What changed in this filing

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Item 1. Financial Statements

2026-09-04 compared with 2026-06-03 · 142 added, 103 removed, 341 unchanged (42% of the section changed)

38 unchanged sentences

Additional paid-in capital 113,669 113,761 113,667

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

(Accumulated deficit) retained earnings ( 2,827 ) ( 7,875 ) 1,264

Accumulated other comprehensive (loss) income ( 525 ) ( 112 ) 288

2 unchanged sentences

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Operations

Three Months Ended

Unaudited Condensed Consolidated Statements of Income

Three Months Ended Six Months Ended

7/31/2026 7/31/2025 7/31/2026 7/31/2025

1 unchanged sentence

Net sales $ 87,466 $ 92,086 $ 118,158 $ 125,840

Costs of goods sold 17,997 17,734

Cost of goods sold 52,453 51,212 70,450 68,946

Gross profit 35,013 40,874 47,708 56,894

Selling, general and administrative expenses 24,466 25,503 40,821 41,617

Operating loss ( 3,660 ) ( 94 )

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

Operating income 10,547 15,371 6,887 15,277

Unrealized (gain) loss on investment in trust account ( 656 ) 968 ( 529 ) ( 207 )

Pension (benefit) expense ( 203 ) 27 ( 392 ) 54

Interest expense, net 170 205 276 265

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

Income tax (benefit) expense ( 927 ) 262

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

Income before income taxes 11,236 14,171 7,532 15,165

Income tax expense 2,623 3,985 1,696 4,247

Net income $ 8,613 $ 10,186 $ 5,836 $ 10,918

Cash dividends declared per common share:

$ 0.025 $ 0.025 $ 0.050 $ 0.050

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

Net income per common share:

Basic $ 0.55 $ 0.65 $ 0.37 $ 0.69

3 unchanged sentences

Diluted 15,737 15,743 15,735 15,750

(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

Unaudited Condensed Consolidated Statements of Comprehensive Income

Three Months Ended Six Months Ended

7/31/2026 7/31/2025 7/31/2026 7/31/2025

(In thousands)

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

Net income $ 8,613 $ 10,186 $ 5,836 $ 10,918

Other comprehensive loss:

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

Pension adjustments (net of tax adjustment of $( 70 ) and $( 23 ) for the three months, and $( 139 ) and $( 46 ) for the six months ended July 31, 2026 and 2025, respectively)

( 206 ) ( 67 ) ( 413 ) ( 134 )

Net comprehensive (loss) income $ ( 2,984 ) $ 665

Net comprehensive income $ 8,407 $ 10,119 $ 5,423 $ 10,784

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

7/31/2026 7/31/2025

1 unchanged sentence

Operating activities

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

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

Net income $ 5,836 $ 10,918

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

Depreciation and amortization 2,913 3,086

5 unchanged sentences

Amortization of net actuarial gain for pension plans ( 552 ) ( 180 )

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

Non-cash unrealized gain on investment ( 529 ) ( 207 )

Surrender of life insurance policies — ( 300 )

8 unchanged sentences

Purchases of property, plant and equipment ( 1,301 ) ( 3,816 )

Proceeds from surrendering life insurance policies — 300

Net cash used in investing activities ( 1,301 ) ( 3,516 )

11 unchanged sentences

Cash paid during the period for income taxes, net of refunds $ 58 $ 104

Noncash investment in right-of-use assets in exchange for a lease liability $ — $ 237

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity

Three-Month Period Ended April 30, 2026

Three-Month Period Ended July 31, 2026

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

Balance at January 31, 2026 15,761,141 $ 157 $ 113,761 $ ( 7,875 ) $ ( 112 ) $ 105,931

Net loss — — — ( 2,777 ) — ( 2,777 )

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

Net income — — — 8,613 — 8,613

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

3 unchanged sentences

Stock repurchased — — — — — —

Balance at July 31, 2026 15,763,815 $ 157 $ 113,669 $ ( 2,827 ) $ ( 525 ) $ 110,474

Three-Month Period Ended July 31, 2025

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

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

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

Net income — — — 10,186 — 10,186

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

Pension adjustments — — — — ( 67 ) ( 67 )

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

Stock compensation expense — — 51 — — 51

Stock repurchased — — — — — —

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

Six-Month Period Ended July 31, 2026

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

Balance at January 31, 2026 15,761,141 $ 157 $ 113,761 $ ( 7,875 ) $ ( 112 ) $ 105,931

5 unchanged sentences

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

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

Balance at July 31, 2026 15,763,815 $ 157 $ 113,669 $ ( 2,827 ) $ ( 525 ) $ 110,474

See accompanying notes to unaudited condensed consolidated financial statements.

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity

Six-Month Period Ended July 31, 2025

In thousands, except share data Shares Amount Additional Paid-in Capital (Accumulated Deficit) Retained Earnings Accumulated Other Comprehensive Income Total Stockholder's 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 repurchased ( 348,944 ) ( 4 ) ( 3,996 ) — — ( 4,000 )

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

See accompanying notes to unaudited condensed consolidated financial statements.

Notes to Unaudited Condensed Consolidated Financial Statements

April 30, 2026

July 31, 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 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.

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

GAAP for complete financial statements.

All references to the “Company”, “we” and “our” refer to Virco Mfg.

43 unchanged sentences

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

ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements.

In December 2025, the FASB issued this ASU which clarifies the guidance in Topic 270 and provides a comprehensive list of required interim disclosures.

The amendments also establish a disclosure principle requiring entities to disclose events and changes occurring after the end of the most recent annual reporting period that have a material impact on the entity.

The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption 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 FASB for consideration of their applicability to our condensed consolidated financial statements.

14 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 selling direct to customers.

The Company generates revenue primarily by manufacturing and distributing products through resellers and selling directly 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.

2 unchanged sentences

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

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.

Inventories are valued at the lower of cost or net realizable value.

Cost is determined using standard costs, which approximate a first-in, first-out ("FIFO") basis, and includes material, labor, and factory overhead.

The Company reviews standard costs of raw materials, work-in-process and finished goods on a periodic basis to ensure that its inventories approximate current actual costs.

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

2 unchanged sentences

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.

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 $ 53,032 $ 56,735 $ 59,866

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.

As more fully described in the Form 10-K, 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 quantitative information regarding our leases is as follows:

Three Months Ended

Three Months Ended Six Months Ended

7/31/2026 7/31/2025 7/31/2026 7/31/2025

10 unchanged sentences

Weighted-average discount rate 9.85 % 9.83 %

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

Minimum future lease payments for operating leases in effect as of July 31, 2026 are as follows:

Operating Leases

11 unchanged sentences

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.

As of July 31, 2026, the Company has received approximately $ 134,000 in reimbursements under the tenant improvement allowance.

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

8 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 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 was amended numerous times since its origination in December 2011.

The Credit Agreement 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.

Substantially all of the Borrowers' accounts receivable are automatically and promptly swept to repay amounts outstanding under the Credit Agreement upon receipt by the Borrowers.

Substantially all of the Borrowers' accounts receivable are automatically and promptly swept to

repay amounts outstanding under the Credit Agreement upon receipt by the Borrowers.

Due to this automatic liquidating nature of the Credit Agreement, if the Borrowers breach any covenant, violate any representation or warranty, or suffer a deterioration in their ability to borrow pursuant to the borrowing base calculation, the Borrowers may not have access to cash liquidity unless provided by PNC at its discretion.

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

The other material terms of the Credit Agreement in effect during the fiscal quarter (but prior to Amendment No.

8 discussed below) include the following:

(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;

5 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 was in compliance with its debt covenants as of July 31, 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 $ 36.4 million was available for borrowing as of April 30, 2026.

Approximately $ 57.0 million was available for borrowing as of July 31, 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 interest rate at July 31, 2026 was 8.25 %.

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 balance under the Credit Agreement as of April 30, 2026.

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) 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.

Reduce the Revolving Line of Credit limit by $ 10.0 million, except for the months of October, December, and January.

The maximum Revolving Line of Credit limit during June through August was reduced from $ 70.0 million to $ 60.0 million.

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 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.

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.

The Company did not have an outstanding balance under the Credit Agreement as of July 31, 2026.

Subsequent to the quarter ended July 31, 2026, the Company entered into Amendment No.

8 to the Credit Agreement with PNC, which amended the Credit Agreement to reflect the following material changes effective as of September 3, 2026:

• The maximum revolving advance amount under the Credit Agreement was changed to $ 40.0 million, replacing a schedule of maximum amounts that varied by calendar month.

The Company may also request increases to the maximum revolving advance amount up to a cap of $ 60.0 million in minimum increments of $ 5.0 million, subject to lender consent and customary conditions.

• The term of the Credit Agreement was extended from April 15, 2027 to September 3, 2031.

• The receivables advance rate was increased from 85 % to 90 % of "Eligible Receivables" (as defined in the Credit Agreement).

• A new equipment loan sublimit of up to $ 3.0 million was added for equipment purchases, advanced at 85 % of net invoice cost for new equipment or 80 % for used equipment.

• The required minimum FCCR was reduced from 1.10 to 1.00 , and the requirement was changed to a springing covenant tested only if excess availability falls below 17.5 % of the maximum revolving advance amount or during an event of default.

• The financial test for restricted payments (dividends/share repurchases) was modified to require both 30-day and pro forma excess availability to exceed 25 %, or such targets are reduced to 17.5 % if the Company maintains a pro forma FCCR of 1.05 to 1.00.

The aggregate limit on restricted payments remains unchanged at $ 8.0 million during any fiscal year.

In connection with this amendment, the Company incurred fees totaling $ 60,000 which will be capitalized as deferred financing costs included in other assets on the next quarter's unaudited condensed consolidated balance sheets.

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 $ 3.8 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.

The outstanding amount under this note was approximately $ 3.7 million as of July 31, 2026.

Management believes that the carrying value of debt approximated its fair value at July 31, 2026.

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of its deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income or reversal of deferred tax liabilities during the periods in which those temporary differences become deductible.

As a part of this evaluation, the Company assesses all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, the availability of tax 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 $ 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.

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 $ 254,000 , $ 231,000 and $ 216,000 as of July 31, 2026, January 31, 2026 and July 31, 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 July 31, 2026 was an increase of $ 24,000 , compared to no change for July 31, 2025.

The net change in the valuation allowance for the six months ended July 31, 2026 and 2025 was an increase of $ 23,000 and a decrease of $ 20,000 , respectively.

For the three months ended July 31, 2026 and 2025, the effective income tax rates were 23.3 % and 28.1 %, respectively.

For the six months ended July 31, 2026 and 2025, the effective income tax rates were 22.5 % and 28.0 %, 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.

As of July 31, 2026 income taxes payable of $ 239,000 were included in other long-term liabilities on the accompanying unaudited condensed consolidated balance sheets.

As of July 31, 2025, income taxes payable of $ 257,000 and $ 14,000 were included in other long-term liabilities and income tax payable, respectively, 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.

Net (Loss) Income per Share

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

Three Months Ended

Net Income per Share

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

Three Months Ended Six Months Ended

7/31/2026 7/31/2025 7/31/2026 7/31/2025

(In thousands, except per share data)

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

Net income $ 8,613 $ 10,186 $ 5,836 $ 10,918

Weighted average shares of common stock outstanding - basic 15,734 15,741 15,733 15,749

1 unchanged sentence

Weighted average shares of common stock outstanding - diluted 15,737 15,743 15,735 15,750

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

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

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

Net income per share - basic $ 0.55 $ 0.65 $ 0.37 $ 0.69

Net income per share - diluted $ 0.55 $ 0.65 $ 0.37 $ 0.69

Stock-Based Compensation

3 unchanged sentences

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.

During the three and six months ended July 31, 2026, the Company granted 34,272 awards, vested 23,003 shares according to their terms and forfeited zero shares under the 2019 Plan.

As of July 31, 2026, there were approximately 464,584 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

Three Months Ended Six Months Ended

7/31/2026 7/31/2025 7/31/2026 7/31/2025

3 unchanged sentences

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

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.

As of July 31, 2026, there was $ 177,000 of unrecognized compensation expense related to unvested restricted stock awards, which is expected to be recognized over ten months.

Retirement Plans

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.

As more fully described in the Form 10-K, 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.

As more fully described in the Form 10-K, benefit accruals under the VIP Plan were frozen effective December 31, 2003.

There is no service cost incurred under the VIP Plan.

3 unchanged sentences

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.

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.

As of July 31, 2026, rabbi trust assets of $ 7.1 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.

As of July 31, 2025, assets held in the rabbi trust were included in other non-current assets on the accompanying unaudited condensed consolidated balance sheets.

As of July 31, 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 July 31, 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

Three Months Ended Six Months Ended

7/31/2026 7/31/2025 7/31/2026 7/31/2025

6 unchanged sentences

Recognized net actuarial gain ( 276 ) ( 90 ) ( 552 ) ( 180 )

Pension (benefit) cost $ ( 189 ) $ 27

Pension (benefit) expense $ ( 203 ) $ 27 $ ( 392 ) $ 54

401(k) Retirement Plan

2 unchanged sentences

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

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.

At July 31, 2026 and 2025, the plan held 1,153,940 shares and 1,097,691 shares of Virco stock, respectively.

For the three months ended July 31, 2026 and 2025, the compensation costs incurred for employer match, which are paid in the form of Company stock, were $ 456,000 and $ 469,000 , respectively.

For the six months ended July 31, 2026 and 2025, the compensation costs incurred for employer match, which are paid in the form of Company stock, were $ 911,000 and $ 1,014,000 , respectively.

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

3 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.

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.

As of July 31, 2026, the related accrual totaled $ 400,000 , of which $ 150,000 was included in other accrued liabilities and $ 250,000 was included in other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets.

As of July 31, 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

Three Months Ended Six Months Ended

7/31/2026 7/31/2025 7/31/2026 7/31/2025

1 unchanged sentence

Beginning balance $ 500 $ 500 $ 500 $ 500

Provision 34 43

Provision adjustments ( 76 ) 33 ( 42 ) 76

Costs incurred ( 24 ) ( 33 ) ( 58 ) ( 76 )

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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.

As of July 31, 2026, the related accrual totaled $ 1.3 million, of which $ 120,000 was included in other accrued liabilities and $ 1.2 million was included in other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets.

As of July 31, 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.

1 unchanged sentence

In February 2026, the U.S.

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

Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") exceeded the President's authority.

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.

Customs 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.

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

As of July 31, 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 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.

For the three months ended July 31, 2026 and 2025, shipping and classroom delivery costs of approximately $ 9.7 million and $ 10.0 million, respectively, were included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of income.

For the six months ended July 31, 2026 and 2025, shipping and classroom delivery costs of approximately $ 13.2 million and $ 13.4 million, respectively, were included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of income.

Property, Plant and Equipment, Net

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Property, plant and equipment, net $ 33,396 $ 34,578 $ 36,120

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.

Depreciation and amortization expenses related to property, plant and equipment recorded within cost of goods sold were $ 1.1 million for the three months ended July 31, 2026 and 2025.

Depreciation and amortization expenses related to property, plant and equipment recorded within selling, general and administrative expenses were $ 0.3 million and $ 0.5 million for the three months ended July 31, 2026 and 2025, respectively.

Depreciation and amortization expenses related to property, plant and equipment recorded within cost of goods sold were $ 2.3 million for the six months ended July 31, 2026 and 2025.

Depreciation and amortization expenses related to property, plant and equipment recorded within selling, general and administrative expenses were $ 0.6 million and $ 0.8 million for the six months ended July 31, 2026 and 2025, respectively.

Segment Information

6 unchanged sentences

Subsequent Events

On June 2, 2026, the Company’s Board of Directors declared a cash dividend for the Company’s second fiscal quarter of

On September 3, 2026, the Company’s Board of Directors declared a cash dividend for the Company’s third fiscal quarter of

$ 0.025 on each outstanding share of common stock.

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

The dividend is payable on October 9, 2026 to stockholders of record of the common stock as of the close of business on September 18, 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 September 3, 2026, the Company entered into Amendment No.

8 to its existing Credit Agreement with PNC.

See " Note 7.

Debt " above.

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