What changed in this filing

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Item 1. Financial Statements

2026-06-03 compared with 2025-12-08 · 119 added, 180 removed, 325 unchanged (48% of the section changed)

5 unchanged sentences

Cash $ 3,734 $ 14,437 $ 935

Trade accounts receivables, net 13,799 13,004 28,168

Trade accounts receivable, net 15,028 13,590 12,279

Income tax receivable 4,766 3,863 3,806

8 unchanged sentences

Total assets $ 175,478 $ 174,179 $ 183,782

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Balance Sheets

10/31/2025 1/31/2025 10/31/2024

(In thousands, except share and par value data)

Current liabilities

7 unchanged sentences

Non-current liabilities

Accrued self-insurance retention 927 780 1,033

Accrued pension expenses 6,389 6,746 9,345

Income tax payable, less current portion 287 200 261

Long-term debt, less current portion 3,541 3,609 3,812

12 unchanged sentences

Accumulated deficit ( 11,046 ) ( 7,875 ) ( 8,528 )

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

Accumulated other comprehensive (loss) income ( 319 ) ( 112 ) 355

Total stockholders’ equity 102,410 105,931 105,600

2 unchanged sentences

Unaudited Condensed Consolidated Statements of Operations

Three Months Ended Nine Months Ended

Three Months Ended

4/30/2026 4/30/2025

4 unchanged sentences

Selling, general and administrative expenses 16,355 16,114

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

Operating loss ( 3,660 ) ( 94 )

Unrealized loss (gain) on investment in trust account 127 ( 1,175 )

Pension expense 27 106 81 320

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

Pension (benefit) expense ( 189 ) 27

Interest expense, net 106 60

(Loss) income before income taxes ( 3,704 ) 994

3 unchanged sentences

$ 0.025 $ 0.025

Net (loss) income per common share:

Net (loss) income per common share (a):

Basic $ ( 0.18 ) $ 0.05

3 unchanged sentences

Diluted 15,732 15,773

(a) Net loss per share for quarter ended April 30, 2026 was calculated based on basic shares outstanding due to the anti-dilutive effect of the inclusion of common stock equivalent shares.

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income

Three Months Ended Nine Months Ended

Three Months Ended

4/30/2026 4/30/2025

2 unchanged sentences

Other comprehensive loss:

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)

Pension adjustments (net of tax adjustment of $( 69 ) and $( 23 ) for three months ended April 30, 2026 and 2025, respectively)

( 207 ) ( 67 )

2 unchanged sentences

Unaudited Condensed Consolidated Statements of Cash Flows

Nine Months Ended

Three Months Ended

4/30/2026 4/30/2025

1 unchanged sentence

Operating activities

Net income $ 9,592 $ 27,374

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

Net (loss) income $ ( 2,777 ) $ 732

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

Depreciation and amortization 1,474 1,534

Non-cash lease expense 4,114 302

Non-cash lease (benefit) expense ( 120 ) 720

Provision for credit losses 15 15

3 unchanged sentences

Amortization of net actuarial gain for pension plans ( 276 ) ( 90 )

Non-cash unrealized gain on investment ( 158 ) ( 1,058 )

Non-cash unrealized loss (gain) on investment 127 ( 1,175 )

Surrender of life insurance policies — 300

Loss on disposal of property and equipment 7 —

Changes in operating assets and liabilities:

4 unchanged sentences

Accounts payable and accrued liabilities 6,474 ( 3,126 )

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

Net cash used in operating activities ( 9,354 ) ( 19,031 )

Investing activities

Purchases of property, plant and equipment ( 699 ) ( 2,444 )

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

Net cash used in investing activities ( 699 ) ( 2,444 )

Financing activities

Borrowing from long-term debt — 23,165

Repayment of long-term debt ( 66 ) ( 64 )

Common stock repurchased ( 190 ) ( 4,000 )

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

Payment of deferred financing costs — ( 50 )

Cash dividends paid ( 394 ) ( 393 )

Net cash used in financing activities ( 650 ) ( 4,457 )

Net (decrease) increase in cash ( 358 ) 33,572

Net decrease in cash ( 10,703 ) ( 25,932 )

Cash at beginning of period $ 14,437 $ 26,867

6 unchanged sentences

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Consolidated Statements of Changes in Stockholders' Equity

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 )

Pension adjustments — — — — ( 68 ) ( 68 )

Shares vested and others — — — — — —

Stock compensation expense — — 47 — — 47

Stock repurchase — — — — — —

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

Three-Month Period Ended October 31, 2024

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity

Three-Month Period Ended April 30, 2026

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

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

Net income — — — 8,401 — 8,401

Cash dividends — — — ( 407 ) — ( 407 )

Pension adjustments — — — — ( 9 ) ( 9 )

Shares vested and others — — ( 1 ) — — ( 1 )

Stock compensation expense — — 63 — — 63

Stock repurchase — — — — — —

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, 2026 15,761,141 $ 157 $ 113,761 $ ( 7,875 ) $ ( 112 ) $ 105,931

Net income — — — 9,592 — 9,592

Net loss — — — ( 2,777 ) — ( 2,777 )

Cash dividends — — — ( 394 ) — ( 394 )

2 unchanged sentences

Stock compensation expense — — 47 — — 47

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

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

Stock repurchased ( 31,598 ) — ( 190 ) — — ( 190 )

Balance at April 30, 2026 15,729,543 $ 157 $ 113,618 $ ( 11,046 ) $ ( 319 ) $ 102,410

Three-Month Period Ended April 30, 2025

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

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

4 unchanged sentences

Stock compensation expense — — 63 — — 63

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

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

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

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

See accompanying notes to unaudited condensed consolidated financial statements.

Notes to Unaudited Condensed Consolidated Financial Statements

October 31, 2025

April 30, 2026

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 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.

Operating results for the three months ended April 30, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2027.

The balance sheet at January 31, 2026 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.

19 unchanged sentences

New Accounting Pronouncements Recently Adopted

Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

In November 2023, the FASB issued this ASU to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted ASU 2023-07 during the year ended January 31, 2025.

Refer to Note 16 for required disclosures.

Recently Issued Accounting Pronouncements

Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740):

Improvements to Tax Disclosures.

In December 2023, the Financial Accounting Standards Board ("FASB") issued this ASU amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation.

We adopted this ASU for the year ended January 31, 2026 and applied the amendments prospectively.

Adoption of the new standard did not impact our consolidated income statements, balance sheets, or statements of cash flows.

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

1 unchanged sentence

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.

The Company adopted this ASU for the year ending January 31, 2027.

Adoption did not impact our consolidated income statements, balance sheets, or statements of cash flows.

Recently Issued Accounting Pronouncements

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

Disaggregation of Income Statement Expenses.

In November 2024, the FASB issued this ASU which requires a public entity to disclose additional information about specific expense categories in the notes to financial statements on an annual and interim basis.

In November 2024, the FASB issued this ASU which requires a public entity to

disclose additional information about specific expense categories in the notes to financial statements on an annual and interim basis.

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

1 unchanged sentence

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

ASU 2023-09, Income Taxes (Topic 740):

Improvements to Tax Disclosures.

In December 2023, the FASB issued this ASU which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S.

and foreign jurisdictions.

The update will be effective for annual periods beginning after December 15, 2024.

ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

In September 2025, the FASB issued this ASU which eliminates the requirement to evaluate software development stages in determining when capitalization of internal-use software costs should begin.

Under the updated guidance, capitalization is required when management authorizes and commits to funding a software project and it is probable that the project will be completed and placed into service for its intended use.

The ASU is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years.

The guidance may be applied either prospectively or retrospectively, and early adoption is permitted.

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

The Company evaluates all ASUs issued by the Financial Accounting Standards Board ("FASB") for consideration of their applicability to our condensed consolidated financial statements.

The Company evaluates all ASUs issued by the FASB for consideration of their applicability to our condensed consolidated financial statements.

We have assessed all ASUs issued but not yet adopted and concluded that those not disclosed are not relevant to the Company or are not expected to have a material impact.

13 unchanged sentences

Variable consideration for these programs is estimated in the transaction price at contract inception based on current sales levels and historical experience using the expected value method, subject to constraint.

The Company generates revenue primarily by manufacturing and distributing products through resellers and direct-to-customers.

The Company generates revenue primarily by manufacturing and distributing products through resellers and selling direct to customers.

Control transfers to both resellers and direct customers at a point in time when the delivery process is complete as determined by the corresponding shipping terms.

6 unchanged sentences

Valuation adjustments for slow-moving and obsolete inventory are calculated using an estimated percentage applied to inventories based on a physical inspection of the product in connection with a physical inventory, a review of slow-moving products and component stage, inventory category, historical and forecasted consumption of sales, and consideration of active marketing programs.

The market for educational furniture is traditionally driven by value, not style, and the Company has not typically incurred material obsolescence expenses.

If market conditions are less favorable than those anticipated by management, additional valuation adjustments may be required.

The market for educational furniture is traditionally driven by value, and the Company has not typically incurred material obsolescence expenses.

If market conditions are less favorable than those

anticipated by management, additional valuation adjustments may be required.

The Company records the cost of excess capacity as a period expense, not as a component of capitalized inventory valuation.

6 unchanged sentences

Total inventories $ 68,333 $ 56,735 $ 74,029

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.

The Company's lease terms include options to extend or terminate the lease only when it is reasonably certain that we exercise that option.

All of the Company’s leases are classified as operating leases.

The Company uses the implicit rate when readily determinable, or the incremental borrowing rate.

Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments using Company specific credit spreads.

The Company’s lease terms include options to extend or terminate the lease only when it is reasonably certain that we will exercise that option.

Lease expense for our operating leases is recognized on a straight-line basis over the lease term.

As more fully described in the Annual Report on Form 10-K for the year ended January 31, 2026, the Company has operating leases on real property, equipment, and automobiles, expiring at various dates through fiscal year 2031.

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.

The Company has the option of buying the assets at the end of the lease period at a price that does not result in the Company being reasonably certain of exercising the option.

In addition, the Company leases trucks and automobiles under operating leases that include certain fleet management and maintenance services.

Certain of the leases contain renewal or purchase options and require payment for property taxes and insurance.

The Company records lease expense on a straight-line basis based on the contractual lease payments.

The Company recognizes the present value of the future lease commitments as an operating lease liability, and a corresponding right-of-use asset (“ROU asset”), net of tenant allowances.

Tenant improvements and related tenant allowances are recorded as a reduction to the ROU asset.

The Company elected to account for leases with an original term of 12 months or less that do not contain a purchase option as short-term leases.

Additionally, certain of the leases provide for variable payment for property taxes, insurance, and common area maintenance payments, among others.

The Company recognizes variable lease expenses for these leases in the period incurred.

The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The quantitative information regarding our leases is as follows:

Three Months Ended Nine Months Ended

Three Months Ended

4/30/2026 4/30/2025

5 unchanged sentences

Total lease cost $ 2,817 $ 2,739

Other operating leases information:

Other operating lease information:

Cash paid for amounts included in the measurement of lease liabilities $ 2,432 $ 1,638

2 unchanged sentences

Weighted-average discount rate 9.84 % 9.82 %

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

Minimum future lease payments for operating leases in effect as of April 30, 2026, are as follows:

Operating Leases

For the year ending January 31, (In thousands)

Remaining of 2026 $ 2,448

Thereafter 6,832

Remainder of 2027 $ 7,346

Remaining balance of lease payments 43,357

Short-term lease liabilities 6,557

Long-term lease liabilities (a) 31,467

Long-term lease liabilities 28,392

Total lease liabilities 34,949

Difference between undiscounted cash flows and discounted cash flows $ 8,408

(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.

On July 23, 2024, the Company entered into a new lease agreement (the “Lease”) with Starboard Distribution Center, LLC which extended 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 extended the tenancy for 65 months, covering the period from May 1, 2025 through September 30, 2030.

Under the Lease, the monthly base rent was abated for the initial 5-month period from May 1, 2025 to September 30, 2025, then was 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 to be used by December 31, 2026.

As of April 30, 2026, the Company has not drawn on the tenant improvement allowance.

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 are as follows:

21 unchanged sentences

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

The Company was in compliance with its debt covenants as of April 30, 2026.

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

Approximately $ 16.6 million was available for borrowing as of October 31, 2025.

Approximately $ 36.4 million was available for borrowing as of April 30, 2026.

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 at April 30, 2026 was 8.75 %.

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.

The Company did not have an outstanding balance under the Credit Agreement as of April 30, 2026.

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

2 unchanged sentences

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.

Modify the stock repurchase window (originally from February 1, 2025 to January 31, 2026) such that the window is now from 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") $ 8.0 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.

2 unchanged sentences

Reduce the $ 15.0 million seasonal over-advance to $ 10.0 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.

In connection with this amendment, the Company incurred fees totaling $ 20,000 which were capitalized as deferred financing costs and are included in prepaid expenses and other current assets on the accompanying unaudited condensed consolidated balance sheets.

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

2 unchanged sentences

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.

5 to Amended and Restated Revolving Credit and Security Agreement (“Amendment No.

5”) with PNC, with an effective date of October 1, 2024.

Amendment No.

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

Reduced the facility fee on the unused portion of the revolving line of credit to 0.250 % from 0.375 % per annum, commencing October 1, 2024;

Increased limits on permitted acquisitions (as defined in the Credit Agreement) from $ 5 million to $ 8 million during the term of the Credit Agreement;

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

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 $ 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.

The outstanding amount under this note was approximately $ 3.8 million as of April 30, 2026.

Management believes that the carrying value of debt approximated fair value at April 30, 2026, 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 $ 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.

Valuation allowances of $ 230,000 , $ 231,000 and $ 216,000 as of April 30, 2026, January 31, 2026 and April 30, 2025, 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, 2026 and 2025 was a decrease of $ 1,000 and $ 20,000 , respectively.

For the three months ended April 30, 2026 and 2025, the effective income tax rates were 25.0 % and 26.4 %, respectively.

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

As of April 30, 2026 and 2025, income taxes payable of $ 242,000 and $ 237,000 , respectively, were included in other long-term liabilities on the accompanying unaudited condensed consolidated balance sheets.

The January 31, 2023 and subsequent fiscal years remain open for examination by the IRS and some state jurisdictions.

1 unchanged sentence

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 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.

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

Three Months Ended

4/30/2026 4/30/2025

6 unchanged sentences

Net (loss) income per share - diluted $ ( 0.18 ) $ 0.05

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

There were 23,000 anti-dilutive shares excluded from the computation of diluted earnings per share for the three months ended April 30, 2026.

Stock-Based Compensation

Stock Incentive Plan

Under the Company's 2019 Omnibus Equity Incentive Plan (the “2019 Plan”), the Company may grant an aggregate of up to 1,000,000 shares to its employees and non-employee directors in the form of restricted stock units, restricted stock awards and stock options.

Restricted stock units and awards granted under the 2019 Plan are expensed ratably over the vesting period of the units and awards.

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 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.

Restricted stock awards granted under the 2019 Plan are expensed ratably over the vesting period of the awards.

The Company determines the fair value of its restricted stock awards and related compensation expense as the difference between the market value of the awards on the date of grant less the exercise price of the awards granted.

During the three months ended April 30, 2026, the Company granted zero awards, vested zero shares according to their terms and forfeited zero shares under the 2019 Plan.

As of April 30, 2026, 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 Nine Months Ended

Three Months Ended

4/30/2026 4/30/2025

3 unchanged sentences

Total stock-based compensation expense $ 47 $ 63

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.

As of April 30, 2026, there was $ 16,000 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 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.

The Company also provides a supplementary retirement plan for certain key employees, the VIP Retirement Plan (the “VIP Plan”).

As more fully described in the Annual Report on Form 10-K for the year ended January 31, 2025, benefit accruals under the VIP Plan were frozen since December 31, 2003.

The Company and its subsidiaries cover certain employees under a noncontributory defined benefit retirement plan, entitled the Virco Employees’ Retirement Plan (“Employee Plan”).

As more fully described in the Annual Report on Form 10-K for the year ended January 31, 2026, benefit accruals under the Employee Plan were frozen effective December 31, 2003.

There is no service cost incurred under the Employee Plan.

The Company also provides a supplementary retirement plan for certain key employees, the Virco Important Performers Retirement Plan (“VIP Plan”).

As more fully described in the Annual Report on Form 10-K for the year ended January 31, 2026, benefit accruals under the VIP Plan were frozen effective December 31, 2003.

There is no service cost incurred under the VIP Plan.

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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 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 during the fourth quarter of the fiscal year ending January 31, 2027.

Pension settlement charges related to the VIP Plan termination, which include the recognition of VIP Plan gains or losses recorded within accumulated other comprehensive (loss) income on the Company’s unaudited condensed consolidated balance sheets, are currently expected to be recognized during the fourth quarter of the fiscal year ending January 31, 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 Nine Months Ended

As of April 30, 2026, rabbi trust assets of $ 6.7 million are included in prepaid expenses and other current assets on the accompanying unaudited condensed consolidated balance sheets and are expected to be liquidated to fund the settlement of the VIP Plan pension obligation during the fourth quarter of the fiscal year ending January 31, 2027.

Management intends to hold the remaining rabbi trust assets as long-term investments and as such they are included in other non-current assets on the accompanying unaudited condensed consolidated balance sheets.

As of April 30, 2025, assets held in the rabbi trust were included in other non-current assets on the accompanying unaudited condensed consolidated balance sheets.

As of April 30, 2026, accrued pension liabilities related to the Employee Plan and the VIP Plan totaled $ 7.2 million, of which $ 6.3 million was included in accrued compensation and employee benefits and $ 0.9 million was included in other long-term liabilities on the accompanying unaudited condensed consolidated balance sheets.

As of April 30, 2025, accrued pension liabilities related to these plans totaled $ 6.7 million, of which $ 0.4 million was included in accrued compensation and employee benefits and $ 6.3 million was included in other long-term liabilities on the accompanying unaudited condensed consolidated balance sheets.

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

Three Months Ended

4/30/2026 4/30/2025

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Recognized net actuarial gain ( 276 ) ( 90 )

Benefit cost $ 27 $ 106 $ 81 $ 320

Pension (benefit) cost $ ( 189 ) $ 27

401(k) Retirement Plan

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

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

At April 30, 2026 and 2025, the plan held 1,112,598 shares and 1,063,340 shares of Virco stock, respectively.

For the three months ended April 30, 2026 and 2025, the compensation costs incurred for employer match, which are paid in the form of Company stock, were $ 455,000 and $ 545,000 , respectively.

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

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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.

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

Three Months Ended Nine Months Ended

As of April 30, 2026 and 2025, the related accrual totaled $ 500,000 , of which $ 150,000 was included in other accrued liabilities and $ 350,000 was included in other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets.

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

Three Months Ended

4/30/2026 4/30/2025

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Ending balance $ 500 $ 500

Contingencies

Commitments and Contingencies

The Company has a self-insured retention for product liability losses up to $ 150,000 per occurrence, workers’ compensation liability losses up to $ 250,000 per occurrence, general liability losses up to $ 150,000 per occurrence and automobile liability losses up to $ 50,000 per occurrence.

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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.

As of April 30, 2026, the related accrual totaled $ 1.5 million, of which $ 120,000 was included in other accrued liabilities and $ 1.4 million was included in other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets.

As of April 30, 2025, the accrual totaled $ 1.4 million, of which $ 120,000 was included in other accrued liabilities and $ 1.3 million was included in other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets.

The Company and its subsidiaries are defendants in various legal proceedings resulting from operations in the normal course of business.

It is the opinion of management, in consultation with legal counsel, that the ultimate outcome of all such matters will not materially affect the Company’s financial position, results of operations or cash flows.

In February 2026, the U.S.

Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were unconstitutional.

Subsequently, in March 2026, the U.S.

Court of International Trade ("CIT") issued orders directing U.S.

Customers and Border Protection ("CBP") to process related refunds.

In response to these rulings, CBP launched a refund claims process for qualifying importers.

Since the IEEPA tariffs were first imposed in February 2025, the Company has paid approximately $ 1.0 million in IEEPA tariffs, and it has now begun the process of requesting refunds of eligible amounts paid.

As of April 30, 2026, the Company has not recognized any tariff refunds in its unaudited condensed consolidated financial statements because the Company was unable to assert that the realization of such recovery is probable as of such date, due to uncertainties surrounding the refund process and collectability of claims.

As of the date of this Quarterly Report on Form 10-Q, the Company has not received any portion of the requested refunds.

Delivery Costs

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.

For the three months ended April 30, 2026 and 2025, shipping and classroom delivery costs of approximately $ 3.5 million and $ 3.4 million, respectively, were included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.

Property, Plant and Equipment, Net

Property, plant and equipment consists of the following:

Property, plant and equipment, net consists of the following:

4/30/2026 1/31/2026 4/30/2025

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Property, plant and equipment, net $ 33,746 $ 34,578 $ 36,482

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.

Depreciation and amortization expenses related to property, plant and equipment recorded within cost of goods sold were $ 1.2 million for the three months ended April 30, 2026 and 2025.

Depreciation and amortization expenses related to property, plant and equipment recorded within selling, general and administrative expenses were $ 0.3 million for the three months ended April 30, 2026 and 2025.

Segment Information

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The Company determines operating segments based on how its Chief Operating Decision Maker (“CODM”) manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance.

The Company’s CODM is a group of individuals comprised of our senior executives, who regularly review the Company’s operating results on a consolidated basis.

The Company’s CODM is its Senior Executives, who regularly review the Company’s operating results on a consolidated basis.

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

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Subsequent Events

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

On June 2, 2026, 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 January 9, 2026 to stockholders of record of the common stock as of the close of business on December 19, 2025.

The dividend is payable on July 10, 2026 to stockholders of record of the common stock as of the close of business on June 19, 2026.

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