Virco Mfg. Corporation reported a net loss of $1.3 million for the quarter ended October 31 2025, a sharp reversal from the $8.4 million profit it earned on $82.6 million in sales a year earlier. The company’s revenue fell 42% to $47.6 million, missing the consensus estimate of $87.6 million by $40 million, while its earnings per share slipped to a loss of $0.08, a miss of $0.55 against the $0.47 estimate.
Gross profit dropped to $18.1 million, giving a gross margin of 38.0% versus 44.4% in the prior year. The margin compression reflects a lower sales mix and higher input costs, as the company’s moveable school‑furniture business—its core revenue driver—experienced a 30% downturn after the one‑time disaster‑recovery orders that boosted last year’s results. The decline in sales volume also reduced the benefit of economies of scale, further squeezing the margin.
Selling, general and administrative expenses rose to $19.8 million, or 41.5% of sales, up from $25.6 million (30.9% of sales) a year earlier. The increase is largely attributable to fixed overhead that remains in place even as revenue contracts, and to higher marketing and sales support costs aimed at stabilizing demand in a cyclical market. The higher SG&A as a percentage of sales contributed to the net loss despite the company’s efforts to control variable costs.
Management said the company is in a defensive mode, focusing on cost discipline and aligning operations with the lower demand level. It noted early signs of demand stabilization but did not provide specific quantitative guidance for the next quarter. The company’s CEO emphasized that the strong balance sheet and ample liquidity will help it weather the downturn and position for a recovery once the market for school furniture begins to rebound.
Virco’s balance sheet remains robust, with a current ratio of 3.98 and a sizable credit line that provides additional liquidity. The company also continued its quarterly dividend of $0.025 per share, signaling confidence in its cash‑flow generation even amid the earnings miss. The dividend, combined with the company’s liquidity, suggests management believes the downturn is temporary and that the firm can maintain shareholder returns while it navigates the cyclical cycle.
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