2023: Three Months Ended 4/30/2024 4/30/2023 (In thousands) Service cost $ — $ — Interest cost 311 360 Expected return on plan assets (169) (199) Plan settlement — — Amortization of prior service cost (35) — Recognized net actuarial loss — — Benefit cost $ 107 $ 161 401(k) Retirement Plan The Company’s retirement plan, which covers all U.S. employees, allows participants to defer from 1% to 75% of their eligible compensation through a 401(k) retirement program. The plan includes Virco stock as one of the investment options. At April 30, 2024 and 2023, the plan held 1,240,365 shares and 1,320,482 shares of Virco stock, respectively. For the three months ended April 30, 2024 and 2023, the compensation costs incurred for employer match, which is paid in the form of Company stock, was $441,000 and $403,000 respectively.

Warranty Accrual

Warranty Accrual	3 Months Ended
	Apr. 30, 2024
Product Warranties Disclosures [Abstract]
Warranty Accrual	Warranty Accrual Effective February 1, 2014 the Company modified its warranty to a limited lifetime warranty. The warranty was 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, 2024 and 2023: Three Months Ended 4/30/2024 4/30/2023 (In thousands) Beginning balance $ 500 $ 600 Provision 30 41 Costs incurred (30) (41) Ending balance $ 500 $ 600

Contingencies

Contingencies	3 Months Ended
	Apr. 30, 2024
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 $30.0 million. 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, 2024
Other Income and Expenses [Abstract]
Delivery Costs	Delivery CostsFor the three months ended April 30, 2024 and 2023, shipping and classroom delivery costs of approximately $4.2 million and $3.3 million, 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, 2024
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On June 4, 2024, the Company’s Board of Directors declared a cash dividend for the Company’s second fiscal quarter of $0.02 on each outstanding share of common stock. The dividend is payable on July 12, 2024 to stockholders of record of the

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Apr. 30, 2024
Inventory Disclosure [Abstract]
Schedule of Inventory	The following table presents a breakdown of the Company’s inventories as of April 30, 2024, January 31, 2024 and April 30, 2023: 4/30/2024 1/31/2024 4/30/2023 (In thousands) Finished goods $ 28,183 $ 18,861 $ 34,370 Work in process 27,588 25,047 32,918 Raw materials 15,562 14,463 18,352 Total inventories 71,333 $ 58,371 $ 85,640

Leases (Tables)

Leases (Tables)	3 Months Ended
	Apr. 30, 2024
Leases [Abstract]
Quantitative Information of Leases	The quantitative information regarding our leases is as follows: Three Months Ended 4/30/2024 4/30/2023 (In thousands, except lease term and discount rate) Operating lease cost $ 1,419 $ 1,269 Short-term lease cost 104 108 Sublease income (10) (10) Variable lease (benefit) cost (72) 261 Total lease cost $ 1,441 $ 1,628 Other operating leases information: Cash paid for amounts included in the measurement of lease liabilities $ 1,621 $ 1,433 Right-of-use assets obtained in exchange for new lease liabilities $ 954 $ 292 Weighted-average remaining lease term (years) 1.2 2.2 Weighted-average discount rate 6.36 % 6.33 %
Schedule of Minimum Future Lease Payments	Minimum future lease payments for operating leases in effect as of April 30, 2024, are as follows: Operating Lease For the year ending January 31, (In thousands) Remaining of 2025 $ 4,862 2026 2,194 2027 441 2028 6 2029 — Thereafter — Remaining balance of lease payments 7,503 Short-term lease liabilities 6,221 Long-term lease liabilities 915 Total lease liabilities 7,136 Difference between undiscounted cash flows and discounted cash flows $ 367

Debt (Tables)

Debt (Tables)	3 Months Ended
	Apr. 30, 2024
Debt Disclosure [Abstract]
Outstanding balances of long-term debt	Outstanding balances for the Company’s long-term debt were as follows: 4/30/2024 1/31/2024 4/30/2023 (In thousands) Revolving credit line $ 2,693 $ — $ 30,121 Other 4,323 4,384 4,564 Total debt 7,016 4,384 34,685 Less current portion 250 248 20,362 Non-current portion $ 6,766 $ 4,136 $ 14,323

Net Income (Loss) per Share (Ta

Net Income (Loss) per Share (Tables)	3 Months Ended
	Apr. 30, 2024
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	Three Months Ended 4/30/2024 4/30/2023 (In thousands, except per share data) Net income (loss) $ 2,140 $ (1,442) Weighted average shares of common stock outstanding - basic 16,264 16,211 Dilutive effect of common stock equivalents from equity incentive plans 129 — Weighted average shares of common stock outstanding - diluted 16,393 16,211 Net income (loss) per share - basic $ 0.13 $ (0.09) Net income (loss) per share - diluted $ 0.13 $ (0.09)

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Apr. 30, 2024
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 units and awards recognized in the Company's statements of operations for the three months ended April 30, 2024 and 2023: Three Months Ended 4/30/2024 4/30/2023 (In thousands) Cost of goods sold $ 28 $ 28 Selling, general and administrative expenses 144 75 Total stock-based compensation expense $ 172 $ 103

Retirement Plans (Tables)

Retirement Plans (Tables)	3 Months Ended
	Apr. 30, 2024
Retirement Benefits [Abstract]
Schedule of Defined Benefit Plans Disclosures	The following table summarizes the net periodic pension cost for the Pension Plan and the VIP Plan for the three months ended April 30, 2024 and 2023: Three Months Ended 4/30/2024 4/30/2023 (In thousands) Service cost $ — $ — Interest cost 311 360 Expected return on plan assets (169) (199) Plan settlement — — Amortization of prior service cost (35) — Recognized net actuarial loss — — Benefit cost $ 107 $ 161

Warranty Accrual (Tables)

Warranty Accrual (Tables)	3 Months Ended
	Apr. 30, 2024
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, 2024 and 2023: Three Months Ended 4/30/2024 4/30/2023 (In thousands) Beginning balance $ 500 $ 600 Provision 30 41 Costs incurred (30) (41) Ending balance $ 500 $ 600

Seasonality (Details)

Seasonality (Details)	3 Months Ended
	Apr. 30, 2024
Sales [Member]
Seasonality (Textual) [Abstract]
The market for educational furniture is marked by extreme seasonality	50%

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Apr. 30, 2024	Jan. 31, 2024	Apr. 30, 2023
Inventory Disclosure [Abstract]
Finished goods	$ 28,183	$ 18,861	$ 34,370
Work in process	27,588	25,047	32,918
Raw materials	15,562	14,463	18,352
Total inventories	$ 71,333	$ 58,371	$ 85,640

Leases - ASC 842 Quantitative I

Leases - ASC 842 Quantitative Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Leases [Abstract]
Operating lease cost	$ 1,419	$ 1,269
Short-term lease cost	104	108
Sublease income	(10)	(10)
Variable lease (benefit) cost	(72)	261
Total lease cost	1,441	1,628
Cash paid for amounts included in the measurement of lease liabilities	1,621	1,433
Right-of-use assets obtained in exchange for new lease liabilities	$ 954	$ 292
Weighted-average remaining lease term (years)	1 year 2 months 12 days	2 years 2 months 12 days
Weighted-average discount rate	6.36%	6.33%

Leases - ASC 842 Minimum Lease

Leases - ASC 842 Minimum Lease Payments (Details) - USD ($) $ in Thousands	Apr. 30, 2024	Jan. 31, 2024	Apr. 30, 2023
Leases [Abstract]
Remaining of 2025	$ 4,862
2026	2,194
2027	441
2028	6
2029	0
Thereafter	0
Remaining balance of lease payments	7,503
Short-term lease liabilities	6,221	$ 5,744	$ 5,271
Long-term lease liabilities	915	$ 1,829	$ 5,648
Total lease liabilities	7,136
Difference between undiscounted cash flows and discounted cash flows	$ 367

Debt (Long-term Debt) (Details)

Debt (Long-term Debt) (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Jan. 31, 2024	Apr. 30, 2023
Debt Instrument [Line Items]
Total debt	$ 7,016	$ 4,384	$ 34,685
Less current portion	250	248	20,362
Non-current portion	$ 6,766	4,136	14,323
Interest rate during period	10.50%
Revolving credit line
Debt Instrument [Line Items]
Total debt	$ 2,693	0	30,121
Other
Debt Instrument [Line Items]
Total debt	$ 4,323	$ 4,384	$ 4,564

Debt (Narrative) (Details)

Debt (Narrative) (Details)	1 Months Ended	3 Months Ended
	Aug. 31, 2017 USD ($)	Apr. 30, 2024 USD ($)	Aug. 31, 2024 USD ($)	Jun. 01, 2024 USD ($)	Apr. 29, 2024 USD ($)	Apr. 28, 2024 USD ($)	Jan. 31, 2024 USD ($)	Apr. 30, 2023 USD ($)
Line of Credit Facility [Line Items]
Interest rate during period		10.50%
Unused portion fee rate		0.375%
Long-term debt		$ 7,016,000					$ 4,384,000	$ 34,685,000
Original Mortgage Note
Line of Credit Facility [Line Items]
Interest rate	4%
Long-term debt		4,300,000
Face amount	$ 5,800,000
Term	20 years
Amended and Restated Credit Agreement
Line of Credit Facility [Line Items]
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
Increase in inventory sublimit under credit agreement					$ 35,000,000
Amended and Restated Credit Agreement | Forecast
Line of Credit Facility [Line Items]
Increase in assemble to ship inventory sublimit under credit agreement			$ 15,000,000
Amended and Restated Credit Agreement | Consecutive Four Fiscal Quarters Ending July 31, 2020
Line of Credit Facility [Line Items]
Minimum fixed charge coverage ratio					1.20
Amended and Restated Credit Agreement | Inventory
Line of Credit Facility [Line Items]
Revolving credit facility borrowing base limitation		60%
Amended and Restated Credit Agreement | Inventories
Line of Credit Facility [Line Items]
Revolving credit facility borrowing base limitation		85%
Amended and Restated Credit Agreement | Maximum | Accounts receivable
Line of Credit Facility [Line Items]
Revolving credit facility borrowing base limitation		85%
Revolving credit line
Line of Credit Facility [Line Items]
Long-term debt		$ 2,700,000
Equipment Loan | Amended and Restated Credit Agreement
Line of Credit Facility [Line Items]
Line of credit facility, equipment financing		2,000,000
PNC | Amended and Restated Credit Agreement
Line of Credit Facility [Line Items]
Maximum dividend amount in fiscal year					$ 5,000,000	$ 3,000,000
PNC | Revolving credit line
Line of Credit Facility [Line Items]
Remaining borrowing capacity		$ 42,400,000
PNC | Revolving credit line | Secured Overnight Financing Rate (SOFR) | January through July
Line of Credit Facility [Line Items]
Basis spread on variable rate		3%
PNC | Revolving credit line | Secured Overnight Financing Rate (SOFR) | August through December
Line of Credit Facility [Line Items]
Basis spread on variable rate		2.50%
PNC | Revolving credit line | Amended and Restated Credit Agreement
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 65,000,000			$ 70,000,000	$ 72,500,000
PNC | Revolving credit line | Amended and Restated Credit Agreement | Forecast
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity				$ 70,000,000
PNC | Equipment Loan | Amended and Restated Credit Agreement
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 10,000,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023	Jan. 31, 2024
Income Tax Disclosure [Abstract]
Valuation allowance	$ 217	$ 575	$ 251
Effective tax rate	25.50%	23.50%

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, 2024	Apr. 30, 2023
Earnings Per Share [Abstract]
Net income (loss)	$ 2,140	$ (1,442)
Weighted average shares outstanding - basic (shares)	16,264	16,211
Net effect of dilutive share-based on the treasury stock method using average market price (shares)	129	0
Totals (shares)	16,393	16,211
Net income (loss) per share - basic (usd per share)	$ 0.13	$ (0.09)
Net income (loss) per share - diluted (usd per share)	$ 0.13	$ (0.09)

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 172	$ 103
Cost of goods sold
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	28	28
Selling, general and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	144	$ 75
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 57
Unrecognized compensation expense, weighted average period to be recognized	1 month
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)	537,925

Retirement Plans (Periodic Pens

Retirement Plans (Periodic Pension Cost) (Details) - Pension Plan [Member] - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Components of Net Cost
Service cost	$ 0	$ 0
Interest cost	311	360
Expected return on plan assets	(169)	(199)
Plan settlement	0	0
Amortization of prior service cost	(35)	0
Recognized net actuarial loss	0	0
Benefit cost	$ 107	$ 161

Retirement Plans (Narrative) (D

Retirement Plans (Narrative) (Details) - United States [Member] - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
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	1,240,365	1,320,482
Contributions by employer	$ 441	$ 403

Warranty (Details)

Warranty (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2024	Apr. 30, 2023
Warranty claim activity
Beginning balance	$ 500	$ 600
Provision	30	41
Costs incurred	(30)	(41)
Ending balance	$ 500	$ 600
Maximum
Warranty [Line Items]
Product warranty period	10 years

Contingencies (Details)

Contingencies (Details) - Maximum	Apr. 30, 2024 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, 2024	Apr. 30, 2023
Other Income and Expenses [Abstract]
Shipping and classroom delivery costs	$ 4,200,000	$ 3,300,000

Subsequent Events (Details)

Subsequent Events (Details)	Jun. 04, 2024 $ / shares
Subsequent Event
Subsequent Event [Line Items]
Dividends payable (in dollars per share)	$ 0.02