What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-04-14 compared with 2024-04-12 · 40 added, 47 removed, 388 unchanged (18% of the section changed)

7 unchanged sentences

The Company manufactures a wide assortment of products offering the breadth and depth to furnish all areas of a campus, including mobile tables, mobile storage equipment, student and teacher desks, technology tables, 4-leg and mobile chairs and stools, activity tables, folding chairs and folding tables.

Virco has worked with accomplished designers - such as Peter Glass and Bob Mills - to develop additional products for contemporary

applications.

Virco has worked with accomplished designers - such as Peter Glass and Bob Mills - to develop additional products for contemporary applications.

These include the best-selling ZUMA Series;

14 unchanged sentences

this facility includes our corporate headquarters, West Coast showroom, and our West Coast distribution operations.

In the 2nd quarter of fiscal 2025, the Company executed a five-year extension of this lease expiring in September 30, 2030.

To complement our Torrance-based operations, Virco owns three manufacturing and distribution facilities in Conway, Arkansas.

30 unchanged sentences

With collaborative environments in mind, these tables were designed to bring groups of people together in schools and the workplace.

Featuring a TV mount for screens and built-in USB and Power Ports, students and colleagues can

easily exchange ideas and share content.

These media tables features a TV mount for screens and built-in USB and Power Ports, students and colleagues can easily exchange ideas and share content.

The Plateau Series was also expanded to include more popular shapes and additional leg options including stand-up, low legs, and casters to broaden height ranges and mobility.

24 unchanged sentences

The Company's direct sales force is considered to be an important competitive advantage over competitors who rely primarily upon dealer networks for distribution of their products.

Virco's sales force is supported by a project management team which includes interior designers, CAD layout specialists, project management specialists, purchasing specialists, and field service supervisors.

The project management team and the sales force utilize the Company's proprietary PlanSCAPE® software when preparing complete package solutions for the FF&E segment of bond-funded public-school construction projects.

The PlanSCAPE® software supports classroom by classroom product selection, product specification, pricing, furniture delivery including delivery to and turnkey classroom setup.

Virco's sales force is supported by a project management team which includes field-based project specialists, in-house interior designers, project management specialists, purchasing specialists, and field service supervisors.

The project management team and the sales force utilize the Company's proprietary PlanSCAPE® software in conjunction with Building Information Modeling when preparing complete package solutions for the FF&E segment of bond-bunded public school construction projects.

The PlanSCAPE® software supports classroom by classroom product selection, product specification, pricing, and furniture delivery including delivery to and turnkey classroom setup.

PlanSCAPE® software also enables the entire Virco sales force to prepare quotations for less complicated projects.

3 unchanged sentences

Sales of commercial and contract furniture are made throughout the United States by distributorships and by Company sales representatives who service the distributorship network.

Virco representatives call directly upon state and local governments,

convention centers, individual hospitality venues, and places of worship.

Virco representatives call directly upon state and local governments, convention centers, individual hospitality venues, and places of worship.

This market includes colleges and universities, preschools, private schools, and office training facilities, which typically purchase furniture through commercial channels.

7 unchanged sentences

Risk Factors:

The majority of our sales are priced through one contract, under which we are the exclusive supplier of classroom furniture .” Sales priced under this contract represented approximately 64% of sales in fiscal 2024 and 2023.

We have had a history of contracts with the purchasing organization and was most recently awarded in fiscal 2018, a five-year contract with this organization that extends through December 2022, with two-year extensions at the sole discretion of the purchasing organization extending through 2026 if both options are exercised.

The Company is currently in the first of the available two-year extensions.

The Company is currently in the second of the available two-year extensions.

If Virco were unable to sell under this contract, we believe we would be able to sell to the vast majority of our customers under alternative contracts.

16 unchanged sentences

The Company’s primary competition evolved from manufacturers of furniture to importers and distributors of furniture.

During this same period, Virco elected to significantly reduce its work force, but retain its domestic factory locations.

During this same period, Virco elected to significantly reduce its workforce, but retain its domestic factory locations.

The Company believes that its domestic manufacturing capabilities are a significant strength.

6 unchanged sentences

Finally, management continues to hone Virco's ability to finance, manufacture, and warehouse furniture within the relatively narrow delivery window associated with the highly seasonal demand for education sales.

Historically, Virco ships approximately 50% of its annual revenue in the months of June, July, and August.

In fiscal 2022, the seasonal peak was distorted due to severe supply chain interruptions, labor shortages, and COVID-19 related employee absences and the Company delivered less than 40% of sales during June, July, and August.

In fiscal 2023, the Company started to return to the traditional

seasonality and delivered approximately 47% of annual sales in June, July, and August.

In fiscal 2024, the Company continues to return to the traditional seasonality and delivered approximately 49% of annual sales in June, July, and August.

The company shipped approximately 47% and 49% of annual sales in June, July, and August during fiscal 2025 and 2024, respectively.

Shipments of furniture during peak weeks in July and August can be six times greater than in the seasonally slow winter months.

14 unchanged sentences

steel-frame rockers and floor rockers.

Virco continues to innovate around its line of healthy movement furniture with the Room to Move ("R2M") collection of flexible seating that take movement and choice to a new level.

Virco continues to innovate around its line of healthy movement furniture with the R2M collection of flexible seating that take movement and choice to a new level.

The R2M Collection is based on the idea that today’s classrooms are active, dynamic places where students are often given room to move – empowering them with choices of where to sit, how to sit and even when to sit.

The Floor Rocker provides a safe, durable and ergonomic option for floor seating.

The Choose to Move ("C2M") 4-leg Chair, winner of the EDspaces Innovation in Seating Award and the A4LE LearningSCAPES Industry Partner Award, offers an empowering new twist on flexible seating with a mode selector that allows the same chair to easily transform from fixed to active seating.

The C2M 4-leg Chair, winner of the EDspaces Innovation in Seating Award and the A4LE LearningSCAPES Industry Partner Award, offers an empowering new twist on flexible seating with a mode selector that allows the same chair to easily transform from fixed to active seating.

Like the C2M Chair, the R2M Mobile Task Chair offers movement in all directions – front-to-back and side-to-side – as well as the mobility and adjustability of a task Chair.

22 unchanged sentences

From classrooms to open-office spaces, the Tetra is simple enough to serve as an everyday workstation but can be customized to suit the needs of a fast-paced media lab or seminar training room.

Lunada® tables, combining Virco's popular Lunada bi-point bases with a selection of 20 top sizes, make great choices for

seminar, conference, and related settings.

Lunada® tables, combining Virco's popular Lunada bi-point bases with a selection of 20 top sizes, make great choices for seminar, conference, and related settings.

Designed for Virco by Peter Glass, Plateau® tables bring exceptional versatility, sturdy construction, and great styling to working and learning environments.

3 unchanged sentences

Virco’s Makerspace tables are designed specifically for hands-on learning environments most commonly found in vocational classes, makerspace areas and STEM / STEAM centered education.

Designed for modern learning environments, Virco Butcher Block Tables feature thick-profile legs and a durable, hard maple surface with an easy to clean finish.

Designed for modern

learning environments, Virco Butcher Block Tables feature thick-profile legs and a durable, hard maple surface with an easy to clean finish.

Virco also carries traditional folding tables and office tables, as well as the technology tables and mobile tables described below.

37 unchanged sentences

Virco's wide-ranging product selection includes hundreds of furniture models that have earned GREENGUARD® Gold Certification (formerly known as the GREENGUARD® Children & Schools Program for indoor air quality).

Virco's ZUMA and ZUMAfrd™ products earned the distinction of being the first classroom furniture models to be certified by the GREENGUARD Children & Schools Program, now known as GREENGUARD Gold certification.

and ZUMAfrd™ products earned the distinction of being the first classroom furniture models to be certified by the GREENGUARD Children & Schools Program, now known as GREENGUARD Gold certification.

All of the models in the Company's most popular product lines - including ZUMA, Sage, Analogy™, 9000 Series, 5000 and 4000 Series Activity Tables, TEXT®, Core-a-Gator®, Parameter®, Plateau®, and Tetra™ furniture models - are GREENGUARD-certified.

20 unchanged sentences

Historically the Company has experienced years where the price of steel, plastic, and wood have spiked significantly, often because of global demand or tariffs on international supply but also in response to domestic supply interruptions.

In fiscal 2024, the cost of commodities was relatively stable.

In fiscal 2023, the cost of commodities was volatile, but the volatility dampened noticeably compared to fiscal 2022.

Some commodities decreased in cost, but others increased, resulting in a net modest increase in cost.

Subsequent to fiscal year end 2024, the Company is anticipating that the global sanctions on Russia and other geopolitical challenges may impact steel, plastic and fuel-related costs.

In fiscal 2025 and 2024, the cost of commodities was relatively stable.

In early 2025, there have been significant changes and proposed changes to U.S.

trade policies.

For example, effective March 4, 2025, the U.S.

implemented a 25% additional tariff on imports from Canada and Mexico and a 20% additional tariff on imports from China.

also reinstated the steel import tariff to 25% effective March 12, 2025.

These tariffs are likely to result in increased prices for imported components and materials supplied locally for fiscal year ending January 31, 2026.

In addition to the raw materials described above, the Company purchases components used in the fabrication and assembly of furniture from a variety of overseas locations, primarily from China, and certain components from domestic suppliers.

4 unchanged sentences

As this is in a seasonally slow period of the Company’s business cycle and is predictable, it has not created supply chain disruptions.

In fiscal 2022, the Company has experienced supply chain disruption caused primarily by availability of freight from China to the United States.

During fiscal 2022, freight costs for containers from China increased by a factor of nearly eight.

Cost for ocean freight moderated during fiscal 2023, and by the end of the year had returned to more normal levels.

Cost and availability of ocean freight was stable during 2024.

While we currently do not believe there will be a recurrence of material supply chain disruptions, our suppliers in China may experience material disruptions in the future, whether due to COVID-19 or otherwise.

With respect to the Company's annual pricing contracts (or those contracts that have longer terms), the Company may have a limited ability to increase prices during the term of the contract.

The Company has, however, negotiated increased flexibility under many of these contracts, allowing the Company to increase prices on future orders.

Nevertheless, even with respect to these more flexible contracts, the Company may not have the ability to increase prices on orders received prior to any announced price increases in commodities.

Nevertheless, even with respect to these more flexible contracts, the Company may not have the ability to increase prices on orders received prior to any

announced price increases in commodities.

Due to the intensely seasonal nature of our business, the Company may receive significant orders during the first and second quarters for delivery in the second and third quarters of its fiscal year.

2 unchanged sentences

The Company typically benefits from any decreases in raw material costs under the contracts described above.

Historically, Virco ships approximately 50% of its annual revenue in the months of June, July, and August, and shipments of furniture during peak weeks in July and August can be six times greater than in the seasonally slow winter months.

In fiscal 2022, due primarily to the COVID-19 pandemic, the seasonal peak was distorted due to severe supply chain interruptions, labor shortages, and employee absences, and the Company delivered less than 40% of sales during June, July, and August.

In fiscal 2023, the Company started to return to the traditional seasonality and delivered approximately 47% of annual sales in June, July, and August.

In 2024 the Company continued to the traditional seasonality and delivered approximately 49% of annual sales in June, July, and August.

Historically, Virco ships approximately 50% of its annual revenue in the months of June, July, and August.

The company shipped approximately 47% and 49% of annual sales in June, July, and August during fiscal 2025 and 2024, respectively.

Shipments of furniture during peak weeks in July and August can be six times greater than in the seasonally slow winter months.

Virco's substantial warehouse space allows the Company to build adequate inventories to service this narrow delivery window for the education market.

Working Capital Requirements During Our “Peak” Summer Season

19 unchanged sentences

Our manufacturing facility capacity utilization generally remains less than 100% during these off-season months;

because physical structure capacity cannot be

adjusted as readily as personnel capacity, we have secured sufficient physical structure capacity to accommodate our current needs, as well as for anticipated future growth.

because physical structure capacity cannot be adjusted as readily as personnel capacity, we have secured sufficient physical structure capacity to accommodate our current needs, as well as for anticipated future growth.

Our physical structure utilization is significantly lower during the first and fourth quarters of each year than it is during the second and third quarters.

The Company utilizes a comparable strategy to address warehousing and distribution requirements.

During summer months, temporary labor and third party contractor are hired to supplement experienced warehouse, distribution and service personnel.

During summer months, temporary labor and third-party contractors are hired to supplement experienced warehouse, distribution and service personnel.

More than 90% of the Company's freight is provided by third-party carriers.

4 unchanged sentences

For example, management expends a significant amount of time in the first quarter of each year developing a stocking plan and estimating the number of temporary summer employees, the amount of raw materials, and the types of components and products that will be required during the peak season.

If management underestimates any of these requirements, Virco's ability to meet customer orders in a timely manner or to provide adequate customer service may be diminished.

If management underestimates any of these requirements, Virco's ability

to meet customer orders in a timely manner or to provide adequate customer service may be diminished.

If management overestimates any of these requirements, the Company may have to absorb higher storage, labor, and related costs, each of which may negatively affect the Company's results of operations.

12 unchanged sentences

The manufacturers that Virco competes with include Artcobell, KI Inc., Steelcase, Smith System (owned by Steelcase), V/S America, Scholarcraft, Academia, Alumni, Columbia, Moore Co., Paragon, SICO, Learniture (owned by School Outfitters) and Hon ("HNI").

Our competitors that purchase and re-sell furniture include School Outfitters, School Specialty ("SCHS"), MeTEOR (formerly Contrax), Kay-Twelve, and Hertz.

Our competitors that purchase and re-sell furniture include School Outfitters, School Specialty ("SCHS"), MeTEOR (formerly Contrax), MiEN, Kay-Twelve, and Hertz.

There are numerous catalogers, internet resellers, and smaller local education furniture dealers that sell into local markets.

7 unchanged sentences

Sales order backlog at January 31, 2024, totaled approximately $48.5 million.

The sales order backlog was higher at January 31, 2023 due in large part to a significant number of orders received in January 2023 for delivery in the Company’s second quarter ended July 31, 2023.

Substantially all of the 2024 backlog shipped in 2025.

35 unchanged sentences

Moreover, Virco has enacted policies for recycling and resource recovery that have earned repeated commendations, including:

recognition by the California Department of Resources Recycling and Recovery

("CalRecycle") in 2012 and 2011 as a Waste Reduction Awards Program (“WRAP”) honoree;

recognition by the California Department of Resources Recycling and Recovery ("CalRecycle") in 2012 and 2011 as a Waste Reduction Awards Program (“WRAP”) honoree;

recognition by the United States Environmental Protection Agency in 2019 as a WasteWise Winner for reducing waste, in 2004 as a WasteWise Hall of Fame Charter Member, in 2003 as a WasteWise Partner of the Year, and in 2002 as a WasteWise Program Champion for Large Businesses;

7 unchanged sentences

Normal recurring expenses relating to operating our factories in a manner that meets or exceeds environmental laws are matched to the cost of producing inventory.

It is possible that the Company's operations may result in noncompliance with, or liability for remediation pursuant to, environmental laws.

is possible that the Company's operations may result in noncompliance with, or liability for remediation pursuant to, environmental laws.

Should such eventualities occur, the Company records liabilities for remediation costs when remediation costs are probable and can be reasonably estimated.

8 unchanged sentences

For information regarding the Company's revenues, gross profit and total assets for each of the last two fiscal years, see the Company's consolidated financial statements.

During fiscal 2024, Virco derived approximately 4.7% of its revenues from customers located outside of the United States (primarily Canada).

During fiscal 2025, Virco derived approximately 12.3% of its revenues from customers located outside of the United States (primarily Puerto Rico).

During fiscal 2024, Virco derived approximately 4.7% of its revenues from customers located outside of the United States (primarily Canada).

24 unchanged sentences

has been employed by the Company for 27 years and has served as Corporate Controller, and currently as Vice President Accounting, Corporate Controller, Assistant Secretary and Assistant Treasurer.

As previously announced, Robert Dose intends to retire from the Company as of April 30, 2025 and Bassey Yau has been appointed to succeed Mr.

Dose as Chief Financial Officer, Treasurer and Secretary.”

None of the Company’s executive officers have written employment contracts.

10 unchanged sentences

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-K

Item 1. Business