Virco Reports Revenue through Six Months Declined 6.1% to $118.2 Million from $125.8 Million, as Rebalancing of School Furniture Market Continues

Virco’s mid‑year results show lower sales and earnings but strong margins, liquidity and a maintained cash dividend.

Rhea-AI Summary

Virco (VIRC) reported lower revenue but continued profitability for its second quarter and six months ended July 31, 2026.

Q2 net sales were $87.5 million, down from $92.1 million, with a gross margin of 40.0% and operating income of $10.5 million, which the company said remains above its long-term average. Six-month net sales declined 6.1% to $118.2 million from $125.8 million, while operating income fell to $6.9 million from $15.3 million. Q2 net income was $8.6 million versus $10.2 million, and year-to-date net income was $5.8 million versus $10.9 million. Year-to-date gross margin was 40.4%, and selling, general and administrative expenses were 34.5% of revenue versus 33.1% a year earlier.

Shipments plus backlog totaled $162.5 million, 2.1% lower than the prior year. The company highlighted a current ratio of 2.5, modest interest expense of $0.3 million year-to-date, and low debt. The board declared a quarterly dividend of $0.025 per share, payable October 9, 2026 to shareholders of record on September 18, 2026.

Positive

• Q2 gross margin 40.0% and year-to-date gross margin 40.4%, indicating strong pricing and cost control.
• Q2 operating income $10.5 million remains above the company’s long-term average for the period.
• Shipments plus backlog $162.5 million, only 2.1% below the same period last year.
• Current ratio 2.5 and year-to-date interest expense just $0.3 million, supporting low-leverage operations.
• Quarterly cash dividend $0.025 per share declared, with total $0.050 per share year-to-date.
• Total stockholders’ equity $110.5 million at July 31, 2026, up from $105.9 million at January 31, 2026.

Negative

• Six-month net sales down 6.1% to $118.2 million from $125.8 million year-over-year.
• Year-to-date net income down 46.5% to $5.8 million from $10.9 million a year earlier.
• Q2 net income down 15.4% to $8.6 million from $10.2 million in the prior-year quarter.
• Year-to-date operating income $6.9 million versus $15.3 million, a substantial decline.
• SG&A 34.5% of revenue year-to-date, higher than 33.1% in the prior year.
• Management cautions that typical lower second-half volume is likely to limit improvement in full-year results.

Market Context

Recent insider filings recorded 20,842 shares bought and none sold. That platform signal adds shareh...

Analysis

Recent insider filings recorded 20,842 shares bought and none sold. That platform signal adds shareholder-alignment context to VIRC’s earnings update, while declining profitability remains the principal risk and future reports warrant attention.

Key Figures

Q2 Net Sales: $87.5 million Q2 Gross Margin: 40.0% Q2 Operating Income: $10.5 million +5 more

8 metrics

Q2 Net Sales $87.5 million Second quarter 2026 vs. $92.1 million prior year

Q2 Gross Margin 40.0% Second quarter 2026

Q2 Operating Income $10.5 million Second quarter 2026 vs. $15.4 million prior year

Six-Month Net Sales $118.2 million Six months ended July 31, 2026; down 6.1% from $125.8 million

Six-Month Operating Income $6.9 million Six months ended July 31, 2026 vs. $15.3 million prior year

Six-Month Net Income $5.8 million Six months ended July 31, 2026 vs. $10.9 million prior year; down 46.5%

Current Ratio 2.5 Supports development of existing and new revenue streams

Quarterly Dividend $0.025 per share Declared September 3, 2026; payable October 9, 2026

Historical Context

2 past events · Latest: Jun 03 (Negative)

Pattern 2 events

Date	Event	Sentiment	24h Move	Catalyst
Jun 03	First-quarter earnings	Negative	-9.5%	Net loss and slower school-furniture demand accompanied a 9.1% sales decline.
Apr 08	Full-year earnings	Negative	-5.3%	Full-year profitability contrasted with lower fourth-quarter revenue and a wider operating loss.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Prior negative earnings updates were followed by negative share-price reactions, with no observed divergence.

Key Terms

gross margin, current ratio, operating income

3 terms

gross margin financial

"Revenue quality remains high, with a gross margin of 40.0% for the quarter."

Gross margin is the difference between how much money a company makes from selling its products and how much it costs to produce them, expressed as a percentage of sales. It shows how efficiently a company is turning sales into profit before other expenses like marketing or salaries. Higher gross margin means the company keeps more money from each sale, which is a good sign of financial health.

View in glossary

current ratio financial

"Current Ratio of 2.5 Supports Aggressive Development of Existing and New Revenue Streams"

The current ratio measures a company’s short-term ability to pay upcoming bills by comparing assets that can be turned into cash within a year (like cash, inventory, and receivables) to obligations due within the same period. Investors use it like a household budget check — a ratio above 1 suggests the company has more short-term resources than immediate debts, while a very low or very high ratio can signal liquidity risk or inefficient use of assets.

View in glossary

operating income financial

"Operating income for the quarter was $10.5 million versus $15.4 million last year."

Operating income is the profit a company earns from its regular business activities after subtracting the costs directly related to running the business, such as wages, rent, and supplies. It shows how well the core operations are performing, ignoring income or expenses from non-regular activities like investments or one-time events. Investors use it to assess the company's efficiency and profitability from its main work.

View in glossary

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

• Operating Income of $10.5 Million for Second Quarter Remains Above Long-Term Average
• Shipments Plus Backlog of $162.5 Million is 2.1% Lower Than Same Period Last Year
• Current Ratio of 2.5 Supports Aggressive Development of Existing and New Revenue Streams
• Revenue Quality Remains High, With YTD Gross Margin of 40.4%
• Board Declares Quarterly Dividend of $0.025 per Share, Payable October 9, 2026 to Shareholders of Record as of September 18, 2026

TORRANCE, Calif., Sept. 04, 2026 (GLOBE NEWSWIRE) -- Virco Mfg. Corporation (NASDAQ: VIRC), a leading manufacturer and direct supplier of moveable furniture and equipment for educational environments and public spaces in the United States, reported solid profitability for its second quarter and the six months ended July 31, 2026.  Reflecting the ongoing rebalancing of the market for school furniture following uncertainties of the past few years, net sales for the second quarter totaled $87.5 million, versus $92.1 million for the same quarter in the prior year.  Revenue quality remains high, with a gross margin of 40.0% for the quarter.  Operating income for the quarter was $10.5 million versus $15.4 million last year.  This remains well above the Company’s long-term average performance for the period.

Through six months, net sales totaled $118.2 million, a 6.1% decline from last year’s $125.8 million.  Operating income was $6.9 million versus $15.3 million in the prior year.  Year-over-year comparisons may reflect uncertainties among school administrators regarding the just-ended budget cycle.  Most public schools have fiscal years that run from July 1 through June 30.  Uncertainties heading into the current cycle may have resulted in cautious spending through the Company’s first and second quarters.  Very recent trends show a slight improvement in demand following recent approval of new budgets for the school year of July 2026 through June 2027.  Management cautions that even though these trends are encouraging, they come at a low point in the annual revenue cycle and are therefore unlikely to meaningfully improve the Company’s full-year results.

The Company’s domestically-based fabrication and service model continues to deliver good control over cost of goods sold and inventory levels, excellence of delivery and customer service, and of course product quality.  In addition, the flexibility provided by U.S. manufacturing allows more responsive customer service without excessive reliance on debt financing.  Through six months, interest expense was flat at $0.3 million, while selling, general, and administrative expense was 34.5% of revenue vs. 33.1% in the prior year.

Net income for the three months ended July 31, 2026 was $8.6 million versus $10.2 million in the prior year (a 15.4% decline).  Through six months, net income was $5.8 million compared to $10.9 million the year before (a 46.5% decline).  The performance comparison between each of the first two quarters of this year reflects a modest improvement in recent trends, as discussed earlier, following approval of new budgets in many public schools.  Again, Management cautions that while trends are positive, the typical lower volume of the second half of the year is likely to moderate their impact on full-year results.

As global supply chains continue to rebalance, the impact on the Company’s core market of school furniture and equipment remains fluid.  Business development efforts in adjacent markets with similar products, processes, and distribution channels are beginning to show consistent data suggesting that domestic manufacturers like Virco, while always enjoying advantages in flexibility, customization, and response time, are now finally nearing cost parity as well.  As that threshold is approached, the other advantages of Virco’s U.S. factories and experience may be extensible to an entirely new customer base.

Supply chain relationships tend to be “sticky” and Management anticipates that any rebalancing in Virco’s favor may take several years. However, initial responses to these efforts are encouraging enough to justify further investment in new products and “platform processes”, Management’s term for major operating systems like tube mills, panel processing, injection molding, and metal finishing.  Management expects any new investments to fall comfortably within the Company’s typical $4 to $6 million annual capital expenditures budget, which also includes ongoing maintenance and repairs.

Commenting on the first half of the year, Virco Chairman and CEO Robert Virtue said: “As the school delivery season becomes more compressed, the response time of our U.S. factories becomes more of a competitive advantage.  We can provide superior quality, customization, and speed of service, while also operating with virtually no debt.  While this current year will prove to be challenging in comparison to our recent years of record financial performance, our foundation is very strong and we’re actively using that strength to gain market share and develop new customers.

“None of this would be possible without our highly experienced workforce, 40% of whom have been with Virco for more than 20 years.  The collective know-how and skills we nurtured through many hard years of competing against cheap overseas labor may now be paying off.  For us, it was never only about the money.  Sustainability isn’t just about the environment although our record there is outstanding.  It’s also about our neighbors and communities.  By keeping good jobs here we supported workers, families, schools, students, and communities.  That our effort is now beginning to generate meaningful financial advantage seems only fair. 

“We look forward to sharing our capabilities with public and private schools and many other customers and organizations who may now be in a position to fully appreciate what Virco has to offer.”

On September 3, 2026, the Company’s Board of Directors declared a cash dividend for the Company’s third fiscal quarter of $0.025 on each outstanding share of common stock. The dividend is payable on October 9, 2026 to stockholders of record of the common stock as of the close of business on September 18, 2026.

About Virco Mfg. Corporation

Founded in 1950, Virco Mfg. Corporation is the largest manufacturer and supplier of moveable educational furniture and equipment for the preschool through 12th grade market in the United States. The Company manufactures a wide assortment of products, including mobile tables, mobile storage equipment, desks, computer furniture, chairs, activity tables, folding chairs and folding tables. Along with serving customers in the education market - which in addition to preschool through 12th grade public and private schools includes: junior and community colleges; four-year colleges and universities; trade, technical and vocational schools - Virco is a furniture and equipment supplier for convention centers and arenas; the hospitality industry with respect to banquet and meeting facilities; government facilities at the federal, state, county and municipal levels; and places of worship. The Company also sells to wholesalers, distributors, traditional retailers and catalog retailers that serve these same markets. With operations entirely based in the United States, Virco designs, manufactures, and ships its furniture and equipment from one facility in Torrance, CA and three facilities in Conway, AR. More information on the Company can be found at www.virco.com.

Contact:
Virco Mfg. Corporation
(310) 533-0474
Robert A. Virtue, Chairman and Chief Executive Officer
Doug Virtue, President
Bassey Yau, Chief Financial Officer

Statement Concerning Forward-Looking Information

This news release contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995.  These statements include, but are not limited to, statements regarding: our future financial results and growth in our business; our business strategies; market demand and product development; estimates of backlog; order rates and trends in seasonality; product relevance; economic conditions and patterns; the educational furniture industry generally, including the domestic market for classroom furniture; cost control initiatives; absorption rates; and supply chain challenges. Forward-looking statements are based on current expectations and beliefs about future events or circumstances, and you should not place undue reliance on these statements.  Such statements involve known and unknown risks, uncertainties, assumptions and other factors, many of which are out of our control and difficult to forecast.  These factors may cause actual results to differ materially from those that are anticipated.  Such factors include, but are not limited to: the impacts of tariffs and global trade uncertainties; changes in general economic conditions including raw material, energy and freight costs; state and municipal bond funding; state, local, and municipal tax receipts; order rates; the seasonality of our markets; the markets for school and office furniture generally, the specific markets and customers with which we conduct our principal business; the impact of cost-saving initiatives on our business; the competitive landscape, including responses of our competitors and customers to changes in our prices; changes in demographics; and the terms and conditions of available funding sources.  See our Annual Report on Form 10-K for the year ended January 31, 2026, our Quarterly Reports on Form 10-Q, and other reports and material that we file with the Securities and Exchange Commission for a further description of these and other risks and uncertainties applicable to our business.  We assume no, and hereby disclaim any, obligation to update any of our forward-looking statements.  We nonetheless reserve the right to make such updates from time to time by press release, periodic reports, or other methods of public disclosure without the need for specific reference to this press release.  No such update shall be deemed to indicate that other statements which are not addressed by such an update remain correct or create an obligation to provide any other updates.

Financial Tables Follow

Virco Mfg. Corporation Unaudited Condensed Consolidated Balance Sheets
	7/31/2026				1/31/2026				7/31/2025
	(In thousands)
Assets
Current assets
Cash	$	9,212			$	14,437			$	2,610
Trade accounts receivable, net		45,560				13,590				46,817
Income tax receivable		4,237				3,863				—
Inventories		53,032				56,735				59,866
Prepaid expenses and other current assets		10,568				10,104				2,592
Total current assets		122,609				98,729				111,885
Non-current assets
Property, plant and equipment, net		33,396				34,578				36,120
Operating lease right-of-use assets		27,396				30,415				33,019
Deferred income tax assets, net		3,594				5,437				5,847
Other assets, net		5,171				5,020				11,770
Total assets	$	192,166			$	174,179			$	198,641
Liabilities
Current liabilities
Accounts payable	$	20,034			$	7,393			$	17,069
Accrued compensation and employee benefits		12,850				11,434				6,856
Income tax payable		—				—				14
Current portion of long-term debt		274				269				263
Current portion of operating lease liability		6,623				6,490				4,790
Other accrued liabilities		8,714				6,396				8,747
Total current liabilities		48,495				31,982				37,739
Non-current liabilities
Long-term debt, less current portion		3,471				3,609				3,745
Operating lease liability, less current portion		26,672				30,006				33,096
Other long-term liabilities		3,054				2,651				8,685
Total non-current liabilities		33,197				36,266				45,526
Commitments and contingencies (Note 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 15,763,815 shares at 7/31/2026, 15,761,141 shares at 1/31/2026, and 15,761,141 shares at 7/31/2025		157				157				157
Additional paid-in capital		113,669				113,761				113,667
(Accumulated deficit) retained earnings		(2,827	)			(7,875	)			1,264
Accumulated other comprehensive (loss) income		(525	)			(112	)			288
Total stockholders’ equity		110,474				105,931				115,376
Total liabilities and stockholders’ equity	$	192,166			$	174,179			$	198,641

Virco Mfg. Corporation

Unaudited Condensed Consolidated Statements of Income

	Three Months Ended							Six Months Ended
	7/31/2026				7/31/2025			7/31/2026				7/31/2025
	(In thousands, except per share data)
Net sales	$	87,466			$	92,086		$	118,158			$	125,840
Cost of goods sold		52,453				51,212			70,450				68,946
Gross profit		35,013				40,874			47,708				56,894
Selling, general and administrative expenses		24,466				25,503			40,821				41,617
Operating income		10,547				15,371			6,887				15,277
Unrealized (gain) loss on investment in trust account		(656	)			968			(529	)			(207	)
Pension (benefit) expense		(203	)			27			(392	)			54
Interest expense, net		170				205			276				265
Income before income taxes		11,236				14,171			7,532				15,165
Income tax expense		2,623				3,985			1,696				4,247
Net income	$	8,613			$	10,186		$	5,836			$	10,918
Cash dividends declared per common share:	$	0.025			$	0.025		$	0.050			$	0.050
Net income per common share:
Basic	$	0.55			$	0.65		$	0.37			$	0.69
Diluted	$	0.55			$	0.65		$	0.37			$	0.69
Weighted average shares of common stock outstanding:
Basic		15,734				15,741			15,733				15,749
Diluted		15,737				15,743			15,735				15,750

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/937177b1-765d-4e40-b0c5-048296f11f14. 

FAQ

What were Virco (VIRC) net sales and profit for Q2 2026?

For the quarter ended July 31, 2026, Virco reported net sales of $87.5 million versus $92.1 million a year earlier. Net income was $8.6 million, down from $10.2 million, with operating income of $10.5 million and a 40.0% gross margin.

How did Virco (VIRC) revenue and earnings perform for the first six months of 2026?

Through six months ended July 31, 2026, Virco’s net sales were $118.2 million, a 6.1% decline from $125.8 million last year. Operating income was $6.9 million versus $15.3 million, and net income was $5.8 million compared with $10.9 million a year earlier.

What margins did Virco (VIRC) report for Q2 and year-to-date 2026?

Virco reported a gross margin of 40.0% for the second quarter of 2026. For the first six months of 2026, the company achieved a gross margin of 40.4%. Selling, general and administrative expenses were 34.5% of revenue year-to-date, compared with 33.1% in the prior year.

What is Virco (VIRC) saying about demand trends and its backlog in 2026?

Shipments plus backlog totaled $162.5 million, 2.1% lower than the same period last year. The company attributes softer demand partly to school budget uncertainties but notes recent slight improvement after new budgets, while cautioning that low second-half volume may limit full-year impact.

What dividend did Virco (VIRC) declare and when will it be paid?

On September 3, 2026, Virco’s board declared a cash dividend of $0.025 per share for the third fiscal quarter. The dividend is payable on October 9, 2026 to shareholders of record as of the close of business on September 18, 2026.

How strong is Virco (VIRC) financially in terms of liquidity and debt as of July 31, 2026?

As of July 31, 2026, Virco reported a current ratio of 2.5, total current assets of $122.6 million, and modest debt, with year-to-date interest expense of $0.3 million. Total stockholders’ equity was $110.5 million, indicating a solid balance sheet in the company’s view.

What outlook or guidance did Virco (VIRC) management provide for the rest of 2026?

Management noted slightly improving demand after school budget approvals but cautioned that the usual lower second-half volume is likely to moderate any benefit, and that the current year will be challenging compared with recent record performance, despite strong margins and low debt.