What changed in this filing

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Item 1. Financial Statements

2025-12-08 compared with 2025-09-05 · 123 added, 95 removed, 382 unchanged (36% of the section changed)

45 unchanged sentences

Additional paid-in capital 113,714 117,549 119,796

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

Accumulated deficit ( 456 ) ( 8,867 ) ( 2,734 )

Accumulated other comprehensive income (loss) 220 422 ( 1,366 )

2 unchanged sentences

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Income

Three Months Ended Six Months Ended

Unaudited Condensed Consolidated Statements of Operations

Three Months Ended Nine Months Ended

10/31/2025 10/31/2024 10/31/2025 10/31/2024

4 unchanged sentences

Selling, general and administrative expenses 19,785 25,565 61,402 71,265

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

Operating (loss) income ( 1,693 ) 11,113 13,584 35,978

Unrealized loss (gain) on investment in trust account 49 ( 246 ) ( 158 ) ( 1,058 )

Pension expense 27 106 81 320

Interest expense, net 205 322 265 530

Income before income taxes 14,171 22,062 15,165 24,933

Income tax expense 3,985 5,229 4,247 5,960

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

Interest expense (income), net 40 ( 24 ) 305 506

(Loss) income before income taxes ( 1,809 ) 11,277 13,356 36,210

Income tax (benefit) expense ( 484 ) 2,876 3,764 8,836

Net (loss) income $ ( 1,325 ) $ 8,401 $ 9,592 $ 27,374

Cash dividends declared per common share:

$ 0.025 $ 0.025 $ 0.075 $ 0.065

Net income per common share:

Net (loss) income per common share:

Basic $ ( 0.08 ) $ 0.52 $ 0.61 $ 1.67

4 unchanged sentences

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Comprehensive Income

Three Months Ended Six Months Ended

Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income

Three Months Ended Nine Months Ended

10/31/2025 10/31/2024 10/31/2025 10/31/2024

(In thousands)

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

Net (loss) income $ ( 1,325 ) $ 8,401 $ 9,592 $ 27,374

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)

Pension adjustments (net of tax adjustment of $( 22 ) and $( 29 ) for three months, and $( 68 ) and $( 57 ) for nine months at October 31, 2025 and 2024, respectively)

( 68 ) ( 9 ) ( 202 ) ( 56 )

Net comprehensive income $ 10,119 $ 16,814 $ 10,784 $ 18,926

Net comprehensive (loss) income $ ( 1,393 ) $ 8,392 $ 9,390 $ 27,318

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

10/31/2025 10/31/2024

2 unchanged sentences

Net income $ 9,592 $ 27,374

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

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 4,630 4,165

Non-cash lease expense (benefits) 2,780 ( 418 )

Non-cash lease expense 4,114 302

Provision for credit losses 45 45

5 unchanged sentences

Surrender of life insurance policies ( 219 ) ( 719 )

Loss on disposal of property and equipment 7 —

Changes in operating assets and liabilities:

4 unchanged sentences

Accounts payable and accrued liabilities ( 13,026 ) 6,286

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

Net cash provided by operating activities 9,982 41,420

Investing activities

Purchases of property, plant and equipment ( 5,086 ) ( 5,365 )

Purchases of marketable securities in trust accounts — ( 1,285 )

Proceeds from sale of fixed assets — 4

Proceeds from sale of marketable securities in trust accounts — 1,285

Proceeds from surrendering life insurance policies 119 719

18 unchanged sentences

Unaudited Consolidated Statements of Changes in Stockholders' Equity

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

Three-Month Period Ended October 31, 2025

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

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

Net loss — — — ( 1,325 ) — ( 1,325 )

Cash dividends — — — ( 395 ) — ( 395 )

3 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

Balance at October 31, 2025 15,761,141 $ 157 $ 113,714 $ ( 456 ) $ 220 $ 113,635

Three-Month Period Ended October 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

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

Net income — — — 8,401 — 8,401

4 unchanged sentences

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 October 31, 2024 16,289,406 $ 163 $ 119,796 $ ( 2,734 ) $ ( 1,366 ) $ 115,859

Nine-Month Period Ended October 31, 2025

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

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

5 unchanged sentences

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

Balance at October 31, 2025 15,761,141 $ 157 $ 113,714 $ ( 456 ) $ 220 $ 113,635

Nine-Month Period Ended October 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 July 31, 2024 16,289,406 $ 163 $ 119,734 $ ( 10,728 ) $ ( 1,357 ) $ 107,812

Balance at October 31, 2024 16,289,406 $ 163 $ 119,796 $ ( 2,734 ) $ ( 1,366 ) $ 115,859

See accompanying notes to unaudited condensed consolidated financial statements.

Notes to Unaudited Condensed Consolidated Financial Statements

July 31, 2025

October 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 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.

Operating results for the three and nine months ended October 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.

26 unchanged sentences

Recently Issued Accounting Pronouncements

ASU 2025-05, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

In July 2025, the FASB issued this ASU which provides a practical expedient to assume that the conditions as of the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers.

This guidance is effective for annual reporting periods beginning after December 15, 2025, and for interim periods within those annual reporting periods, with early adoption permitted.

The amendments in ASU 2025-05 should be applied prospectively.

We do not expect that this guidance will have a material impact on our consolidated financial statements and disclosures.

ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

14 unchanged sentences

The Company manufactures, markets and distributes a wide variety of school and office furniture to wholesalers, distributors, educational institutions and governmental entities.

Revenue is recorded for promised goods or services when control is transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services.

The Company's sales generally involve a single performance obligation to deliver goods pursuant to customer purchase orders.

14 unchanged sentences

We do not manage or evaluate the business based on product line or any other discernable category.

Inventory is valued at the lower of cost or net realizable value (determined on a first-in, first-out basis (“FIFO”) and includes material, labor, and factory overhead.

Inventories are valued at the lower of cost or net realizable value (determined on a first-in, first-out basis (“FIFO”) and include material, labor, and factory overhead.

The Company records valuation adjustments for the excess cost of the inventory over its estimated net realizable value.

32 unchanged sentences

The quantitative information regarding our leases is as follows:

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

10/31/2025 10/31/2024 10/31/2025 10/31/2024

10 unchanged sentences

Weighted-average discount rate 9.84 % 9.80 %

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

Operating Lease

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

Operating Leases

For the year ending January 31, (In thousands)

22 unchanged sentences

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 9, 2025.

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 $ 8.0 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 was amended numerous times since its origination in December 2011, most recently on December 5, 2025.

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 $ 8.0 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 ("FCCR") 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 FCCR, 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.

2 unchanged sentences

The other material terms of the Credit Agreement as currently in effect include the following:

(i) a revolving line of credit with a Maximum Revolving Advance Amount of $ 60.0 million (increasing to $ 70.0 million during the months of June

through August) that is subject to a borrowing base limitation and generally provides for advances of up to 85 % of eligible accounts receivable, plus a percentage equal to the lesser of 60 % of the value of eligible inventory or 85 % of the liquidation value of eligible inventory, plus $ 15.0 million from January through July of each year, minus undrawn amounts of letters of credit and reserves;

(i) a revolving line of credit with a stated Maximum Revolving Advance Amount that is subject to a borrowing base limitation and generally provides for advances of up to 85 % of eligible accounts receivable, plus a percentage equal to the lesser of 60 % of the value of eligible inventory or 85 % of the liquidation value of eligible inventory, plus $ 10.0 million from January through June of each year, minus undrawn amounts of letters of credit and reserves;

(ii) inventory sublimit of $ 35.0 million and assemble-to-ship ("ATS") inventory sublimit of $ 15.0 million during the months of May through August;

1 unchanged sentence

The Credit Agreement is secured by substantially all of the Borrowers’ personal property and certain of the Borrowers’ real property.

The Credit Agreement is subject to certain prepayment penalties upon early termination of the Credit Agreement.

The Credit Agreement is subject to certain prepayment penalties upon early termination.

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 July 31, 2025.

The Credit Agreement also contains certain financial covenants, including covenants requiring a minimum FCCR and limits on capital expenditures.

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

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

Approximately $ 16.6 million was available for borrowing as of October 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 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 %.

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

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

On December 5, 2025, the Company entered into Amendment No.

7 to the Credit Agreement with PNC.

Amendment No.

7 amended the Credit Agreement and the secured revolving line of credit provided to the Company by PNC to reflect the following material changes:

Modify the stock repurchase window, originally from February 1, 2025 to January 31, 2026, changed to November 1, 2024 to October 31, 2025 for the $ 7.5 million of permitted share repurchases that are excluded from a) the FCCR testing, b) the Payment Conditions governing stock repurchases, and c) the trailing twelve months ("TTM") $ 8 million aggregate limit on stock repurchases and dividends.

Commencing with respect to the fiscal quarter ending October 31, 2025, modify the definition of Earnings Before Interest, Taxes, Depreciation, and Amortization as it relates to the FCCR testing to add back non-cash lease expense or subtract non-cash lease income for each TTM reporting period.

Reduce the Revolving Line of Credit limit by $ 10 million, except for the months of October, December, and January.

The maximum Revolving Line of Credit limit during June through August was reduced from $ 70 million to $ 60 million.

Reduce the $ 15 million seasonal over-advance to $ 10 million and limit to the months of January through June (removing access in the month of July).

In connection with this amendment, the Company incurred fees totaling $20,000 which will be capitalized as deferred financing costs when paid.

On April 9, 2025, the Company entered into Amendment No.

6 to the Credit Agreement with PNC, which established a new category of permitted share repurchases in an amount up to $ 7.5 million, which was a new category in addition to the share repurchases otherwise permitted under the Credit Agreement.

The share repurchases under the new category were required to occur during the fiscal year ending January 31, 2026, may not occur while any Default or Event of Default exists or would result from such repurchases, and must be made solely from cash on hand and not from the proceeds of advances under the Credit Agreement.

The permitted share repurchases under this new category were also not counted as “Restricted Payments” when calculating the Company’s compliance with the FCCR covenants in the Credit Agreement.

On November 22, 2024, the Company entered into Amendment No.

6 unchanged sentences

Increased limits on cash dividends and common stock repurchase payments from $ 5 million to $ 8 million in the aggregate during any fiscal year.

On April 9, 2025, the Company entered into Amendment No.

6 to the Credit Agreement with PNC Bank, which established a new category of permitted share repurchases in an amount up to $ 7.5 million, which is in addition to the dollar limits on permitted share repurchases under the Credit Agreement discussed above.

The share repurchases under the new category must occur during the fiscal year ending January 31, 2026, may not occur while any Default or Event of Default exists or would result from such repurchases, and must be made solely from cash on hand and not from the proceeds of advances under the Credit Facility.

The permitted share repurchases under this new category are also not counted as “Restricted Payments” when calculating the Company’s compliance with the Fixed Charge Coverage Ratio covenants in the Credit Agreement.

The Company also carries a mortgage on its 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 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 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.

The outstanding amount under this note was approximately $ 3.9 million as of October 31, 2025.

Management believes that the carrying value of debt approximated fair value at October 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 $ 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.

Valuation allowances of $ 217,000 , $ 236,000 and $ 218,000 as of October 31, 2025, January 31, 2025 and October 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 an increase in the valuation allowance of $ 1,000 for the three months ended October 31, 2025 and a decrease of $ 19,000 for the nine months ended October 31, 2025.

There was no change in the valuation allowance during the three months ended October 31, 2024.

The valuation allowance decreased $ 33,000 during the nine months ended October 31, 2024.

For the three months ended October 31, 2025 and 2024, the effective income tax rates were 26.8 % and 25.5 %, respectively.

For the nine months ended October 31, 2025 and 2024, the effective income tax rates were 28.2 % and 24.4 %, respectively.

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

4 unchanged sentences

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.

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

Among other provisions, the OBBB repealed the capitalization of domestic research and development expenditures, extended bonus depreciation on fixed assets, and reduced the 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 Six Months Ended

The Company is 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 period s.

Net (Loss) Income per Share

Net (loss) 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 (loss) income per share:

Three Months Ended Nine Months Ended

10/31/2025 10/31/2024 10/31/2025 10/31/2024

(In thousands, except per share data)

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

Net (loss) income $ ( 1,325 ) $ 8,401 $ 9,592 $ 27,374

Weighted average shares of common stock outstanding - basic 15,761 16,289 15,761 16,379

1 unchanged sentence

Weighted average shares of common stock outstanding - diluted 15,761 16,296 15,766 16,382

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

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.

Net (loss) income per share - basic $ ( 0.08 ) $ 0.52 $ 0.61 $ 1.67

Net (loss) income per share - diluted $ ( 0.08 ) $ 0.52 $ 0.61 $ 1.67

There were 14,000 anti-dilutive shares excluded from the computation of diluted earnings per share for the three months ended October 31, 2025.

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 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.

During the nine months ended October 31, 2025, the Company granted 23,003 awards, vested 16,066 shares according to their terms and forfeited zero shares under the 2019 Plan.

As of October 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

Three Months Ended Nine Months Ended

10/31/2025 10/31/2024 10/31/2025 10/31/2024

3 unchanged sentences

Total stock-based compensation expense $ 47 $ 63 $ 161 $ 333

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.

As of October 31, 2025, there was $ 109,000 of unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized over seven months.

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 for the year ended January 31, 2025, 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 Pension 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.

In September 2025, the Company’s Board of Directors approved the termination of the VIP Plan.

The termination became effective on November 1, 2025.

The VIP Plan’s benefit obligation is expected to be settled by offering lump sum distributions to participants funded by the liquidation of assets held in a rabbi trust.

Pension settlement charges related to the VIP Plan termination, which include the recognition of VIP Plan gains or losses recorded within accumulated other comprehensive income on the Company’s unaudited condensed consolidated balance sheets, are currently expected to be recognized during the fourth quarter of fiscal year 2027.

The Company anticipates that the termination will not materially impact the Company's consolidated financial statements.

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

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

10/31/2025 10/31/2024 10/31/2025 10/31/2024

8 unchanged sentences

401(k) Retirement Plan

The Company’s retirement plan, which covers all U.S.

The Company’s 401(k) retirement plan, which covers all U.S.

employees, allows participants to defer from 1 % to 75 % of their eligible compensation through a 401(k) retirement program.

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

At 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.

At October 31, 2025 and 2024, the plan held 1,067,754 shares and 1,105,376 shares of Virco stock, respectively.

For the three months ended October 31, 2025 and 2024, the compensation costs incurred for employer match, which are paid in the form of Company stock, were $ 456,000 and $ 387,000 respectively.

For the nine months ended October 31, 2025 and 2024, the compensation costs incurred for employer match, which are paid in the form of Company stock, were $ 1,470,000 and $ 1,165,000 respectively.

Warranty Accrual

4 unchanged sentences

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:

Three Months Ended Six Months Ended

T he following is a summary of the Company’s warranty-claim activity:

Three Months Ended Nine Months Ended

10/31/2025 10/31/2024 10/31/2025 10/31/2024

5 unchanged sentences

Contingencies

The Company has a self-insured retention for product losses up to $ 250,000 per occurrence, workers’ compensation liability losses up to $ 250,000 per occurrence, general liability losses up to $ 50,000 per occurrence and automobile liability losses up to $ 50,000 per occurrence.

The Company has a self-insured retention for product liability 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.

3 unchanged sentences

Delivery Costs

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.

For the three months ended October 31, 2025 and 2024, shipping and classroom delivery costs of approximately $ 5.4 million and $ 8.8 million, respectively, were included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.

For the nine months ended October 31, 2025 and 2024, shipping and classroom delivery costs of approximately $ 18.7 million and $ 23.1 million, respectively, were included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.

Property, Plant and Equipment, Net

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Property, plant and equipment, net $ 35,453 $ 36,428 $ 35,621

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.

Depreciation and amortization expenses related to property, plant and equipment recorded within cost of goods sold were $ 1.2 million and $ 1.1 million for the three months ended October 31, 2025 and 2024, respectively.

Depreciation and amortization expenses related to property, plant and equipment recorded within selling, general and administrative expenses were $ 0.4 million and $ 0.3 million for the three months ended October 31, 2025 and 2024, respectively.

Depreciation and amortization expenses related to property, plant and equipment recorded within cost of goods sold were $ 3.5 million and $ 3.2 million for the nine months ended October 31, 2025 and 2024, respectively.

Depreciation and amortization expenses related to property, plant and equipment recorded within selling, general and administrative expenses were $ 1.1 million and $ 1.0 million for the nine months ended October 31, 2025 and 2024, respectively.

Segment Information

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Subsequent Events

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

In September 2025, the Company’s Board of Directors approved the termination of the VIP Plan.

The termination became effective on November 1, 2025.

Pension settlement charges related to the VIP Plan termination are currently expected to be recognized during the fourth quarter of fiscal year 2027.

See Note 11 .

On December 4, 2025, the Company’s Board of Directors declared a cash dividend for the Company’s fourth fiscal quarter of

$ 0.025 on each outstanding share of common stock.

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.

The dividend is payable on January 9, 2026 to stockholders of record of the common stock as of the close of business on December 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.

There can be no assurance that the Company will declare and pay dividends in future periods.

On December 5, 2025, the Company executed Amendment No.

7 to the Restated Credit Agreement.

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