Virco Mfg (VIRC) investor relations material

Executive summary

• Net sales declined 42.3% for the quarter and 27.0% for the nine months ended October 31, 2025, compared to the same periods last year, primarily due to the absence of prior year one-time disaster recovery shipments and weaker demand amid macroeconomic uncertainty.

• Net loss of $1.3 million for the quarter on sales of $47.6 million, compared to net income of $8.4 million on $82.6 million last year; nine-month net income of $9.6 million on $173.5 million, down from $27.4 million on $237.8 million in the prior year.

• Backlog nearly matched prior year levels by Q3 end as order rates stabilized.

• Board declared a quarterly cash dividend of $0.025 per share for Q4, payable January 2026.

• Gross margin decreased to 38.0% for the quarter and 43.2% for the nine months, reflecting lower sales volume and reduced production levels.

Financial highlights

• Quarterly net sales: $47.6 million (down from $82.6 million); nine-month net sales: $173.5 million (down from $237.8 million).

• Quarterly net loss: $1.3 million; nine-month net income: $9.6 million.

• Quarterly EPS: $(0.08) basic and diluted; nine-month EPS: $0.61 basic and diluted.

• Cash at period end: $26.5 million, down from $38.9 million last year.

• Inventory increased $4.1 million year-over-year, while accounts receivable decreased $14.4 million.

Outlook and guidance

• Management expects the majority of the $26 million order backlog at October 31, 2025, to be delivered in Q4.

• Management does not provide formal guidance but notes early signs of demand stabilization at pre-pandemic levels.

• Pipeline of projects is beginning to refill, suggesting a possible catch-up in business velocity over the next two to three years.

• Traditional seasonal cycle for school furniture has returned to pre-pandemic patterns.

• Future growth rates are expected to moderate compared to recent years.