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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-K
 (Mark One) [X]
    
    Annual Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934For the fiscal year ended January 31, 2004.[
  ]
    
    Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934For the transition period
from            to
 Commission file number 1-8777 VIRCO MFG. CORPORATION
  DELAWARE
    
    95-1613718(State or other jurisdiction of
incorporation or organization)
2027 Harpers Way, Torrance, California
    
    (IRS Employer
Identification No.)
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 class
    
    Name of each exchange on which
registered:Common Stock, $0.01 Par Value
    
    American Stock Exchange
  Securities registered pursuant to section 12(g) of the Act: None 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 [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of 1




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registrants knowledge, in definitive proxy or information statements
incorporated by reference or in Part III of this Form 10-K or any amendment to
this Form 10-K [X]. Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [X] No [ ] The aggregate market value of the voting and non-voting common equity of
the registrant held by non-affiliates of the registrant on July 31, 2003, based
on the closing price at which such stock was sold on the American Stock
Exchange on that date, was approximately $83,834,000. Shares of common stock held by each officer and director have been
excluded in that such persons may be deemed to be affiliates. This
determination of affiliate status is not necessarily a conclusive determination
for other purposes. The number of shares of Common Stock outstanding at April 1, 2004, was
13,095,801 shares. DOCUMENTS INCORPORATED BY
REFERENCE Portions of registrants definitive proxy statement for registrants 2004
Annual Meeting of Stockholders to be filed with the Commission pursuant to
Regulation 14A no later than 120 days after the end of the fiscal year covered
by this Form are incorporated by reference into Part III of this Form 10-K
Report as set forth herein. Portions of registrants Annual Report to
Stockholders for the year ended January 31, 2004, are incorporated by reference
into Part I and Part II of this Form 10-K Report as set forth herein.   2




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TABLE OF CONTENTS PART IItem 1. BusinessItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity SecuritiesItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and
Results of OperationsItem 7a. Quantitative and Qualitative Disclosures about Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and
Financial DisclosuresItem 9A. Controls and ProceduresPART IIIItem 10. Directors and Executive Officers of the RegistrantItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder MattersItem 13. Certain Relationships and Related TransactionsItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-KSIGNATURESEXHIBITS TO FORM 10-K ANNUAL REPORTEXHIBIT 13.1EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 24.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
  3




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PART I This report onForm 10-Kcontains a number of forward-looking statements
that reflect the Companys current views with respect to future events and
financial performance, including, but not limited to, statements regarding
plans and objectives of management for future operations, including plans and
objectives relating to products, marketing, expansion, manufacturing processes
and potential or contemplated acquisitions; new business strategies; our
ability to continue to control costs and inventory levels; the potential impact
of our Assemble-To-Ship program on earnings; market demand; our ability to
position ourselves in the market; references to current and future investments
in and utilization of our infrastructure; statements relating to managements
beliefs that cash flow from current operations, existing cash reserves, and
available lines of credit will be sufficient to support our working capital
requirements to fund existing operations; references to expectations of future
revenues; pricing; and seasonality. Such statements involve known and unknown risks, uncertainties,
assumptions and other factors, many of which are out of our control and
difficult to forecast, that may cause actual results to differ materially from
those which are anticipated. Such factors include, but are not limited to,
changes in, or our ability to predict, general economic conditions, the markets
for school and office furniture generally and specifically in areas and with
customers with which we conduct our principal business activities, the rate of
approval of school bonds for the construction of new schools, the extent to
which existing schools order replacement furniture, customer confidence, and
competition. In this report, words such as anticipates, believes, expects,
future, intends, plans, potential, budgets, may, could and
similar expressions identify forward-looking statements. Readers are cautioned
not to place undue reliance on forward-looking statements, which speak only as
of the date hereof. 
 Item 1.Business Introduction Designing, producing and distributing high-value furniture for a diverse
family of customers is a 54-year tradition at Virco Mfg. Corporation (Virco
or the Company). Over the years, Virco has become the largest manufacturer of
moveable educational furniture and equipment for the preschool
through 12th
grade market in the United States. The Company has also become a leading
supplier of tables, chairs and storage equipment for offices, convention
centers, auditoriums, places of worship, hotels and related settings. The markets that Virco has served over the years include the education
market (the Companys primary market), which includes public and private
schools (preschool through 12th grade), junior and community colleges,
four-year colleges and universities, and trade, technical and vocational
schools; convention centers and arenas; the hospitality industry, with respect
to their banquet and meeting facilities requirements; government facilities at
the federal, state, county and municipal levels; and places of worship. In
addition, the Company sells to wholesalers, distributors, retailers and catalog
retailers that serve these same markets. 4




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Although Virco started as a local supplier of chairs and desks for Los
Angeles-area schools, folding chairs and folding tables were soon added to the
Companys offerings with a resultant expansion of sales to a broadening
customer base. Successive product lines were subsequently introduced, including
a variety of upholstered stack chairs, banquet tables and mobile storage
equipment. Products such as these have helped Virco provide complete furniture
solutions for thousands of customers in the hospitality, food service,
convention center and public facilities markets. Virco serves its customers through a well-trained, nationwide sales and
support team. Vircos educational product line is marketed through what
management believes is the largest direct sales force of any education
furniture manufacturer, as well as a growing dealer network. In addition,
Virco also established a Corporate Accounts Group to pursue wholesalers, mail
order accounts and national chains where management believes that it would be
more efficient to have a single sales representative or group approach such
persons, as they tend to have needs that transcend the geographic boundaries
established for Vircos local accounts. The Company also has an array of
support services, including complete package solutions for the Furniture,
Fixture, and Equipment (FF&E) line item on school budgets, computer-assisted
layout planning, transportation planning, product delivery, installation, and
repair. Virco operates one business segment, with one product line that is
marketed and distributed through a variety of sales channels. Virco maintains a
core marketing group, which reports to the President and is composed of
representatives from sales, product development and corporate marketing. This
group prepares annual plans for the allocation of resources for product
development, marketing and selling expense for various sales channels, for
customer service, and for the implementation of the Companys product stocking
plan. Virco employs approximately 1,200 people nationwide and has approximately
1.1 million square feet of fabrication facilities and 1.4 million square feet
of assembly and warehousing facilities for the production and distribution of
furniture in two principal facilities which are located in Torrance,
California, and Conway, Arkansas. Much of the Companys product line can be
made in either facility, although management has chosen to produce many
products and components at only one factory in consideration of space, cost or
process requirements. In addition, both facilities maintain a customer service
department, giving Virco the ability to provide sales support and order
fulfillment services to end users from coast to coast. Managements strategy is to position Virco as the overall value supplier
of moveable furniture for publicly-funded institutions characterized by extreme
seasonality and/or a bid-based purchasing function. The Companys business
model, which is designed to support this strategy, includes the development of
several competencies to enable superior service to the markets in which Virco
competes. For one, Virco has developed what management believes to be the
largest direct sales force of any education furniture manufacturer. Management
believes this provides Virco with a competitive advantage 5




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over the Companys primary competitors, who rely instead upon distributorships,
by allowing Virco to cut-out the middleman and deal directly with end
customers. Another important element of Vircos business model is the Companys
emphasis on developing and maintaining key manufacturing capabilities. For
example, Virco has developed competencies in several manufacturing processes
that are important to the markets the Company serves, such as finishing
systems, plastic molding, metal fabrication and woodworking. For more
information about the Companys business model and strategy for the future,
please see the section entitled To Our Stockholders in Vircos Annual Report
to Stockholders for the year ended January 31, 2004. Finally, management continues to hone Vircos ability to finance,
manufacture and warehouse furniture within the relatively narrow delivery
window associated with the highly seasonal demand for education sales. In the
fiscal year covered by this report, over 50% of the Companys total sales were
delivered in June, July, August and September with an even higher portion of
educational sales delivered in that period. Vircos substantial warehouse space
allows the Company to build adequate inventories to service this narrow
delivery window for the education market. Virco was incorporated in California in February 1950, and reorganized as
a Delaware corporation in April 1984. Principal Products Virco offers the broadest line of furniture for the K-12 market of any
company in the United States. Virco also provides a variety of products for the
pre-school markets and has recently developed products that are targeted for
college, university, and corporate learning center environments. The Companys
primary furniture lines are constructed of tubular metal legs and frames,
combined with wood and plastic tops, plastic seats and backs, upholstered seats
and backs, and upholstered rigid polyethylene and polypropylene shells. Vircos principal products include:  SEATING Among the Companys newest chair offerings are the Ph.D.®, and-1,
Lunada® and Virtuoso® lines. Traditional favorites include best-selling Classic
Series stack chairs and a variety of Martest 21® hard plastic seating. In
addition, Virco provides a wide selection of upholstered stack chairs, plastic
stack chairs, Egg® Series ergonomic office chairs, steel dining chairs and
folding chairs.TABLES Virco tables range from the innovative Plateau® table system to
lightweight Core-a-Gator® folding tables. The Future Access® Series delivers
functional computer-support solutions, while Lunada bases by Peter Glass may be
used in a wide variety of environments. The Company offers a full spectrum of
traditional folding and banquet tables, activity tables, mobile tables, cafe
tops and bases, and office tables. 6




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COMPUTER FURNITURE Vircos full range of computer furniture includes the
Mojave® desking system, as well as versatile Future Access and 8700 Series
computer tables. In addition, the Companys new Plateau Office Solutions
collection offers a variety of technology-support furniture alternatives, as
does the recently released Plateau Library/Technology Solutions product line.DESKS/CHAIR DESKS Vircos extensive offerings include a complete spectrum of
student desks, chair desks, combo units, tablet arms and teachers desks.
Selected models are available with durable, colorfast Martest 21 hard plastic
seats, backs and work surfaces.MOBILE FURNITURE Virco offers a complete line of sturdy mobile cabinets for
storage needs. In addition, the Company offers mobile tables for situations
where quick set-up and tear-down are desirable, such as in banquet facility and
lunchroom settings.STORAGE EQUIPMENT Virco offers a complete line of chair and table trucks, as
well as large-scale storage units for arenas, convention centers and similar
venues. Please note that this report includes trademarks of Virco, including, but
not limited to, the following: Ph.D.®, I.Q.®, Virtuoso®, Classic Series,
Martest 21®, Lunada®, Plateau®, Core-a-Gator®, Future Access®, Sigma and
Mojave®. Other names and brands included in this report may be claimed by Virco
as well or by third parties. Vircos major customers include educational institutions, convention
centers and arenas, hospitality providers, government facilities, and places of
worship. Raw Materials The Company purchases steel, aluminum, plastic, polyurethane,
polyethylene, polypropylene, plywood, particleboard, cartons and other raw
materials in the manufacture of its principal products from many different
sources. Management does not believe that we are more vulnerable with respect
to the sources and availability of these raw materials than other
manufacturers. Marketing and Distribution Virco serves its customers through a well-trained, nationwide sales and
support team, as well as a growing dealer network. In addition, Virco has
established a Corporate Accounts Group to pursue wholesalers, mail order
accounts and national chains where management believes that it would be more
efficient to have a single sales representative or group approach such persons,
as they tend to have needs that transcend the geographic boundaries established
for Vircos local accounts. Vircos educational product line is marketed through what management
believes to be the largest direct sales force of any education furniture
manufacturer. The Companys approach to servicing its customer base is very
flexible, and is tailored to best meet the needs of individual customers and
regions. When considered to be most efficient, the sales force will call
directly upon school business officials, who may include purchasing 7




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agents or individual school principals where site based management is
practiced. Where it is considered advantageous, the Company will use large
exclusive distributors and full service dealer partners. The Companys direct
sales force is considered to be an important competitive advantage over
competitors who rely primarily upon dealer networks for distribution of their
products. Significant portions of educational furniture are sold on a bid
basis. On May 1, 2002, Virco acquired certain assets of Furniture Focus, an Ohio
based reseller of furniture that offers complete package solutions for the
Furniture, Fixture, and Equipment (FF&E) segment of bond funded public school
construction projects. The Furniture Focus sales force and back office
operations were integrated into Virco at the acquisition date. Because the
acquisition date was very close to the peak summer season, the marketing of
package solutions or PlanSCAPE, was limited to the
five state region in which
Furniture Focus had operated. In 2003, Virco began to market package
solutions nationwide. Sales of commercial and contract furniture are made throughout the United
States by distributorships and by Company sales representatives who service the
distributorship network. Virco representatives call directly upon state and
local governments, convention centers, individual hospitality installations,
and mass merchants. Sales to this market include colleges and universities,
pre-schools, private schools, and office training facilities, which typically
purchase furniture through commercial channels. Sales are made to thousands of customers, and no single customer
represents a significant amount of the Companys business. Seasonality The
educational sales market is extremely seasonal. Over 50% of total sales are
delivered in June, July, August and September with an even higher portion of
educational sales delivered in that period. Working Capital Requirements During the Peak Summer Season As discussed above, the market for educational furniture is marked by
extreme seasonality, with the vast majority of sales occurring from June to
September each year, which is the Companys peak season. Hence, Virco builds
and carries significant amounts of inventory during 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, Virco has historically relied on third party
bank financing to meet cash flow requirements during the build-up period
immediately preceding the high season. In addition, Virco typically is faced with a large balance of accounts
receivable during the peak season. This occurs for two primary reasons. First,
accounts receivable balances naturally increase during the peak season as
shipments of products increase. Second, 8




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many customers during this period are government institutions, which tend to
pay accounts receivable more slowly than commercial customers. Virco has
historically enjoyed high levels of collectability on these accounts receivable
due to the low-credit risk associated with such customers. Nevertheless, due to
the time differential between inventory build-up in anticipation of the peak
season and the collection on accounts receivable throughout the peak season,
the Company currently relies on a line of credit from Wells Fargo Bank to
assist in meeting cash flow requirements as inventory is built for, and
business is transacted during, the peak summer season. For more information on
this financing arrangement, please see the section entitled Liquidity and
Capital Resources in the Managements Discussion and Analysis section
contained in Vircos Annual Report to Stockholders for the fiscal year ended
January 31, 2004. Virco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. For example, management expends a significant amount of
time in the first quarter of each year developing a stocking plan and
estimating the number of temporary summer employees, the amount of raw
materials, and the types of components and products that will be required
during the peak season. If management underestimates any of these requirements,
Vircos ability to meet customer orders in a timely manner or to provide
adequate customer service may be diminished. If management overestimates any of
these requirements, the Company may be required to absorb higher storage, labor
and related costs, each of which may affect the bottom line. On an on-going
basis, management evaluates its estimates, including those related to market
demand, labor costs, and stocking inventory; moreover, management continually
strives to improve its ability to correctly forecast the requirements of the
Companys business during the peak season each year. As part of Vircos efforts to balance seasonality, financial performance
and quality without sacrificing service or market share, management has been
refining an operating model called Assemble-to-Ship (ATS). ATS is Vircos
version of mass-customization, which assembles standard, stocked components
into customized configurations before shipment. The ATS program reduces the
total amount of inventory and working capital needed to support a given level
of sales. It does this by increasing the inventorys versatility, delaying
costly assembly until the last moment, and reducing the amount of warehouse
space needed to store finished goods. As part of the ATS stocking program,
Virco has endeavored to create a more flexible workforce. The Company has
developed compensation programs to reward employees who are willing to move
from fabrication to assembly to the warehouse as seasonal demands evolve.
During the 2002 year, the Company added a sabbatical program to reduce spending
in the fourth quarter when sales and required production are at the lowest
levels. These programs have helped Virco avoid layoffs and reduce the need for
inefficient temporary production workers. 9




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Developments During 2003 For a discussion of the general developments of Vircos business during
the period covered by this report, please see the section entitled To Our
Stockholders in the Companys Annual Report to Stockholders for the year ended
January 31, 2004. Other Matters Competition Virco has numerous competitors in each of its markets. In the educational
furniture market, competitors include Sagus International LLC, which markets
product under Artco-Bell, American Desk, Midwest Folding Products,
CampbellRhea, and LSI; Royal, Bretford, Smith Systems, Columbia, Scholarcraft
and School Specialty. Competitors in contract furniture vary depending upon the
specific product line or sales market and include Falcon Products, Inc.,
Krueger International, Inc., MTS and Mity Enterprises, Inc. The educational furniture market is characterized by price competition, as many
sales occur on a bid basis. Management compensates for this market
characteristic through a combination of methods that may include, but are not
expected to emphasize, direct price competition. Instead, management expects to
emphasize the value of Vircos products, the value of Vircos distribution and
delivery capabilities, the value of Vircos customer support capabilities and
other intangibles. In addition, management believes that the streamlining of
costs assists the Company in compensating for this market characteristic by
allowing Virco to offer a higher value product at a lower price. For example,
as discussed above, Virco has decreased distribution costs by avoiding
resellers, and management believes that the Companys large direct sales force
and the Companys sizeable manufacturing and warehousing capabilities
facilitate these efforts. Backlog Sales order backlog at January 31, 2004, totaled $12.4 million and approximates
five weeks of sales, compared to $13.0 million at January 31, 2003, and $26.0
million at January 31, 2002. Patents and Trademarks In November 2002, the United States Patent and Trademark Office (the USPTO)
issued to Virco a patent entitled Office Furniture System for the Mojave®
product line. This patent covers the method of connecting the pieces within the
system and it covers the method of stacking pieces to create multiple
configurations. In addition, in 2002, the USPTO issued Virco three design
patents covering its new Ph.D.® chair. Virco has a number of other design and utility patents in the United States and
other countries that provide protection for Vircos intellectual property as
well. 10




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These patents expire over a period of time ranging from 4 to 17 years.
Virco maintains an active program to protect its investment in technology and
all of its patents by monitoring and enforcing its intellectual property
rights. While Vircos patents are an important element of its success, Vircos
business as a whole is not believed to be materially dependent on any one
patent. In order to distinguish genuine Virco products from competitors products,
Virco has obtained certain trademarks and tradenames for its products and
engages in advertising and sales campaigns to promote its brands and to
identify genuine Virco products. While Vircos tradenames play an important
role in its success, Vircos business as a whole is not believed to be
materially dependent on any one trademark, except perhaps the trademark
Virco, which the company has protected and enhanced as an emblem of quality
educational furniture for over fifty years. Virco has no franchises or concessions that are considered to be of material
importance to the conduct of its business and has not appraised or established
a value for its patents or trademarks. Employees Virco and its subsidiaries employ approximately 1,200 full-time employees at
various locations. Of this number, approximately 945 are involved in
manufacturing and distribution, 175 in sales and marketing and approximately 80
in administration. During the period covered by this report, the Companys
headcount was reduced by approximately 800 from the prior year. The decrease
is attributable to a voluntary severance program (500 employees), a mandatory
severance program (160 employees) and attrition. Environmental Compliance Virco is subject to numerous environmental laws and regulations in the various
jurisdictions in which it operates that (a) govern operations that may have
adverse environmental effects, such as the discharge of materials into the
environment, as well as handling, storage, transportation and disposal
practices for solid and hazardous wastes, and (b) impose liability for response
costs and certain damages resulting from past and current spills, disposals or
other releases of hazardous materials. Although Virco has enacted policies for
recycling and resource recovery that have earned repeated commendations,
including designation in 2003 as a WasteWise Hall of Fame Charter Member, in
2002 as a WasteWise Partner of the Year and 2001 as a WasteWise Program
Champion for Large Businesses by the United States Environmental Protection
Agency, it is possible that the Companys operations may result in
noncompliance with or liability for remediation pursuant to environmental laws.
Environmental laws have changed rapidly in recent years, and Virco may be
subject to more stringent environmental laws in the future. The Company has
expended, and may be expected to continue to expend, significant 11




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amounts in the
future for the investigation of environmental conditions, installation of
environmental control equipment, or remediation of environmental contamination. Financial Information About Geographic Areas During the period covered by this report, Virco derived approximately 3.0 % of
its revenues from external customers located outside of the United States
(primarily in Canada). The Company determines sales to these markets based upon
the customers principal place of business. The Company does not have any
long-lived assets outside of the United States. Executive Officers of the Registrant As of April 1, 2004, the executive officers of Virco Mfg. Corporation, who
are elected by and serve at the discretion of the Companys Board of Directors,
were as follows: Age at
    
    Has HeldJanuary 31,
    
    OfficeName
    
    Office
    
    2004
    
    SinceR. A. Virtue(1)
    
    President, Chairman of the
Board and Chief Executive
Officer
    
    
    71
    
    
    
    1990R. E. Dose(2)
    
    Vice President  Finance, Secretary & Treasurer
    
    
    47
    
    
    
    1995G. D. Parish(3)
    
    Vice President  General Manager, Conway Division
    
    
    66
    
    
    
    1999W. D. Roberts(4)
    
    Vice President  Chief Information Officer
    
    
    27
    
    
    
    2001D. R. Smith(5)
    
    Vice President  Marketing
    
    
    55
    
    
    
    1995L. L. Swafford(6)
    
    Vice President  Legal Affairs
    
    
    39
    
    
    
    1998D. A. Virtue(7)
    
    Executive Vice President
    
    
    45
    
    
    
    1992L. O. Wonder(8)
    
    Vice President  Sales
    
    
    52
    
    
    
    1995
  (1)
    
    Appointed Chairman in 1990; has been employed by the Company
for 48 years and has served as the President since 1982.(2)
    
    Appointed in 1995; has been employed by the Company for 14 years and has served as the Corporate
Controller, and currently as Vice President-Finance, Secretary and Treasurer.(3)
    
    Appointed in 1999; has been employed by the Company for 45 years and has served in a variety of
manufacturing, warehousing and sales and marketing positions and currently as Vice President and General
Manager of the Conway Division. 12




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(4)
    
    Appointed in 2001; has been employed by the Company for 7 years in a variety of analytic and technology
positions, currently as Vice President and Chief Information Officer.(5)
    
    Appointed in 1995; has been employed by the Company for 19 years in a variety of sales and marketing
positions, currently as Vice President of Marketing.(6)
    
    Appointed in 1998; has been employed by the Company for 9 years and has served as Associate Corporate
Counsel, and currently as Vice President of Legal Affairs.(7)
    
    Appointed in 1992; has been employed by the Company for 19 years and has served in Production Control,
as Contract Administrator, as Manager of Marketing Services, as General Manager of the Torrance
Division, and currently as Corporate Executive Vice President.(8)
    
    Appointed in 1995; has been employed by the Company for 26 years in a variety of sales and marketing
positions, currently as Vice President of Sales.*
    
    Company officers do not have employment contracts. The information required by this Item regarding Directors is incorporated
by reference to Vircos Proxy Statement to be filed within 120 days after the
end of the Companys most recent fiscal year and is incorporated herein by this
reference. Available Information Virco files annual, quarterly and special reports, proxy statements and
other information with the SEC. Stockholders may read and copy this information
at the SECs Public Reference Room at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549. Information on the operation of the Public Reference
Room may be obtained by calling the SEC at 1-800-SEC-0330. Stockholders may
also obtain copies of this information by mail from the Public Reference Room
at the address set forth above, at prescribed rates. The SEC also maintains an internet world wide web site that contains reports,
proxy statements and other information about issuers like Virco who file
electronically with the SEC. The address of that site is http://www.sec.gov. In addition, Virco makes available to its stockholders, free of charge
through its internet world wide web site, its annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Exchange Act, as soon as reasonably practicable after Virco electronically
files such material with, or furnishes it to, the SEC. The address of that site
is http://www.virco.com. 13




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Item 2.Properties Torrance, California Virco leases a 560,000 sq. ft. office, manufacturing and warehousing
facility located on 23.5 acres of land in Torrance, California. This facility
is occupied under a 10-year lease (with two five-year renewal options) expiring
January 2005. This facility also includes the corporate headquarters, the West
Coast showroom, and all West Coast distribution operations. Conway, Arkansas The Company owns 100 acres of land in Conway, Arkansas, containing
1,200,000 sq. ft. of manufacturing, warehousing, and office facilities. This
facility is equipped with high-density storage systems, features 70 dock doors
dedicated to outbound freight, and has substantial yard capacity to store and
stage trailers, which has enabled the Company to consolidate the warehousing
function and implement the Assemble-to-Ship (ATS) inventory stocking program.
Management believes that this facility supports Vircos ability to handle
increased sales during the peak delivery season and enhances the efficiency
with which orders are filled. In addition to the complex described above, the Company operates three
facilities in Conway, Arkansas. The first is a 375,000 sq. ft. fabrication
facility that was acquired in 1954, and expanded and modernized over the
subsequent 45 years. The Company manufactures fabricated steel and injection
molded plastic components at this facility. The second is a 175,000 sq. ft.
manufacturing facility that is used to fabricate and store compression molded
components. This building is leased under a 10-year lease expiring in March
2008. The third is a 150,000 sq. ft. finished goods warehouse, which is being
marketed for sale. Los Angeles, California Virco owned a 160,000 sq. ft. manufacturing facility located on 8 acres of
land in Gardena, California. This manufacturing facility, which was held as
rental property, was sold in November 2003. 
 Item 3.Legal Proceedings Virco has various legal actions pending against it arising in the ordinary
course of business, which in the opinion of the Company, are not material in
that management either expects to 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 suits and claims,
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 4.Submission of Matters to a Vote of Security Holders None. 14




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PART II 
 Item 5.Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities Incorporated herein by reference is the information appearing under the
caption Supplemental Stockholders Information which appears in Vircos
Annual Report to Stockholders for the year ended January 31, 2004. As of April
1, 2004, there were approximately 325 Registered Stockholders according to
transfer agent records. There were approximately 1,100 Beneficial
Stockholders. On January 31, 2003, there were 373,000 shares available for grant under
the 1997 Employee Incentive Plan. On January 31, 2004, there were 403,000
shares available for grant. Dividend Policy It is the Board of Directors policy to periodically review the payment of
cash and stock dividends in light of the Companys earnings and liquidity. In
2003 Virco declared $0.02 cash dividends in the first and second quarters. No
dividends were declared or paid in the third or fourth quarters. In each of
the fiscal years ending January 31, 2003, and January 31, 2002, Virco declared
a $0.02 per quarter cash dividend and an annual 10% stock dividend. Under the
current line of credit with Wells Fargo, Virco is restricted from paying cash
dividends. Securities Authorized for Issuance Under Equity Compensation Plans Equity Compensation Plan InformationNumber of securitiesremaining available forfuture issuance underNumber of securities to
    
    Weighted-average
    
    equity compensationbe issued upon exercise
    
    exercise price of
    
    plans-excludingof outstanding options,
    
    outstanding options,
    
    securities reflected inwarrants and rights
    
    warrants and rights
    
    column (a)Plan category
    
    (a)
    
    (b)
    
    (c)Equity compensation plans
approved by security
holders
    
    
    340,000
    
    
    $
    11.30
    
    
    
    403,000Equity compensation plans
not approved by security
holders
    
    None
    
    None
    
    NoneTotal
    
    
    340,000
    
    
    $
    11.30
    
    
    
    403,000
 
 Item 6.Selected Financial Data Incorporated herein by reference is the Selected Financial Data
Information appearing in Vircos Annual Report to Stockholders for the year
ended January 31, 2004. This data 15




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should be read in conjunction with Item 8, Financial Statements and
Supplementary Data thereto, and with Item 7, Managements Discussion and
Analysis of Financial Condition and Results of Operations. 
 Item 7.Managements Discussion and Analysis of Financial Condition and Results
of Operations This information is incorporated herein by reference to the Managements
Discussion and Analysis of Financial Condition and Results of Operations section included in Vircos
Annual Report to Stockholders for the year ended January 31, 2004. 
 Item 7a. Quantitative and Qualitative Disclosures about Market Risk This information is incorporated herein by reference to the Inflation and
Future Change in Prices section of Managements Discussion and Analysis and
Results of Operations included in Vircos Annual Report to Stockholders for
the year ended January 31, 2004. As of January 31, 2004, Virco had borrowed $24,129,000 under the Wells
Fargo credit facilities. Accordingly, a 100 basis point upward fluctuation in
the interest rate would have caused the Company to incur additional interest
charges of approximately $404,000 for the fiscal year ended January 31, 2004.
Virco would have benefited from a similar interest savings if the base rate
were to fluctuate downward by the same amount. In February 2004, the Company entered into an interest rate swap agreement
with Wells Fargo Bank to reduce exposure to changes in interest rates. The
initial notional swap amount is $6,000,000 for the period February 1, 2004
through January 31, 2007. Under this agreement, interest is payable monthly at
6.32% for a term of three years. 
 Item 8. Financial Statements and Supplementary Data The report of independent auditors and consolidated financial statements
included in the Annual Report to Stockholders for the year ended January 31,
2004, are incorporated herein by reference. Unaudited quarterly results in Note 12 of the financial statements
included in the Annual Report to Stockholders for the year ended January 31,
2004, are incorporated herein by reference. 
 Item 9.Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures None. 
 Item 9A.
Controls and Procedures The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in reports filed with the
Securities and Exchange Commission (the SEC) pursuant to the Securities
Exchange Act of 1934 (the Exchange Act) is recorded, processed, summarized
and reported within the time periods specified in the SECs rules and forms,
and that such information is accumulated 16




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and communicated to the Companys management, including its President and Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure. Assessing the costs and benefits of
such controls and procedures necessarily involves the exercise of judgment by
management, and such controls and procedures, by their nature, can provide only
reasonable assurance that managements objectives in establishing them will be
achieved. Virco carried out an evaluation, under the supervision and with the
participation of the Companys management, including its President and Chief
Executive Officer along with its Chief Financial Officer, of the effectiveness
of the design and operation of disclosure controls and procedures as of the end
of the period covered by this Annual Report pursuant to Exchange Act Rule
13a-15. Based upon the foregoing, the Companys President and Chief Executive
Officer along with the Companys Chief Financial Officer and other members of
management concluded that Vircos disclosure controls and procedures are
effective in alerting them in a timely fashion to material information relating
to the Company (including its consolidated subsidiaries) required to be
included in the Companys periodic filings with the Securities Exchange
Commission. No changes in internal control over financial reporting have come to
managements attention during the Companys fourth fiscal quarter that have
materially affected, or are reasonably likely to materially affect, Vircos
internal control over financial reporting. 17




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PART III 
 Item 10.Directors and Executive Officers of the Registrant The information required by this Item is incorporated by reference to
information set forth in the Companys definitive Proxy Statement to be filed
within 120 days after the end of the Companys most recent fiscal year and in
Part I of this report under the heading Executive Officers of the Registrant. 
 Item 11. Executive Compensation The information required by this Item is incorporated by reference to
information set forth in the Companys definitive Proxy Statement to be filed
within 120 days after the end of the Companys most recent fiscal year. 
 Item 12.Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters The information required by this Item is incorporated by reference to
information set forth in the Companys definitive Proxy Statement to be filed
within 120 days after the end of the Companys most recent fiscal year. 
 Item 13.Certain Relationships and Related Transactions The information required by this Item is incorporated by reference to
information set forth in the Companys definitive Proxy Statement to be filed
within 120 days after the end of the Companys most recent fiscal year. 
 Item 14. Principal Accountant Fees and Services The information required by this Item is incorporated by reference to
information set forth in the Companys definitive Proxy Statement to be filed
within 120 days after the end of the Companys most recent fiscal year. 18




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PART IV 
 Item 15.Exhibits Financial Statement Schedules, and Reports on Form 8-K a) 1.
    
    The following consolidated financial statements of Virco Mfg.
Corporation, included in the annual report of the registrant to its
stockholders for the year ended January 31, 2004, are incorporated
by reference in Item 8.
Report of Management.
Report of Independent Auditors.
Consolidated balance sheets  January 31, 2004 and 2003.
Consolidated statements of operations  Years ended January 31,
2004, 2003, and 2002.
Consolidated statements of stockholders equity  Years ended
January 31, 2004, 2003, and 2002.
Consolidated statements of cash flows  Years ended January 31,
2004, 2003, and 2002.
Notes to consolidated financial statements  January 31, 2004.2.
    
    The following consolidated financial statement schedule of Virco
Mfg. Corporation is included in Item 15:
Schedule II Valuation and Qualifying Accounts and Reserves.
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are
not required under the related instructions, are inapplicable, or
are included in the Financial Statements or Notes thereto, and
therefore are not required to be presented under this Item.3.
    
    Exhibits
See Index to Exhibits. The Exhibits listed in the accompanying
Index to Exhibits are filed as part of this report.b)
    
    Reports on Form 8-K.None.
 19




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SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) 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. CORPORATIONDate:
    
    April 14, 2004
    
    /s/ Robert A. VirtueRobert A. Virtue, Chairman of the Board (Principal Executive Officer)Date:
    
    April 14, 2004
    
    /s/ Robert E. DoseRobert E. Dose, Vice President  Finance, Secretary
& Treasurer (Principal Financial Officer)Date:
    
    April 14, 2004
    
    /s/ Bassey YauBassey Yau, Corporate Controller (Principal Accounting Officer)
 20




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VIRCO MFG. CORPORATION 
 EXHIBITS TO FORM 10-K
ANNUAL REPORT
 For the Year Ended
January 31, 2004
 ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation of the Company dated April 23,
1984, as amended (incorporated by reference to Exhibit 4.4
to the Companys Form S-8 Registration Statement
(Commission File No. 33-65098), filed with the Commission
on June 25, 1993).3.2
    
    Amended and Restated Bylaws of the Company dated September
10, 2001 (incorporated by reference to Exhibit 3.2 to the
Companys Quarterly Report on Form 10-Q (Commission File
No. 001-08777), filed with the Commission on September 14,
2001).10.1
    
    Form of Virco Mfg. Corporation Employee Stock Ownership
Plan (the ESOP) (incorporated by reference to Exhibit 4.1
to the Companys Form S-8 Registration Statement
(Commission File No. 33-65098), filed with the Commission
on June 25, 1993).10.2
    
    Trust Agreement for the ESOP (incorporated by reference to
Exhibit 4.2 to the Companys Form S-8 Registration
Statement (Commission File No. 33-65098), filed with the
Commission on June 25, 1993).10.3
    
    Form of Registration Rights Agreement for the ESOP
(incorporated by reference to Exhibit 4.3 to the Companys
Form S-8 Registration Statement (Commission File No.
33-65098), filed with the Commission on June 25, 1993).10.4
    
    Rights Agreement dated as of October 18, 1996, by and
between the Company and Mellon Investor Services, as Rights
Agent (incorporated by reference to Exhibit 1 to the
Companys Form S-8 Registration Statement (Commission File
No. 001-08777), filed with the Commission on October 25,
1996).10.5
    
    1993 Stock Incentive Plan of the Company (incorporated by
reference to Exhibit 4.1 to the Companys Form S-8
Registration Statement (Commission File No. 33-65098),
filed with the Commission on June 1993).10.6
    
    Lease between FHL Group, a California Corporation, as
landlord and Virco Mfg. Corporation, a Delaware
Corporation, as tenant
 21




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ExhibitNumber
    
    Description(incorporated by reference to
Exhibit 10.6 to the Companys Annual Report on Form 10-K
for the fiscal year ended January 31, 2002 (Commission File
No. 001-08777), filed with the Commission on May 1, 2002).10.7
    
    Revolving Line of Credit Note dated January 27, 2004,
between the Company and Wells Fargo Bank, N.A., a national
banking association.13.1
    
    Annual Report to Stockholders for the Year Ended January
31, 2004.21.1
    
    List of All Subsidiaries of Virco Mfg. Corporation.23.1
    
    Consent of Independent Auditors.24.1
    
    Power of Attorney (see signature page).31.1
    
    Certification of the Chief Executive Officer Pursuant to
Rule 13a-14(a) under the Securities and Exchange Act of
1934, as adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer Pursuant to
Rule 13a-14(a) under the Securities and Exchange Act of
1934, as adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to 18 U.S.C. Section 1350.
 22