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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    Annual Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
 For the fiscal year ended January 31, 2011.
 o
    
    Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission file number 1-8777
 VIRCO MFG. CORPORATION
  DELAWARE
    
    95-1613718(State or other jurisdiction of incorporation or organization)
    
    (IRS Employer Identification No.)2027 Harpers Way, Torrance, California
    
    90501(Address of principal executive offices)
    
    (Zip Code)
 
 Title of each class
    
    Name of each exchange on which registered:Common Stock, $0.01 Par Value
    
    NASDAQ
  o þ
 o þ
 þ o
 o o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS
 PART IItem 1. Business
    
    
    3Item 1A. Risk Factors
    
    
    11Item 1B. Unresolved Staff Comments
    
    
    17Item 2. Properties
    
    
    17Item 3. Legal Proceedings
    
    
    18Item 4. Removed and Reserved
    
    
    18PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
    
    
    19Item 6. Selected Financial Data
    
    
    20Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 7A. Quantitative and Qualitative Disclosures about Market Risk
    
    
    35Item 8. Financial Statements and Supplementary Data
    
    
    36Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
    
    
    61Item 9A. Controls and Procedures
    
    
    61Item 9B. Other Information
    
    
    62PART IIIItem 10. Directors, Executive Officers, and Corporate Governance
    
    
    63Item 11. Executive Compensation
    
    
    63Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    63Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    63Item 14. Principal Accounting Fees and Services
    
    
    63PART IVItem 15. Exhibits, Financial Statement Schedules
    
    
    64SIGNATURES
    
    
    66POWER OF ATTORNEY
    
    
    67EX-10.31EX-18EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1
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PART I
 Cautionary Statement Regarding Forward-Looking Statements
 This report on Form 10-K contains 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, availability of funding for educational institutions, statements regarding plans and
objectives of management for future operations, including plans and objectives relating to
products, pricing, marketing, expansion, manufacturing processes , business strategies; the
Companys ability to continue to control costs and inventory levels; availability and cost of raw
materials, especially steel and petroleum-based products; the availability and cost of labor; the
potential impact of the Companys Assemble-To-Ship program on earnings; market demand; the
Companys ability to position itself in the market; references to current and future investments in
and utilization of 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 the Companys 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 the Companys 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 the Companys ability to predict, general economic conditions, the availability
and cost of raw materials, the markets for school and office furniture generally and specifically
in areas and with customers with which the Company conducts its 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, competition and other factors included in
the Risk Factors section of this report.
 In this report, words such as anticipates, believes, expects, will continue, future,
intends, plans, estimates, projects, 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.
 Throughout this report, our fiscal years ended January 31, 2007, January 31, 2008, January 31,
2009, January 31, 2010 and January 31, 2011 are referred to as years 2006, 2007, 2008, 2009 and
2010, respectively.
 Please note that this report includes trademarks of Virco, including, but not limited to, the
following: ZUMA® , ZUMAfrd, Ph.D.® , I.Q.® Virtuoso® ,
Classic Series, Martest 21® , Lunada® , Plateau® ,
Core-a-Gator® , Future Access® , Sigma® , Metaphor® ,
Telos® , TEXT® and Parameter®. Solely for convenience, from time to time we
refer to our trademarks in this report without the ® and  symbols, but such references
are not intended to indicate that we will not assert, to the fullest extent under applicable law,
our rights to our trademarks. In addition, other names and brands included in this report may be
claimed by us as well or by third parties.
 
 Item 1. Business
 Introduction
 ® ® ® ® ® ® ®
 ®
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Principal Products






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Customers
  Raw Materials
     Marketing and Distribution
   ®
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Seasonality
  Working Capital Requirements During the Peak Summer Season
     8




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Other Matters
 Competition
   Backlog
  Patents and Trademarks
 ® ® ®
    Employees
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Environmental Compliance
 ® ® ® ®
 Financial Information About Industry Segment and Geographic Areas
   Executive Officers of the Registrant
  Age at
    
    
    Has HeldJanuary 31,
    
    
    OfficeName
    
    Office
    
    2011
    
    
    SinceR. A. Virtue (1)
    
    President, Chairman of the Board and Chief Executive Officer
    
    
    78
    
    
    1990D. A. Virtue (2)
    
    Executive Vice President
    
    
    52
    
    
    1992S. Bell (3)
    
    Vice President  General Manager, Conway Division
    
    
    54
    
    
    2004R. E. Dose (4)
    
    Vice President  Finance, Secretary and Treasurer
    
    
    54
    
    
    1995P. Quinones (5)
    
    Vice President  Logistics, Marketing Services and
Information Technology
    
    
    47
    
    
    2004D. R. Smith (6)
    
    Vice President  Corporate Marking and Corporate Stewardship
    
    
    62
    
    
    1995L. L. Swafford (7)
    
    Vice President  Legal Affairs and Corporate Counsel
    
    
    46
    
    
    1998N. Wilson (8)
    
    Vice President  General Manager, Torrance Division
    
    
    63
    
    
    2004L. O. Wonder (9)
    
    Vice President  Sales
    
    
    59
    
    
    1995B. Yau (10)
    
    Vice President  Corporate Controller, Assistant Secretary
and Assistant Treasurer.
    
    
    52
    
    
    2004
 
 (1)
    
    Appointed Chairman in 1990; has been employed by the Company for 54 years and has served as the President since 1982 and
Chief Executive Officer since 1988.(2)
    
    Appointed in 1992; has been employed by the Company for 25 years and has served in Production Control, as 10




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Contract
Administrator, as Manager of Marketing Services, as General Manager of the Torrance Division, and currently as Corporate
Executive Vice President.(3)
    
    Appointed in 2004; has been employed by the Company for 22 years and has served in a variety of manufacturing, safety,
and environmental positions, and currently Vice President  General Manager, Conway Division.(4)
    
    Appointed in 1995; has been employed by the Company for 20 years and has served as the Corporate Controller, and
currently as Vice President of Finance, Secretary and Treasurer.(5)
    
    Appointed in 2004; has been employed by the Company for 19 years in a variety customer and marketing service positions,
and currently as Vice President of Logistics, Marketing Services and Information Technology.(6)
    
    Appointed in 1995; has been employed by the Company for 26 years in a variety of sales and marketing positions, and
currently as Vice President of Corporate Marketing and Corporate Stewardship.(7)
    
    Appointed in 1998; has been employed by the Company for 15 years and has served as Associate Corporate Counsel, and
currently as Vice President of Legal Affairs and Corporate Counsel.(8)
    
    Appointed in 2004; has been employed by the Company for 44 years in a variety of manufacturing, warehousing, and
transportation positions, and currently as Vice President  General Manager, Torrance Division.(9)
    
    Appointed in 1995; has been employed by the Company for 33 years in a variety of sales and marketing positions, and
currently as Vice President of Sales.(10)
    
    Appointed in 2004; has been employed by the Company for 14 years and has served as Corporate Controller, and currently as
Vice President Accounting, Corporate Controller, Assistant Secretary and Assistant Treasurer.  Available Information
    
 Item 1A. Risk Factors
  Our product sales are significantly affected by education funding, which is a function of general
economic conditions. If the economy continues to remain weak or further weakens, funding for
education may fail to improve or decrease further, which would adversely affect our business and
results of operations.
  11




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Gaps in state budgets may adversely affect our revenue and results of operations.
  Reduced levels of spending on education may significantly impact spending on furniture and increase
price competition in the furniture market. If price competition increases, we may need to reduce
our prices to build or maintain our market share, which in turn could lower our profit margins.
  Our efforts to introduce new products that meet customer requirements may not be successful, which
could limit our sales growth or cause our sales to decline.
  The majority of our sales are generated under annual contracts, which combined with the seasonal
nature of our business, may limit our ability to raise prices on a timely basis during a given year
in response to increases in costs.
  12




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We depend on outside suppliers who may be unable to meet our volume and quality requirements, and
we may be unable to obtain alternative sources.
  Increases in basic commodity, raw material and component costs could adversely affect our
profitability.
  We are affected by the cost of energy, and increases in energy prices could reduce our margins and
profits.
  Approximately 40% of our sales are priced through one contract, under which we are the exclusive
supplier of classroom furniture.
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We operate in a seasonal business, and require significant amounts of working capital through our
existing credit facility to fund acquisitions of inventory, fund expenses for freight and
installation, and finance receivables during the summer delivery season. Restrictions imposed by the terms of our existing credit
facility may limit our operating and financial flexibility.
   We may not be able to renew our credit facility on favorable terms, or at all, which would
adversely affect our results of operations.
  If management does not accurately forecast the Companys requirements for the peak summer season,
the Companys results of operations could be adversely affected.
  We may require additional capital in the future, which may not be available or may be available
only on unfavorable terms.
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An inability to protect our intellectual property could have a significant impact on our business.
  If third parties claim that we infringe upon their intellectual property rights, we may incur
liability and costs and may have to redesign or discontinue an infringing product.
  We could be required to incur substantial costs to comply with environmental requirements.
Violations of, and liabilities under, environmental laws and regulations may increase our costs or
require us to change our business practices.
  ®
 The Patient Protection and Affordable Care Act may increase the cost of providing medical benefits
to employees, which could have a significant adverse impact on our results of operations.
  15




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We may not be able to manage our business effectively if we are unable to retain our experienced
management team or recruit other key personnel.
  We are subject to potential labor disruptions, which could have a significant impact on our
business.
  Our insurance coverage may not adequately insulate us from expenses for product defects.
  Volatility in the equity markets or interest rates could substantially increase our pension costs
and have a negative impact on our operating results.
  Holders of approximately 40% of the shares of our stock have entered into an agreement restricting
the sale of the stock.
  Our corporate documents and Delaware law contain provisions that could discourage, delay or prevent
a change in control of our company.
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Our stock price has historically been volatile, and investors in our common stock could suffer a decline in value.
  
    
    actual or anticipated fluctuations in our operating results or future prospects;
    
    our announcements or our competitors announcements of new products;
    
    the publics reaction to our press releases, our other public announcements and our filings with the SEC;
    
    strategic actions by us or our competitors, such as acquisitions or restructurings;
    
    new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
    
    changes in accounting standards, policies, guidance, interpretations or principles;
    
    changes in our growth rates or our competitors growth rates;
    
    our inability to raise additional capital;
    
    conditions of the school furniture industry as a result of changes in funding or general economic
conditions, including those resulting from war, incidents of terrorism and responses to such events; and
    
    changes in stock market analyst recommendations or earnings estimates regarding our common stock, other
comparable companies or the education furniture industry generally.
 
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
 Torrance, California
  Conway, Arkansas
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Item 3. Legal Proceedings
  
 Item 4. Removed and Reserved
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PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
  Dividend Policy
  Quarterly Dividend and Stock Market Information
 Cash Dividends Declared

    
    Common Stock Range2010

    
    2009
    

    
    2010
    
    
    2009High
    
    Low
    
    High
    
    Low1st Quarter
    
    $
    0.05
    
    
    $
    0.05
    
    
    $
    4.10
    
    
    $
    3.07
    
    
    $
    3.81
    
    
    $
    1.652nd Quarter
    
    
    
    
    
    
    
    
    
    
    3.85
    
    
    
    2.34
    
    
    
    3.57
    
    
    
    2.783rd Quarter
    
    
    0.05
    
    
    
    0.05
    
    
    
    3.20
    
    
    
    2.60
    
    
    
    3.20
    
    
    
    2.744th Quarter
    
    
    
    
    
    
    
    
    
    
    3.07
    
    
    
    2.41
    
    
    
    3.99
    
    
    
    2.73
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Stock Performance Graph
  COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG VIRCO MFG. CORPORATION, NASDAQ MARKET INDEX,
AND MORNINGSTAR INDEX
 
 Period EndingCompany/Market/Peer Group
    
    1/31/2006
    
    
    1/31/2007
    
    
    1/31/2008
    
    
    1/31/2009
    
    
    1/31/2010
    
    
    1/31/2011Virco Mfg. Corporation
    
    $
    100.00
    
    
    $
    135.39
    
    
    $
    96.68
    
    
    $
    32.74
    
    
    $
    56.56
    
    
    $
    50.46NASDAQ Market Index
    
    $
    100.00
    
    
    $
    107.27
    
    
    $
    104.74
    
    
    $
    65.27
    
    
    $
    95.88
    
    
    $
    121.70Morningstar Business
Equipment
    
    $
    100.00
    
    
    $
    126.27
    
    
    $
    101.49
    
    
    $
    60.68
    
    
    $
    84.53
    
    
    $
    115.96
  
 Item 6. Selected Financial Data
  20




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Five Year Summary of Selected Financial Data
 As Adjusted
    
    
    As AdjustedIn thousands, except per share data
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Summary of OperationsNet sales
    
    $
    180,995
    
    
    $
    190,513
    
    
    $
    212,003
    
    
    $
    229,565
    
    
    $
    223,107Net (loss) income (3)
    
    $
    (17,594
    )
    
    $
    (725
    )
    
    $
    2,479
    
    
    $
    22,219
    
    
    $
    7,545Net
(loss) income per share data (a) (3)Basic
    
    $
    (1.25
    )
    
    $
    (0.05
    )
    
    $
    0.17
    
    
    $
    1.54
    
    
    $
    0.56Assuming dilution
    
    
    (1.25
    )
    
    
    (0.05
    )
    
    
    0.17
    
    
    
    1.53
    
    
    
    0.55Cash dividends declared per
share
    
    $
    0.10
    
    
    $
    0.10
    
    
    $
    0.10
    
    
    $
    0.03
    
    
    $
    
 
 (a)
    
    Net loss per share was calculated based on basic shares outstanding due to
the anti-dilutive effect on the inclusion of common stock equivalent shares. Other Financial Data
 As Adjusted
    
    
    As Adjusted
    
    
    As AdjustedIn thousands, except per share data
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Total assets (3)
    
    $
    100,588
    
    
    $
    122,432
    
    
    $
    123,432
    
    
    $
    131,273
    
    
    $
    116,277Working capital (3)
    
    $
    29,498
    
    
    $
    38,386
    
    
    $
    36,525
    
    
    $
    36,902
    
    
    $
    22,994Current ratio (3)
    
    
    2.5/1
    
    
    
    2.7/1
    
    
    
    2.4/1
    
    
    
    2.1/1
    
    
    
    1.6/1Total long-term obligations
    
    $
    30,169
    
    
    $
    30,236
    
    
    $
    25,104
    
    
    $
    21,129
    
    
    $
    30,101Stockholders equity (3)
    
    $
    50,402
    
    
    $
    69,270
    
    
    $
    71,520
    
    
    $
    76,236
    
    
    $
    48,878Shares outstanding at year-end
    
    
    14,205
    
    
    
    14,163
    
    
    
    14,239
    
    
    
    14,429
    
    
    
    14,380Stockholders equity per share (3)
    
    $
    3.55
    
    
    $
    4.89
    
    
    $
    5.02
    
    
    $
    5.28
    
    
    $
    3.40
 Financial Highlights
 As Adjusted
    
    
    As Adjusted
    
    
    As AdjustedIn thousands, except per share data
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Summary of OperationsNet sales
    
    $
    180,995
    
    
    $
    190,513
    
    
    $
    212,003
    
    
    $
    229,565
    
    
    $
    223,107Net (loss) income (3)
    
    $
    (17,594
    )
    
    $
    (725
    )
    
    $
    2,479
    
    
    $
    22,219
    
    
    $
    7,545Net (loss) income per
share (1) (3)
    
    $
    (1.25
    )
    
    $
    (0.05
    )
    
    $
    0.17
    
    
    $
    1.54
    
    
    $
    0.55Stockholders equity (3)
    
    
    50,402
    
    
    
    69,270
    
    
    
    71,520
    
    
    
    76,236
    
    
    
    48,878Stockholders equity
per share (2) (3)
    
    
    3.55
    
    
    
    4.89
    
    
    
    5.02
    
    
    
    5.28
    
    
    
    3.40
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In thousands, except per share data
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Summary of OperationsNet sales
    
    $
    214,450
    
    
    $
    199,854
    
    
    $
    191,852
    
    
    $
    244,355
    
    
    $
    257,462Net (loss) income (4)
    
    $
    (9,574
    )
    
    $
    (13,995
    )
    
    $
    (23,607
    )
    
    $
    282
    
    
    $
    246Net (loss) income per
share (1) (4)
    
    $
    (0.73
    )
    
    $
    (1.07
    )
    
    $
    (1.80
    )
    
    $
    0.02
    
    
    $
    0.02Stockholders equity (4)
    
    
    39,100
    
    
    
    49,265
    
    
    
    62,352
    
    
    
    82,774
    
    
    
    90,223Stockholders equity
per share (2)(4)
    
    
    2.98
    
    
    
    3.76
    
    
    
    4.76
    
    
    
    6.31
    
    
    
    6.71
 
 (1)
    
    Based on average number of shares outstanding each year after giving retroactive effect to stock
dividends and stock split.(2)
    
    Based on number of shares outstanding at year-end giving effect to stock dividends and stock split.(3)
    
    The historical financial data has been modified for the opening balance sheet for 2007 and for the
results of operations and ending balance sheets for 2008, 2009, and 2010 to reflect our fourth
quarter 2010 change in accounting principle for our method of accounting for certain of our
inventory, which is discussed in further detail in Note 2 of our consolidated financial statements
included in this report.(4)
    
    For 2003, an adjustment of $1.6 million of income tax expense was made to reflect tax effect of
minimum pension liability. 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Cautionary Statement Regarding Forward-Looking Statements
    Executive Overview
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® ® ®
 ®
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Critical Accounting Policies and Estimates
  24




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Accounting Changes
and Error Corrections
  25




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Results of Operations (2010 vs. 2009)
 Financial Results and Cash Flow
  Sales
 ® ® ® ®
  Cost of Sales
    .
 27




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Selling, General and Administrative and Other Expenses
    Provision for Income Taxes
    Results of Operations (2009 vs. 2008)
 Financial Results and Cash Flow
  Sales
  28




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® ® ®
 Cost of Sales
  Selling, General and Administrative and Other Expenses
   Provision for Income Taxes
  Gain on Real Estate
  Goodwill Impairment
   29




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Inflation and Future Change in Prices
   Liquidity and Capital Resources
 Working Capital Requirements
      30




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Long-Term Capital Requirements
   Asset Impairment
    Contractual Obligations
  31




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Less than 1
    
    
    
    
    
    
    
    
    
    
    More than 5In thousands
    
    Total
    
    
    year
    
    
    1-3 years
    
    
    3-5 years
    
    
    yearsLong-term debt obligations
    
    $
    6,531
    
    
    $
    12
    
    
    $
    6,519
    
    
    $
    
    
    
    $
    Interest on long-term debt
    
    
    326
    
    
    
    
    
    
    
    326
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    25,691
    
    
    
    6,351
    
    
    
    11,769
    
    
    
    6,530
    
    
    
    1,041Purchase obligations
    
    
    15,434
    
    
    
    15,434
    
    
    
    
    
    
    
    
    
    
    
    $
    47,982
    
    
    $
    21,797
    
    
    $
    18,614
    
    
    $
    6,530
    
    
    $
    1,041
    January 31,(In thousands)
    
    2011
    
    
    2010Beginning balance
    
    $
    1,675
    
    
    $
    1,950Provision
    
    
    1,519
    
    
    
    710Costs incurred
    
    
    (894
    )
    
    
    (985
    )Ending balance
    
    $
    2,300
    
    
    $
    1,675
 Retirement Obligations
    32




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Stockholders Equity
   33




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Environmental and Contingent Liabilities
    Off-Balance Sheet Arrangements
  New Accounting Pronouncements
  34




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Item 7A. Quantitative and Qualitative Disclosures about Market Risk
    35




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Item 8. Financial Statements and Supplementary Data
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageManagements Report on Internal Control Over Financial Reporting
    
    
    37Report of Independent Registered Public Accounting Firm
    
    
    38Consolidated Balance Sheets as of January 31, 2011 and 2010
    
    
    39Consolidated Statements of Operations for the Years Ended January 31, 2011, 2010 and 2009
    
    
    41Consolidated Statements of Stockholders Equity for the Years Ended January 31, 2011, 2010 and 2009
    
    
    42Consolidated Statements of Cash Flows for the Years Ended January 31, 2011, 2010 and 2009
    
    
    43Notes to Consolidated Financial Statements
    
    
    44
 36




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##### Table of Contents



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
      37




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 The Board of Directors and Stockholders of Virco Mfg. Corporation
     /s/ Ernst & Young LLP 
 38




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##### Table of Contents



Virco Mfg. Corporation
 
 Consolidated Balance Sheets
 January 31,As Adjusted2011
    
    
    2010(In thousands)AssetsCurrent assetsCash
    
    $
    1,528
    
    
    $
    1,045Trade accounts receivables (net of allowance
for doubtful accounts of $200 in 2010 and
2009)
    
    
    10,462
    
    
    
    14,127Other receivables
    
    
    168
    
    
    
    141Income tax receivable
    
    
    367
    
    
    
    259InventoriesFinished goods, net
    
    
    9,618
    
    
    
    11,140Work in process, net
    
    
    13,773
    
    
    
    22,228Raw materials and supplies, net
    
    
    11,980
    
    
    
    10,22135,371
    
    
    
    43,589Deferred tax assets, net
    
    
    
    
    
    
    637Prepaid expenses and other current assets
    
    
    1,619
    
    
    
    1,514Total current assets
    
    
    49,515
    
    
    
    61,312Property, plant and equipmentLand and land improvements
    
    
    3,108
    
    
    
    3,329Buildings and building improvements
    
    
    47,797
    
    
    
    47,796Machinery and equipment
    
    
    118,799
    
    
    
    116,425Leasehold improvements
    
    
    2,699
    
    
    
    2,688172,403
    
    
    
    170,238Less accumulated depreciation and amortization
    
    
    130,342
    
    
    
    125,804Net property, plant and equipment
    
    
    42,061
    
    
    
    44,434Deferred tax assets, net
    
    
    2,605
    
    
    
    10,428Other assets
    
    
    6,407
    
    
    
    6,258Total assets
    
    $
    100,588
    
    
    $
    122,432
 See accompanying notes.
 39




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##### Table of Contents



Virco Mfg. Corporation
 Consolidated Balance Sheets
 January 31,As Adjusted2011
    
    
    2010(In thousands, except share data)LiabilitiesCurrent liabilitiesChecks released but not yet cleared bank
    
    $
    1,154
    
    
    $
    2,360Accounts payable
    
    
    8,382
    
    
    
    11,641Accrued compensation and employee benefits
    
    
    3,946
    
    
    
    4,396Current portion of long-term debt
    
    
    12
    
    
    
    12Deferred tax liabilities
    
    
    1,398
    
    
    
    Other accrued liabilities
    
    
    5,125
    
    
    
    4,517Total current liabilities
    
    
    20,017
    
    
    
    22,926Non-current liabilitiesAccrued self-insurance retention and other
    
    
    4,901
    
    
    
    4,918Accrued pension expenses
    
    
    18,027
    
    
    
    17,286Income tax payable
    
    
    722
    
    
    
    1,120Long-term debt, less current portion
    
    
    6,519
    
    
    
    6,912Total non-current liabilities
    
    
    30,169
    
    
    
    30,236Commitments and contingenciesStockholders equityPreferred 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 14,204,998
shares in 2010 and 14,163,044 shares in
2009
    
    
    142
    
    
    
    142Additional paid-in capital
    
    
    114,467
    
    
    
    114,152Accumulated deficit
    
    
    (54,465
    )
    
    
    (35,453
    )Accumulated other comprehensive loss
    
    
    (9,742
    )
    
    
    (9,571
    )Total stockholders equity
    
    
    50,402
    
    
    
    69,270Total liabilities and stockholders equity
    
    $
    100,588
    
    
    $
    122,432
 See accompanying notes.
 40




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##### Table of Contents



Virco Mfg. Corporation
 
 Consolidated Statements of Operations
 Year ended January 31,As Adjusted
    
    
    As Adjusted2011
    
    
    2010
    
    
    2009(In thousands, except per share data)Net sales
    
    $
    180,995
    
    
    $
    190,513
    
    
    $
    212,003Costs of goods sold
    
    
    129,621
    
    
    
    129,423
    
    
    
    141,314Gross profit
    
    
    51,374
    
    
    
    61,090
    
    
    
    70,689Selling, general and administrative expenses
    
    
    58,891
    
    
    
    61,494
    
    
    
    64,487Gain on sale of property, plant and
equipment and other, net
    
    
    (7
    )
    
    
    (80
    )
    
    
    (1,131
    )Goodwill and intangible impairment
    
    
    
    
    
    
    
    
    
    
    2,284Interest expense, net
    
    
    1,077
    
    
    
    1,127
    
    
    
    1,452(Loss) income before income taxes
    
    
    (8,587
    )
    
    
    (1,451
    )
    
    
    3,597Income tax expense (benefit)
    
    
    9,007
    
    
    
    (726
    )
    
    
    1,118Net (loss) income
    
    $
    (17,594
    )
    
    $
    (725
    )
    
    $
    2,479Dividend declared:Cash
    
    $
    0.10
    
    
    $
    0.10
    
    
    $
    0.10Net (loss) income per common share (a):Basic
    
    $
    (1.25
    )
    
    $
    (0.05
    )
    
    $
    0.17Diluted
    
    $
    (1.25
    )
    
    $
    (0.05
    )
    
    $
    0.17Weighted average shares outstanding:Basic
    
    
    14,130
    
    
    
    14,155
    
    
    
    14,390Diluted
    
    
    14,130
    
    
    
    14,155
    
    
    
    14,434
 
 (a)
    
    Net loss per share was calculated based on basic shares outstanding due to the anti-dilutive effect on the inclusion of common
stock equivalent shares. See accompanying notes.
 41




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##### Table of Contents



Virco Mfg. Corporation
 
 Consolidated Statements of Stockholders Equity
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    OtherPaid-in
    
    
    Accumulated
    
    
    Comprehensive
    
    
    ComprehensiveIn thousands, except share data
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Income (Loss)
    
    
    Loss
    
    
    TotalBalance at January 31,
2008, as adjusted
    
    
    14,428,662
    
    
    $
    144
    
    
    $
    114,318
    
    
    $
    (33,136
    )
    
    
    
    
    
    $
    (5,090
    )
    
    
    76,236Net income, as adjusted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,479
    
    
    $
    2,479
    
    
    
    
    
    
    
    2,479Pension adjustments,
net of tax
effect of $2,275
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,292
    )
    
    
    (4,292
    )
    
    
    (4,292
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,813
    )
    
    
    
    
    
    
    Adoption of ASC 715-60
(formerly EITF 06-4),
net of
tax effect of $679
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,151
    )
    
    
    
    
    
    
    
    
    
    
    (1,151
    )Adoption of SFAS 158,
net of
tax effect of $36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (54
    )
    
    
    
    
    
    
    
    
    
    
    (54
    )Shares vested
    
    
    107,039
    
    
    
    1
    
    
    
    (159
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (158
    )Stock compensation
expense
    
    
    
    
    
    
    
    
    
    
    855
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    855Stock repurchased
    
    
    (296,707
    )
    
    
    (3
    )
    
    
    (947
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (950
    )Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,445
    )
    
    
    
    
    
    
    
    
    
    
    (1,445
    )Balance at January 31,
2009, as adjusted
    
    
    14,238,994
    
    
    $
    142
    
    
    $
    114,067
    
    
    $
    (33,307
    )
    
    
    
    
    
    $
    (9,382
    )
    
    $
    71,520Net loss, as adjusted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (725
    )
    
    $
    (725
    )
    
    
    
    
    
    
    (725
    )Pension adjustments,
net of tax
effect of $147
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (189
    )
    
    
    (189
    )
    
    
    (189
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (914
    )
    
    
    
    
    
    
    Shares vested
    
    
    118,845
    
    
    
    2
    
    
    
    (120
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (118
    )Stock compensation
expense
    
    
    
    
    
    
    
    
    
    
    857
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    857Stock repurchased
    
    
    (194,795
    )
    
    
    (2
    )
    
    
    (652
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (654
    )Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,421
    )
    
    
    
    
    
    
    
    
    
    
    (1,421
    )Balance at January 31,
2010, as adjusted
    
    
    14,163,044
    
    
    $
    142
    
    
    $
    114,152
    
    
    $
    (35,453
    )
    
    
    
    
    
    $
    (9,571
    )
    
    $
    69,270Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,594
    )
    
    $
    (17,594
    )
    
    
    
    
    
    
    (17,594
    )Pension adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (171
    )
    
    
    (171
    )
    
    
    (171
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,765
    )
    
    
    
    
    
    
    Shares vested
    
    
    141,838
    
    
    
    1
    
    
    
    (141
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (140
    )Stock compensation
expense
    
    
    
    
    
    
    
    
    
    
    799
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    799Stock repurchased
    
    
    (99,884
    )
    
    
    (1
    )
    
    
    (343
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (344
    )Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,418
    )
    
    
    
    
    
    
    
    
    
    
    (1,418
    )Balance at January 31,
2011
    
    
    14,204,998
    
    
    $
    142
    
    
    $
    114,467
    
    
    $
    (54,465
    )
    
    
    
    
    
    $
    (9,742
    )
    
    $
    50,402
 See accompanying notes.
 42




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##### Table of Contents



Virco Mfg. Corporation
 
 Consolidated Statements of Cash Flows
 Year Ended January 31,As Adjusted
    
    
    As Adjusted2011
    
    
    2010
    
    
    2009(In thousands)Operating activitiesNet (loss) income
    
    $
    (17,594
    )
    
    $
    (725
    )
    
    $
    2,479Adjustments to reconcile net (loss) income
to net cash provided by (used in) operating
activitiesDepreciation and amortization
    
    
    5,352
    
    
    
    5,387
    
    
    
    5,673Provision for doubtful accounts
    
    
    79
    
    
    
    127
    
    
    
    7(Gain) loss on sale of property, plant and
equipment
    
    
    (7
    )
    
    
    2
    
    
    
    (1,131
    )Deferred income taxes
    
    
    9,859
    
    
    
    (916
    )
    
    
    461Goodwill and intangible assets impairment
    
    
    
    
    
    
    
    
    
    
    2,284Stock-based compensation
    
    
    799
    
    
    
    857
    
    
    
    855Changes in operating assets and liabilitiesTrade accounts receivable
    
    
    3,586
    
    
    
    (61
    )
    
    
    1,274Other receivables
    
    
    (27
    )
    
    
    269
    
    
    
    (126
    )Inventories
    
    
    8,218
    
    
    
    (2,070
    )
    
    
    7,935Income taxes
    
    
    (506
    )
    
    
    58
    
    
    
    193Prepaid expenses and other current assets
    
    
    (584
    )
    
    
    146
    
    
    
    (165
    )Accounts payable and accrued liabilities
    
    
    (3,723
    )
    
    
    (5,869
    )
    
    
    (8,579
    )Net cash provided by (used in) operating
activities
    
    
    5,452
    
    
    
    (2,795
    )
    
    
    11,160Investing activitiesCapital expenditures
    
    
    (3,002
    )
    
    
    (5,345
    )
    
    
    (5,056
    )Proceeds from sale of property, plant and
equipment
    
    
    39
    
    
    
    27
    
    
    
    2,392Net investment in life insurance
    
    
    149
    
    
    
    36
    
    
    
    (50
    )Net cash used in investing activities
    
    
    (2,814
    )
    
    
    (5,282
    )
    
    
    (2,714
    )Financing activitiesProceeds from long-term debt
    
    
    
    
    
    
    6,877
    
    
    
    Repayment of long-term debt
    
    
    (393
    )
    
    
    (69
    )
    
    
    (3,730
    )Purchase of treasury stock
    
    
    (344
    )
    
    
    (652
    )
    
    
    (950
    )Cash dividend paid
    
    
    (1,418
    )
    
    
    (1,421
    )
    
    
    (1,445
    )Net cash (used in) provided by financing
activities
    
    
    (2,155
    )
    
    
    4,735
    
    
    
    (6,125
    )Net increase (decrease) in cash
    
    
    483
    
    
    
    (3,342
    )
    
    
    2,321Cash at beginning of year
    
    
    1,045
    
    
    
    4,387
    
    
    
    2,066Cash at end of year
    
    $
    1,528
    
    
    $
    1,045
    
    
    $
    4,387Supplemental disclosures of cash flow informationCash paid during the year for:Interest
    
    $
    1,077
    
    
    $
    1,127
    
    
    $
    1,452Income tax, net
    
    
    68
    
    
    
    176
    
    
    
    464Non-cash activities(Decrease) Increase in accrued asset retirement
obligations
    
    $
    
    
    
    $
    (200
    )
    
    $
    113
 See accompanying notes.
 43




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##### Table of Contents



VIRCO MFG. CORPORATION
 
 Notes to Financial Statements
 January 31, 2011
 1. Summary of Business and Significant Accounting Policies
 Business
   Principles of Consolidation
  Management Use of Estimates
  Fiscal Year End
  Concentration of Credit Risk
   Fair Values of Financial Instruments
  44




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##### Table of Contents



Inventories
   Property, Plant and Equipment
  Land improvements
    
    5 to 25 yearsBuildings and building improvements
    
    5 to 40 yearsMachinery and equipment
    
    3 to 10 yearsLeasehold improvements
    
    shorter of lease or useful life
      45




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##### Table of Contents



2010
    
    
    2009Balance at beginning of period
    
    $
    (627,000
    )
    
    $
    (818,000
    )Decrease in obligation
    
    
    
    
    
    
    (200,000
    )Accretion expense
    
    
    (9,000
    )
    
    
    (9,000
    )Balance at end of period
    
    $
    (636,000
    )
    
    $
    (627,000
    )
 Impairment of Long-Lived Assets
  Net (Loss) Income per Share
  As Adjusted
    
    
    As AdjustedIn thousands, except per share data
    
    2010
    
    
    2009
    
    
    2008NumeratorNet (loss) income
    
    $
    (17,594
    )
    
    $
    (725
    )
    
    $
    2,479DenominatorWeighted-average shares  basic
    
    
    14,130
    
    
    
    14,155
    
    
    
    14,390Common equivalent shares from common stock options
and warrants
    
    
    
    
    
    
    
    
    
    
    44Weighted-average shares  diluted (1)
    
    
    14,130
    
    
    
    14,155
    
    
    
    14,434Net (loss) income per common shareBasic
    
    $
    (1.25
    )
    
    $
    (0.05
    )
    
    $
    0.17Diluted
    
    
    (1.25
    )
    
    
    (0.05
    )
    
    
    0.17
 
 (1)
    
    For the period ended January 31, 2011, approximately 59,000 shares of common stock equivalents
were excluded in the computation of diluted net income per share, as the effect would be
anti-dilutive. For the period ended January 31, 2010, approximately 41,000 common stock
equivalents were excluded in the computation of diluted net income per share, as the effect would
be anti-dilutive. Effective June 6, 2006, in connection with a stock purchase agreement, the
Company issued warrants to purchase 268,010 shares of common stock at an exercise price of $6.06.
Effective September 30, 2006, in connection with a stock purchase agreement, the Company issued
warrants to purchase 14,364 shares of common stock at an exercise price of $6.53. The warrants
expire five years from the date of issue. Goodwill and Other Intangible Assets
  Impairment of Goodwill
  46




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##### Table of Contents



Impairment of Intangible Assets
  Environmental Costs
    Advertising Costs
  Product Warranty Expense
  47




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##### Table of Contents



Self-Insurance
  Stock-Based Compensation Plans
  Reclassifications
  Revenue Recognition
  Shipping and Installation Fees
  Accounting for Income Taxes
   New Accounting Pronouncements
  Improving Disclosures about Fair Value Measurements
 48




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##### Table of Contents



2. Change in Accounting Principle
 Accounting Changes and Error
Corrections
   As Previously
    
    
    Impact of Change inIn thousands
    
    Reported
    
    
    Accounting Principle
    
    
    As Adjusted(in thousands, except per share data)Condensed consolidated balance sheet as of April 30, 2010 (unaudited):Inventories
    
    $
    50,833
    
    
    $
    6,919
    
    
    $
    57,752Deferred tax assets
    
    
    4,534
    
    
    
    2,587
    
    
    
    7,121Accumulated deficit
    
    
    (45,571
    )
    
    
    4,332
    
    
    
    (41,239
    )Condensed
consolidated statement of operations for the three-months ended
April 30, 2010 (unaudited):Cost of sales
    
    $
    18,589
    
    
    $
    
    
    
    $
    18,589Income (loss) before income taxes
    
    $
    (6,494
    )
    
    $
    
    
    
    $
    (6,494
    )Provision for income taxes (income tax benefit)
    
    
    (1,413
    )
    
    
    
    
    
    
    (1,413
    )Net income (loss)
    
    $
    (5,081
    )
    
    $
    
    
    
    $
    (5,081
    )
 49




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##### Table of Contents



As Previously
    
    
    Impact of Change inIn thousands
    
    Reported
    
    
    Accounting Principle
    
    
    As Adjusted(in thousands, except per share data)Basic earnings (loss) per share
    
    $
    (0.36
    )
    
    $
    
    
    
    $
    (0.36
    )Diluted earnings (loss) per share
    
    
    (0.36
    )
    
    
    
    
    
    
    (0.36
    )Condensed consolidated balance sheet as of July 31, 2010 (unaudited):Inventories
    
    $
    41,082
    
    
    $
    6,919
    
    
    $
    48,001Deferred tax assets
    
    
    3,150
    
    
    
    2,587
    
    
    
    5,737Accumulated deficit
    
    
    (41,534
    )
    
    
    4,332
    
    
    
    (37,202
    )Condensed consolidated statement of operations for the three-months ended July 31, 2010 (unaudited):Cost of sales
    
    $
    49,391
    
    
    $
    
    
    
    $
    49,391Income (loss) before income taxes
    
    $
    4,978
    
    
    $
    
    
    
    $
    4,978Provision for income taxes (income tax benefit)
    
    
    941
    
    
    
    
    
    
    
    941Net income (loss)
    
    $
    4,037
    
    
    $
    
    
    
    $
    4,037Basic earnings (loss) per share
    
    $
    0.28
    
    
    $
    
    
    
    $
    0.28Diluted earnings (loss) per share
    
    
    0.28
    
    
    
    
    
    
    
    0.28Condensed consolidated balance sheet as of October 31, 2010 (unaudited):Inventories
    
    $
    25,719
    
    
    $
    6,919
    
    
    $
    32,638Deferred tax assets
    
    
    3,775
    
    
    
    2,587
    
    
    
    6,362Accumulated deficit
    
    
    (42,090
    )
    
    
    4,332
    
    
    
    (37,758
    )Condensed consolidated statement of operations for the three-months ended 
October 31, 2010 (unaudited):Cost of sales
    
    $
    43,586
    
    
    $
    
    
    
    $
    43,586Income (loss) before income taxes
    
    $
    (123
    )
    
    $
    
    
    
    $
    (123
    )Provision for income taxes (income tax benefit)
    
    
    (277
    )
    
    
    
    
    
    
    (277
    )Net income (loss)
    
    $
    154
    
    
    $
    
    
    
    $
    154Basic earnings (loss) per share
    
    $
    0.01
    
    
    $
    
    
    
    $
    0.01Diluted earnings (loss) per share
    
    
    0.01
    
    
    
    
    
    
    
    0.01
 3. Debt
  January 31,In thousands, except per share data
    
    2011
    
    
    2010Revolving credit line with Wells Fargo Bank
    
    $
    6,496
    
    
    $
    6,877Other
    
    
    35
    
    
    
    47Total long-term debt
    
    
    6,531
    
    
    
    6,924Less current portion
    
    
    12
    
    
    
    12Non-current portion
    
    $
    6,519
    
    
    $
    6,912
   50




---



##### Table of Contents



Year ending January 31,2012
    
    $
    122013
    
    
    6,5192014
    
    
    2015
    
    
    2016
    
    
    Thereafter
    
    
    
   4. Retirement Plans
 Pension Plans
     51




---



##### Table of Contents



52




---



##### Table of Contents



Employee Plan
    
    
    VIP Plan
    
    
    Directors Plan01/31/2011
    
    
    01/31/2010
    
    
    01/31/2011
    
    
    01/31/2010
    
    
    01/31/2011
    
    
    01/31/2010Change in Benefit ObligationBenefit obligation at beg. of year
    
    $
    25,268
    
    
    $
    22,516
    
    
    $
    6,076
    
    
    $
    5,238
    
    
    $
    463
    
    
    $
    464Service cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest cost
    
    
    1,406
    
    
    
    1,467
    
    
    
    350
    
    
    
    338
    
    
    
    25
    
    
    
    30Participant contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amendments
    
    
    
    
    
    
    (1,395
    )
    
    
    
    
    
    
    1,703
    
    
    
    
    
    
    
    Actuarial losses (gains)
    
    
    1,880
    
    
    
    3,759
    
    
    
    561
    
    
    
    (727
    )
    
    
    (38
    )
    
    
    (31
    )Benefits paid
    
    
    (1,474
    )
    
    
    (1,079
    )
    
    
    (458
    )
    
    
    (476
    )
    
    
    
    
    
    
    Benefit obligation at end of year
    
    $
    27,080
    
    
    $
    25,268
    
    
    $
    6,529
    
    
    $
    6,076
    
    
    $
    450
    
    
    $
    463Change in Plan AssetsFair value at beg of year
    
    $
    16,192
    
    
    $
    10,213
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Actual return on plan assets
    
    
    2,338
    
    
    
    2,691
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Company contributions
    
    
    681
    
    
    
    4,367
    
    
    
    458
    
    
    
    476
    
    
    
    
    
    
    
    Benefits paid
    
    
    (1,474
    )
    
    
    (1,079
    )
    
    
    (458
    )
    
    
    (476
    )
    
    
    
    
    
    
    Fair value at end of year
    
    $
    17,737
    
    
    $
    16,192
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Funded StatusUnfunded status of the plan
    
    $
    (9,343
    )
    
    $
    (9,076
    )
    
    $
    (6,529
    )
    
    $
    (6,076
    )
    
    $
    (450
    )
    
    $
    (463
    )Amounts Recognized in Statement of
Financial PositionCurrent liabilities
    
    
    
    
    
    
    
    
    
    
    (412
    )
    
    
    (496
    )
    
    
    (67
    )
    
    
    (63
    )Non-current liabilities
    
    
    (9,343
    )
    
    
    (9,076
    )
    
    
    (6,117
    )
    
    
    (5,580
    )
    
    
    (383
    )
    
    
    (400
    )Accrued benefit cost
    
    $
    (9,343
    )
    
    $
    (9,076
    )
    
    $
    (6,529
    )
    
    $
    (6,076
    )
    
    $
    (450
    )
    
    $
    (463
    )Amounts Recognized in Statement of Financial
Position and OperationsAccrued benefit liability
    
    $
    (9,343
    )
    
    $
    (9,076
    )
    
    $
    (6,529
    )
    
    $
    (6,076
    )
    
    $
    (450
    )
    
    $
    (463
    )Accumulated other comp. loss (gain)
    
    
    12,226
    
    
    
    12,609
    
    
    
    1,115
    
    
    
    554
    
    
    
    (84
    )
    
    
    (77
    )Net amount recognized
    
    $
    2,883
    
    
    $
    3,533
    
    
    $
    (5,414
    )
    
    $
    (5,522
    )
    
    $
    (534
    )
    
    $
    (540
    )Items not yet Recognized as a Component of Net
Periodic Pension Expense, Included in AOCIUnrecognized net actuarial loss
(gain)
    
    $
    12,226
    
    
    $
    12,609
    
    
    $
    1,115
    
    
    $
    554
    
    
    $
    (84
    )
    
    $
    (77
    )Unamortized prior service costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net initial asset recognition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    12,226
    
    
    $
    12,609
    
    
    $
    1,115
    
    
    $
    554
    
    
    $
    (84
    )
    
    $
    (77
    )Other Changes in Plan Assets and Benefit Obligations
Recognized in Other Comprehensive IncomeNet loss (gain)
    
    $
    589
    
    
    $
    1,785
    
    
    $
    561
    
    
    $
    (727
    )
    
    $
    (38
    )
    
    $
    (31
    )Prior service cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of (loss) gain
    
    
    (972
    )
    
    
    (922
    )
    
    
    
    
    
    
    (98
    )
    
    
    31
    
    
    
    184Amortization of prior service cost
(credit)
    
    
    
    
    
    
    (1,741
    )
    
    
    
    
    
    
    1,886
    
    
    
    
    
    
    
    Amortization of initial asset
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total recognized in other
    
    $
    (383
    )
    
    $
    (878
    )
    
    $
    561
    
    
    $
    1,061
    
    
    $
    (7
    )
    
    $
    153Comprehensive IncomeItems to be recognized as a component of 2011
periodic pension costPrior service cost
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Net actuarial loss (gain)
    
    
    1,050
    
    
    
    972
    
    
    
    51
    
    
    
    
    
    
    
    (38
    )
    
    
    (31
    )$
    1,050
    
    
    $
    972
    
    
    $
    51
    
    
    $
    
    
    
    $
    (38
    )
    
    $
    (31
    )Supplemental DataProjected benefit obligation
    
    $
    27,080
    
    
    $
    25,268
    
    
    $
    6,529
    
    
    $
    6,076
    
    
    $
    450
    
    
    $
    463Accumulated benefit obligation
    
    
    27,080
    
    
    
    25,268
    
    
    
    6,529
    
    
    
    6,076
    
    
    
    450
    
    
    
    463Fair value of plan assets
    
    
    17,737
    
    
    
    16,192
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 53




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##### Table of Contents



Employee Plan
    
    
    VIP Plan
    
    
    Directors Plan01/31/2011
    
    
    01/31/2010
    
    
    01/31/2011
    
    
    01/31/2010
    
    
    01/31/2011
    
    
    01/31/2010Components of Net CostService cost
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Interest cost
    
    
    1,406
    
    
    
    1,467
    
    
    
    350
    
    
    
    338
    
    
    
    25
    
    
    
    30Expected return on plan assets
    
    
    (1,048
    )
    
    
    (717
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of transition amount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Recognized (gain) loss due to
Curtailments
    
    
    
    
    
    
    (164
    )
    
    
    
    
    
    
    135
    
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    
    
    
    
    510
    
    
    
    
    
    
    
    (318
    )Recognized net actuarial loss
    
    
    972
    
    
    
    923
    
    
    
    
    
    
    
    98
    
    
    
    (31
    )
    
    
    (184
    )Benefit cost
    
    $
    1,330
    
    
    $
    2,019
    
    
    $
    350
    
    
    $
    253
    
    
    $
    (6
    )
    
    $
    (154
    )Estimated Future Benefit PaymentsFYE 01-31-2012
    
    $
    1,795
    
    
    
    
    
    
    $
    412
    
    
    
    
    
    
    $
    67FYE 01-31-2013
    
    
    1,738
    
    
    
    
    
    
    
    409
    
    
    
    
    
    
    
    62FYE 01-31-2014
    
    
    1,634
    
    
    
    
    
    
    
    420
    
    
    
    
    
    
    
    57FYE 01-31-2015
    
    
    1,864
    
    
    
    
    
    
    
    401
    
    
    
    
    
    
    
    52FYE 01-31-2016
    
    
    1,872
    
    
    
    
    
    
    
    391
    
    
    
    
    
    
    
    47FYE 01-31-2017 to 2021
    
    
    8,815
    
    
    
    
    
    
    
    1,739
    
    
    
    
    
    
    
    167Total
    
    $
    17,718
    
    
    
    
    
    
    $
    3,772
    
    
    
    
    
    
    $
    452Weighted Average Assumptions to Determine Benefit
Obligations at Year-EndDiscount rate
    
    
    5.50
    %
    
    
    5.75
    %
    
    
    6.00
    %
    
    
    6.00
    %
    
    
    5.50
    %
    
    
    5.75
    %Rate of compensation increase
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/AWeighted Average Assumptions to Determine Net
Periodic Pension CostDiscount rate
    
    
    5.75
    %
    
    
    6.75
    %
    
    
    6.00
    %
    
    
    6.75
    %
    
    
    5.75
    %
    
    
    6.75
    %Expected return on plan assets
    
    
    6.50
    %
    
    
    6.50
    %
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ARate of compensation increase
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
 Fair Value Measurements of Plan Assets
  01/31/2011
    
    
    01/31/2010Level 1 MeasurementCash & Cash Equivalents
    
    $
    245
    
    
    $
    215Common Stock
    
    
    3,673
    
    
    
    3,438Total Level 1
    
    $
    3,918
    
    
    $
    3,653Level 2 MeasurementBond Index Fund
    
    $
    395
    
    
    $
    2,264Total Return Bond Fund
    
    
    358
    
    
    
    US Aggregate Bond Index Fund
    
    
    436
    
    
    
    Large Cap Growth Index Fund
    
    
    3,750
    
    
    
    2,085Large Cap Value Index Fund
    
    
    2,835
    
    
    
    2,858Russell 2000 Index Fund
    
    
    3,253
    
    
    
    2,373International Equity Index
Fund
    
    
    2,131
    
    
    
    2,421Managed Investment Fund
    
    
    661
    
    
    
    538Total Level 2
    
    $
    13,819
    
    
    $
    12,539Level 3 MeasurementNone
    
    
    N/A
    
    
    
    N/A
 401(k) Retirement Plan
  54




---



##### Table of Contents



Life Insurance
  01/31/2011
    
    
    01/31/2010Liability beginning of year
    
    $
    1,997,000
    
    
    $
    1,894,000Accretion expense
    
    
    104,000
    
    
    
    103,000Present value of death benefits paid
    
    
    (137,000
    )
    
    
    Liability end of year
    
    $
    1,964,000
    
    
    $
    1,997,000
 5. Stock-Based Compensation and Stockholders Rights
 Stock Incentive Plans
    Accounting for the Plans
  2011
    
    
    2010
    
    
    2009Weighted-
    
    
    
    
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseOptions
    
    
    Price
    
    
    Options
    
    
    Price
    
    
    Options
    
    
    PriceOutstanding at
beginning of year
    
    
    12,100
    
    
    $
    8.82
    
    
    
    102,869
    
    
    $
    10.79
    
    
    
    161,433
    
    
    $
    11.46Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    (90,769
    )
    
    
    11.06
    
    
    
    (58,564
    )
    
    
    12.64Outstanding at end of year
    
    
    12,100
    
    
    
    8.82
    
    
    
    12,100
    
    
    
    8.82
    
    
    
    102,869
    
    
    
    10.79Exercisable at end of year
    
    
    12,100
    
    
    
    8.82
    
    
    
    12,100
    
    
    
    8.82
    
    
    
    102,869
    
    
    
    10.79
  55




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##### Table of Contents



Options Outstanding
    
    
    Options ExercisableRemainingContractualPrice
    
    Number of Shares
    
    
    Life
    
    
    Number of Shares
    
    
    Price$8.82
    
    
    12,100
    
    
    
    0.55
    
    
    
    12,100
    
    
    $
    8.82
  Restricted Stock Unit Awards
  UnrecognizedCompensationExpense for 12 months ended
    
    
    Cost at1/31/2011
    
    
    1/31/2010
    
    
    1/31/2009
    
    
    1/31/20112007 Plan56,455 Grants of
Restricted Stock, issued
6/8/2010, vesting over 1
year
    
    $
    116,000
    
    
    
    
    
    
    
    
    
    
    $
    58,000382,500 Restricted Stock
Units, issued 6/16/2009,
vesting over 5 years
    
    
    268,000
    
    
    $
    178,000
    
    
    
    
    
    
    
    893,00049,854 Restricted Stock
Units, issued 6/16/2009,
vesting over 1 year
    
    
    58,000
    
    
    
    116,000
    
    
    
    
    
    
    
    262,500 Restricted Stock
Units, issued 6/19/2007,
vesting over 5 years
    
    
    357,000
    
    
    
    357,000
    
    
    $
    356,000
    
    
    
    475,00035,644 Grants of
Restricted Stock, issued
6/17/2008, vesting over 1
year
    
    
    
    
    
    
    58,000
    
    
    
    117,000
    
    
    
    12,887 Grants of
Restricted Stock, issued
6/19/2007, vesting over 1
year
    
    
    
    
    
    
    
    
    
    
    29,000
    
    
    
    1997 Plan270,000 Restricted Stock
Units, issued 6/30/2004,
vesting over 5 years
    
    
    
    
    
    
    147,000
    
    
    
    353,000
    
    
    
    Totals for the period
    
    $
    799,000
    
    
    $
    856,000
    
    
    $
    855,000
    
    
    $
    1,426,000
  2011
    
    
    2010
    
    
    2009Weighted-
    
    
    
    
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-average fair
    
    
    
    
    
    
    average fair
    
    
    
    
    
    
    average fairvalue of
    
    
    
    
    
    
    value of
    
    
    
    
    
    
    value ofRestricted
    
    
    restricted
    
    
    Restricted
    
    
    restricted
    
    
    Restricted
    
    
    restrictedstock units
    
    
    stock units
    
    
    stock units
    
    
    stock units
    
    
    stock units
    
    
    stock unitsOutstanding at
beginning of year
    
    
    589,854
    
    
    $
    4.38
    
    
    
    296,644
    
    
    $
    6.59
    
    
    
    364,500
    
    
    $
    6.82Granted
    
    
    56,455
    
    
    
    3.10
    
    
    
    432,354
    
    
    
    3.51
    
    
    
    35,644
    
    
    
    4.91Vested
    
    
    (178,854
    )
    
    
    4.47
    
    
    
    (139,144
    )
    
    
    3.52
    
    
    
    (103,500
    )
    
    
    4.95Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at end of year
    
    
    467,455
    
    
    
    4.19
    
    
    
    589,854
    
    
    
    4.38
    
    
    
    296,644
    
    
    
    6.59Weighted-average fair
value of restricted stock
units granted during the
year
    
    
    
    
    
    $
    3.10
    
    
    
    
    
    
    $
    3.51
    
    
    
    
    
    
    $
    4.91
 56




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##### Table of Contents



Stockholders Rights
  6. Comprehensive Loss
  7. Income Taxes
  Year ended January 31,As Adjusted
    
    
    As Adjusted2011
    
    
    2010
    
    
    2009Statutory
    
    $
    (2,920
    )
    
    $
    (493
    )
    
    $
    1,223State taxes (net of federal tax)
    
    
    (445
    )
    
    
    61
    
    
    
    117Change in valuation allowance
    
    
    13,989
    
    
    
    (437
    )
    
    
    87State rate adjustment
    
    
    (1,365
    )
    
    
    (12
    )
    
    
    (244
    )Other
    
    
    (252
    )
    
    
    155
    
    
    
    (65
    )$
    9,007
    
    
    $
    (726
    )
    
    $
    1,118
  January 31,As Adjusted
    
    
    As Adjusted2011
    
    
    2010
    
    
    2009CurrentFederal
    
    $
    (459
    )
    
    $
    (17
    )
    
    $
    5State
    
    
    (393
    )
    
    
    207
    
    
    
    653(852
    )
    
    
    190
    
    
    
    658DeferredFederal
    
    
    (3,482
    )
    
    
    (413
    )
    
    
    859State
    
    
    (648
    )
    
    
    (66
    )
    
    
    (484
    )(4,130
    )
    
    
    (479
    )
    
    
    375Change in valuation allowance
    
    
    13,989
    
    
    
    (437
    )
    
    
    879,859
    
    
    
    (916
    )
    
    
    462$
    9,007
    
    
    $
    (726
    )
    
    $
    1,118
 57




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##### Table of Contents



January 31,As Adjusted2011
    
    
    2010Deferred tax assetsAccrued vacation and sick leave
    
    $
    1,009
    
    
    $
    1,027Retirement plans
    
    
    7,110
    
    
    
    6,497Insurance reserves
    
    
    1,113
    
    
    
    978Warranty
    
    
    996
    
    
    
    694Net operating loss carryforwards
    
    
    6,609
    
    
    
    3,751Intangibles
    
    
    397
    
    
    
    427Other
    
    
    1,551
    
    
    
    1,45818,785
    
    
    
    14,832Deferred tax liabilitiesTax in excess of book depreciation
    
    
    (2,187
    )
    
    
    (1,766
    )Inventory
    
    
    (732
    )
    
    
    (1,432
    )Other
    
    
    (111
    )
    
    
    (79
    )(3,030
    )
    
    
    (3,277
    )Valuation allowance
    
    
    (14,548
    )
    
    
    (490
    )Net deferred tax asset
    
    $
    1,207
    
    
    $
    11,065Reported as:Current deferred tax (liabilities) assets
    
    $
    (1,398
    )
    
    $
    637Long-term deferred tax assets
    
    
    2,605
    
    
    
    10,428The Company adopted the provisions of FASB ASC 740, Income Taxes on February 1, 2007, the
beginning of fiscal 2008. There was no material impact as a result of the implementation of FASB
ASC 740. The following table summarizes the activity related to our gross unrecognized tax benefits
from February 1, 2009 to January 31, 2011 (in thousands):January 31,2011
    
    
    2010Balance as of February 1,
    
    $
    636
    
    
    $
    642Increases related to prior year tax positions
    
    
    
    
    
    
    101Decreases related to prior year tax positions
    
    
    (18
    )
    
    
    (144
    )Increases related to current year tax positions
    
    
    
    
    
    
    37Decreases related to settlements with taxing authorities
    
    
    
    
    
    
    Decreases related to lapsing of statue of limitations
    
    
    (212
    )
    
    
    Balance as of January 31,
    
    $
    406
    
    
    $
    636
  58




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##### Table of Contents



8. Commitments
   Year ending January 31,2012
    
    $
    6,3512013
    
    
    5,9782014
    
    
    5,7912015
    
    
    5,3842016
    
    
    1,146Thereafter
    
    
    1,041Total minimum lease payments
    
    
    25,691Less sublease revenues
    
    
    (1,194
    )$
    24,257
  Year ended January 31,2011
    
    $
    7,3722010
    
    
    8,2582009
    
    
    7,953
  59




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##### Table of Contents



9. Contingencies
     Year ending January 31,2011
    
    $
    6972012
    
    
    5752013
    
    
    5752014
    
    
    5752015
    
    
    575Total
    
    
    2,997Discount to net present value
    
    
    (227
    )$
    2,770
  10. Warranty
  60




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##### Table of Contents



January 31,2011
    
    
    2010Beginning balance
    
    $
    1,675
    
    
    $
    1,950Provision
    
    
    1,519
    
    
    
    710Costs incurred
    
    
    (894
    )
    
    
    (984
    )Ending balance
    
    $
    2,300
    
    
    $
    1,675
 11. Subsequent Events
  12. Quarterly Results (Unaudited)
  Q1
    
    
    Q2
    
    
    Q3
    
    
    Q4Year ended January 31, 2011Net sales
    
    $
    24,860
    
    
    $
    72,363
    
    
    $
    60,779
    
    
    $
    22,993Gross profit
    
    
    6,271
    
    
    
    22,972
    
    
    
    17,193
    
    
    
    4,938Net (loss) income
    
    
    (5,081
    )
    
    
    4,037
    
    
    
    154
    
    
    
    (16,704
    )Per common shareNet (loss) income (a)Basic
    
    $
    (0.36
    )
    
    $
    0.28
    
    
    $
    0.01
    
    
    $
    (1.18
    )Assuming dilution
    
    
    (0.36
    )
    
    
    0.28
    
    
    
    0.01
    
    
    
    (1.18
    )Year ended January 31,
2010, as adjustedNet sales
    
    $
    27,049
    
    
    $
    74,623
    
    
    $
    62,920
    
    
    $
    25,921Gross profit
    
    
    8,300
    
    
    
    25,776
    
    
    
    21,045
    
    
    
    5,969Net (loss) income
    
    
    (2,987
    )
    
    
    4,046
    
    
    
    2,905
    
    
    
    (4,689
    )Per common shareNet (loss) income (a)Basic
    
    $
    (0.21
    )
    
    $
    0.29
    
    
    $
    0.21
    
    
    $
    (0.33
    )Assuming dilution
    
    
    (0.21
    )
    
    
    0.29
    
    
    
    0.20
    
    
    
    (0.33
    )
 
 (a)
    
    Net loss per share was calculated based on basic shares
outstanding due to the anti-dilutive effect on the inclusion of
common stock equivalent shares. 
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
  
 Item 9A. Controls and Procedures
 Disclosure Controls and Procedures
 61




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
  
 Item 9B. Other Information
  62




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##### Table of Contents



PART III
 
 Item 10. Directors, Executive Officers of the Registrant and Corporate Governance
  
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  
 Item 14. Principal Accounting Fees and Services
  63




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##### Table of Contents



PART IV
 
 Item 15. Exhibits, Financial Statement Schedules
 1. The following consolidated financial statements of Virco Mfg. Corporation are set forth in Item 8 of this report.Report of Independent Registered Public Accounting Firm
    
    
    38Consolidated balance sheets  January 31, 2011 and 2010
    
    
    39Consolidated statements of operations  Years ended January 31, 2011, 2010, and 2009
    
    
    41Consolidated statements of stockholders equity  Years ended January 31, 2011, 2010, and 2009
    
    
    42Consolidated statements of cash flows  Years ended January 31, 2011, 2010, and 2009
    
    
    43Notes to consolidated financial statements  January 31, 2011
    
    
    44
 64




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##### Table of Contents



VIRCO MFG. CORPORATION AND SUBSIDIARIES
SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED JANUARY 31, 2011, 2010 AND 2009
  Col. C
    
    
    Col. ECol. B
    
    
    Charged to
    
    
    Deductions from
    
    
    Col. FCol. A
    
    Beginning Balance
    
    
    Expenses
    
    
    Reserves
    
    
    Ending BalanceAllowance for doubtful
accounts for the period
ended:January 31, 2011
    
    $
    200
    
    
    $
    79
    
    
    $
    79
    
    
    $
    200January 31, 2010
    
    $
    200
    
    
    $
    127
    
    
    $
    127
    
    
    $
    200January 31, 2009
    
    $
    200
    
    
    $
    7
    
    
    $
    7
    
    
    $
    200Inventory valuation
reserve for the period ended, as adjusted:January 31, 2011
    
    $
    3,500
    
    
    $
    250
    
    
    $
    
    
    
    $
    3,750January 31, 2010
    
    $
    3,150
    
    
    $
    350
    
    
    $
    
    
    
    $
    3,500January 31, 2009
    
    $
    2,400
    
    
    $
    750
    
    
    $
    
    
    
    $
    3,150Warranty reserve for the
period ended:January 31, 2011
    
    $
    1,675
    
    
    $
    1,519
    
    
    $
    894
    
    
    $
    2,300January 31, 2010
    
    $
    1,950
    
    
    $
    710
    
    
    $
    985
    
    
    $
    1,675January 31, 2009
    
    $
    1,750
    
    
    $
    1,184
    
    
    $
    984
    
    
    $
    1,950Product, general,
workers compensation and
automobile liability
reserves for the period ended:January 31, 2011
    
    $
    2,614
    
    
    $
    156
    
    
    $
    
    
    
    $
    2,770January 31, 2010
    
    $
    2,345
    
    
    $
    269
    
    
    $
    
    
    
    $
    2,614January 31, 2009
    
    $
    3,305
    
    
    $
    
    
    
    $
    960
    
    
    $
    2,345Deferred tax valuation
allowance for the period
ended:January 31, 2011
    
    $
    490
    
    
    $
    14,058
    
    
    $
    
    
    
    $
    14,548January 31, 2010
    
    $
    927
    
    
    $
    269
    
    
    $
    706
    
    
    $
    490January 31, 2009
    
    $
    841
    
    
    $
    86
    
    
    $
    
    
    
    $
    927
  3. Exhibits
  65




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##### Table of Contents



SIGNATURES
  VIRCO MFG. CORPORATIONDate: April 15, 2011
    By:
    /s/ Robert A. VirtueRobert A. VirtueChairman of the Board and Chief
Executive Officer 66




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##### Table of Contents



POWER OF ATTORNEY
   SIGNATURE
    
    TITLE
    
    DATE/s/ Robert A. Virtue

Robert A. Virtue
    
    Chairman of the Board, Chief
Executive Officer, President and
Director (Principal Executive
Officer), Director
    
    April 15, 2011/s/ Douglas A. Virtue

Douglas A. Virtue
    
    Executive Vice President, Director
    
    April 15, 2011/s/ Robert E. Dose

Robert E. Dose
    
    Vice President, Finance,
Secretary and Treasurer
(Principal Financial Officer)
    
    April 15, 2011/s/ Bassey Yau

Bassey Yau
    
    Vice President, Accounting,
Corporate Controller, Assistant
Secretary and Assistant Treasurer
(Principal Accounting Officer)
    
    April 15, 2011/s/ Donald S. Friesz

Donald S. Friesz
    
    Director
    
    April 15, 2011/s/ Thomas J. Schulte

Thomas J. Schulte
    
    Director
    
    April 15, 2011/s/ Robert K. Montgomery

Robert K. Montgomery
    
    Director
    
    April 15, 2011/s/ Albert J. Moyer

Albert J. Moyer
    
    Director
    
    April 15, 2011/s/ Glen D. Parish

Glen D. Parish
    
    Director
    
    April 15, 2011/s/ Donald A. Patrick

Donald A. Patrick
    
    Director
    
    April 15, 2011/s/ James R. Wilburn

James R. Wilburn
    
    Director
    
    April 15, 2011/s/ William L. Beer

William L. Beer
    
    Director
    
    April 15, 2011
 67




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##### Table of Contents



VIRCO MFG. CORPORATION
EXHIBITS TO FORM 10-K ANNUAL REPORT
for the Year Ended January 31, 2011
 ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation of the Company dated April 23, 1984, as amended (incorporated by reference to
Exhibit 1 to the Companys Form 8-A12B (Commission File No. 001-08777), filed with the Commission on June
18, 2007).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).3.3
    
    First Amendment to Amended and Restated Bylaws of the Company dated February 15, 2011 (incorporated by
reference to Exhibit 3.1 to the Companys Current Report on Form 8-K (Commission File No. 001-08777), filed
with the Commission on October 31, 2007).3.4
    
    Second Amendment to Amended and Restated Bylaws of the Company dated February 15, 2011 (incorporated by
reference to Exhibit 3.1 to the Companys Current Report on Form 8-K (Commission File No. 001-08777), filed
with the Commission on February 22, 2011).4.1
    
    Rights Agreement dated as of October 18, 1996, by and between the Company and Mellon Investor Services (as
assignee of The Chase Manhattan Bank), 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, 1996.4.2
    
    Amendment dated as of April 30, 2007, by and between the Company and Mellon Investor Services LLC to the
Rights Agreement by and between the Company and The Chase Manhattan Bank dated as of October 18, 1996, as
incorporated by reference to Exhibit 4.1 to the Companys Quarterly Report on Form 10-Q filed with the
Commission on June 8, 2007.10.1
    
    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).10.5
    
    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 dated February 1, 2006, between FHL Group, a California Corporation, as landlord and Virco Mfg.
Corporation, a Delaware Corporation, as tenant (incorporated by reference to Exhibit 99.1 to the Companys
Current Report on Form 8-K filed with the Commission on February 3, 2006).10.7
    
    Amended and Restated Credit Agreement dated as of January 27, 2004, between the Company and Wells Fargo
Bank, National Association (incorporated by reference to Exhibit 99.2 to the Companys Current Report on
Form 8-K filed with the Commission on January 30, 2004).10.8
    
    Amendment No. 2 to Amended and Restated Credit Agreement dated as of January 21, 2006, between the Company
and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 99.2 to the Companys
Current Report on Form 8-K filed with the Commission on January 27, 2006).10.9
    
    Subsidiary Guaranty dated as of January 27, 2004, by Virco Mgmt. Corporation in favor of Wells Fargo Bank,
National Association (incorporated by reference to Exhibit 99.3 to the Companys Current Report on Form 8-K
filed with the Commission on January 30, 2004).
 68




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##### Table of Contents



ExhibitNumber
    
    Description10.10
    
    Subsidiary Guaranty dated as of January 27, 2004, by Virco, Inc. in favor of Wells Fargo Bank, National
Association (incorporated by reference to Exhibit 99.4 to the Companys Current Report on Form 8-K filed
with the Commission on January 30, 2004).10.11
    
    Amended and Restated Security Agreement dated as of January 27, 2004, among the Company, Virco Mgmt.
Corporation, Virco, Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit
99.7 to the Companys Current Report on Form 8-K filed with the Commission on January 30, 2004).10.12
    
    Revolving Line of Credit Note dated March 26, 2007, between the Company and Wells Fargo Bank, National
Association (incorporated by reference to Exhibit 10.12 to the Companys Form 10-K filed with the
Commission on April 16, 2007).10.13
    
    Term Note dated March 26, 2007, between the Company and Wells Fargo Bank, National Association
(incorporated by reference to Exhibit 10.13 to the Companys Form 10-K filed with the Commission on April
16, 2007).10.14
    
    Amendment No. 4 to Amended and Restated Credit Agreement dated as of March 26, 2007, between the Company
and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.4 to the Companys Form
10-K filed with the Commission on April 16, 2007).10.15
    
    Stock Purchase Agreement dated June 6, 2006, between the Company and Wedbush, Inc. and Wedbush Morgan
Securities, Inc. (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K
filed with the Commission on June 8, 2006).10.16
    
    Warrant Agreement dated June 6, 2006, between the Company and Wedbush, Inc. (incorporated by reference to
Exhibit 10.2 to the Companys Current Report on Form 8-K filed with the Commission on June 8, 2006).10.17
    
    Warrant Agreement dated June 6, 2006, between the Company and Wedbush Morgan Securities, Inc. (incorporated
by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed with the Commission on June
8, 2007).10.18
    
    Amended Stock Purchase Agreement dated August 29, 2006, between the Company and Steve Presley, Ed Gyenes,
Nick Wilson, Scotty Bell, Patty Quinones, Eric Nordstrom, Larry Maddox, James Simms, Bassey Yau, Robert
Virtue, Doug Virtue and Evan Gruber (incorporated by reference to Exhibit 10.1 to the Companys Quarterly
Report on Form 10-Q filed with the Commission on December 11, 2006).10.19
    
    Design Agreement dated January 21, 2008, between the Company and Peter Glass Design, LLC, and Hedgehog
Design, LLC. (incorporated by reference to Exhibit 10.1 and 10.2 to the Companys Current Report on Form
8-K filed with the Commission on January 25, 2008).10.20
    
    Second Amended and Restated Credit Agreement, dated as of March 12, 2008, between Virco Mfg. Corporation
and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K filed with the Commission on March 24, 2008).10.21
    
    Revolving Line of Credit Note, dated as of March 12, 2008, by Virco Mfg. Corporation in favor of Wells
Fargo Bank, National Association (incorporated by reference to Exhibit 10.2 to the Companys Current Report
on Form 8-K filed with the Commission on March 24, 2008).10.22
    
    Master Reaffirmation Agreement, dated as of March 12, 2008, among Virco Mfg. Corporation, Virco Mgmt.
Corporation, Virco Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit
10.3 to the Companys Current Report on Form 8-K filed with the Commission on March 24, 2008).10.23
    
    Amended and Restated Mortgage, dated as of March 12, 2008, by Virco Mfg. Corporation in favor of Wells
Fargo Bank, National Association (incorporated by reference to Exhibit 10.4 to the Companys Current Report
on Form 8-K filed with the Commission on March 24, 2008).10.24
    
    Amendment No. 1 to the Second Amended and Restated Credit Agreement, dated as of July 31, 2008, between
Virco Mfg. Corporation and Wells Fargo Bank, National Association (incorporated by reference to Exhibit
10.2 to the Companys Quarterly Report on Form 10Q filed with the Commission on September 9, 2008).
 69




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##### Table of Contents



ExhibitNumber
    
    Description10.25
    
    Amendment No. 2 to Second Amended and Restated Credit Agreement, dated as of March 27, 2009, by Virco Mfg.
Corporation and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.25 to the
Companys Annual Report on Form 10K filed with the Commission on April 16, 2009).10.26
    
    Lease amendment dated August 14, 2008, between AMB Property, L.P., a Delaware Limited Partnership, as
landlord and Virco Mfg. Corporation, a Delaware Corporation, as tenant (incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Report on Form 10Q filed with the Commission on September 9, 2008).10.27
    
    Amendment No. 3 to Second Amended and Restated Credit Agreement, dated as of March 27, 2009, by Virco Mfg.
Corporation and Wells Fargo Bank, National Association (incorporate by reference to Exhibit 10.25 to the
Companys Annual Report on Form 10-K filed with the Commission on April 16, 2009).10.28
    
    Amendment No. 4 to Second Amended and Restated Credit Agreement, dated as of April 28, 2010, by Virco Mfg.
Corporation and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on Form 10Q filed with the Commission on June 7, 2010).10.29
    
    Amendment No. 5 to Second Amended and Restated Credit Agreement, dated as of July 30, 2010, by Virco Mfg.
Corporation and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on Form 10Q filed with the Commission on September 10, 2010).10.30
    
    Amendment No. 6 to Second Amended and Restated Credit Agreement, dated as of October 29, 2010, by Virco
Mfg. Corporation and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to
the Companys Quarter Report on Form 10Q filed with the Commission on December 9, 2010).10.31*
    
    Amendment No. 7 to Second Amended and Restated Credit Agreement, dated as of January 31, 2011, by Virco
Mfg. Corporation and Wells Fargo Bank, National Association.18*
    
    Letter from Independent Registered Public Accounting Firm Regarding Change in Accounting Principle.21.1*
    
    List of All Subsidiaries of Virco Mfg. Corporation.23.1*
    
    Consent of Independent Registered Public Accounting Firm.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.
 
 *
    
    Filed herewith. 70