What changed in this filing

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Item 1. Financial Statements

2025-09-05 compared with 2025-06-06 · 97 added, 60 removed, 380 unchanged (29% of the section changed)

23 unchanged sentences

Accrued compensation and employee benefits 6,856 11,064 11,572

Income tax payable 14 — 3,648

Current portion of long-term debt 263 258 253

10 unchanged sentences

Total non-current liabilities 45,526 48,406 53,030

Commitments and contingencies (Notes 6, 7 and 13)

Commitments and contingencies (Note 13)

Stockholders’ equity

6 unchanged sentences

Additional paid-in capital 113,667 117,549 119,734

Accumulated deficit ( 8,528 ) ( 8,867 ) ( 27,235 )

Retained earnings (accumulated deficit) 1,264 ( 8,867 ) ( 10,728 )

Accumulated other comprehensive income (loss) 288 422 ( 1,357 )

3 unchanged sentences

Unaudited Condensed Consolidated Statements of Income

Three months ended

Three Months Ended Six Months Ended

7/31/2025 7/31/2024 7/31/2025 7/31/2024

4 unchanged sentences

Selling, general and administrative expenses 25,503 28,324 41,617 45,700

Operating (loss) income ( 94 ) 2,971

Unrealized gain on investment in trust account ( 1,175 ) ( 215 )

Operating income 15,371 21,894 15,277 24,865

Unrealized loss (gain) on investment in trust account 968 ( 597 ) ( 207 ) ( 812 )

Pension expense 27 107 54 214

13 unchanged sentences

Unaudited Condensed Consolidated Statements of Comprehensive Income

Three months ended

Three Months Ended Six Months Ended

7/31/2025 7/31/2024 7/31/2025 7/31/2024

1 unchanged sentence

Net income $ 10,186 $ 16,833 $ 10,918 $ 18,973

Other comprehensive income:

Pension adjustments (net of tax adjustment of $ 23 and $ 10 at April 30, 2025 and 2024, respectively)

Other comprehensive loss:

Pension adjustments (net of tax adjustment of $ 23 and $ 21 for three months, and $ 46 and $ 28 for six months at July 31, 2025 and 2024, respectively)

( 67 ) ( 19 ) ( 134 ) ( 47 )

2 unchanged sentences

Unaudited Condensed Consolidated Statements of Cash Flows

Three months ended

Six Months Ended

7/31/2025 7/31/2024

2 unchanged sentences

Net income $ 10,918 $ 18,973

Adjustments to reconcile net income to net cash used in operating activities:

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

Depreciation and amortization 3,086 2,716

11 unchanged sentences

Income taxes 4,130 3,607

Prepaid expenses and other current assets ( 638 ) ( 1,647 )

Prepaid expenses and other assets 3 ( 1,454 )

Accounts payable and accrued liabilities 1,774 18,483

Net cash used in operating activities ( 19,031 ) ( 4,507 )

Net cash (used in) provided by operating activities ( 15,826 ) 7,963

Investing activities:

Purchases of property, plant and equipment ( 3,816 ) ( 2,886 )

Proceeds from sale of fixed assets — 2

Proceeds from surrendering life insurance policies 300 145

4 unchanged sentences

Common stock repurchased ( 4,000 ) ( 1,499 )

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

Payment of deferred financing costs — ( 50 )

Cash dividends paid ( 787 ) ( 653 )

Net cash (used in) provided by financing activities ( 4,457 ) 806

Net decrease in cash ( 25,932 ) ( 4,642 )

Net cash used in financing activities ( 4,915 ) ( 2,737 )

Net (decrease) increase in cash ( 24,257 ) 2,485

Cash at beginning of period 26,867 5,286

4 unchanged sentences

Cash paid during the period for income taxes, net of refunds $ 104 $ 2,405

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, 2025

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, 2025 16,087,082 $ 161 $ 117,549 $ ( 8,867 ) $ 422 $ 109,265

Three-Month Period Ended July 31, 2025

In thousands, except share data Shares Amount Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

Balance at April 30, 2025 15,738,138 $ 157 $ 113,616 $ ( 8,528 ) $ 355 $ 105,600

Net income — — — 10,186 — 10,186

4 unchanged sentences

Stock repurchase — — — — — —

Balance at July 31, 2025 15,761,141 $ 157 $ 113,667 $ 1,264 $ 288 $ 115,376

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 Stockholders' Equity

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

Three-Month Period Ended April 30, 2024

Net income — — — 16,833 — 16,833

Cash dividends — — — ( 326 ) — ( 326 )

Pension adjustments — — — — ( 19 ) ( 19 )

Shares vested and others 81,794 1 ( 412 ) — — ( 411 )

Stock compensation expense — — 98 — — 98

Stock repurchase — — — — — —

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

Six-Month Period Ended July 31, 2025

In thousands, except share data Shares Amount Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

Balance at January 31, 2025 16,087,082 $ 161 $ 117,549 $ ( 8,867 ) $ 422 $ 109,265

Net income — — — 10,918 — 10,918

Cash dividends — — — ( 787 ) — ( 787 )

Pension adjustments — — — — ( 134 ) ( 134 )

Shares vested and others 23,003 — — — — —

Stock compensation expense — — 114 — — 114

Stock repurchase ( 348,944 ) ( 4 ) ( 3,996 ) — — ( 4,000 )

Balance at July 31, 2025 15,761,141 $ 157 $ 113,667 $ 1,264 $ 288 $ 115,376

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

6 unchanged sentences

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

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

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

See accompanying notes to unaudited condensed consolidated financial statements.

Notes to unaudited Condensed Consolidated Financial Statements

April 30, 2025

July 31, 2025

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, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2026.

Operating results for the three and six months ended July 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2026.

The balance sheet at January 31, 2025 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.

5 unchanged sentences

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.

If the capital required for this build-up 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.

22 unchanged sentences

The amendments are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted.

A public entity should apply the amendments either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods

presented in the financial statements.

We are currently evaluating the impact that this guidance will have on our consolidated financial statements and disclosures.

33 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, 2025, January 31, 2025 and April 30, 2024:

The following table presents a breakdown of the Company’s inventories:

7/31/2025 1/31/2025 7/31/2024

25 unchanged sentences

The quantitative information regarding our leases is as follows:

Three Months Ended

Three Months Ended Six Months Ended

7/31/2025 7/31/2024 7/31/2025 7/31/2024

10 unchanged sentences

Weighted-average discount rate 9.83 % 9.78 %

Minimum future lease payments for operating leases in effect as of April 30, 2025, are as follows:

Minimum future lease payments for operating leases in effect as of July 31, 2025, are as follows:

Operating Lease

14 unchanged sentences

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:

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

7/31/2025 1/31/2025 7/31/2024

20 unchanged sentences

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.

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 to $ 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, 2025.

The Company was in compliance with its debt covenants as of July 31, 2025.

The Company's revolving line of credit with PNC is structured to provide seasonal credit availability during the Company's peak summer season.

Approximately $ 42.9 million was available for borrowing as of April 30, 2025.

Approximately $ 68.0 million was available for borrowing as of July 31, 2025.

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 Company did not have an outstanding amount under the Credit Agreement as of April 30, 2025.

The Company did not have an outstanding amount under the Credit Agreement as of July 31, 2025.

The Company also incurred a fee on the unused portion of the revolving line of credit at a rate of 0.25 %.

13 unchanged sentences

The original note was dated August 2017 with a principal balance of $ 5.8 million, at a fixed rate of 4.0 % per year and 20 -year term.

The outstanding amount under this note was $ 4.1 million as of April 30, 2025.

Management believes that the carrying value of debt approximated fair value at April 30, 2025, 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.

The outstanding amount under this note was approximately $ 4.0 million as of July 31, 2025.

Management believes that the carrying value of debt approximated fair value at July 31, 2025, as all of the long-term debt bears interest at variable rates based on prevailing market conditions, except the mortgage for the manufacturing building in Conway, Arkansas.

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.

1 unchanged sentence

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 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 $ 216,000 , $ 236,000 and $ 217,000 as of April 30, 2025, January 31, 2025 and April 30, 2024, respectively, are needed for 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 ended April 30, 2025 and April 30, 2024 were a decrease of $ 20,000 and $ 34,000 , respectively.

For the three months ended April 30, 2025 and 2024, the effective income tax rates were 26.4 % and 25.5 %, respectively.

Valuation allowances of $ 216,000 , $ 236,000 and $ 218,000 as of July 31, 2025, January 31, 2025 and July 31, 2024, respectively, are needed for 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.

There was no change in the valuation allowance for the three months ended July 31, 2025 and a decrease of $ 20,000 for the six months ended July 31, 2025.

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 decrease of $ 33,000 , respectively.

For the three months ended July 31, 2025 and 2024, the effective income tax rates were 28.1 % and 23.7 %, respectively.

For the six months ended July 31, 2025 and 2024, the effective income tax rates were 28.0 % and 23.9 %, respectively.

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

2 unchanged sentences

The Company is not currently under federal or state examination.

On July 4, 2025, the One Big Beautiful Bill (“OBBB”) Act, which includes a broad range of tax reform provisions, was signed into law in the United States.

FASB Topic 740, Income Taxes, requires the effects of tax law changes to be recognized in the period of enactment.

As the legislation was signed into law before the close of the second quarter, the impacts are contemplated in our operating results for the six months ended July 31, 2025.

Among other provisions, the OBBB repealed the capitalization of domestic research and development expenditures, extended bonus depreciation on fixed assets, and includes a reduced deduction rate on foreign-derived deduction eligible income and income from non-U.S.

subsidiaries.

We're still evaluating these provisions, but we do not expect them to have a material impact on our effective tax rate and deferred tax assets in the fiscal year ending January 31, 2026, or in future periods.

Net Income per Share

Net income per share is calculated by dividing net income by the basic weighted-average number of common shares outstanding.

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

Three Months Ended

Three Months Ended Six Months Ended

7/31/2025 7/31/2024 7/31/2025 7/31/2024

6 unchanged sentences

Net income per share - diluted $ 0.65 $ 1.04 $ 0.69 $ 1.16

There were no anti-dilutive shares excluded from the computation of diluted earnings per share for the periods disclosed above.

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, 2025, the Company granted 0 awards, vested 0 shares according to their terms and forfeited 0 shares under the 2019 Plan.

As of April 30, 2025, there were approximately 521,859 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 income for the three months ended April 30, 2025 and 2024:

Three Months Ended

During the three months and six months ended July 31, 2025, the Company granted 23,003 awards, vested 16,066 shares according to their terms and forfeited 0 shares under the 2019 Plan.

As of July 31, 2025, there were approximately 498,856 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 income:

Three Months Ended Six Months Ended

7/31/2025 7/31/2024 7/31/2025 7/31/2024

3 unchanged sentences

Total stock-based compensation expense $ 51 $ 98 $ 114 $ 270

As of April 30, 2025, there was $ 21,000 of unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized in one month.

As of July 31, 2025, there was $ 156,000 of unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized in one month.

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 for the year ended January 31, 2025, 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, 2025 and 2024:

Three Months Ended

The following table summarizes the net periodic pension cost for the Pension Plan and the VIP Plan:

Three Months Ended Six Months Ended

7/31/2025 7/31/2024 7/31/2025 7/31/2024

11 unchanged sentences

The plan includes Virco stock as one of the investment options.

At April 30, 2025 and 2024, the plan held 1,063,340 shares and 1,240,365 shares of Virco stock, respectively.

For the three months ended April 30, 2025 and 2024, the compensation costs incurred for employer match, which is paid in the form of Company stock, was $ 545,000 and $ 441,000 respectively.

At July 31, 2025 and 2024, the plan held 1,097,691 shares and 1,154,305 shares of Virco stock, respectively.

For the three months ended July 31, 2025 and 2024, the compensation costs incurred for employer match, which are paid in the form of Company stock,

were $ 469,000 and $ 337,000 respectively.

For the six months ended July 31, 2025 and 2024, the compensation costs incurred for employer match, which are paid in the form of Company stock, were $ 1,014,000 and $ 778,000 respectively.

Warranty Accrual

Effective February 1, 2014, the Company modified its warranty to a limited lifetime warranty.

The warranty was effective February 1, 2014, and is not anticipated to have a significant effect on warranty expense.

The modification 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, 2025 and 2024:

Three Months Ended

The following is a summary of the Company’s warranty-claim activity:

Three Months Ended Six Months Ended

7/31/2025 7/31/2024 7/31/2025 7/31/2024

11 unchanged sentences

Delivery Costs

For the three months ended April 30, 2025 and 2024, shipping and classroom delivery costs of approximately $ 3.4 million and $ 4.2 million, respectively, were included in selling, general and administrative expenses in the accompanying condensed consolidated statements of income.

Property, Plant, and Equipment

Property, plant, and equipment consisted of the following (in thousands):

For the three months ended July 31, 2025 and 2024, shipping and classroom delivery costs of approximately $ 10.0 million and $ 10.1 million, respectively, were included in selling, general and administrative expenses in the accompanying condensed consolidated statements of income.

For the six months ended July 31, 2025 and 2024, shipping and classroom delivery costs of approximately $ 13.4 million and $ 14.3 million, respectively, were included in selling, general and administrative expenses in the accompanying condensed consolidated statements of income.

Property, Plant, and Equipment, Net

Property, plant, and equipment consists of the following:

7/31/2025 1/31/2025 7/31/2024

8 unchanged sentences

Property, plant and equipment, net $ 36,120 $ 36,428 $ 34,980

Depreciation and amortization expenses related to property, plant, and equipment recorded within cost of goods sold was $ 1.2 million and $ 1.0 million for the three months ended April 30, 2025 and 2024, respectively.

Depreciation and amortization expenses related to property, plant, and equipment recorded within selling, general, and administrative expenses was $ 0.3 million and $ 0.3 million for the three months ended April 30, 2025 and 2024, respectively.

Depreciation and amortization expenses related to property, plant, and equipment recorded within cost of goods sold were $ 1.1 million and $ 1.1 million for the three months ended July 31, 2025 and 2024, respectively.

Depreciation and amortization expenses related to property, plant, and equipment recorded within selling, general, and administrative expenses were $ 0.5 million and $ 0.3 million for the three months ended July 31, 2025 and 2024, respectively.

Depreciation and amortization expenses related to property, plant, and equipment recorded within cost of goods sold were $ 2.3 million and $ 2.1 million for the six months ended July 31, 2025 and 2024, respectively.

Depreciation and amortization expenses related to property, plant, and equipment recorded within selling, general, and administrative expenses were $ 0.8 million and $ 0.6 million for the six months ended July 31, 2025 and 2024, respectively.

Segment Information

3 unchanged sentences

The Company’s CODM regularly reviews financial information presented on a consolidated basis.

The CODM uses consolidated revenue, gross profit, net income to allocate operating and capital resources and assess performance by comparing actual results to historical results and previously forecasted financial information.

The CODM uses consolidated revenue, gross profit and net income to allocate operating and capital resources and assess performance by comparing actual results to historical results and previously forecasted financial information.

The Company’s measure of segment assets is reported on the consolidated balance sheets as total assets.

Subsequent Events

On June 3, 2025, the Company’s Board of Directors declared a cash dividend for the Company’s second fiscal quarter of

On September 2, 2025, the Company’s Board of Directors declared a cash dividend for the Company’s second fiscal quarter of

$ 0.025 on each outstanding share of common stock.

The dividend is payable on July 11, 2025 to stockholders of record of the common stock as of the close of business on June 20, 2025.

The dividend is payable on October 10, 2025 to stockholders of record of the common stock as of the close of business on September 19, 2025.

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