What changed in this filing

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Item 1. Financial Statements

2024-09-09 compared with 2024-06-07 · 142 added, 79 removed, 326 unchanged (40% of the section changed)

6 unchanged sentences

Trade accounts receivables, net 56,065 23,161 68,592

Income tax receivable 66 — 321

Inventories 58,574 58,371 71,853

24 unchanged sentences

Current portion of long-term debt 253 248 32,256

Current portion operating lease liability 6,221 5,744 5,271

Current portion of operating lease liability 1,431 5,744 5,386

Other accrued liabilities 12,517 8,570 11,259

15 unchanged sentences

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

issued and outstanding 16,289,406 shares at 7/31/2024, and 16,347,314 at 1/31/2024 and 7/31/2023

Additional paid-in capital 119,734 121,373 121,030

4 unchanged sentences

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Operations

Unaudited Condensed Consolidated Statements of Income

Three months ended

5 unchanged sentences

Selling, general and administrative expenses 28,324 27,324

Operating income (loss) 2,971 ( 1,312 )

Operating income 21,894 21,254

Unrealized gain on investment in trust account ( 597 ) ( 325 )

1 unchanged sentence

Interest expense 322 1,083

Income (loss) before income taxes 2,871 ( 1,886 )

Income tax expense (benefit) 731 ( 444 )

Net income (loss) $ 2,140 $ ( 1,442 )

Income before income taxes 22,062 20,335

Income tax expense 5,229 4,801

Net income $ 16,833 $ 15,534

Cash dividends declared per common share:

Net income (loss) per common share:

Net income per common share:

Basic $ 1.04 $ 0.95

4 unchanged sentences

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

Unaudited Condensed Consolidated Statements of Income

Six months ended

7/31/2024 7/31/2023

(In thousands, except per share data)

Net sales $ 155,154 $ 142,264

Costs of goods sold 84,589 80,484

Gross profit 70,565 61,780

Selling, general and administrative expenses 45,700 41,838

Operating income 24,865 19,942

Unrealized gain on investment in trust account ( 812 ) ( 624 )

Pension expense 214 322

Interest expense 530 1,795

Income before income taxes 24,933 18,449

Income tax expense 5,960 4,357

Net income $ 18,973 $ 14,092

Cash dividends declared per common share:

Net income per common share:

Basic $ 1.16 $ 0.87

Diluted $ 1.16 $ 0.87

Weighted average shares of common stock outstanding:

Basic 16,305 16,242

Diluted 16,305 16,257

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Comprehensive Income

Three months ended

1 unchanged sentence

(In thousands)

Net income (loss) $ 2,140 $ ( 1,442 )

Other comprehensive loss:

Pension adjustments (net of tax adjustment of $ 10 and $ 0 )

Net comprehensive income (loss) $ 2,112 $ ( 1,442 )

Net income $ 16,833 $ 15,534

Other comprehensive income:

Pension adjustments (net of tax adjustment of $ 21 and $ 0 at July 31, 2024 and 2023, respectively)

Net comprehensive income $ 16,814 $ 15,534

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Comprehensive Income

Six months ended

7/31/2024 7/31/2023

(In thousands)

Net income $ 18,973 $ 14,092

Other comprehensive income:

Pension adjustments (net of tax expense of $ 28 and $ 0 at July 31, 2024 and 2023, respectively)

Net comprehensive income $ 18,926 $ 14,092

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Cash Flows

Three months ended

Six months ended

7/31/2024 7/31/2023

1 unchanged sentence

Operating activities

Net income (loss) $ 2,140 $ ( 1,442 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Net income $ 18,973 $ 14,092

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization 2,716 2,455

2 unchanged sentences

Amortization of debt issuance costs 64 55

Loss on sale of property, plant and equipment 1 —

Deferred income taxes ( 19 ) 700

2 unchanged sentences

Non-cash unrealized gain on investment ( 812 ) ( 624 )

Surrender of life insurance policies ( 265 ) ( 95 )

Changes in operating assets and liabilities:

5 unchanged sentences

Accounts payable and accrued liabilities 18,483 13,737

Net cash used in operating activities ( 4,507 ) ( 11,715 )

Net cash provided by (used in) operating activities 7,963 ( 21,150 )

Investing activities:

Purchases of property, plant and equipment ( 2,886 ) ( 2,795 )

Proceeds from sale of property, plant and equipment 2 —

Proceeds from surrendering life insurance policies 145 —

4 unchanged sentences

Common stock repurchased ( 1,499 ) —

Tax withholding payments on share-based compensation ( 412 ) ( 110 )

Payment of deferred financing costs ( 50 ) ( 175 )

Cash dividends paid ( 653 ) —

Net cash provided by financing activities 806 12,816

Net decrease in cash ( 4,642 ) ( 432 )

Net cash (used in) provided by financing activities ( 2,737 ) 24,488

Net increase in cash 2,485 543

Cash at beginning of period 5,286 1,057

2 unchanged sentences

Property, plant and equipment acquired and not yet paid at end of period $ 531 $ 1,074

Cash paid during the year for interest $ 208 $ 712

Cash paid during the year for income taxes, net of refunds $ 971 $ 344

Cash paid during the period for interest $ 530 $ 1,795

Cash paid during the period for income taxes, net of refunds $ 2,405 $ 345

Noncash investment in right-of-use assets in exchange for a lease liability $ 32,982 $ —

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Consolidated Statements of Changes in Stockholders' Equity

Three-Month Period Ended April 30, 2024

Three-Month Period Ended July 31, 2024

In thousands, except share data Shares Amount Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholder's Equity

Balance at January 31, 2024 16,347,314 $ 164 $ 121,373 $ ( 29,048 ) $ ( 1,310 ) $ 91,179

Balance at April 30, 2024 16,207,612 $ 162 $ 120,048 $ ( 27,235 ) $ ( 1,338 ) $ 91,637

Net income — — — 16,833 — 16,833

4 unchanged sentences

Stock repurchase — — — — — —

Balance at July 31, 2024 16,289,406 $ 163 $ 119,734 $ ( 10,728 ) $ ( 1,357 ) $ 107,812

Three-Month Period Ended July 31, 2023

In thousands, except share data Shares Amount Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholder's Equity

Balance at April 30, 2023 16,210,985 $ 162 $ 120,993 $ ( 52,073 ) $ ( 2,360 ) $ 66,722

Three-Month Period Ended April 30, 2023

Net income — — — 15,534 — 15,534

Cash dividends — — — — — —

Pension adjustments — — — — — —

Shares vested and others 136,329 2 ( 112 ) — — ( 110 )

Stock compensation expense — — 149 — — 149

Stock repurchase — — — — — —

Balance at July 31, 2023 16,347,314 $ 164 $ 121,030 $ ( 36,539 ) $ ( 2,360 ) $ 82,295

Six-Month Period Ended July 31, 2024

In thousands, except share data Shares Amount Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholder's Equity

Balance at January 31, 2024 16,347,314 $ 164 $ 121,373 $ ( 29,048 ) $ ( 1,310 ) $ 91,179

Net loss — — — ( 1,442 ) — ( 1,442 )

Net income — — — 18,973 — 18,973

Cash dividends — — — ( 653 ) — ( 653 )

3 unchanged sentences

Stock repurchase ( 139,702 ) ( 2 ) ( 1,497 ) $ — — ( 1,499 )

Balance at April 30, 2023 16,210,985 $ 162 $ 120,993 $ ( 52,073 ) $ ( 2,360 ) $ 66,722

Balance at July 31, 2024 16,289,406 $ 163 $ 119,734 $ ( 10,728 ) $ ( 1,357 ) $ 107,812

Six-Month Period Ended July 31, 2023

In thousands, except share data Shares Amount Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholder's Equity

Balance at January 31, 2023 16,210,985 $ 162 $ 120,890 $ ( 50,631 ) $ ( 2,360 ) $ 68,061

Net income — — — 14,092 — 14,092

Cash dividends — — — — — —

Pension adjustments — — — — — —

Shares vested and others 136,329 2 ( 112 ) — — ( 110 )

Stock compensation expense — — 252 — — 252

Stock repurchase — — — — — —

Balance at July 31, 2023 16,347,314 $ 164 $ 121,030 $ ( 36,539 ) $ ( 2,360 ) $ 82,295

See accompanying notes to unaudited condensed consolidated financial statements.

Notes to unaudited Condensed Consolidated Financial Statements

April 30, 2024

July 31, 2024

Basis of Presentation

4 unchanged sentences

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.

Operating results for the three months and six months ended July 31, 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.

16 unchanged sentences

liabilities under pension, warranty and self-insurance;

and the accounts receivable allowance for doubtful accounts.

and the accounts receivable allowance for credit losses.

Recently Issued Accounting Standards

38 unchanged sentences

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:

The following table presents a breakdown of the Company’s inventories as of July 31, 2024, January 31, 2024 and July 31, 2023:

7/31/2024 1/31/2024 7/31/2023

4 unchanged sentences

Total inventories $ 58,574 $ 58,371 $ 71,853

The Company has operating leases on real property, equipment, and automobiles, expiring at various dates through 2026.

The Company has operating leases on real property, equipment, and automobiles, expiring at various dates through the fiscal year 2031.

The Company determines if an arrangement is a lease at inception and assesses classification of the lease at commencement.

5 unchanged sentences

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 has an operating lease for its corporate office and manufacturing and distribution facility located in Torrance, California, currently with a remaining lease term through September 2030.

The Company leases equipment under a 5-year operating lease arrangement.

10 unchanged sentences

The quantitative information regarding our leases is as follows:

Three Months Ended

Three Months Ended Six Months Ended

7/31/2024 7/31/2023 7/31/2024 7/31/2023

3 unchanged sentences

Sublease income ( 10 ) ( 10 ) ( 20 ) ( 20 )

Variable lease (benefit) cost ( 72 ) 261

Variable lease cost 690 160 618 421

Total lease cost $ 2,233 $ 1,511 $ 3,674 $ 3,139

1 unchanged sentence

Cash paid for amounts included in the measurement of lease liabilities $ 3,260 $ 2,890

Right-of-use assets obtained in exchange for new lease liabilities $ 954 $ 292

Right-of-use assets obtained in exchange for new lease liabilities (a) $ 34,012 $ 364

Weighted-average remaining lease term (years) 6.0 1.7

Weighted-average discount rate 9.78 % 6.36 %

Minimum future lease payments for operating leases in effect as of April 30, 2024, are as follows:

Minimum future lease payments for operating leases in effect as of July 31, 2024, are as follows:

Operating Lease

1 unchanged sentence

Remaining of 2025 $ 3,232

Thereafter 16,739

Remaining balance of lease payments 53,356

3 unchanged sentences

Difference between undiscounted cash flows and discounted cash flows $ 14,721

(a) On July 23, 2024, the Company entered into a new lease agreement (the “ Lease ”) with Starboard Distribution Center, LLC which extends the Company’s tenancy at its 560,000 sq.

office, manufacturing and warehouse facility in Torrance, California.

The Lease extends the tenancy for 65 months, covering the period from May 1, 2025 through September 30, 2030.

Under the Lease, the monthly base rent will be abated for the initial 5-month period from May 1, 2025 to September 30, 2025, then is set at $ 726,700 for October 1, 2025 through April 30, 2026, with subsequent increases of 3.5 % every 12 months thereafter.

The Lease also provides for a tenant improvement allowance of up to $ 1.7 million.

The Landlord has the right to terminate the Lease upon customary events of default.

In connection with this lease agreement, in the second quarter ended July 31, 2024, the Company recorded approximately $ 33.0 million (the present value of the future lease commitments) as an operating lease liability, and a corresponding ROU asset.

Outstanding balances for the Company’s long-term debt were as follows:

6 unchanged sentences

Non-current portion $ 4,008 $ 4,136 $ 14,261

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 Company and Virco Inc., its wholly-owned subsidiary (collectively, 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, 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.

The Credit Agreement as currently in effect permits the Company to issue cash 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.

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:

7 unchanged sentences

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 was in compliance with its debt covenants as of July 31, 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.

Approximately $ 68.0 million was available for borrowing as of July 31, 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 did not have an outstanding amount under this note as of July 31, 2024.

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 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.

The outstanding amount under this note was $ 4.3 million as of July 31, 2024.

On April 29, 2024, the Company entered into Amendment No.

4 unchanged sentences

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.

Management believes that the carrying value of debt approximated fair value at July 31, 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.

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.

carrybacks, 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 $ 218,000 , $ 251,000 and $ 390,000 as of July 31, 2024, January 31, 2024 and July 31, 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.

The net change in the valuation allowance for the three months and six months ended July 31, 2024 was an increase of $ 1,000 and a decrease of $ 33,000 , respectively.

The net change in the valuation allowance for the three months and six months ended July 31, 2023 was a decrease of $ 185,000 and a decrease of $ 474,000 , respectively.

For the three months ended July 31, 2024 and 2023, the effective income tax rates were 23.7 % and 23.6 %, respectively.

For the six months ended July 31, 2024 and 2023, the effective income tax rates were 23.9 % and 23.6 %, respectively.

Our effective tax rate varies from the 21% federal statutory rate primarily due to state taxes.

1 unchanged sentence

The Company is not currently under any state examination.

Net Income (Loss) per Share

The following table sets forth the computation of basic and diluted net income (loss) per share:

Three Months Ended

Net Income per Share

The following table sets forth the computation of basic and diluted net income per share:

Three Months Ended Six Months Ended

7/31/2024 7/31/2023 7/31/2024 7/31/2023

(In thousands, except per share data)

Net income (loss) $ 2,140 $ ( 1,442 )

Net income $ 16,833 $ 15,534 $ 18,973 $ 14,092

Weighted average shares of common stock outstanding - basic 16,214 16,272 16,305 16,242

1 unchanged sentence

Weighted average shares of common stock outstanding - diluted 16,215 16,294 16,305 16,257

Net income (loss) per share - basic $ 0.13 $ ( 0.09 )

Net income (loss) per share - diluted $ 0.13 $ ( 0.09 )

Net income per share - basic $ 1.04 $ 0.95 $ 1.16 $ 0.87

Net income per share - diluted $ 1.04 $ 0.95 $ 1.16 $ 0.87

Stock-Based Compensation

3 unchanged sentences

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

During the three-month and six-month period ended July 31, 2024, the Company granted 16,066 awards, vested 164,110 shares according to their terms and forfeited 0 shares under the 2019 Plan.

As of July 31, 2024, there were approximately 521,859 shares available for future issuance under the 2019 Plan.

Three Months Ended Six Months Ended

7/31/2024 7/31/2023 7/31/2024 7/31/2023

3 unchanged sentences

Total stock-based compensation expense $ 98 $ 149 $ 270 $ 252

As of April 30, 2024, there was $ 57,000 of unrecognized compensation expense related to unvested restricted stock units and/or awards, which is expected to be recognized over a weighted average period of approximately 1 month.

As of July 31, 2024, there was $ 208,000 of unrecognized compensation expense related to unvested restricted stock units and/or awards, which is expected to be recognized over a weighted average period of approximately one year .

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.

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.

2 unchanged sentences

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

The following table summarizes the net periodic pension cost for the Pension Plan and the VIP Plan for the three months ended July 31, 2024 and 2023:

Three Months Ended Six Months Ended

7/31/2024 7/31/2023 7/31/2024 7/31/2023

11 unchanged sentences

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.

At July 31, 2024 and 2023, the plan held 1,154,305 shares and 1,415,111 shares of Virco stock, respectively.

For the three months ended July 31, 2024 and 2023, the compensation costs incurred for employer match, which is paid in the form of Company stock, was $ 337,000 and $ 319,000 respectively.

For the six months ended July 31, 2024 and 2023, the compensation costs incurred for employer match, which is paid in the form of Company stock, was $ 778,000 and $ 722,000 respectively.

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.

The warranty was effective February 1, 2014, and 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 .

1 unchanged sentence

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

The following is a summary of the Company’s warranty-claim activity for the three months ended July 31, 2024 and 2023:

Three Months Ended Six Months Ended

7/31/2024 7/31/2023 7/31/2024 7/31/2023

6 unchanged sentences

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 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.

2 unchanged sentences

Delivery Costs

For 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.

For the three months ended July 31, 2024 and 2023, shipping and classroom delivery costs of approximately $ 10.1 million and $ 10.0 million, respectively, were included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

For the six months ended July 31, 2024 and 2023, shipping and classroom delivery costs of approximately $ 14.3 million and $ 13.3 million, respectively, were included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Subsequent Events

On June 4, 2024, the Company’s Board of Directors declared a cash dividend for the Company’s second fiscal quarter of

On September 3, 2024, the Company’s Board of Directors declared a cash dividend for the Company’s third fiscal quarter of

$ 0.025 on each outstanding share of common stock.

The dividend is payable on July 12, 2024 to stockholders of record of the

common stock as of the close of business on June 21, 2024.

The dividend is payable on October 11, 2024 to stockholders of record of the common stock as of the close of business on September 20, 2024.

While the Company currently intends to pay future dividends on a quarterly basis, following review and approval by the Board of Directors, the declaration and payment of future dividends, as well as the amounts thereof, are subject to the discretion of the Board as well as restrictive covenants in the Company’s lending agreements.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements