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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
  
☒Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended July 31, 2023

OR
☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from        to        
Commission File number 1-8777
  
VIRCO MFG. CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 95-1613718
(State or Other Jurisdiction of
Incorporation or Organization)		 (I.R.S. Employer
Identification No.)
2027 Harpers Way, Torrance, CA
 90501
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (310) 533-0474

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.01 par value per shareVIRCThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:


Large accelerated filer☐Accelerated filer☐
Non-accelerated filerýSmaller reporting company☒
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ý

The number of shares outstanding for each of the registrant’s classes of common stock, as of the latest practicable date:
Common Stock, $.01 par value — 16,347,314 shares as of September 4, 2023.



TABLE OF CONTENTS

Unaudited condensed consolidated statements of income - Six months ended July 31, 2023 and 2022
Unaudited condensed consolidated statements of comprehensive income - Six months ended July 31, 2023 and 2022
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
EX-31.1
EX-31.2
EX-32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

 

2

PART I. Financial Information
Item 1. Financial Statements


Virco Mfg. Corporation
Unaudited Condensed Consolidated Balance Sheets
 
7/31/20231/31/20237/31/2022
(In thousands)
Assets
Current assets
Cash$1,600 $1,057 $2,179 
Trade accounts receivables, net 68,592 18,435 44,286 
Other receivables58 68 95 
Income tax receivable— 19 111 
Inventories71,853 67,406 61,228 
Prepaid expenses and other current assets2,228 2,083 2,068 
Total current assets144,331 89,068 109,967 
Non-current assets
Property, plant and equipment
Land3,731 3,731 3,731 
Land improvements686 686 653 
Buildings and building improvements51,441 51,310 51,456 
Machinery and equipment115,899 113,662 115,029 
Leasehold improvements977 983 1,012 
Total property, plant and equipment172,734 170,372 171,881 
Less accumulated depreciation and amortization137,392 135,810 136,973 
Net property, plant and equipment35,342 34,562 34,908 
Operating lease right-of-use assets8,285 10,120 12,115 
Deferred tax assets, net7,100 7,800 488 
Other assets, net9,279 8,576 8,051 
Total assets$204,337 $150,126 $165,529 

See accompanying notes to unaudited condensed consolidated financial statements.

3

Virco Mfg. Corporation
Unaudited Condensed Consolidated Balance Sheets
 
 7/31/20231/31/20237/31/2022
(In thousands, except share and par value data)
Liabilities
Current liabilities
Accounts payable$27,854 $19,448 $27,290 
Accrued compensation and employee benefits10,983 9,554 6,873 
Income tax payable3,325 — — 
Current portion of long-term debt32,256 7,360 22,736 
Current portion operating lease liability5,386 5,082 4,909 
Other accrued liabilities11,259 7,081 10,057 
Total current liabilities91,063 48,525 71,865 
Non-current liabilities
Accrued self-insurance retention934 1,050 1,436 
Accrued pension expenses10,827 10,676 15,238 
Long-term debt, less current portion14,261 14,384 14,504 
Operating lease liability, less current portion4,317 6,796 9,241 
Other long-term liabilities640 634 740 
Total non-current liabilities30,979 33,540 41,159 
Commitments and contingencies (Notes 6, 7 and 13)
Stockholders’ equity
Preferred stock:
Authorized 3,000,000 shares, $0.01 par value; none issued or outstanding
— — — 
Common stock:
Authorized 25,000,000 shares, $0.01 par value; issued and outstanding 16,347,314 shares at 7/31/2023 and 16,210,985 at 1/31/2023 and 7/31/2022
164 162 162 
Additional paid-in capital121,030 120,890 120,684 
Accumulated deficit(36,539)(50,631)(62,582)
Accumulated other comprehensive loss(2,360)(2,360)(5,759)
Total stockholders’ equity82,295 68,061 52,505 
Total liabilities and stockholders’ equity$204,337 $150,126 $165,529 

See accompanying notes to unaudited condensed consolidated financial statements.

4

Virco Mfg. Corporation
Unaudited Condensed Consolidated Statements of Income
 
 Three months ended
 7/31/20237/31/2022
(In thousands, except per share data)
Net sales$107,321 $82,797 
Costs of goods sold58,743 50,952 
Gross profit48,578 31,845 
Selling, general and administrative expenses27,324 20,671 
Operating income21,254 11,174 
Unrealized (gain) loss on investment in trust account(325)305 
Pension expense161 196 
Interest expense1,083 698 
Income before income taxes20,335 9,975 
Income tax expense4,801 295 
Net income$15,534 $9,680 
Net income per common share:
Basic$0.95 $0.60 
Diluted$0.95 $0.60 
Weighted average shares of common stock outstanding:
Basic16,272 16,108 
Diluted16,294 16,108 

See accompanying notes to unaudited condensed consolidated financial statements.




















5

Virco Mfg. Corporation
Unaudited Condensed Consolidated Statements of Income
 
 Six months ended
 7/31/20237/31/2022
(In thousands, except per share data)
Net sales$142,264 $114,881 
Costs of goods sold80,484 73,329 
Gross profit61,780 41,552 
Selling, general and administrative expenses41,838 35,122 
Operating income 19,942 6,430 
Unrealized (gain) loss on investment in trust account(624)305 
Pension expense322 391 
Interest expense1,795 1,125 
Income before income taxes18,449 4,609 
Income tax expense4,357 13 
Net income$14,092 $4,596 
Net income per common share:
Basic$0.87 $0.29 
Diluted$0.87 $0.29 
Weighted average shares of common stock outstanding:
Basic16,242 16,071 
Diluted16,257 16,071 


See accompanying notes to unaudited condensed consolidated financial statements.
6


Virco Mfg. Corporation
Unaudited Condensed Consolidated Statements of Comprehensive Income
 Three months ended
 7/31/20237/31/2022
 (In thousands)
Net income$15,534 $9,680 
Other comprehensive income:
Pension adjustments — 135 
Net comprehensive income$15,534 $9,815 

See accompanying notes to unaudited condensed consolidated financial statements.


7

Virco Mfg. Corporation
Unaudited Condensed Consolidated Statements of Comprehensive Income
 Six months ended
 7/31/20237/31/2022
 (In thousands)
Net income$14,092 $4,596 
Other comprehensive income:
Pension adjustments — 270 
Net comprehensive income $14,092 $4,866 

See accompanying notes to unaudited condensed consolidated financial statements.
8

Virco Mfg. Corporation
Unaudited Condensed Consolidated Statements of Cash Flows
 Six months ended
7/31/20237/31/2022
(In thousands)
Operating activities
Net income$14,092 $4,596 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization2,455 2,259 
Non-cash lease benefits(340)(265)
Provision for doubtful accounts30 35 
Amortization of debt issuance costs 55 69 
Deferred income taxes700 (89)
Stock-based compensation252 406 
Amortization of net actuarial loss for pension plans— 270 
Non-cash unrealized (gain) loss on investment(624)305 
Surrender of life insurance policies(95)— 
Changes in operating assets and liabilities:
Trade accounts receivable(50,187)(26,552)
Other receivables10 23 
Inventories(4,447)(13,855)
Income taxes3,346 43 
Prepaid expenses and other current assets(134)(91)
Accounts payable and accrued liabilities13,737 12,876 
Net cash used in operating activities(21,150)(19,970)
Investing activities:
Capital expenditures(2,795)(1,524)
Purchases of marketable securities in trust accounts— (4,856)
Proceeds from sale of marketable securities in trust accounts— 2,112 
Proceeds from surrendering life insurance policies— 2,744 
Net cash used in investing activities(2,795)(1,524)
Financing activities:
Borrowing from long-term debt35,688 28,352 
Repayment of long-term debt(10,915)(5,625)
Payment on deferred financing costs(175)(200)
Tax withholding payments on share-based compensation(110)(213)
Net cash provided by financing activities24,488 22,314 
Net increase in cash543 820 
Cash at beginning of period1,057 1,359 
Cash at end of period$1,600 $2,179 

See accompanying notes to unaudited condensed consolidated financial statements.

9

Virco Mfg. Corporation
Unaudited Consolidated Statements of Changes in Stockholders' Equity

Three-Month Period Ended July 31, 2023
Common Stock
In thousands, except share dataSharesAmountAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Stockholder's Equity
Balance at May 1, 202316,210,985 $162 $120,993 $(52,073)$(2,360)$66,722 
Net income— — — 15,534 — 15,534 
Cash dividends— — — — — — 
Pension adjustments— — — — — — 
Shares vested and others136,329 2 (112)— — (110)
Stock compensation expense— — 149 — — 149 
Balance at July 31, 202316,347,314 $164 $121,030 $(36,539)$(2,360)$82,295 
Three-Month Period Ended July 31, 2022
Common Stock
In thousands, except share dataSharesAmountAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Stockholder's Equity
Balance at May 1, 202216,102,023 $161 $120,745 $(72,262)$(5,894)$42,750 
Net income— — — 9,680 — 9,680 
Cash dividends— — — — — — 
Pension adjustments— — — — 135 135 
Shares vested and others108,962 1 (214)— — (213)
Stock compensation expense— — 153 — — 153 
Balance at July 31, 202216,210,985 $162 $120,684 $(62,582)$(5,759)$52,505 

Six-Month Period Ended July 31, 2023
Common Stock
In thousands, except share dataSharesAmountAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Stockholder's Equity
Balance at February 1, 202316,210,985 $162 $120,890 $(50,631)$(2,360)$68,061 
Net income— — — $14,092 — 14,092 
Cash dividends— — — — — — 
Pension adjustments— — — — — — 
Shares vested and others136,329 2 (112)— — (110)
Stock compensation expense— — 252 — — 252 
Balance at July 31, 202316,347,314 $164 $121,030 $(36,539)$(2,360)$82,295 


10

Six-Month Period Ended July 31, 2022
Common Stock
In thousands, except share dataSharesAmountAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal Stockholder's Equity
Balance at February 1, 202216,102,023 $161 $120,492 $(67,178)$(6,029)$47,446 
Net income— — — $4,596 — 4,596 
Cash dividends— — — — — — 
Pension adjustments— — — — 270 270 
Shares vested and others108,962 1 (214)— — (213)
Stock compensation expense— — 406 — — 406 
Balance at July 31, 202216,210,985 $162 $120,684 $(62,582)$(5,759)$52,505 


See accompanying notes to unaudited condensed consolidated financial statements.
11

VIRCO MFG. CORPORATION
Notes to unaudited Condensed Consolidated Financial Statements
July 31, 2023
Note 1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements and are presented in accordance with the requirements of Form 10-Q and Rule 10-01 of Regulation S-X. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2023 (“Form 10-K”).  In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three months and six months ended July 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2024. The balance sheet at January 31, 2023 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. All references to the “Company” refer to Virco Mfg. Corporation and its subsidiaries.

Note 2. Seasonality and Management Use of Estimates

The market for educational furniture is marked by extreme seasonality, with approximately 50% of the Company’s total sales typically occurring from June to August each year, the Company’s peak season. Hence, the Company typically builds and carries significant amounts of inventory during and in anticipation of this peak summer season to facilitate the rapid delivery requirements of customers in the educational market. This requires a large up-front investment in inventory, labor, storage and related costs as inventory is built in anticipation of peak sales during the summer months. As the capital required for this build-up generally exceeds cash available from operations, the Company has generally relied on third-party bank financing to meet cash flow requirements during the build-up period immediately preceding the peak season. In addition, the Company typically is faced with an overall higher accounts receivable balance during the peak season. This occurs for two primary reasons. First, accounts receivable balances typically increase during the peak season as shipments of products increase. Second, many customers during this period are educational institutions and government entities, which tend to pay accounts receivable slower than commercial customers.

The Company’s working capital requirements during and in anticipation of the peak summer season require management to make estimates and judgments that affect assets, liabilities, revenues and expenses, and related contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to market demand, labor costs and stocking inventory. Significant estimates made by management include, but are not limited to, valuation of inventory; deferred tax assets and liabilities; useful lives of property, plant and equipment; liabilities under pension, warranty and self-insurance; and the accounts receivable allowance for doubtful accounts.

Note 3. Recently Issued Accounting Standards

The Company evaluates all Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board ("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.

Note 4. Revenue Recognition

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.  Prices for our products are based on published price lists and customer agreements. The Company has determined that the performance obligations are satisfied at a point in time when the Company completes delivery per the customer contract. The majority of sales are free on board ("FOB") destination where the destination is specified per the customer contract and may
12

include delivering the furniture into the classroom, school site or warehouse. Sales of furniture that are sold FOB factory are typically made to resellers of our product who in turn provide logistics to the ultimate customer. Once a product has been delivered per the shipping terms, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from the asset. The Company considers control to have transferred upon shipment or delivery in accordance with shipping terms because the Company has a present right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset, and the customer has significant risks and rewards of ownership of the asset.

Sales are recorded net of discounts, sales incentives and rebates, sales taxes and estimated returns and allowances. The Company offers sales incentives and discounts through various regional and national programs to our customers. These programs include product rebates, product returns allowances and trade promotions. 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. 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. Therefore, we do not consider them to be meaningfully different revenue streams given similarities in the nature of the products, performance obligation and distribution processes. Sales are predominately in the United States and to a similar class of customer. We do not manage or evaluate the business based on product line or any other discernable category.

Note 5. Inventories

Inventory is valued at the lower of cost or net realizable value (determined on a first-in, first-out basis) and includes material, labor, and factory overhead. The Company records valuation adjustments for the excess cost of the inventory over its estimated net realizable value. 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 education 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 Company records the cost of excess capacity as a period expense, not as a component of capitalized inventory valuation.

The following table presents a breakdown of the Company’s inventories as of July 31, 2023, January 31, 2023 and July 31, 2022:
7/31/20231/31/20237/31/2022
(In thousands)
 Finished goods$24,995 $25,740 $26,336 
 Work in process29,081 25,303 19,138 
 Raw materials17,777 16,363 15,754 
Total inventories$71,853 $67,406 $61,228 

Note 6. Leases

The Company has operating leases on real property, equipment, and automobiles, expiring at various dates through 2026. The Company determines if an arrangement is a lease at inception and assesses classification of the lease at commencement. All of the Company’s leases are classified as operating leases. Pursuant to ASC 842 - 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.

The Company has an operating lease for its corporate office and manufacturing and distribution facility located in Torrance, CA, currently with a remaining lease term through April 2025. The Company's lease terms include options to extend or terminate the lease only when it is reasonably certain that we exercise that option. The Company leases equipment under a 5-
13

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. In accordance with ASC 842, 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 EndedSix Months Ended
7/31/20237/31/20227/31/20237/31/2022
(In thousands, except lease term and discount rate)
Operating lease cost$1,281 $1,288 $2,550 $2,615 
Short-term lease cost80 79 188 176 
Sublease income(10)(10)(20)(20)
Variable lease cost160 278 421 531 
Total lease cost$1,511 $1,635 $3,139 $3,302 
Other operating leases information:
Cash paid for amounts included in the measurement of lease liabilities$2,890 $2,880 
Right-of-use assets obtained in exchange for new lease liabilities$364 $398 
Weighted-average remaining lease term (years)1.72.7
Weighted-average discount rate6.36 %6.38 %

Minimum future lease payments for operating leases in effect as of July 31, 2023, are as follows:
Operating Lease
For the year ending January 31, (In thousands)
Remaining of 2024$2,902 
20255,825 
20261,564 
20278 
2028— 
Thereafter— 
Remaining balance of lease payments10,299 
Short-term lease liabilities5,386 
Long-term lease liabilities4,317 
Total lease liabilities9,703 
Difference between undiscounted cash flows and discounted cash flows$596 


14

Note 7. Debt

Outstanding balances for the Company’s long-term debt were as follows:
7/31/20231/31/20237/31/2022
(In thousands)
Revolving credit line$42,012 $17,122 $32,502 
Other4,505 4,622 4,738 
Total debt46,517 21,744 37,240 
Less current portion32,256 7,360 22,736 
Non-current portion$14,261 $14,384 $14,504 

The Company and Virco Inc., its wholly-owned subsidiary (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. On September 28, 2021, the Borrowers entered into an Amended and Restated Revolving Credit and Security Agreement (the “Restated Credit Agreement”) with PNC Bank, which amended and restated the prior Credit Agreement and effectively incorporated all of the prior amendments into an amended and restated form of agreement.

The Restated Credit Agreement permits the Company to issue dividends or make payments with respect to the Company’s capital stock in an aggregate amount up to $3.0 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 Restated 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. In connection with the Restated Credit Agreement, the Company also agreed to pay to PNC Bank a non-refundable fee of $50,000.

In addition to the financial covenants, the Restated 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 Restated Credit Agreement upon receipt by the Borrowers. Due to this automatic liquidating nature of the Restated 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 Restated Credit Agreement are substantially the same as those of the original Credit Agreement, consisting of (i) a revolving line of credit with a Maximum Revolving Advance Amount of $65.0 million 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 and (ii) an equipment loan of $2.0 million. The Restated Credit Agreement is secured by substantially all of the Borrowers’ personal property and certain of the Borrowers’ real property. The Restated Credit Agreement is subject to certain prepayment penalties upon early termination of the Restated Credit Agreement. Prior to the maturity date, principal amounts outstanding under the Restated Credit Agreement may be repaid and reborrowed at the option of the Borrowers without premium or penalty, subject to borrowing base limitations, seasonal adjustments and certain other conditions, including reduced borrowings under the revolving line to less than or equal $10.0 million for a period of 30 consecutive days during the fourth quarter of each fiscal year. The Restated 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, 2023.

The Company's revolving line of credit with PNC is structured to provide seasonal credit availability during the Company's peak summer season. Approximately $30.5 million was available for borrowing as of July 31, 2023. The interest rate range for outstanding loan balances during the quarter ended July 31, 2023 was 8.19% to 10.25%. The Company also incurs a fee on the unused portion of the revolving line of credit at a rate of 0.375%.
15


In addition to the outstanding debt balance of $42.0 million on the Company's revolving credit line, the Company also carries a mortgage on a manufacturing building in Conway Arkansas. The original note was dated August 2017 for $5.8 million, at a fixed rate of 4% per year and 20 years term. The outstanding amount under this note was $4.5 million as of July 31, 2023.

On May 19, 2023, the Company entered into Amendment No. 3 to Amended and Restated Revolving Credit and Security Agreement (“Amendment No. 3”) with PNC, with an effective date of May 5, 2023. Amendment No. 3 amended the Restated Credit Agreement and the secured revolving line of credit provided to the Company under the revolving credit facility to reflect the following material changes:

i.Maximum size of the PNC line of credit has been increased to $72.5 million during the months of June through August of 2023, to provide additional availability for the Company’s forecast through the 2023 peak borrowing period;

ii.Increase in the total inventory sublimit under the Credit Agreement to $35.0 million and increase in the Assemble-to-ship (ATS) inventory sublimit to $15.0 million during the months of May through August of 2023;

iii.The Company agreed to pay an amendment fee of $50,000, which is 0.67% on the incremental line increase of $7.5 million; and

iv.Increase in the Applicable Margin (as defined in the Credit Agreement) of 25 basis points.

Management believes that the carrying value of debt approximated fair value at July 31, 2023, as all of the long-term debt bears interest at variable rates based on prevailing market conditions.

Note 8. Income Taxes

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 carry backs, 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 $390,000, $864,000 and $9,241,000 as of July 31, 2023, January 31, 2023 and July 31, 2022, respectively, are needed for federal deferred tax assets and 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.

For the three months ended July 31, 2023 and 2022, the effective income tax rates were 23.6% and 3.0%, respectively. For the six months ended July 31, 2023 and 2022, the effective income tax rates were 23.6% and 0.3%, respectively. The change in effective tax rates for the three and six months ended July 31, 2023 was primarily due to the change in forecasted mix of income before federal and state income taxes and estimated permanent differences. The effective tax rate for the three and six months ended July 31, 2022 was primarily due to the recording of a valuation allowance needed for federal deferred tax assets and certain state net operating loss carryforwards.

The January 31, 2018 and subsequent fiscal years remain open for examination by the IRS and state tax authorities. The Company is not currently under any state examination.
16

Note 9. Net Income per Share

The following table sets forth the computation of basic and diluted net income per share:
 Three Months EndedSix Months Ended
 7/31/20237/31/20227/31/20237/31/2022
 (In thousands, except per share data)
Net income$15,534 $9,680 $14,092 $4,596 
Weighted average shares of common stock outstanding - basic16,272 16,108 16,242 16,071 
Dilutive effect of common stock equivalents from equity incentive plans 22 — 15 — 
Weighted average shares of common stock outstanding - diluted16,294 16,108 16,257 16,071 
Net income per share - basic$0.95 $0.60 $0.87 $0.29 
Net income per share - diluted$0.95 $0.60 $0.87 $0.29 

Note 10. 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 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 three-month and six-month periods ended July 31, 2023, the Company granted 70,510 awards, vested 93,600 shares according to their terms and forfeited 0 shares under the 2019 Plan. As of July 31, 2023, there were approximately 537,925 shares available for future issuance under the 2019 Plan.

The following table summarizes the stock-based compensation expense related to restricted stock awards recognized in the Company's statements of operations for the three and six months ended July 31, 2023 and 2022:

Three Months EndedSix Months Ended
7/31/20237/31/20227/31/20237/31/2022
(In thousands)
Cost of goods sold$28 $37 $56 $92 
Selling, general and administrative expenses121 116 196 314 
Total stock-based compensation expense$149 $153 $252 $406 
As of July 31, 2023, there was $572,000 of unrecognized compensation expense related to unvested restricted stock units and/or awards, which is expected to be recognized over a weighted average period of approximately 1 year.

Note 11. Retirement Plans

The Company and its subsidiaries cover certain employees under a noncontributory defined benefit retirement plan, entitled the Virco Employees’ Retirement Plan (the “Pension Plan”). As more fully described in the Annual Report on Form 10-K, benefit accruals under the Employees Retirement Plan were frozen effective December 31, 2003. There is no service cost incurred under this plan.

17

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, 2023, benefit accruals under the VIP Plan were frozen since December 31, 2003. There is no service cost incurred under the VIP Plan.

The following table summarizes the net periodic pension cost for the Pension Plan and the VIP Plan for the three and six months ended July 31, 2023 and 2022:
Three Months EndedSix Months Ended
7/31/20237/31/20227/31/20237/31/2022
(In thousands)
Service cost$—$—$—$—
Interest cost360299720597
Expected return on plan assets(199)(237)(398)(474)
Plan settlement————
Amortization of prior service cost————
Recognized net actuarial loss—134—268
Benefit cost$161$196$322 $391 

401(k) Retirement Plan

The Company’s 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, 2023 and 2022, the plan held 1,415,111 shares and 1,221,095 shares of Virco stock, respectively. For the three-month period ended July 31, 2023 and 2022, the compensation costs incurred for employer match, which is paid in the form of Company stock, was $319,000 and $322,000 respectively. For the six-month period ended July 31, 2023 and 2022, the compensation costs incurred for employer match, which is paid in the form of Company stock, was $722,000 and $652,000 respectively.
.
Note 12. Warranty Accrual

The Company provides a warranty against all substantial defects in material and workmanship. The standard warranty offered on products sold through January 31, 2013 is ten years. Effective February 1, 2014 the Company modified its warranty to a limited lifetime warranty. The warranty was effective February 1, 2014, is not anticipated to have a significant effect on warranty expense. Effective January 1, 2017, the Company modified the standard warranty offered on products sold after January 1, 2017 to provide specific warranty periods by product component, with no warranty period longer than ten years. The Company’s warranty is not a guarantee of service life, which depends upon events outside the Company’s control and may be different from the warranty period. The Company accrues an estimate of its exposure to warranty claims based upon both product sales data and an analysis of actual warranty claims incurred.

The following is a summary of the Company’s warranty-claim activity for the three and six months ended July 31, 2023 and 2022:
 Three Months EndedSix Months Ended
7/31/20237/31/20227/31/20237/31/2022
(In thousands)
Beginning balance$600 $600 $600 $600 
Provision50 116 91 150 
Costs incurred(50)(66)(91)(100)
Ending balance$600 $650 $600 $650 

Note 13. 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 purchased insurance to cover losses in excess of the self-insurance retention or
18

deductible up to a limit of $30,000,000. 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.

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.


Note 14. Delivery Costs

For the three months ended July 31, 2023 and 2022, shipping and classroom delivery costs of approximately $9,991,000 and $7,129,000, respectively, were included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

For the six months ended July 31, 2023 and 2022, shipping and classroom delivery costs of approximately $13,334,000 and $10,383,000, respectively, were included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Note 15. Subsequent Events

None.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Overview

The results of operations for the three-month and six-month periods ended July 31, 2023 and the comparable periods ended July 31, 2022 have been impacted by economic conditions driven by the COVID-19 pandemic and global supply chain disruptions. The impact of COVID-19 has been quite different during the current year compared to the prior years. Typically, the Company has an exceptionally seasonal annual cycle where approximately 50% of sales occur in the months of June, July and August. Orders received from customers follow a similar but less pronounced cycle. The Company typically receives orders for projects several months in advance of delivery, while smaller orders for fill in or replacements are typically received 4-6 weeks prior to delivery.

During the months of June, July, and August of 2021, the Company was severely impacted by shortages of labor and materials. The Company delivered less than 40% of annual shipments during the traditional summer season. During the months of June, July, and August of 2022 the Company substantially returned to the traditional seasonal cycle and delivered approximately 47% of sales. For the three months of June, July, and August 2023 the Company believes that there has been a full return to the traditional seasonal summer peak. The Company began the three-month period of June, July, and August of 2023 with a larger backlog of orders for summer delivery, nearly $20 million of increased inventory (as of April 30, 2023) and adequate availability of both full time and temporary labor to service the summer delivery season.

During the quarter ended April 30, 2023, the Company had experienced a 10.4% increase in orders, most of which were for summer of 2023 delivery. During the quarter ended July 31, 2023 the Company experienced a 3.3% increase in orders. Year-to-date the Company experienced a 6.7% increase in orders. In addition, the Company started the current fiscal year with an order backlog that was approximately $18 million greater than the prior year. This caused the Company’s backlog of unshipped orders when entering the traditional seasonal period at April 30, 2023 compared to April 30, 2022 to increase by nearly $19 million to $104.6 million compared to $85.7 million. A significant portion of this order backlog is anticipated to be delivered during the months of June, July, and August 2023.

The significant increase in sales for the second quarter ended July 31, 2023 was attributable to the increase is order backlog going into the quarter, an $19 million increase in inventory at the beginning of the second quarter, and to the Company’s ability to service the increase in orders during the summer delivery window. The Company’s backlog of unshipped sales orders at July 31, 2023 declined by $7.2 million to $74.0 million compared to $81.2 million in the prior year.

Three Months Ended July 31, 2023

For the three months ended July 31, 2023, the Company earned pre-tax income of $20,335,000 on sales of $107,321,000 compared to a pre-tax income of $9,975,000 on sales of $82,797,000 in the prior year.

Sales for the second quarter increased by approximately $24,524,000 or 29.6%, compared to the same period in 2022. The increase was attributable to an increase in beginning of year sales backlog, increased first quarter orders, a price increase for orders received after July 1, 2022 and January 1, 2023, and by the Company’s ability to service the traditional seasonal cycle.

Gross margin for the second quarter ended July 31, 2023 was 45.3% compared to 38.5% in the prior year. The increase in margin was attributable to the price increases discussed above, relatively stable commodity costs, and an increase in sales which include Virco full service. The increase in full service orders improves gross margin, but does require increased freight and service costs, which are included in selling, general and administrative expenses.

Selling, general and administrative expenses for the three months ended July 31, 2023 increased by approximately $6,653,000 and was slightly higher as a percentage of sales compared to the same period last year. The increase in selling, general and administrative expenses was attributable in part to increased variable freight and service expense attributable to a larger portion of full service orders, increased variable selling expenses, and a provision for a management bonus based upon profitability.

Interest expense increased by $385,000 for the three months ended July 31, 2023 compared to the same period last year. The increase was primarily attributable to an increase in the amount borrowed in 2023 to finance seasonal working capital and an increase in interest rates.

20

For the three months ended July 31, 2023 and 2022, the effective income tax rates were 23.6% and 3.0%, respectively. The lower effective tax rate in 2022 was due primarily to the recording of a valuation allowance needed for federal deferred tax assets and certain state net operating loss carryforwards, which commenced in the fourth quarter of fiscal year ended January 31, 2022 and continued through the period ended July 31, 2022. The increase in the effective tax rate for the second quarter ended July 31, 2023 was primarily due to the reversal of the valuation allowance at January 31, 2023.

Six Months Ended July 31, 2023

For the six-month period ended July 31, 2023 the Company earned a pre-tax profit of $18,449,000 on sales of $142,264,000 compared to a pre-tax profit of $4,609,000 on sales of $114,881,000 in the prior year. Sales increased by approximately $27,383,000 or 23.8%. The increase was attributable to an increase in beginning of year sales backlog, increased first quarter orders, a price increase for orders received after January 1, 2023 and July 1, 2022, and by the Company’s ability to service the traditional seasonal cycle.

Gross Margin for the first six months of fiscal 2024 was 43.4% compared to 36.2% in the prior year. The margin was affected by price increases on July 1, 2022 and January 1, 2023, combined with relatively stable costs for raw materials and labor expenses, and an increase in business which included Virco full service.

Selling, general and administrative expenses for the six months ended July 31, 2023 increased compared to the same period last year and decreased as a percentage of sales. The increase in selling, general and administrative expenses was attributable to an increase in orders which include Virco full service, increased variable freight and service expenses, variable selling expenses, and a provision for management bonus based upon profitability.

Interest expense increased by $670,000 for the six months ended July 31, 2023 compared to the same period last year. The increase was primarily attributable to an increase in the amount borrowed in 2023 to finance seasonal working capital and an increase in interest rates.

For the six months ended July 31, 2023 and 2022, the effective income tax rates were 23.6% and 0.3%, respectively. The lower effective tax rate in 2022 was due primarily to the recording of a valuation allowance needed for federal deferred tax assets and certain state net operating loss carryforwards which commenced in the fourth quarter of fiscal year ended January 31, 2022 and continued through the period ended July 31, 2022. The increase in the effective tax rate for the six months ended July 31, 2023 was primarily due to the reversal of the valuation allowance at January 31, 2023.

Liquidity and Capital Resources

The market for education furniture is extremely seasonal and approximately 50% of the Company's annual sales volume is shipped in the months of June through August of each year. The Company traditionally manufactures large quantities of inventory during the first and second quarters of each fiscal year in anticipation of seasonally high summer shipments. In addition, the Company finances a large balance of accounts receivable during the peak season. As discussed above, due to COVID-19, during fiscal 2021 and 2022 the Company incurred supply chain disruptions and labor shortages which adversely affected the Company’s ability to service the traditional summer delivery window. The Company believes that the Company’s ability to service the traditional seasonal sales cycle has returned and will continue through the remainder of this fiscal year.

Accounts Receivable increased by $24,306,000 at July 31, 2023 compared to the same period last year. The increase is attributable to increased sales in the quarter ended July 31, 2023.

Inventory increased by $10,625,000 at July 31, 2023 compared to July 31, 2022. The increase is primarily attributable to increased quantity. The increase in inventory was financed by increased borrowing under the Company’s line of credit with PNC Bank and increased vendor credit, which traditionally increases with increased purchases of materials.

Accrual basis capital expenditures for the six months ended July 31, 2023 were $3,235,000 compared to $1,839,000 for the same period last year. Capital expenditures are being financed through the Company's credit facility with PNC Bank and operating cash flow and restricted to not exceed $8,000,000 per year by covenant.

The Company was in violation of its financial covenants under the Restated Credit Agreement as of January 31, 2022, due to an increase in the Company’s net loss primarily attributable to the effects of supply chain disruptions and labor shortages. On April 15, 2022, the Company entered into Amendment No. 2 to the Revolving Credit and Security Agreement with PNC Bank, which implemented certain changes to the Company’s credit facility with PNC Bank, including the extension of the final maturity date of the facility to April 15, 2027. On May 19, 2023, the Company entered into Amendment No. 3 which increased
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the borrowing limit to $72.5 million during the peak seasonal period from June through August 2023. See Note 7. Debt of Notes to Unaudited Consolidated Financial Statements under Item 1 of this Quarterly Report on Form 10-Q.

Based on the Company’s current projections, raw material costs and its ability to introduce price increases, management believes it will maintain compliance with its financial covenants under the Credit Agreement, although risks and uncertainties remain, such as changes in economic conditions, changing raw material costs and supply chain challenges. The Company was in compliance with its debt covenants as of July 31, 2023.

The Company believes that cash flows from operations, together with the Company's unused borrowing capacity with PNC Bank will be sufficient to fund the Company's debt service requirements, capital expenditures and working capital needs for the next twelve months.

Off Balance Sheet Arrangements

None.

Critical Accounting Policies and Estimates

The Company's critical accounting policies are outlined in its Annual Report on Form 10-K for the fiscal year ended January 31, 2023.

Forward-Looking Statements

From time to time, including in this Quarterly Report on Form 10-Q for the quarterly period ended July 31, 2023, the Company or its representatives have made and may make forward-looking statements, orally or in writing. Such forward-looking statements may be included in, without limitation, reports to stockholders, press releases, oral statements made with the approval of an authorized executive officer of the Company and filings with the Securities and Exchange Commission ("SEC"). The words or phrases “anticipates,” “expects,” “will continue,” “believes,” “estimates,” “projects,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The results contemplated by the Company's forward-looking statements are subject to certain risks and uncertainties that could cause actual results to vary materially from anticipated results, including without limitation, availability of funding for educational institutions, availability and cost of materials, availability and cost of labor, demand for the Company's products, competitive conditions affecting selling prices and margins, capital costs and general economic conditions. Such risks and uncertainties are discussed in more detail in the Company's Form 10-K for the fiscal year ended January 31, 2023, including under the caption "Risk Factors".

The Company's forward-looking statements represent its judgment only on the dates such statements were made. By making any forward-looking statements, the Company assumes no duty to update them to reflect new, changed or unanticipated events or circumstances.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and is therefore not required to provide the information under this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including its Principal Executive Officer along with its Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”) as of July 31, 2023. Based upon the foregoing, the Company's Principal Executive Officer along with the Company's Principal Financial Officer concluded that the Company's disclosure controls and procedures as of such date were effective to ensure that the information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Company management, including its Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, Company management recognizes that any controls and procedures, no matter how well designed and
22

operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Changes in Internal Control Over Financial Reporting

The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including its Principal Executive Officer along with its Principal Financial Officer, of the effectiveness of the design and operation of disclosure controls and procedures. Based upon the foregoing, the Company's Principal Executive Officer along with the Company's Principal Financial Officer concluded that the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective as of the end of the period covered by this Quarterly Report on Form 10-Q.

There have been no changes in the Company's internal control over financial reporting during the fiscal quarter covered by this quarterly report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
23

PART II — Other Information

Virco Mfg. Corporation

Item 1. Legal Proceedings

The Company is a party to various legal actions arising in the ordinary course of business which, in the opinion of the Company, are not material in that management either expects that the Company will be successful on the merits of the pending cases or that any liabilities resulting from such cases will be substantially covered by insurance. While it is impossible to estimate with certainty the ultimate legal and financial liability with respect to these actions, management believes that the aggregate amount of such liabilities will not be material to the results of operations, financial position, or cash flows of the Company.

Item 1A. Risk Factors

You should carefully consider and evaluate the information in this Quarterly Report and the risk factors set forth under the caption “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023 (the “Form 10-K”), which was filed with the SEC on April 28, 2023. The risk factors associated with our business have not materially changed compared to the risk factors disclosed in the Form 10-K.

None.

Item 3. Defaults Upon Senior Securities
None.

Item 4. Mine Safety Disclosures
Not applicable.

Item 5. Other Information
During the fiscal quarter ended July 31, 2023, no director or officer of the Company adopted or terminated a "Rule 10-b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits
Exhibit
Number
Document
10.1
10.2
31.1
31.2
32.1
Exhibit 101.INS — XBRL Instance Document.
24

Exhibit 101.SCH — XBRL Taxonomy Extension Schema Document.
Exhibit 101.CAL — XBRL Taxonomy Extension Calculation Linkbase Document.
Exhibit 101.LAB — XBRL Taxonomy Extension Label Linkbase Document.
Exhibit 101.PRE — XBRL Taxonomy Extension Presentation Linkbase Document.
25


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

VIRCO MFG. CORPORATION
Date: September 11, 2023By:/s/ Robert E. Dose
Robert E. Dose
Vice President — Finance
(Principal Financial Officer)

26

Exhibit 31.1
CERTIFICATIONS
I, Robert A. Virtue, certify that:
1. I have reviewed this Form 10-Q of Virco Mfg. Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
/s/ Robert A. Virtue
Robert A. Virtue
Date: September 11, 2023
Chief Executive Officer and Chairman of the Board (Principal Executive Officer)




Exhibit 31.2
CERTIFICATIONS
I, Robert E. Dose, certify that:
1. I have reviewed this Form 10-Q of Virco Mfg. Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
/s/ Robert E. Dose
Robert E. Dose
Date: September 11, 2023Vice President — Finance, Secretary and Treasurer (Principal Financial Officer)






Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in his capacity as an officer of Virco Mfg. Corporation (the “Company”), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his own knowledge:
•The Quarterly Report of the Company on Form 10-Q for the period ended July 31, 2023, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
•The information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: September 11, 2023
/s/ Robert A. Virtue
Robert A. Virtue
Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
/s/ Robert E. Dose
Robert E. Dose
Vice President — Finance, Secretary and Treasurer
(Principal Financial Officer)
A signed original of this written statement required by Section 906 has been provided to Virco Mfg. Corporation and will be retained by Virco Mfg. Corporation and furnished to the Securities and Exchange Commission or its staff upon request.


v3.23.2
Cover Page - shares
 6 Months Ended
Jul. 31, 2023
Sep. 04, 2023
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jul. 31, 2023  
Document Transition Report false  
Entity File Number 1-8777  
Entity Registrant Name VIRCO MFG. CORPORATION  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 95-1613718  
Entity Address, Address Line One 2027 Harpers Way  
Entity Address, City or Town Torrance  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 90501  
City Area Code 310  
Local Phone Number 533-0474  
Title of 12(b) Security Common Stock, $0.01 par value per share  
Trading Symbol VIRC  
Security Exchange Name NASDAQ  
Entity Central Index Key 0000751365  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   16,347,314
Current Fiscal Year End Date --01-31  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q2  
Amendment Flag false  
v3.23.2
Unaudited Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Jul. 31, 2023
Jan. 31, 2023
Jul. 31, 2022
Current assets:      
Cash $ 1,600 $ 1,057 $ 2,179
Trade accounts receivables, net 68,592 18,435 44,286
Other receivables 58 68 95
Income tax receivable 0 19 111
Inventories 71,853 67,406 61,228
Prepaid expenses and other current assets 2,228 2,083 2,068
Total current assets 144,331 89,068 109,967
Property, plant and equipment:      
Land 3,731 3,731 3,731
Land improvements 686 686 653
Buildings and building improvements 51,441 51,310 51,456
Machinery and equipment 115,899 113,662 115,029
Leasehold improvements 977 983 1,012
Total property, plant and equipment 172,734 170,372 171,881
Less accumulated depreciation and amortization 137,392 135,810 136,973
Net property, plant and equipment 35,342 34,562 34,908
Operating lease right-of-use assets 8,285 10,120 12,115
Deferred tax assets, net 7,100 7,800 488
Other assets, net 9,279 8,576 8,051
Total assets 204,337 150,126 165,529
Current liabilities:      
Accounts payable 27,854 19,448 27,290
Accrued compensation and employee benefits 10,983 9,554 6,873
Income tax payable 3,325 0 0
Current portion of long-term debt 32,256 7,360 22,736
Current portion operating lease liability 5,386 5,082 4,909
Other accrued liabilities 11,259 7,081 10,057
Total current liabilities 91,063 48,525 71,865
Non-current liabilities:      
Accrued self-insurance retention 934 1,050 1,436
Accrued pension expenses 10,827 10,676 15,238
Long-term debt, less current portion 14,261 14,384 14,504
Operating lease liability, less current portion 4,317 6,796 9,241
Other long-term liabilities 640 634 740
Total non-current liabilities 30,979 33,540 41,159
Commitments and contingencies (Notes 6, 7 and 13)
Preferred stock:      
Authorized 3,000,000 shares, $0.01 par value; none issued or outstanding 0 0 0
Common stock:      
Authorized 25,000,000 shares, $0.01 par value; issued and outstanding 16,347,314 shares at 7/31/2023 and 16,210,985 at 1/31/2023 and 7/31/2022 164 162 162
Additional paid-in capital 121,030 120,890 120,684
Accumulated deficit (36,539) (50,631) (62,582)
Accumulated other comprehensive loss (2,360) (2,360) (5,759)
Total stockholders’ equity 82,295 68,061 52,505
Total liabilities and stockholders’ equity $ 204,337 $ 150,126 $ 165,529
Common Stock, Shares, Issued 16,347,314 16,210,985 16,210,985
Common stock, shares outstanding (shares) 16,347,314 16,210,985 16,210,985
v3.23.2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Jul. 31, 2023
Jan. 31, 2023
Jul. 31, 2022
Statement of Financial Position [Abstract]      
Preferred stock, shares authorized (shares) 3,000,000 3,000,000 3,000,000
Preferred stock, par value (usd per share) $ 0.01 $ 0.01 $ 0.01
Preferred stock, shares issued (shares) 0 0 0
Preferred stock, shares outstanding (shares) 0 0 0
Common stock, shares authorized (shares) 25,000,000 25,000,000 25,000,000
Common stock, par value (usd per share) $ 0.01 $ 0.01 $ 0.01
Common stock, shares issued (shares) 16,347,314 16,210,985 16,210,985
Common stock, shares outstanding (shares) 16,347,314 16,210,985 16,210,985
v3.23.2
Unaudited Condensed Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Jul. 31, 2023
Jul. 31, 2022
Jul. 31, 2023
Jul. 31, 2022
Income Statement [Abstract]        
Net sales $ 107,321 $ 82,797 $ 142,264 $ 114,881
Costs of goods sold 58,743 50,952 80,484 73,329
Gross profit 48,578 31,845 61,780 41,552
Selling, general and administrative expenses 27,324 20,671 41,838 35,122
Operating income 21,254 11,174 19,942 6,430
Unrealized (gain) loss on investment in trust account (325) 305 (624) 305
Pension expense 161 196 322 391
Interest expense 1,083 698 1,795 1,125
Income before income taxes 20,335 9,975 18,449 4,609
Income tax expense 4,801 295 4,357 13
Net income $ 15,534 $ 9,680 $ 14,092 $ 4,596
Net income per common share:        
Basic (usd per share) $ 0.95 $ 0.60 $ 0.87 $ 0.29
Diluted (usd per share) $ 0.95 $ 0.60 $ 0.87 $ 0.29
Weighted average shares of common stock outstanding:        
Basic (shares) 16,272 16,108 16,242 16,071
Diluted (shares) 16,294 16,108 16,257 16,071
v3.23.2
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jul. 31, 2023
Jul. 31, 2022
Jul. 31, 2023
Jul. 31, 2022
Statement of Comprehensive Income [Abstract]        
Net income $ 15,534 $ 9,680 $ 14,092 $ 4,596
Other comprehensive income:        
Pension adjustments, net of tax effect 0 135 0 270
Net comprehensive income $ 15,534 $ 9,815 $ 14,092 $ 4,866
v3.23.2
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 6 Months Ended
Jul. 31, 2023
Jul. 31, 2022
Operating activities    
Net income $ 14,092 $ 4,596
Adjustments to reconcile net income to net cash used in operating activities:    
Depreciation and amortization 2,455 2,259
Non-cash lease benefits (340) (265)
Provision for doubtful accounts 30 35
Amortization of debt issuance costs 55 69
Deferred income taxes 700 (89)
Stock-based compensation 252 406
Amortization of net actuarial loss for pension plans 0 270
Non-cash unrealized (gain) loss on investment (624) 305
Surrender of life insurance policies (95) 0
Changes in operating assets and liabilities:    
Trade accounts receivable (50,187) (26,552)
Other receivables 10 23
Inventories (4,447) (13,855)
Income taxes 3,346 43
Prepaid expenses and other current assets (134) (91)
Accounts payable and accrued liabilities 13,737 12,876
Net cash used in operating activities (21,150) (19,970)
Investing activities:    
Capital expenditures (2,795) (1,524)
Purchases of marketable securities in trust accounts 0 (4,856)
Proceeds from sale of marketable securities in trust accounts 0 2,112
Proceeds from surrendering life insurance policies 0 2,744
Net cash used in investing activities (2,795) (1,524)
Financing activities:    
Borrowing from long-term debt 35,688 28,352
Repayment of long-term debt (10,915) (5,625)
Payment on deferred financing costs (175) (200)
Tax withholding payments on share-based compensation (110) (213)
Net cash provided by financing activities 24,488 22,314
Net increase in cash 543 820
Cash at beginning of period 1,057 1,359
Cash at end of period $ 1,600 $ 2,179
v3.23.2
Unaudited Consolidated Statements of Changes in Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Accumulated Other Comprehensive Loss
Beginning balance (shares) at Jan. 31, 2022   16,102,023      
Beginning balance at Jan. 31, 2022 $ 47,446 $ 161 $ 120,492 $ (67,178) $ (6,029)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 4,596     4,596  
Pension adjustments, net of tax effect 270       270
Shares vested and others (shares)   108,962      
Shares vested and others (213) $ 1 (214)    
Stock compensation expense $ 406   406    
Ending balance (shares) at Jul. 31, 2022 16,210,985 16,210,985      
Ending balance at Jul. 31, 2022 $ 52,505 $ 162 120,684 (62,582) (5,759)
Beginning balance (shares) at Apr. 30, 2022   16,102,023      
Beginning balance at Apr. 30, 2022 42,750 $ 161 120,745 (72,262) (5,894)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 9,680     9,680  
Pension adjustments, net of tax effect 135       135
Shares vested and others (shares)   108,962      
Shares vested and others (213) $ 1 (214)    
Stock compensation expense $ 153   153    
Ending balance (shares) at Jul. 31, 2022 16,210,985 16,210,985      
Ending balance at Jul. 31, 2022 $ 52,505 $ 162 120,684 (62,582) (5,759)
Beginning balance (shares) at Jan. 31, 2023 16,210,985 16,210,985      
Beginning balance at Jan. 31, 2023 $ 68,061 $ 162 120,890 (50,631) (2,360)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 14,092     14,092  
Pension adjustments, net of tax effect 0       0
Shares vested and others (shares)   136,329      
Shares vested and others (110) $ 2 (112)    
Stock compensation expense $ 252   252    
Ending balance (shares) at Jul. 31, 2023 16,347,314 16,347,314      
Ending balance at Jul. 31, 2023 $ 82,295 $ 164 121,030 (36,539) (2,360)
Beginning balance (shares) at Apr. 30, 2023   16,210,985      
Beginning balance at Apr. 30, 2023 66,722 $ 162 120,993 (52,073) (2,360)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income (loss) 15,534     15,534  
Pension adjustments, net of tax effect 0       0
Shares vested and others (shares)   136,329      
Shares vested and others (110) $ 2 (112)    
Stock compensation expense $ 149   149    
Ending balance (shares) at Jul. 31, 2023 16,347,314 16,347,314      
Ending balance at Jul. 31, 2023 $ 82,295 $ 164 $ 121,030 $ (36,539) $ (2,360)
v3.23.2
Basis of Presentation
 6 Months Ended
Jul. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation Basis of PresentationThe accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements and are presented in accordance with the requirements of Form 10-Q and Rule 10-01 of Regulation S-X. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2023 (“Form 10-K”).  In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three months and six months ended July 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2024. The balance sheet at January 31, 2023 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. All references to the “Company” refer to Virco Mfg. Corporation and its subsidiaries.
v3.23.2
Seasonality and Management Use of Estimates
 6 Months Ended
Jul. 31, 2023
Seasonality [Abstract]  
Seasonality and Management Use of Estimates Seasonality and Management Use of EstimatesThe market for educational furniture is marked by extreme seasonality, with approximately 50% of the Company’s total sales typically occurring from June to August each year, the Company’s peak season. Hence, the Company typically builds and carries significant amounts of inventory during and in anticipation of this peak summer season to facilitate the rapid delivery requirements of customers in the educational market. This requires a large up-front investment in inventory, labor, storage and related costs as inventory is built in anticipation of peak sales during the summer months. As the capital required for this build-up generally exceeds cash available from operations, the Company has generally relied on third-party bank financing to meet cash flow requirements during the build-up period immediately preceding the peak season. In addition, the Company typically is faced with an overall higher accounts receivable balance during the peak season. This occurs for two primary reasons. First, accounts receivable balances typically increase during the peak season as shipments of products increase. Second, many customers during this period are educational institutions and government entities, which tend to pay accounts receivable slower than commercial customers. The Company’s working capital requirements during and in anticipation of the peak summer season require management to make estimates and judgments that affect assets, liabilities, revenues and expenses, and related contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to market demand, labor costs and stocking inventory. Significant estimates made by management include, but are not limited to, valuation of inventory; deferred tax assets and liabilities; useful lives of property, plant and equipment; liabilities under pension, warranty and self-insurance; and the accounts receivable allowance for doubtful accounts.
v3.23.2
New Accounting Pronouncements
 6 Months Ended
Jul. 31, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]  
New Accounting Pronouncements The Company evaluates all Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board ("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.
v3.23.2
Revenue Recognition
 6 Months Ended
Jul. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
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.  Prices for our products are based on published price lists and customer agreements. The Company has determined that the performance obligations are satisfied at a point in time when the Company completes delivery per the customer contract. The majority of sales are free on board ("FOB") destination where the destination is specified per the customer contract and may
include delivering the furniture into the classroom, school site or warehouse. Sales of furniture that are sold FOB factory are typically made to resellers of our product who in turn provide logistics to the ultimate customer. Once a product has been delivered per the shipping terms, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from the asset. The Company considers control to have transferred upon shipment or delivery in accordance with shipping terms because the Company has a present right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset, and the customer has significant risks and rewards of ownership of the asset.

Sales are recorded net of discounts, sales incentives and rebates, sales taxes and estimated returns and allowances. The Company offers sales incentives and discounts through various regional and national programs to our customers. These programs include product rebates, product returns allowances and trade promotions. 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. 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. Therefore, we do not consider them to be meaningfully different revenue streams given similarities in the nature of the products, performance obligation and distribution processes. Sales are predominately in the United States and to a similar class of customer. We do not manage or evaluate the business based on product line or any other discernable category.
v3.23.2
Inventories
 6 Months Ended
Jul. 31, 2023
Inventory Disclosure [Abstract]  
Inventories Inventories
Inventory is valued at the lower of cost or net realizable value (determined on a first-in, first-out basis) and includes material, labor, and factory overhead. The Company records valuation adjustments for the excess cost of the inventory over its estimated net realizable value. 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 education 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 Company records the cost of excess capacity as a period expense, not as a component of capitalized inventory valuation.

The following table presents a breakdown of the Company’s inventories as of July 31, 2023, January 31, 2023 and July 31, 2022:
7/31/20231/31/20237/31/2022
(In thousands)
 Finished goods$24,995 $25,740 $26,336 
 Work in process29,081 25,303 19,138 
 Raw materials17,777 16,363 15,754 
Total inventories$71,853 $67,406 $61,228 
v3.23.2
Leases
 6 Months Ended
Jul. 31, 2023
Leases [Abstract]  
Leases Leases
The Company has operating leases on real property, equipment, and automobiles, expiring at various dates through 2026. The Company determines if an arrangement is a lease at inception and assesses classification of the lease at commencement. All of the Company’s leases are classified as operating leases. Pursuant to ASC 842 - 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.

The Company has an operating lease for its corporate office and manufacturing and distribution facility located in Torrance, CA, currently with a remaining lease term through April 2025. The Company's lease terms include options to extend or terminate the lease only when it is reasonably certain that we exercise that option. 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. In accordance with ASC 842, 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 EndedSix Months Ended
7/31/20237/31/20227/31/20237/31/2022
(In thousands, except lease term and discount rate)
Operating lease cost$1,281 $1,288 $2,550 $2,615 
Short-term lease cost80 79 188 176 
Sublease income(10)(10)(20)(20)
Variable lease cost160 278 421 531 
Total lease cost$1,511 $1,635 $3,139 $3,302 
Other operating leases information:
Cash paid for amounts included in the measurement of lease liabilities$2,890 $2,880 
Right-of-use assets obtained in exchange for new lease liabilities$364 $398 
Weighted-average remaining lease term (years)1.72.7
Weighted-average discount rate6.36 %6.38 %

Minimum future lease payments for operating leases in effect as of July 31, 2023, are as follows:
Operating Lease
For the year ending January 31, (In thousands)
Remaining of 2024$2,902 
20255,825 
20261,564 
20278 
2028— 
Thereafter— 
Remaining balance of lease payments10,299 
Short-term lease liabilities5,386 
Long-term lease liabilities4,317 
Total lease liabilities9,703 
Difference between undiscounted cash flows and discounted cash flows$596 
v3.23.2
Debt
 6 Months Ended
Jul. 31, 2023
Debt Disclosure [Abstract]  
Debt Debt
Outstanding balances for the Company’s long-term debt were as follows:
7/31/20231/31/20237/31/2022
(In thousands)
Revolving credit line$42,012 $17,122 $32,502 
Other4,505 4,622 4,738 
Total debt46,517 21,744 37,240 
Less current portion32,256 7,360 22,736 
Non-current portion$14,261 $14,384 $14,504 

The Company and Virco Inc., its wholly-owned subsidiary (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. On September 28, 2021, the Borrowers entered into an Amended and Restated Revolving Credit and Security Agreement (the “Restated Credit Agreement”) with PNC Bank, which amended and restated the prior Credit Agreement and effectively incorporated all of the prior amendments into an amended and restated form of agreement.

The Restated Credit Agreement permits the Company to issue dividends or make payments with respect to the Company’s capital stock in an aggregate amount up to $3.0 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 Restated 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. In connection with the Restated Credit Agreement, the Company also agreed to pay to PNC Bank a non-refundable fee of $50,000.

In addition to the financial covenants, the Restated 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 Restated Credit Agreement upon receipt by the Borrowers. Due to this automatic liquidating nature of the Restated 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 Restated Credit Agreement are substantially the same as those of the original Credit Agreement, consisting of (i) a revolving line of credit with a Maximum Revolving Advance Amount of $65.0 million 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 and (ii) an equipment loan of $2.0 million. The Restated Credit Agreement is secured by substantially all of the Borrowers’ personal property and certain of the Borrowers’ real property. The Restated Credit Agreement is subject to certain prepayment penalties upon early termination of the Restated Credit Agreement. Prior to the maturity date, principal amounts outstanding under the Restated Credit Agreement may be repaid and reborrowed at the option of the Borrowers without premium or penalty, subject to borrowing base limitations, seasonal adjustments and certain other conditions, including reduced borrowings under the revolving line to less than or equal $10.0 million for a period of 30 consecutive days during the fourth quarter of each fiscal year. The Restated 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, 2023.

The Company's revolving line of credit with PNC is structured to provide seasonal credit availability during the Company's peak summer season. Approximately $30.5 million was available for borrowing as of July 31, 2023. The interest rate range for outstanding loan balances during the quarter ended July 31, 2023 was 8.19% to 10.25%. The Company also incurs a fee on the unused portion of the revolving line of credit at a rate of 0.375%.
In addition to the outstanding debt balance of $42.0 million on the Company's revolving credit line, the Company also carries a mortgage on a manufacturing building in Conway Arkansas. The original note was dated August 2017 for $5.8 million, at a fixed rate of 4% per year and 20 years term. The outstanding amount under this note was $4.5 million as of July 31, 2023.

On May 19, 2023, the Company entered into Amendment No. 3 to Amended and Restated Revolving Credit and Security Agreement (“Amendment No. 3”) with PNC, with an effective date of May 5, 2023. Amendment No. 3 amended the Restated Credit Agreement and the secured revolving line of credit provided to the Company under the revolving credit facility to reflect the following material changes:

i.Maximum size of the PNC line of credit has been increased to $72.5 million during the months of June through August of 2023, to provide additional availability for the Company’s forecast through the 2023 peak borrowing period;

ii.Increase in the total inventory sublimit under the Credit Agreement to $35.0 million and increase in the Assemble-to-ship (ATS) inventory sublimit to $15.0 million during the months of May through August of 2023;

iii.The Company agreed to pay an amendment fee of $50,000, which is 0.67% on the incremental line increase of $7.5 million; and

iv.Increase in the Applicable Margin (as defined in the Credit Agreement) of 25 basis points.

Management believes that the carrying value of debt approximated fair value at July 31, 2023, as all of the long-term debt bears interest at variable rates based on prevailing market conditions.
v3.23.2
Income Taxes
 6 Months Ended
Jul. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
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 carry backs, 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 $390,000, $864,000 and $9,241,000 as of July 31, 2023, January 31, 2023 and July 31, 2022, respectively, are needed for federal deferred tax assets and 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.

For the three months ended July 31, 2023 and 2022, the effective income tax rates were 23.6% and 3.0%, respectively. For the six months ended July 31, 2023 and 2022, the effective income tax rates were 23.6% and 0.3%, respectively. The change in effective tax rates for the three and six months ended July 31, 2023 was primarily due to the change in forecasted mix of income before federal and state income taxes and estimated permanent differences. The effective tax rate for the three and six months ended July 31, 2022 was primarily due to the recording of a valuation allowance needed for federal deferred tax assets and certain state net operating loss carryforwards.
The January 31, 2018 and subsequent fiscal years remain open for examination by the IRS and state tax authorities. The Company is not currently under any state examination.
v3.23.2
Net loss per Share
 6 Months Ended
Jul. 31, 2023
Earnings Per Share [Abstract]  
Net income per Share Net Income per Share
The following table sets forth the computation of basic and diluted net income per share:
 Three Months EndedSix Months Ended
 7/31/20237/31/20227/31/20237/31/2022
 (In thousands, except per share data)
Net income$15,534 $9,680 $14,092 $4,596 
Weighted average shares of common stock outstanding - basic16,272 16,108 16,242 16,071 
Dilutive effect of common stock equivalents from equity incentive plans 22 — 15 — 
Weighted average shares of common stock outstanding - diluted16,294 16,108 16,257 16,071 
Net income per share - basic$0.95 $0.60 $0.87 $0.29 
Net income per share - diluted$0.95 $0.60 $0.87 $0.29 
v3.23.2
Stock-Based Compensation
 6 Months Ended
Jul. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation 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 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 three-month and six-month periods ended July 31, 2023, the Company granted 70,510 awards, vested 93,600 shares according to their terms and forfeited 0 shares under the 2019 Plan. As of July 31, 2023, there were approximately 537,925 shares available for future issuance under the 2019 Plan.

The following table summarizes the stock-based compensation expense related to restricted stock awards recognized in the Company's statements of operations for the three and six months ended July 31, 2023 and 2022:

Three Months EndedSix Months Ended
7/31/20237/31/20227/31/20237/31/2022
(In thousands)
Cost of goods sold$28 $37 $56 $92 
Selling, general and administrative expenses121 116 196 314 
Total stock-based compensation expense$149 $153 $252 $406 
As of July 31, 2023, there was $572,000 of unrecognized compensation expense related to unvested restricted stock units and/or awards, which is expected to be recognized over a weighted average period of approximately 1 year.
v3.23.2
Retirement Plans
 6 Months Ended
Jul. 31, 2022
Retirement Benefits [Abstract]  
Retirement Plans Retirement PlansThe Company and its subsidiaries cover certain employees under a noncontributory defined benefit retirement plan, entitled the Virco Employees’ Retirement Plan (the “Pension Plan”). As more fully described in the Annual Report on Form 10-K, benefit accruals under the Employees Retirement Plan were frozen effective December 31, 2003. There is no service cost incurred under this 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, 2023, benefit accruals under the VIP Plan were frozen since December 31, 2003. There is no service cost incurred under the VIP Plan.

The following table summarizes the net periodic pension cost for the Pension Plan and the VIP Plan for the three and six months ended July 31, 2023 and 2022:
Three Months EndedSix Months Ended
7/31/20237/31/20227/31/20237/31/2022
(In thousands)
Service cost$—$—$—$—
Interest cost360299720597
Expected return on plan assets(199)(237)(398)(474)
Plan settlement————
Amortization of prior service cost————
Recognized net actuarial loss—134—268
Benefit cost$161$196$322 $391 

401(k) Retirement Plan

The Company’s 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, 2023 and 2022, the plan held 1,415,111 shares and 1,221,095 shares of Virco stock, respectively. For the three-month period ended July 31, 2023 and 2022, the compensation costs incurred for employer match, which is paid in the form of Company stock, was $319,000 and $322,000 respectively. For the six-month period ended July 31, 2023 and 2022, the compensation costs incurred for employer match, which is paid in the form of Company stock, was $722,000 and $652,000 respectively.
.
v3.23.2
Warranty Accrual
 6 Months Ended
Jul. 31, 2023
Product Warranties Disclosures [Abstract]  
Warranty Accrual Warranty Accrual
The Company provides a warranty against all substantial defects in material and workmanship. The standard warranty offered on products sold through January 31, 2013 is ten years. Effective February 1, 2014 the Company modified its warranty to a limited lifetime warranty. The warranty was effective February 1, 2014, is not anticipated to have a significant effect on warranty expense. Effective January 1, 2017, the Company modified the standard warranty offered on products sold after January 1, 2017 to provide specific warranty periods by product component, with no warranty period longer than ten years. The Company’s warranty is not a guarantee of service life, which depends upon events outside the Company’s control and may be different from the warranty period. The Company accrues an estimate of its exposure to warranty claims based upon both product sales data and an analysis of actual warranty claims incurred.

The following is a summary of the Company’s warranty-claim activity for the three and six months ended July 31, 2023 and 2022:
 Three Months EndedSix Months Ended
7/31/20237/31/20227/31/20237/31/2022
(In thousands)
Beginning balance$600 $600 $600 $600 
Provision50 116 91 150 
Costs incurred(50)(66)(91)(100)
Ending balance$600 $650 $600 $650 
v3.23.2
Contingencies
 6 Months Ended
Jul. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Contingencies ContingenciesThe 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 purchased insurance to cover losses in excess of the self-insurance retention or
deductible up to a limit of $30,000,000. 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.

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.
v3.23.2
Delivery Costs
 6 Months Ended
Jul. 31, 2023
Other Income and Expenses [Abstract]  
Delivery Costs Delivery Costs
For the three months ended July 31, 2023 and 2022, shipping and classroom delivery costs of approximately $9,991,000 and $7,129,000, respectively, were included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

For the six months ended July 31, 2023 and 2022, shipping and classroom delivery costs of approximately $13,334,000 and $10,383,000, respectively, were included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.
v3.23.2
Subsequent Events
 6 Months Ended
Jul. 31, 2023
Subsequent Events [Abstract]  
Subsequent Events Subsequent EventsNone.
v3.23.2
Inventories (Tables)
 6 Months Ended
Jul. 31, 2023
Inventory Disclosure [Abstract]  
Schedule of Inventory
The following table presents a breakdown of the Company’s inventories as of July 31, 2023, January 31, 2023 and July 31, 2022:
7/31/20231/31/20237/31/2022
(In thousands)
 Finished goods$24,995 $25,740 $26,336 
 Work in process29,081 25,303 19,138 
 Raw materials17,777 16,363 15,754 
Total inventories$71,853 $67,406 $61,228 
v3.23.2
Leases (Tables)
 6 Months Ended
Jul. 31, 2023
Leases [Abstract]  
Quantitative Information of Leases
The quantitative information regarding our leases is as follows:
Three Months EndedSix Months Ended
7/31/20237/31/20227/31/20237/31/2022
(In thousands, except lease term and discount rate)
Operating lease cost$1,281 $1,288 $2,550 $2,615 
Short-term lease cost80 79 188 176 
Sublease income(10)(10)(20)(20)
Variable lease cost160 278 421 531 
Total lease cost$1,511 $1,635 $3,139 $3,302 
Other operating leases information:
Cash paid for amounts included in the measurement of lease liabilities$2,890 $2,880 
Right-of-use assets obtained in exchange for new lease liabilities$364 $398 
Weighted-average remaining lease term (years)1.72.7
Weighted-average discount rate6.36 %6.38 %
Schedule of Minimum Future Lease Payments
Minimum future lease payments for operating leases in effect as of July 31, 2023, are as follows:
Operating Lease
For the year ending January 31, (In thousands)
Remaining of 2024$2,902 
20255,825 
20261,564 
20278 
2028— 
Thereafter— 
Remaining balance of lease payments10,299 
Short-term lease liabilities5,386 
Long-term lease liabilities4,317 
Total lease liabilities9,703 
Difference between undiscounted cash flows and discounted cash flows$596 
v3.23.2
Debt (Tables)
 6 Months Ended
Jul. 31, 2023
Debt Disclosure [Abstract]  
Outstanding balances of long-term debt
Outstanding balances for the Company’s long-term debt were as follows:
7/31/20231/31/20237/31/2022
(In thousands)
Revolving credit line$42,012 $17,122 $32,502 
Other4,505 4,622 4,738 
Total debt46,517 21,744 37,240 
Less current portion32,256 7,360 22,736 
Non-current portion$14,261 $14,384 $14,504 
v3.23.2
Net income per Share (Tables)
 6 Months Ended
Jul. 31, 2023
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted
 Three Months EndedSix Months Ended
 7/31/20237/31/20227/31/20237/31/2022
 (In thousands, except per share data)
Net income$15,534 $9,680 $14,092 $4,596 
Weighted average shares of common stock outstanding - basic16,272 16,108 16,242 16,071 
Dilutive effect of common stock equivalents from equity incentive plans 22 — 15 — 
Weighted average shares of common stock outstanding - diluted16,294 16,108 16,257 16,071 
Net income per share - basic$0.95 $0.60 $0.87 $0.29 
Net income per share - diluted$0.95 $0.60 $0.87 $0.29 
v3.23.2
Stock-Based Compensation (Tables)
 6 Months Ended
Jul. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Share-Based Payment Arrangement, Expensed and Capitalized, Amount
The following table summarizes the stock-based compensation expense related to restricted stock awards recognized in the Company's statements of operations for the three and six months ended July 31, 2023 and 2022:

Three Months EndedSix Months Ended
7/31/20237/31/20227/31/20237/31/2022
(In thousands)
Cost of goods sold$28 $37 $56 $92 
Selling, general and administrative expenses121 116 196 314 
Total stock-based compensation expense$149 $153 $252 $406 
v3.23.2
Retirement Plans (Tables)
 6 Months Ended
Jul. 31, 2023
Retirement Benefits [Abstract]  
Schedule of Defined Benefit Plans Disclosures he net periodic pension cost for the Pension Plan and the VIP Plan for the three and six months ended July 31, 2023 and 2022:
Three Months EndedSix Months Ended
7/31/20237/31/20227/31/20237/31/2022
(In thousands)
Service cost$—$—$—$—
Interest cost360299720597
Expected return on plan assets(199)(237)(398)(474)
Plan settlement————
Amortization of prior service cost————
Recognized net actuarial loss—134—268
Benefit cost$161$196$322 $391 
v3.23.2
Warranty Accrual (Tables)
 6 Months Ended
Jul. 31, 2023
Product Warranties Disclosures [Abstract]  
Schedule of Product Warranty Liability
The following is a summary of the Company’s warranty-claim activity for the three and six months ended July 31, 2023 and 2022:
 Three Months EndedSix Months Ended
7/31/20237/31/20227/31/20237/31/2022
(In thousands)
Beginning balance$600 $600 $600 $600 
Provision50 116 91 150 
Costs incurred(50)(66)(91)(100)
Ending balance$600 $650 $600 $650 
v3.23.2
Seasonality (Details)
 6 Months Ended
Jul. 31, 2023
Sales [Member]  
Seasonality (Textual) [Abstract]  
The market for educational furniture is marked by extreme seasonality 50.00%
v3.23.2
Inventories (Details) - USD ($)
$ in Thousands
Jul. 31, 2023
Jan. 31, 2023
Jul. 31, 2022
Inventory Disclosure [Abstract]      
Finished goods $ 24,995 $ 25,740 $ 26,336
Work in process 29,081 25,303 19,138
Raw materials 17,777 16,363 15,754
Total inventories $ 71,853 $ 67,406 $ 61,228
v3.23.2
Leases - ASC 842 Quantitative Information (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jul. 31, 2023
Jul. 31, 2022
Jul. 31, 2023
Jul. 31, 2022
Leases [Abstract]        
Operating lease cost $ 1,281 $ 1,288 $ 2,550 $ 2,615
Short-term lease cost 80 79 188 176
Sublease income (10) (10) (20) (20)
Variable lease cost 160 278 421 531
Total lease cost $ 1,511 $ 1,635 3,139 3,302
Cash paid for amounts included in the measurement of lease liabilities     2,890 2,880
Right-of-use assets obtained in exchange for new lease liabilities     $ 364 $ 398
Weighted-average remaining lease term (years) 1 year 8 months 12 days 2 years 8 months 12 days 1 year 8 months 12 days 2 years 8 months 12 days
Weighted-average discount rate 6.36% 6.38% 6.36% 6.38%
v3.23.2
Leases - ASC 842 Minimum Lease Payments (Details) - USD ($)
$ in Thousands
Jul. 31, 2023
Jan. 31, 2023
Jul. 31, 2022
Leases [Abstract]      
Remaining of 2024 $ 2,902    
2025 5,825    
2026 1,564    
2027 8    
2028 0    
Thereafter 0    
Remaining balance of lease payments 10,299    
Short-term lease liabilities 5,386 $ 5,082 $ 4,909
Long-term lease liabilities 4,317 $ 6,796 $ 9,241
Total lease liabilities 9,703    
Difference between undiscounted cash flows and discounted cash flows $ 596    
v3.23.2
Debt (Long-term Debt) (Details) - USD ($)
$ in Thousands
Jul. 31, 2023
Jan. 31, 2023
Jul. 31, 2022
Debt Instrument [Line Items]      
Long-term debt $ 46,517 $ 21,744 $ 37,240
Less current portion 32,256 7,360 22,736
Non-current portion 14,261 14,384 14,504
Revolving Credit Facility [Member]      
Debt Instrument [Line Items]      
Long-term debt 42,012 17,122 32,502
Other Debt [Member]      
Debt Instrument [Line Items]      
Long-term debt $ 4,505 $ 4,622 $ 4,738
v3.23.2
Debt (Narrative) (Details)
 1 Months Ended 6 Months Ended
May 19, 2023
USD ($)
Aug. 31, 2017
USD ($)
Jul. 31, 2023
USD ($)
Jan. 31, 2023
USD ($)
Jul. 31, 2022
USD ($)
Sep. 28, 2021
USD ($)
Line of Credit Facility [Line Items]            
Maximum dividend amount in fiscal year           $ 3,000,000.0
Line of credit facility, term     $ 15,000,000.0      
Line of credit facility, period for reduced borrowings during fourth quarter of each fiscal year (consecutive days)     30 days      
Waiver and amendment fee $ 50,000          
Unused portion fee rate     0.375%      
Long-term debt     $ 46,517,000 $ 21,744,000 $ 37,240,000  
Increase in inventory sublimit under credit agreement 35,000,000          
Increase in assemble to ship inventory sublimit under credit agreement $ 15,000,000          
Incremental credit line increase (decrease) 0.67%          
Increase (decrease) applicable margin basis points 0.25%          
Incremental Credit Line Increase (Decrease) $ 7,500,000          
Revolving Credit Facility [Member]            
Line of Credit Facility [Line Items]            
Long-term debt     42,012,000 $ 17,122,000 $ 32,502,000  
Original Mortgage Note            
Line of Credit Facility [Line Items]            
Interest rate   4.00%        
Long-term debt     $ 4,500,000      
Face amount   $ 5,800,000        
Term   20 years        
Inventory [Member]            
Line of Credit Facility [Line Items]            
Revolving credit facility borrowing base limitation     60.00%      
Inventories [Member]            
Line of Credit Facility [Line Items]            
Revolving credit facility borrowing base limitation     85.00%      
Maximum [Member] | Accounts receivable [Member]            
Line of Credit Facility [Line Items]            
Revolving credit facility borrowing base limitation     85.00%      
Amended and Restated Credit Agreement | Consecutive Four Fiscal Quarters Ending July 31, 2020            
Line of Credit Facility [Line Items]            
Minimum fixed charge coverage ratio           1.2
Equipment Loan [Member] | Amended and Restated Credit Agreement            
Line of Credit Facility [Line Items]            
Line of credit facility, equipment financing     $ 2,000,000      
PNC [Member] | Amended and Restated Credit Agreement            
Line of Credit Facility [Line Items]            
Non-refundable fee           $ 50,000
PNC [Member] | Revolving Credit Facility [Member]            
Line of Credit Facility [Line Items]            
Remaining borrowing capacity     30,500,000      
PNC [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member]            
Line of Credit Facility [Line Items]            
Line of credit facility, net $ 72,500,000          
PNC [Member] | Revolving Credit Facility [Member] | Amended and Restated Credit Agreement            
Line of Credit Facility [Line Items]            
Line of credit facility, maximum borrowing capacity     65,000,000.0      
PNC [Member] | Equipment Loan [Member] | Amended and Restated Credit Agreement            
Line of Credit Facility [Line Items]            
Line of credit facility, maximum borrowing capacity     $ 10,000,000.0      
Alternate Base Rate Loans [Member] | Maximum [Member]            
Line of Credit Facility [Line Items]            
Interest rate     10.25%      
Alternate Base Rate Loans [Member] | Minimum            
Line of Credit Facility [Line Items]            
Interest rate     8.19%      
v3.23.2
Income Taxes (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jul. 31, 2023
Jul. 31, 2022
Jul. 31, 2023
Jul. 31, 2022
Jan. 31, 2023
Income Tax Disclosure [Abstract]          
Valuation allowance $ 390 $ 9,241 $ 390 $ 9,241 $ 864
Effective tax rate 23.60% 3.00% 23.60% 0.30%  
v3.23.2
Net income per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Jul. 31, 2023
Jul. 31, 2022
Jul. 31, 2023
Jul. 31, 2022
Earnings Per Share [Abstract]        
Net income $ 15,534 $ 9,680 $ 14,092 $ 4,596
Weighted average shares outstanding - basic (shares) 16,272 16,108 16,242 16,071
Net effect of dilutive share-based on the treasury stock method using average market price (shares) 22 0 15 0
Totals (shares) 16,294 16,108 16,257 16,071
Net income (loss) per share - basic (usd per share) $ 0.95 $ 0.60 $ 0.87 $ 0.29
Net income (loss) per share - diluted (usd per share) $ 0.95 $ 0.60 $ 0.87 $ 0.29
v3.23.2
Stock-Based Compensation (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jul. 31, 2023
Jul. 31, 2022
Jul. 31, 2023
Jul. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock-based compensation expense $ 149 $ 153 $ 252 $ 406
Cost of Goods Sold [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock-based compensation expense 28 37 56 92
Selling, General and Administrative Expenses [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Stock-based compensation expense 121 $ 116 196 $ 314
Restricted Stock Units (RSUs) [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Unrecognized compensation expense $ 572   $ 572  
Unrecognized compensation expense, weighted average period to be recognized     1 year  
Restricted Stock Units (RSUs) [Member] | 2019 Plan [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Awards authorized (shares) 1,000,000   1,000,000  
Granted in the period (shares)     70,510  
Vested in period (shares)     93,600  
Forfeited in period (shares)     0  
Awards available for future issuance (shares) 537,925   537,925  
v3.23.2
Retirement Plans (Periodic Pension Cost) (Details) - Pension Plan [Member] - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jul. 31, 2023
Jul. 31, 2022
Jul. 31, 2023
Jul. 31, 2022
Components of Net Cost        
Service cost $ 0 $ 0 $ 0 $ 0
Interest cost 360 299 720 597
Expected return on plan assets (199) (237) (398) (474)
Plan settlement 0 0 0 0
Amortization of prior service cost 0 0 0 0
Recognized net actuarial loss 0 134 0 268
Benefit cost $ 161 $ 196 $ 322 $ 391
v3.23.2
Retirement Plans (Narrative) (Details) - United States [Member] - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jul. 31, 2023
Jul. 31, 2022
Jul. 31, 2023
Jul. 31, 2022
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]        
Minimum annual contributions per employee, percent     1.00%  
Maximum annual contributions per employee, percent     75.00%  
Number of common shares held 1,415,111 1,221,095 1,415,111 1,221,095
Contributions by employer $ 319 $ 322 $ 722 $ 652
v3.23.2
Warranty (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jul. 31, 2023
Jul. 31, 2022
Jul. 31, 2023
Jul. 31, 2022
Warranty claim activity        
Beginning balance $ 600 $ 600 $ 600 $ 600
Provision 50 116 91 150
Costs incurred (50) (66) (91) (100)
Ending balance $ 600 $ 650 $ 600 $ 650
Maximum [Member]        
Warranty [Line Items]        
Product warranty period     10 years  
v3.23.2
Contingencies (Details) - Maximum
Jul. 31, 2023
USD ($)
Product Liability [Member]  
Loss Contingencies [Line Items]  
Self insurance retention $ 250,000
Workers compensation Liability Insurance [Member]  
Loss Contingencies [Line Items]  
Self insurance retention 250,000
General Liability Loss  
Loss Contingencies [Line Items]  
Self insurance retention 50,000
Automobile Liability Loss [Member]  
Loss Contingencies [Line Items]  
Self insurance retention 50,000
Loss Liability [Member]  
Loss Contingencies [Line Items]  
Self insurance retention $ 30,000,000
v3.23.2
Delivery Costs (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jul. 31, 2023
Jul. 31, 2022
Jul. 31, 2023
Jul. 31, 2022
Other Income and Expenses [Abstract]        
Shipping and classroom delivery costs $ 9,991,000 $ 7,129,000 $ 13,334,000 $ 10,383,000
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