|
|
FORM 10-Q
|
ý
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
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)
|
|
Large accelerated filer
|
¨
|
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
¨
|
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
ý
|
|
|
|
|
Unaudited condensed consolidated statements of income - Three months ended October 31, 2015 and 2014
|
|
Unaudited condensed consolidated statements of comprehensive income (loss) - Three months ended October 31, 2015 and 2014
|
|
Item 3. Defaults Upon Senior Securities
|
|
Item 4. Mine Safety Disclosures
|
|
Item 5. Other Information
|
|
EX-10.1
|
|
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
|
|
|
10/31/2015
|
|
1/31/2015
|
|
10/31/2014
|
||||||
(In thousands, except share data)
|
|||||||||||
|
Unaudited (Note 1)
|
|
|
|
Unaudited (Note 1)
|
||||||
Assets
|
|
|
|
|
|
||||||
Current assets
|
|
|
|
|
|
||||||
Cash
|
$
|
1,595
|
|
|
$
|
470
|
|
|
$
|
1,216
|
|
Trade accounts receivables, net
|
20,369
|
|
|
10,614
|
|
|
14,776
|
|
|||
Other receivables
|
141
|
|
|
43
|
|
|
55
|
|
|||
Income tax receivable
|
266
|
|
|
267
|
|
|
299
|
|
|||
Inventories
|
|
|
|
|
|
||||||
Finished goods
|
5,179
|
|
|
5,602
|
|
|
6,732
|
|
|||
Work in process
|
12,858
|
|
|
11,487
|
|
|
11,676
|
|
|||
Raw materials and supplies
|
9,131
|
|
|
9,589
|
|
|
10,018
|
|
|||
|
27,168
|
|
|
26,678
|
|
|
28,426
|
|
|||
Deferred tax assets, net
|
156
|
|
|
156
|
|
|
203
|
|
|||
Prepaid expenses and other current assets
|
1,098
|
|
|
743
|
|
|
1,308
|
|
|||
Total current assets
|
50,793
|
|
|
38,971
|
|
|
46,283
|
|
|||
Property, plant and equipment
|
|
|
|
|
|
||||||
Land
|
1,671
|
|
|
1,671
|
|
|
1,671
|
|
|||
Land improvements
|
851
|
|
|
851
|
|
|
851
|
|
|||
Buildings and building improvements
|
46,448
|
|
|
47,047
|
|
|
47,047
|
|
|||
Machinery and equipment
|
105,289
|
|
|
110,060
|
|
|
112,228
|
|
|||
Leasehold improvements
|
1,758
|
|
|
1,909
|
|
|
1,894
|
|
|||
|
156,017
|
|
|
161,538
|
|
|
163,691
|
|
|||
Less accumulated depreciation and amortization
|
120,742
|
|
|
126,317
|
|
|
128,095
|
|
|||
Net property, plant and equipment
|
35,275
|
|
|
35,221
|
|
|
35,596
|
|
|||
Deferred tax assets, net
|
445
|
|
|
624
|
|
|
545
|
|
|||
Other assets
|
6,932
|
|
|
6,995
|
|
|
6,969
|
|
|||
Total assets
|
$
|
93,445
|
|
|
$
|
81,811
|
|
|
$
|
89,393
|
|
|
10/31/2015
|
|
1/31/2015
|
|
10/31/2014
|
||||||
|
(In thousands, except share data)
|
||||||||||
|
Unaudited (Note 1)
|
|
|
|
Unaudited (Note 1)
|
||||||
Liabilities
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
13,189
|
|
|
$
|
9,901
|
|
|
$
|
12,248
|
|
Accrued compensation and employee benefits
|
5,383
|
|
|
4,199
|
|
|
4,012
|
|
|||
Current portion of long-term debt
|
68
|
|
|
3,366
|
|
|
2,018
|
|
|||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other accrued liabilities
|
5,808
|
|
|
3,939
|
|
|
4,885
|
|
|||
Total current liabilities
|
24,448
|
|
|
21,405
|
|
|
23,163
|
|
|||
Non-current liabilities
|
|
|
|
|
|
||||||
Accrued self-insurance retention
|
2,050
|
|
|
1,730
|
|
|
2,083
|
|
|||
Accrued pension expenses
|
27,368
|
|
|
28,986
|
|
|
22,063
|
|
|||
Income tax payable
|
40
|
|
|
42
|
|
|
39
|
|
|||
Long-term debt, less current portion
|
4,064
|
|
|
6,153
|
|
|
6,153
|
|
|||
Other accrued liabilities
|
978
|
|
|
922
|
|
|
1,095
|
|
|||
Total non-current liabilities
|
34,500
|
|
|
37,833
|
|
|
31,433
|
|
|||
Commitments and contingencies
|
|
|
|
|
|
||||||
Stockholders’ equity
|
|
|
|
|
|
||||||
Preferred stock:
|
|
|
|
|
|
||||||
Authorized 3,000,000 shares, $.01 par value; none issued or outstanding
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock:
|
|
|
|
|
|
||||||
Authorized 25,000,000 shares, $.01 par value; issued and outstanding 14,998,187 shares at 10/31/2015 and 14,852,640 at 1/31/2015 and 10/31/2014
|
150
|
|
|
149
|
|
|
148
|
|
|||
Additional paid-in capital
|
116,510
|
|
|
116,348
|
|
|
116,226
|
|
|||
Accumulated deficit
|
(63,414
|
)
|
|
(73,690
|
)
|
|
(68,560
|
)
|
|||
Accumulated other comprehensive loss
|
(18,749
|
)
|
|
(20,234
|
)
|
|
(13,017
|
)
|
|||
Total stockholders’ equity
|
34,497
|
|
|
22,573
|
|
|
34,797
|
|
|||
Total liabilities and stockholders’ equity
|
$
|
93,445
|
|
|
$
|
81,811
|
|
|
$
|
89,393
|
|
|
Three months ended
|
||||||
|
10/31/2015
|
|
10/31/2014
|
||||
|
(In thousands, except per share data)
|
||||||
Net sales
|
$
|
64,981
|
|
|
$
|
62,273
|
|
Costs of goods sold
|
41,771
|
|
|
41,601
|
|
||
Gross profit
|
23,210
|
|
|
20,672
|
|
||
Selling, general and administrative expenses
|
16,674
|
|
|
15,881
|
|
||
Loss (gain) on sale of property, plant & equipment
|
17
|
|
|
(2
|
)
|
||
Restructuring expense
|
—
|
|
|
—
|
|
||
Operating income (loss)
|
6,519
|
|
|
4,793
|
|
||
Interest expense, net
|
379
|
|
|
393
|
|
||
Income (loss) before income taxes
|
6,140
|
|
|
4,400
|
|
||
Income tax expense (benefit)
|
137
|
|
|
(232
|
)
|
||
Net income (loss)
|
$
|
6,003
|
|
|
$
|
4,632
|
|
|
|
|
|
||||
Net income (loss) per common share:
|
|
|
|
||||
Basic
|
$
|
0.40
|
|
|
$
|
0.31
|
|
Diluted
|
$
|
0.39
|
|
|
$
|
0.31
|
|
Weighted average shares outstanding:
|
|
|
|
||||
Basic
|
14,971
|
|
|
14,824
|
|
||
Diluted
|
15,324
|
|
|
15,054
|
|
|
Nine months ended
|
||||||
|
10/31/2015
|
|
10/31/2014
|
||||
|
(In thousands, except per share data)
|
||||||
Net sales
|
$
|
149,100
|
|
|
$
|
138,698
|
|
Costs of goods sold
|
93,701
|
|
|
89,300
|
|
||
Gross profit
|
55,399
|
|
|
49,398
|
|
||
Selling, general and administrative expenses
|
43,771
|
|
|
42,076
|
|
||
Loss (gain) on sale of property, plant & equipment
|
9
|
|
|
(2
|
)
|
||
Restructuring expense
|
—
|
|
|
62
|
|
||
Operating income ( loss)
|
11,619
|
|
|
7,262
|
|
||
Interest expense, net
|
1,129
|
|
|
1,227
|
|
||
Income (loss) before income taxes
|
10,490
|
|
|
6,035
|
|
||
Income tax expense (benefit)
|
214
|
|
|
55
|
|
||
Net income (loss)
|
$
|
10,276
|
|
|
$
|
5,980
|
|
|
|
|
|
||||
Net income (loss) per common share:
|
|
|
|
||||
Basic
|
$
|
0.69
|
|
|
$
|
0.41
|
|
Diluted
|
$
|
0.67
|
|
|
$
|
0.40
|
|
Weighted average shares outstanding:
|
|
|
|
||||
Basic
|
14,895
|
|
|
14,747
|
|
||
Diluted
|
15,227
|
|
|
14,934
|
|
|
Three months ended
|
||||||
|
10/31/2015
|
|
10/31/2014
|
||||
|
(In thousands)
|
||||||
Net income (loss)
|
$
|
6,003
|
|
|
$
|
4,632
|
|
Other comprehensive income (loss) :
|
|
|
|
||||
Pension adjustments
|
495
|
|
|
321
|
|
||
Comprehensive income (loss)
|
$
|
6,498
|
|
|
$
|
4,953
|
|
|
Nine months ended
|
||||||
|
10/31/2015
|
|
10/31/2014
|
||||
|
(In thousands)
|
||||||
Net income (loss)
|
$
|
10,276
|
|
|
$
|
5,980
|
|
Other comprehensive income (loss) :
|
|
|
|
||||
Pension adjustments
|
1,485
|
|
|
963
|
|
||
Comprehensive income (loss)
|
$
|
11,761
|
|
|
$
|
6,943
|
|
|
Nine months ended
|
||||||
10/31/2015
|
|
10/31/2014
|
|||||
|
(In thousands)
|
||||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
10,276
|
|
|
$
|
5,980
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
3,518
|
|
|
3,300
|
|
||
Provision for doubtful accounts
|
58
|
|
|
115
|
|
||
(Gain) loss on sale of property, plant and equipment
|
9
|
|
|
(2
|
)
|
||
Deferred income taxes
|
179
|
|
|
36
|
|
||
Stock-based compensation
|
370
|
|
|
380
|
|
||
Amortization of net actuarial (gain) loss for pension plans, net of tax
|
1,485
|
|
|
963
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Trade accounts receivable
|
(9,814
|
)
|
|
(6,423
|
)
|
||
Other receivables
|
(98
|
)
|
|
(3
|
)
|
||
Inventories
|
(490
|
)
|
|
(646
|
)
|
||
Income taxes
|
(2
|
)
|
|
(9
|
)
|
||
Prepaid expenses and other current assets
|
(292
|
)
|
|
307
|
|
||
Accounts payable and accrued liabilities
|
5,095
|
|
|
(1,044
|
)
|
||
Net cash provided by (used in) operating activities
|
10,294
|
|
|
2,954
|
|
||
Investing activities
|
|
|
|
||||
Capital expenditures
|
(3,583
|
)
|
|
(2,584
|
)
|
||
Proceeds from sale of property, plant and equipment
|
8
|
|
|
2
|
|
||
Net cash provided by (used in) investing activities
|
(3,575
|
)
|
|
(2,582
|
)
|
||
Financing activities
|
|
|
|
||||
Proceeds from long-term debt
|
31,960
|
|
|
33,750
|
|
||
Repayment of long-term debt
|
(37,348
|
)
|
|
(33,827
|
)
|
||
Common stock repurchased
|
(206
|
)
|
|
(130
|
)
|
||
Net cash provided by (used in) financing activities
|
(5,594
|
)
|
|
(207
|
)
|
||
|
|
|
|
||||
Net increase (decrease) in cash
|
1,125
|
|
|
165
|
|
||
Cash at beginning of period
|
470
|
|
|
1,051
|
|
||
Cash at end of period
|
$
|
1,595
|
|
|
$
|
1,216
|
|
|
10/31/2015
|
|
1/31/2015
|
|
10/31/2014
|
||||||
|
(in thousands)
|
||||||||||
Revolving credit line
|
$
|
4,018
|
|
|
$
|
9,366
|
|
|
$
|
7,967
|
|
Other
|
114
|
|
|
153
|
|
|
204
|
|
|||
Total debt
|
4,132
|
|
|
9,519
|
|
|
8,171
|
|
|||
Less current portion
|
68
|
|
|
3,366
|
|
|
2,018
|
|
|||
Non-current portion
|
$
|
4,064
|
|
|
$
|
6,153
|
|
|
$
|
6,153
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
10/31/2015
|
|
10/31/2014
|
|
10/31/2015
|
|
10/31/2014
|
||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||
Net income (loss)
|
|
$
|
6,003
|
|
|
$
|
4,632
|
|
|
$
|
10,276
|
|
|
$
|
5,980
|
|
Weighted average shares outstanding
|
|
14,971
|
|
|
14,824
|
|
|
14,895
|
|
|
14,747
|
|
||||
Net effect of dilutive share-based on the treasury stock method using average market price
|
|
353
|
|
|
230
|
|
|
332
|
|
|
187
|
|
||||
Totals
|
|
15,324
|
|
|
15,054
|
|
|
15,227
|
|
|
14,934
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share - basic
|
|
$
|
0.40
|
|
|
$
|
0.31
|
|
|
$
|
0.69
|
|
|
$
|
0.41
|
|
Net income (loss) per share - diluted
|
|
$
|
0.39
|
|
|
$
|
0.31
|
|
|
$
|
0.67
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
Expense for 3 months ended
|
|
Expense for 9 months ended
|
|
Unrecognized
Compensation
Cost at
|
||||||||||||||
Date of Grants
|
|
Units Granted
|
|
Terms of Vesting
|
|
10/31/2015
|
|
10/31/2014
|
|
10/31/2015
|
|
10/31/2014
|
|
10/31/2015
|
||||||||||
2011 Stock Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
6/22/2015
|
|
48,000
|
|
4 years
|
|
$
|
8,000
|
|
|
$
|
—
|
|
|
$
|
13,000
|
|
|
$
|
—
|
|
|
$
|
118,000
|
|
6/22/2015
|
|
27,174
|
|
1 year
|
|
19,000
|
|
|
—
|
|
|
33,000
|
|
|
—
|
|
|
44,000
|
|
|||||
6/24/2014
|
|
28,626
|
|
1 year
|
|
—
|
|
|
18,000
|
|
|
25,000
|
|
|
31,000
|
|
|
—
|
|
|||||
6/24/2014
|
|
490,000
|
|
5 years
|
|
60,000
|
|
|
64,000
|
|
|
185,000
|
|
|
107,000
|
|
|
860,000
|
|
|||||
12/3/2013
|
|
10,000
|
|
1 year
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,000
|
|
|
—
|
|
|||||
6/25/2013
|
|
71,430
|
|
1 year
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
|
—
|
|
|||||
6/19/2012
|
|
520,000
|
|
5 years
|
|
37,000
|
|
|
39,000
|
|
|
114,000
|
|
|
118,000
|
|
|
233,000
|
|
|||||
2007 Stock Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
6/16/2009
|
|
382,500
|
|
5 years
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,000
|
|
|
—
|
|
|||||
Totals for the period
|
|
|
|
|
|
$
|
124,000
|
|
|
$
|
121,000
|
|
|
$
|
370,000
|
|
|
$
|
380,000
|
|
|
$
|
1,255,000
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
Pension Plan
|
|
VIP Plan
|
|
Non-Employee Directors Retirement Plan
|
||||||||||||||||||
10/31/2015
|
|
10/31/2014
|
|
10/31/2015
|
|
10/31/2014
|
|
10/31/2015
|
|
10/31/2014
|
|||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
324
|
|
|
315
|
|
|
105
|
|
|
88
|
|
|
3
|
|
|
4
|
|
||||||
Expected return on plan assets
|
(324
|
)
|
|
(275
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of transition amount
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized (gain) loss due to curtailments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized net actuarial (gain) loss
|
375
|
|
|
284
|
|
|
120
|
|
|
45
|
|
|
—
|
|
|
(8
|
)
|
||||||
Benefit cost
|
$
|
375
|
|
|
$
|
324
|
|
|
$
|
225
|
|
|
$
|
133
|
|
|
$
|
3
|
|
|
$
|
(4
|
)
|
|
Nine Months Ended
|
||||||||||||||||||||||
|
Pension Plan
|
|
VIP Plan
|
|
Non-Employee Directors Retirement Plan
|
||||||||||||||||||
10/31/2015
|
|
10/31/2014
|
|
10/31/2015
|
|
10/31/2014
|
|
10/31/2015
|
|
10/31/2014
|
|||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
972
|
|
|
945
|
|
|
315
|
|
|
264
|
|
|
9
|
|
|
12
|
|
||||||
Expected return on plan assets
|
(972
|
)
|
|
(825
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of transition amount
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized (gain) loss due to curtailments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized net actuarial (gain) loss
|
1,125
|
|
|
852
|
|
|
360
|
|
|
135
|
|
|
—
|
|
|
(24
|
)
|
||||||
Benefit cost
|
$
|
1,125
|
|
|
$
|
972
|
|
|
$
|
675
|
|
|
$
|
399
|
|
|
$
|
9
|
|
|
$
|
(12
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
10/31/2015
|
|
10/31/2014
|
|
10/31/2015
|
|
10/31/2014
|
||||||||
|
(In thousands)
|
||||||||||||||
Beginning balance
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
$
|
950
|
|
|
$
|
1,000
|
|
Provision
|
89
|
|
|
134
|
|
|
332
|
|
|
352
|
|
||||
Costs incurred
|
(89
|
)
|
|
(134
|
)
|
|
(282
|
)
|
|
(352
|
)
|
||||
Ending balance
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
VIRCO MFG. CORPORATION
|
|
Date: December 15, 2015
|
By:
|
/s/ Robert E. Dose
|
|
|
Robert E. Dose
|
|
|
Vice President — Finance
|
|
/s/ Robert A. Virtue
|
|
Robert A. Virtue
|
Date: December 15, 2015
|
Chief Executive Officer and Chairman of the Board (Principal Executive Officer)
|
|
/s/ Robert E. Dose
|
|
Robert E. Dose
|
Date: December 15, 2015
|
Vice President — Finance, Secretary and Treasurer (Principal Financial Officer)
|
•
|
The Quarterly Report of the Company on Form 10-Q for the period ended October 31, 2015, 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.
|
/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)
|