SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15 (d) of the Securities Exchange
Act of 1934 [Fee Required]

For the fiscal year ended January 31, 2001.

[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 [No Fee Required]

For the transition period from ________ to ________.

Commission file number 1-8777

VIRCO MFG. CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 95-1613718
------------------------------ ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)

2027 Harpers Way, Torrance, California 90501
- ------------------------------------------ ------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (310) 533-0474
--------------

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered:

Common Stock, $.01 Par Value American Stock Exchange
---------------------------- -----------------------

Securities pursuant to section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference or in Part III of this Form 10-K [X].

The aggregate market value of the voting stock of the registrant held by
non-affiliates of the registrant on April 23, 2001, based on the closing price
at which such stock was sold on the American Stock Exchange on that date was
approximately $111,806,896.

The number of shares of Common Stock outstanding at April 23, 2001, was
11,225,592 shares.

Portions of registrant's definitive proxy statement, expected to be mailed to
stockholders on May 14, 2001, are incorporated into Part III as set forth
herein. Portions of registrant's Annual Report to Stockholders for the year
ended January 31, 2001 are incorporated into Part I and Part II as set forth
herein.

2
3

VIRCO MFG. CORPORATION

INDEX TO ANNUAL REPORT ON FORM 10-K

Caption Page
- ------- ----

PART I

Item 1. Business................................................................ 4

Item 2. Properties.............................................................. 6

Item 3. Legal Proceedings....................................................... 8

Item 4. Submission of Matters to a Vote of Security Holders..................... 8

PART II

Item 5. Market for Registrant's Common Stock and Related Stockholder Matters.... 9

Item 6. Selected Financial Data................................................. 9

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................... 9

Item 7a. Quantitative and Qualitative Disclosures about Market Risk.............. 9

Item 8. Financial Statements and Supplementary Data ............................ 9

Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures............................................... 9

PART III

Item 10. Directors and Executive Officers of the Registrant...................... 10

Item 11. Executive Compensation.................................................. 11

Item 12. Security Ownership of Certain Beneficial Owners and Management.......... 11

Item 13. Certain Relationships and Related Transactions.......................... 11

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8K......... 12

3
4

PART I

Item 1. Business

Introduction

Virco Mfg. Corporation, a Delaware Corporation, is a leader in the
design, production, and distribution of quality furniture for the
contract and education markets worldwide. Over fifty years of product
design and manufacturing have resulted in a wide product line targeted
for facility managers. Examples of these facilities served by the
Company include public and private schools, colleges and universities,
convention centers, federal and state institutions, churches and other
businesses. We also sell to wholesalers, distributors, retailers and
catalog retailers. In order to divide the workload into manageable
amounts, Virco has divided the sales force into two groups: Education
and Commercial.

Virco has one product line and one catalog, which are used to promote
sales of product to all sales channels. A core marketing group, which
reports to the President and is composed of representatives from sales,
product development and corporate marketing, prepares annual plans
which allocate resources for product development, marketing and selling
expense for all sales channels, customer service and the product
stocking plan (Quick Ship program).

Virco maintains two interdependent manufacturing and distribution
facilities: one in Torrance, California, and one in Conway, Arkansas.
Customer service departments are located at each of these locations.
Much of our product line can be produced at either location, but many
products or components are produced at only one factory due to space,
cost or process requirements. Sales support and order fulfillment is
typically provided by the factory/distribution center nearest to the
end user.

The trend in educational sales is becoming increasingly seasonal. The
ability to forecast, finance, manufacture and warehouse furniture for
this narrow delivery window is a significant competency, which gives
the Company a competitive advantage in this market niche. The Company
has approximately one million sq. ft. of distribution and warehouse
facilities. Substantial warehouse space is required to build adequate
inventories to service the highly seasonal demand for educational
sales. Approximately 54% of total sales are delivered in June, July,
August and September with an even higher portion of educational sales
delivered in that period.

Virco has developed several competencies that position the Company to
service its selected markets. Included in these competencies is what we
believe to be the largest direct sales force in the education market
for classroom furniture, where our primary competitors rely upon
distributorships. Another important element of Virco's success is its
manufacturing capabilities. The Company has developed competencies in
several processes, which are important to the markets we serve. These
processes include finishing systems, plastic molding, metal fabrication
and woodworking. Virco's manufacturing facilities are located in
California and Arkansas. Over one million sq. ft. of manufacturing and
support facilities are organized for the production of furniture.

Over the past three years, the Company has made significant capital
investments in the Conway, Arkansas, manufacturing facility, which
services the eastern and central regions of the United States. In late
1997 and early 1998, the Company acquired approximately 100 acres of
land in Conway, Arkansas, which will support up to 1,700,000 sq. ft.

4
5

of manufacturing, warehousing, office and showroom facilities. Capital
spending at this location was approximately $15,974,000 in 2000,
$29,200,000 in 1999 and $20,600,000 in 1998. For a more detailed
discussion of this expansion project, please refer to the MD&A section
of the Company's 2000 annual report and the Property section of the
Form 10-K.

Principal Products

The Company offers the broadest line of furniture for the K-12 market
of any Company in the United States. The Company also provides a
variety of products for the pre-school markets and has recently
developed products that are targeted for college, university, and
corporate learning center environments. These products include a
variety of student and teacher desks, chairs, computer furniture,
folding and adjustable height tables, mobile tables, mobile cabinets,
and folding and stacking chairs for cafeteria and auditorium seating.
The Company also produces a variety of tables, chairs, and storage
equipment designed primarily for the hospitality market, convention
centers, churches, and corporate and government facilities.

The Company's primary furniture lines are constructed of tubular metal
legs and frames, combined with wood and plastic tops, plastic seats and
backs, upholstered seats and backs, and upholstered rigid polyethylene
and polypropylene shells. The Company purchases steel, aluminum,
plastic, polyurethane, polyethylene, polypropylene, plywood,
particleboard, cartons and other raw materials in the manufacture of
its principal products from many different sources and is not more
vulnerable with respect to sources and availability than other
manufacturers.

Marketing and Distribution

The educational product line is marketed through what we believe to be
the largest direct sales force in the educational furniture industry.
During the fourth quarter of 1997, Virco terminated distribution
arrangements with several major educational dealerships and increased
the size of the direct sales force to cover these territories. Virco
has historically increased both sales and margins in territories where
our direct sales force has replaced educational dealerships. The sales
force calls directly upon school business officials, who can include
purchasing agents or individual school principals where site based
management is practiced. Our direct sales force is considered to be an
important competitive advantage over competitors who rely primarily
upon dealer networks for distribution of their products. Significant
portions of educational furniture are sold on a bid basis.

Sales of commercial and contract furniture are made throughout the
United States by distributorships and by Company sales representatives
who service the distributorship network. Company representatives call
directly upon state and local governments, convention centers,
individual hospitality installations, and mass merchants. Sales to
this market include colleges and universities, pre-schools, private
schools, and office training facilities, which typically purchase
furniture through commercial channels.

Sales are made to thousands of customers, and no single customer
represents a significant amount of the Company's business.

5
6

Other Matters

Competition

The Company has numerous competitors in each of its markets. In the
educational furniture market, competitors include Artco-Bell, American
Desk, Royal, Bretford, Columbia and Scholarcraft. Competitors in
contract furniture vary depending upon the specific product line or
sales market and include Falcon Products, Inc., Krueger Metal Products,
Inc., MTS and Mity Lite.

Backlog

Sales order backlog for continuing operations of the consolidated
companies at January 31, 2001, totaled $20.0 million and approximates
six weeks of sales, compared to $16.0 million at January 31, 2000, and
$12.0 million at January 31, 1999.

Patents and Trademarks

Virco has a number of patents and trademarks for which the Company has
not appraised or established a value. It is believed that the loss of
any of the patents would not have a material effect on its
manufacturing business.

Employees

Virco Mfg. Corporation and its Subsidiaries employ approximately 2,300
full-time employees at various locations. Of this number, approximately
1,870 are involved in manufacturing and distribution, 290 in sales and
marketing and approximately 140 in administration.

Environmental Compliance

The Company and other furniture manufacturers are subject to federal,
state and local laws and regulations relating to the discharge of
materials into the environment and the generation, handling, storage,
transportation and disposal of waste and hazardous materials. The
Company has expended, and may be expected to expend significant amounts
in the future for the investigation of environmental conditions,
installation of environmental control equipment, or remediation of
environmental contamination.

Item 2. Properties

Torrance, California

6
7

The Company leases a 560,000 sq. ft. office, manufacturing and
warehousing facility located on 23.5 acres of land. This facility is
occupied under a ten-year lease (with two five-year renewal options)
expiring January 2005. This facility also includes the corporate
headquarters, the West Coast showroom, and all West Coast distribution
operations. In April 2000, the Company sold its 200,000 sq. ft.
warehouse, which was held as rental property, located on 8.5 acres of
land in Torrance, California. As a result, the Company recorded an
approximately $7,900,000 pre-tax gain on disposition during the quarter
ended April 30, 2000.

Los Angeles, California

The Company owns a 160,000 sq. ft. manufacturing facility located on 8
acres of land in Gardena, California. This manufacturing facility is
held as rental property and is leased under a 15-year lease expiring
September 2010. The Company is preparing to market this property for
sale, and expects to begin the marketing process in May 2001.

Conway, Arkansas

In 1997, the Company initiated a plan to expand manufacturing and
consolidate distribution facilities located in Conway, Arkansas. During
1997 and 1998, the Company acquired approximately 100 acres of land. A
long-term master plan was developed for this site, which will allow up
to 1,700,000 sq. ft. of manufacturing, warehousing, and office space.
During 1998, the Company constructed a 400,000 sq. ft. manufacturing
facility, which initiated production in March 1999. In addition to the
production facility, the Company initiated development of an 800,000
sq. ft. distribution facility. The first 400,000 sq. ft. segment of
this warehouse and distribution facility was completed and occupied in
December 1999. The second 400,000 sq. ft. segment was completed in July
2000.

During 2000, the Company operated three manufacturing facilities in
Conway. The original plant, which is owned by the Company, has an
approximately 350,000 sq. ft. building located on nearly 18 acres of
land. The second facility is the newly constructed 400,000 sq. ft.
manufacturing facility described above. A third 200,000 sq. ft.
facility, occupied under a ten-year lease expiring in March 2008, is
utilized for the production and storage of compression molded (hard
plastic) components. A fourth facility, which is owned by the Company,
consists of approximately 155,000 sq. ft. located on approximately 7
acres of land. During 1999, the production equipment from this location
was moved to the newly constructed facility described above. This
building was then converted to a finished goods warehouse. The Company
is currently marketing this property for sale.

At the beginning of 1999, the Conway Division operated seven warehouse
and distribution facilities, four of which were located in Conway,
Arkansas, one in Southern Pines, North Carolina, one in Newport,
Tennessee, and one in Montgomeryville, Pennsylvania. Six of these
facilities were consolidated into the new 800,000 sq. ft. distribution
facility during 1999 and 2000. With the completion of the first 400,000
sq. ft. segment of the new distribution facility in December 1999, the
Company was able to initiate the consolidation process. The 129,000 sq.
ft. facility in Southern Pines, North Carolina, which was formerly
owned by the Company and recently occupied under a lease, was vacated
in the first quarter of 2000. A 60,000 sq. ft. leased warehouse in
Conway, Arkansas, was vacated in at the end of the third quarter of
1999. A 310,000 sq. ft. facility in Conway, Arkansas, which is leased
on a month-to-month basis, was partially vacated in the third and
fourth quarters of 1999. The Company continued to occupy approximately
165,000 sq. ft. of this facility through the summer of 2000, and
vacated the balance of the building in November 2000. A 250,000 sq. ft.
facility in Conway, Arkansas, also leased on a month-to-month basis,
was occupied throughout the summer of 2000 and was vacated in
November 2000. A 54,000 sq. ft. facility located in Conway, Arkansas,

7
8

on 4.5 acres of land was substantially vacated in the first quarter of
2000 and was held for sale. Subsequent to fiscal year end, the Company
sold this property. This sale generated a pre tax profit of
approximately $25,000 and cash of approximately $490,000. The Company
intends to continue to operate the warehousing and distribution
facility in Montgomeryville, Pennsylvania.

Newport, Tennessee

The Company owns a 55,000 sq. ft. manufacturing facility located on 3.5
acres of land in Newport, Tennessee, which was previously used to
manufacture melamine plastic seats, backs and table tops for classroom
furniture. This factory is being held for sale and was used to
warehouse finished goods inventory through the summer of 2000.

Item 3. Legal Proceedings

Virco has various legal actions pending against it which in the opinion
of Management are either not meritorious or are fully covered by
insurance. While it is impossible to estimate with certainty the
ultimate legal and financial liability with respect to these suits and
claims, Virco believes the aggregate amount of such liabilities will
not be material to the results of operations, financial position, or
cash flows of the Company.

Item 4. Submission of Matters to a Vote of Security Holders

None

8
9

PART II

Item 5. Market for Registrant's Common Stock and Related Stockholder Matters

Incorporated herein by reference is the information appearing under the
caption "Supplemental Stockholders' Information" which appears in the
registrant's Annual Report to Stockholders for the year ended January
31, 2001. As of April, there were approximately 365 Registered
Stockholders according to transfer agent records. There were
approximately 1,900 Beneficial Stockholders.

Dividend Policy

It is the Board of Directors' policy to periodically review the payment
of cash and stock dividends in light of the Company's earnings and
liquidity. In 2000, the Company declared an $.08 per share (adjusted
for stock dividends) cash dividend and a 10% stock dividend.

Item 6. Selected Financial Data

Incorporated herein by reference is the Selected Financial Data
Information, which appears in the registrant's Annual Report to
Stockholders for the year ended January 31, 2001.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

This information is incorporated herein by reference to "Management's
Discussion and Analysis and Results of Operations" included in the
registrant's Annual Report to Stockholders for the year ended January
31, 2001.

Item 7a. Quantitative and Qualitative Disclosures about Market Risk

This information is incorporated herein by reference to the "Inflation
and Future Change in Prices" section of "Management's Discussion and
Analysis and Results of Operations" included in the registrant's Annual
Report to Stockholders for the year ended January 31, 2001.

On February 22, 2000, the Company entered into an interest rate swap
agreement with Wells Fargo Bank. The initial notional swap amount is
$30,000,000 for the period February 22, 2000 through February 29, 2001.
The notional swap amount then decreases to $20,000,000 until the end of
the swap agreement, March 3, 2003. The swap agreement is in
consideration for a fixed rate at 7.23% plus a fluctuating margin of
1.25% to 1.50%.

As of January 31, 2001, the Company has borrowed $48,555,000 under its
Wells Fargo credit facilities, of which $20,000,000 is subject to the
interest rate swap agreement as described above and the remaining
contain variable interest rates. Accordingly, a 100 basis point upward
fluctuation in the interest rate would have caused the Company to incur
additional interest charges of approximately $355,000 for the fiscal
year ended January 31, 2001. The Company would have benefited from a
similar interest savings if the base rate were to fluctuate downward by
a like amount.

9
10

Item 8. Financial Statements and Supplementary Data

The report of independent auditors and consolidated financial
statements included in the Annual Report to Stockholders for the year
ended January 31, 2001 are incorporated herein by reference.

Unaudited quarterly results in Note 10 of the financial statements
included in the Annual Report to Stockholders for the year ended
January 31, 2001 are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures

None

PART III

Item 10. Directors and Executive Officers of the Registrant

Age at Has Held
January 31, Office
Name Office 2001 Since
- ---- ------ --------- ---------

R. A. Virtue (1) President, Chairman of the Board 68 1990
and Chief Executive Officer

R. E. Dose (2) Vice President - Finance, 44 1995
Secretary & Treasurer

R. J. Mills (3) Vice President - Engineering, 42 1997
Product Development

G. D. Parish (4) Vice President - General Manager 63 1999
Conway Division

D. R. Smith (5) Vice President - Corporate Marketing 52 1995

L. L. Swafford (6) Vice President - Legal Affairs 36 1998

D. A. Virtue (7) Corporate Executive Vice President 42 1992

L. O. Wonder (8) Vice President - Sales 49 1995

(1) Appointed Chairman in 1990; has been employed by the Company for 45
years. Has served as the President since 1982.

10
11

(2) Appointed in 1995; has been employed by the Company for 11 years and
has served as the Corporate Controller, and currently as Vice President
- Finance, Secretary and Treasurer.

(3) Appointed in 1997; has been employed by the Company for 6 years and has
served as the Corporate Counsel, Vice President and General Manager of
Torrance Division and currently as Vice President - Engineering and
Product Development.

(4) Appointed in 1999; has been employed by the Company for 42 years and
has served in a variety of manufacturing, warehousing and sales and
marketing positions and currently as Vice President and General Manager
of the Conway Division.

(5) Appointed in 1995; has been employed by the Company for 16 years in a
variety of sales and marketing positions, currently as Corporate Vice
President Marketing.

(6) Appointed in 1998; has been employed by the Company for 6 years and has
served as Associate Corporate Counsel, and currently as Vice President
of Legal Affairs.

(7) Appointed in 1992; has been employed by the Company for 16 years and
has served in Production Control, as Contract Administrator, as Manager
of Marketing Services, as General Manager of Torrance Division, and
currently as Corporate Executive Vice President.

(8) Appointed in 1995; has been employed by the Company for 23 years in a
variety of sales and marketing positions, currently as Corporate Vice
President of Sales.

(9) Company officers do not have employment contracts.

The information required by this Item regarding Directors will be
contained in the Company's Proxy Statement to be filed within 120 days
after the end of the Company's most recent fiscal year and is
incorporated herein by this reference.

Item 11. Executive Compensation

The information required by this Item will be contained in the
Company's Proxy Statement to be filed within 120 days after the end of
the Company's most recent fiscal year and is incorporated herein by
this reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Item 13. Certain Relationships and Related Transactions

11
12

12
13

PART IV

Item 14. Financial Statements, Financial Statement Schedules, Exhibits, and
Reports on Form 8-K

a) 1. The following consolidated financial statements of Virco Mfg.
Corporation, included in the annual report of the registrant to its
stockholders for the year ended January 31, 2001, are incorporated by
reference in Item 8.

Consolidated balance sheets - January 31, 2001 and 2000.

Consolidated statements of income - Years ended January 31, 2001, 2000,
and 1999.

Consolidated statements of stockholders' equity - Years ended January
31, 2001, 2000, and 1999.

Consolidated statements of cash flows - Years ended January 31, 2001,
2000, and 1999.

Notes to consolidated financial statements - January 31, 2001.

2. The following consolidated financial statement schedule of Virco
Mfg. Corporation is included in Item 14(d):

Schedule II Valuation and Qualifying Accounts and Reserves.

All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and
therefore have been omitted.

3. Exhibits

3.1 Certificate of Incorporation of the Company dated April 23,
1984, as amended (incorporated by reference to Exhibit 4.4 to
the Company's Form S-8 Registration Statement, Commission File
No. 33-65098, previously filed on June 25, 1993).

3.2 Bylaws of the Company dated April 23, 1984 (incorporated by
reference to Exhibit 4.5 to the Company's Form S-8 Registration
Statement, Commission File No. 33-65098, previously filed on
June 25, 1993).

10.1 Form of Virco Mfg. Corporation Employee Stock Ownership Plan
(the "ESOP") (incorporated by reference to Exhibit 4.1 to the
Company's Form S-8 Registration Statement, Commission File No.
33-65098, previously filed on June 25, 1993).

10.2 Trust Agreement for the ESOP (incorporated by reference to
Exhibit 4.2 to the Company's Form S-8 Registration Statement,
Commission File 33-65098, previously filed on June 25, 1993).

10.3 Form of Registration Rights Agreement for the ESOP (incorporated
by reference to Exhibit 4.3 to the Company's Form S-8
Registration Statement, Commission File 33-65098, previously
filed on June 25, 1993).

10.4 Rights Agreement dated as of October 18, 1996 by and between the
Company and Mellon Investor Services, as Rights Agent
(incorporated by reference to Exhibit 1 to the Company's Form
S-8 Registration Statement, Commission File 001-08777,
previously filed on October 25, 1996).

10.9 1993 Stock Incentive Plan of the Company (incorporated by
reference to Exhibit 4.1 to the Company's Form S-8 Registration
Statement, Commission File 33-65096, previously filed on June
25, 1993).

13 Annual Report to Stockholders for the year ended January 31,
2001.

21 List of all subsidiaries of the registrant.

23 Consent of Ernst & Young LLP.

b) Reports on Form 8-K.

None

13
14

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Torrance, and State of California, on the 30th of April, 2001.

VIRCO MFG. CORPORATION

By /s/ Robert A. Virtue
-------------------------------------------
Robert A. Virtue, Chairman of the Board
(Principal Executive Officer)

By /s/ Robert E. Dose
-------------------------------------------
Robert E. Dose, Vice President - Finance,
Secretary & Treasurer (Principal
Financial Officer)

By /s/ Bassey Yau
-------------------------------------------
Bassey Yau, Corporate Controller
(Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.

Signature Title Date

/s/ Robert A. Virtue Chairman of the Board, April 30, 2001
- ----------------------------------- Chief Executive Officer,
Robert A. Virtue President and Director

/s/ Douglas A. Virtue Director April 30, 2001
- -----------------------------------
Douglas A. Virtue

/s/ Donald S. Friesz Director April 30, 2001
- -----------------------------------
Donald S. Friesz

/s/ John H. Stafford Director April 30, 2001
- -----------------------------------
John H. Stafford

14
15

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Torrance,
and State of California, on the 30th of April, 2001.

VIRCO MFG. CORPORATION

By /s/ Robert A. Virtue
-------------------------------------------
Robert A. Virtue, Chairman of the Board
(Principal Executive Officer)

By /s/ Robert E. Dose
-------------------------------------------
Robert E. Dose, VP.- Finance, Secretary
& Treasurer (Principal Financial Officer)

By /s/ Bassey Yau
-------------------------------------------
Bassey Yau, Corporate Controller
(Principal Accounting Officer)

Signature Title Date

/s/ George W. Ott Director April 30, 2001
- --------------------------------
George W. Ott

/s/ James R. Wilburn Director April 30, 2001
- --------------------------------
James R. Wilburn

/s/ Glen D. Parish Director April 30, 2001
- --------------------------------
Glen D. Parish

/s/ Donald A. Patrick Director April 30, 2001
- --------------------------------
Donald A. Patrick

/s/ Robert K. Montgomery Director April 30, 2001
- --------------------------------
Robert K. Montgomery