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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934

FORM 10-Q

For Quarter Ended July 31, 2003 Commission File Number 1-8777

VIRCO MFG. CORPORATION




(Exact Name of Registrant as Specified in its Charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 95-1613718                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

|                                         |  |  |            | 
|---------------------------------------- |  |  | ---------- | 
|2027 Harpers Way, Torrance, CA           |  |  | 90501      | 
|                                         |  |  |            | 
|(Address of principal executive offices) |  |  | (Zip Code) | 

|                                                    |  |               
|--------------------------------------------------- |  | --------------
|Registrants telephone number, including area code: |  | (310) 533-0474
|                                                    |  |               

No change




Former name, former address and former fiscal year, if changed since last report.


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 whether the registrant is on accelerated files (as
defined in Rule 12b-2 of the Exchange Act).     
Yes     X     No

The number of shares outstanding of each of the issuers classes of common
stock, as of August 15, 2003.

|             |  |                  
|------------ |  | -----------------
|Common Stock |  | 13,095,804 Shares





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TABLE OF CONTENTS



|                          |                                                                                                |                                                      |  |  |  |  |  | 
|------------------------- | ---------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART 1                   
|                          | Item 1. Financial Statements                                                                  
|                          |                                                                                                | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                          |                                                                                                | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
|                          |                                                                                                | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
|                          |                                                                                                | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                          |                                                                                                | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                          | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                          | Item 3. Quantitative and Qualitative Disclosures about Market Risk                            
|                          | Item 4. Controls and Procedures                                                               
|PART II OTHER INFORMATION
|                          | Item 1. Legal Proceedings                                                                     
|                          | Item 2. Changes in Securities and Use of Proceeds                                             
|                          | Item 3. Defaults upon Senior Securities                                                       
|                          | Item 4. Submission of Matters to a Vote of Security Holders                                   
|                          | Item 5. Other Information                                                                     
|                          | Item 6. Exhibits and Reports on Form 8-K                                                      
|SIGNATURES               
|EXHIBIT 31.1             
|EXHIBIT 31.2             
|EXHIBIT 32.1             



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VIRCO MFG. CORPORATION

INDEX

|                              |                                                                                                       |                                                                                            
|----------------------------- | ----------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------
|Part
I. Financial Information
|                              | Item 1.         Financial Statements (unaudited)                                                     
|                              |                                                                                                       | Condensed consolidated balance sheets  July 31, 2003, and January
31, 2003                
|                              |                                                                                                       | Condensed consolidated statements of operations  Three months ended
July 31, 2003 and 2002
|                              |                                                                                                       | Condensed consolidated statements of operations  Six months ended
July 31, 2003 and 2002  
|                              |                                                                                                       | Condensed consolidated statements of cash flows  Six months ended
July 31, 2003 and 2002  
|                              |                                                                                                       | Notes to condensed consolidated financial statements  July 31, 2003                       
|                              | Item 2.         Managements Discussion and Analysis of Financial Condition
and Results of Operations
|                              | Item 3.         Quantitative and Qualitative Disclosures about Market Risk.                          
|                              | Item 4.         Controls and Procedures                                                              
|Part II. Other Information   
|                              | Item 1.         Legal Proceedings                                                                    
|                              | Item 2.         Changes in Securities and Use of Proceeds                                            
|                              | Item 3.         Defaults upon Senior Securities                                                      
|                              | Item 4.         Submission of Matters to a Vote of Security Holders                                  
|                              | Item 5.         Other Information                                                                    
|                              | Item 6.         Exhibits and Reports on Form 8-K                                                     
|                              |                                                                                                       | Exhibit 31.1                                                                               
|                              |                                                                                                       | Exhibit 31.2                                                                               
|                              |                                                                                                       | Exhibit 32.1                                                                               
|                              | Signatures                                                                                           

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PART 1




Item 1. Financial Statements

VIRCO MFG. CORPORATION




CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands, except per share data)

|                            |                                          |                                      |         |                    |         |   |         |        |         | 
|--------------------------- | ---------------------------------------- | ------------------------------------ | ------- | ------------------ | ------- | - | ------- | ------ | ------- | 
|ASSETS                      |                                          | 7/31/2003                            |         | 1/31/2003         
|                            |                                          |                                      |         |                   
|                            |                                          |                                      |         | Unaudited (Note 1) |         |   |         |       
|Current assets              |                                          |                                      |         |                    |         |   |         |       
|                            | Cash                                     |                                      | $       | 2,270              |         |   | $       | 1,639  |        
|                            | Accounts and notes receivable            |                                      |         | 35,743             |         |   |         | 17,601 |        
|                            |                                          | Less allowance for doubtful accounts |         |                    | 358     |   |         |        | 200     | 
|                            |                                          |                                      |         |                    |         |   |         |       
|                            |                                          | Net accounts and notes receivable    |         |                    | 35,385  |   |         |        | 17,401  | 
|                            | Income tax receivable                    |                                      |         | 919                |         |   |         |       |        
|                            | Inventories (Note 2)                     |                                      |         |                    |         |   |         |        |        
|                            |                                          | Finished goods                       |         |                    | 24,236  |   |         |        | 16,510  | 
|                            |                                          | Work in process                      |         |                    | 17,084  |   |         |        | 18,233  | 
|                            |                                          | Raw materials and supplies           |         |                    | 10,079  |   |         |        | 8,296   | 
|                            |                                          |                                      |         |                    |         |   |         |       
|                            |                                          | Total inventories                    |         |                    | 51,399  |   |         |        | 43,039  | 
|                            | Deferred income taxes                    |                                      |         | 2,416              |         |   |         | 2,494  |        
|                            | Prepaid expenses and deferred income tax |                                      |         | 565                |         |   |         | 1,495  |        
|                            |                                          |                                      |         |                    |         |   |         |       
|Total current assets        |                                          |                                      | 92,954  |                    |         |   | 66,068  |       
|Property, plant & equipment |                                          |                                      |         |                    |         |   |         |       
|                            |                                          | Cost                                 |         |                    | 156,828 |   |         |        | 156,863 | 
|                            |                                          | Less accumulated depreciation        |         |                    | 89,094  |   |         |        | 83,827  | 
|                            |                                          |                                      |         |                    |         |   |         |       
|                            |                                          | Net property, plant & equipment      |         |                    | 67,734  |   |         |        | 73,036  | 
|Other assets                |                                          |                                      | 15,692  |                    |         |   | 15,692  |       
|                            |                                          |                                      |         |                    |         |   |         |       
|Total assets                |                                          | $                                    | 176,380 |                    |         | $ | 154,796 |       
|                            |                                          |                                      |         |                    |         |   |         |       

See notes to condensed consolidated financial statements.

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VIRCO MFG. CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands, except per share data)

|                                           |                                                                                               |                                                                                                           |         |                    |     |   |         |         |     | 
|------------------------------------------ | --------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------- | ------- | ------------------ | --- | - | ------- | ------- | --- | 
|LIABILITIES
AND STOCKHOLDERS EQUITY       |                                                                                               | 7/31/2003                                                                                                 |         | 1/31/2003         
|                                           |                                                                                               |                                                                                                           |         |                   
|                                           |                                                                                               |                                                                                                           |         | Unaudited
(Note 1) |     |   |         |        
|Current liabilities                        |                                                                                               |                                                                                                           |         |                    |     |   |         |        
|                                           | Checks released but not yet cleared bank                                                      |                                                                                                           | $       | 3,743              |     |   | $       | 2,506   |    
|                                           | Accounts payable                                                                              |                                                                                                           |         | 9,942              |     |   |         | 8,395   |    
|                                           | Income tax payable                                                                            |                                                                                                           |         |                   |     |   |         | 3,538   |    
|                                           | Accrued compensation and employee benefits                                                    |                                                                                                           |         | 9,376              |     |   |         | 7,109   |    
|                                           | Current maturities on long-term debt                                                          |                                                                                                           |         | 58,363             |     |   |         | 1,087   |    
|                                           | Other current liabilities                                                                     |                                                                                                           |         | 5,478              |     |   |         | 4,685   |    
|                                           |                                                                                               |                                                                                                           |         |                    |     |   |         |        
|Total current liabilities                  |                                                                                               |                                                                                                           | 86,902  |                    |     |   | 27,320  |        
|Non-current liabilities                    |                                                                                               |                                                                                                           |         |                    |     |   |         |        
|                                           | Long term debt (less current portion)                                                         |                                                                                                           |         |                   |     |   |         | 27,905  |    
|                                           | Other non-current liabilities                                                                 |                                                                                                           |         | 19,611             |     |   |         | 16,699  |    
|                                           |                                                                                               |                                                                                                           |         |                    |     |   |         |        
|Total non-current liabilities              |                                                                                               |                                                                                                           | 19,611  |                    |     |   | 44,604  |        
|Deferred income taxes                      |                                                                                               |                                                                                                           | 98      |                    |     |   | 98      |        
|Stockholders equity                       |                                                                                               |                                                                                                           |         |                    |     |   |         |        
|                                           | Preferred stock:                                                                              |                                                                                                           |         |                    |     |   |         |         |    
|                                           |                                                                                               | Authorized 3,000,000 shares, $.01 par
value; none issued or outstanding                                   |         |                    |    |   |         |         |    | 
|                                           | Common stock:                                                                                 |                                                                                                           |         |                    |     |   |         |         |    
|                                           |                                                                                               | Authorized 25,000,000 shares, $.01 par
value; 14,583,331 and 14,527,074 issued
at 7/31/2003 and 1/31/2003 |         |                    | 146 |   |         |         | 145 | 
|                                           | Additional paid-in capital                                                                    |                                                                                                           |         | 126,728            |     |   |         | 126,284 |    
|                                           | Retained deficit                                                                              |                                                                                                           |         | (31,750            | )   |   |         | (18,927 | )  
|                                           | Less treasury stock at cost (1,484,332
shares at 7/31/2003 and 1,416,472 shares
at 1/31/2003) |                                                                                                           |         | (19,379            | )   |   |         | (18,634 | )  
|                                           | Less accumulated comprehensive loss                                                           |                                                                                                           |         | (5,976             | )   |   |         | (6,094  | )  
|                                           |                                                                                               |                                                                                                           |         |                    |     |   |         |        
|Total stockholders equity                 |                                                                                               |                                                                                                           | 69,769  |                    |     |   | 82,774  |        
|                                           |                                                                                               |                                                                                                           |         |                    |     |   |         |        
|Total liabilities and stockholders equity |                                                                                               | $                                                                                                         | 176,380 |                    |     | $ | 154,796 |        
|                                           |                                                                                               |                                                                                                           |         |                    |     |   |         |        

See Notes to Condensed Consolidated Financial Statements.

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VIRCO MFG. CORPORATION




CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited (Note 1)

(Dollar amounts in thousands, except per share data)

|                                            |  |                    |            |           |  |   |            | 
|------------------------------------------- |  | ------------------ | ---------- | --------- |  | - | ---------- | 
|                                            |  | Three Months Ended
|                                            |  |                   
|                                            |  | 7/31/2003          |            | 7/31/2002
|                                            |  |                    |            |          
|Net sales                                   |  | $                  | 65,861     |           |  | $ | 83,164     | 
|Cost of goods sold                          |  |                    | 44,895     |           |  |   | 52,175     | 
|                                            |  |                    |            |           |  |   |            | 
|Gross profit                                |  |                    | 20,966     |           |  |   | 30,989     | 
|Operating expense                           |  |                    |            |           |  |   |            | 
|Selling, general and administrative expense |  |                    | 21,426     |           |  |   | 23,136     | 
|Separation charges                          |  |                    | 7,788      |           |  |   |           | 
|Interest expense                            |  |                    | 418        |           |  |   | 869        | 
|                                            |  |                    |            |           |  |   |            | 
|                                            |  |                    | 29,632     |           |  |   | 24,005     | 
|(Loss)/income before income taxes           |  |                    | (8,666     | )         |  |   | 6,984      | 
|Income tax (benefit )/expense               |  |                    | (380       | )         |  |   | 2,724      | 
|                                            |  |                    |            |           |  |   |            | 
|Net (loss)/income                           |  | $                  | (8,286     | )         |  | $ | 4,260      | 
|                                            |  |                    |            |           |  |   |            | 
|Amounts per common share(a)                 |  |                    |            |           |  |   |            | 
|Net (loss)/income                           |  | $                  | (0.63      | )         |  | $ | 0.32       | 
|                                            |  |                    |            |           |  |   |            | 
|Weighted
average shares outstanding (a)     |  |                    | 13,095,000 |           |  |   | 13,487,000 | 
|Dividend per common share(a)                |  |                    |            |           |  |   |            | 
|Cash                                        |  | $                  | 0.02       |           |  | $ | 0.02       | 

(a)  For fiscal year 2003, net loss per share was calculated based on basic shares
outstanding at July 31, 2003, due to the anti-dilutive effect on the inclusion of common
stock equivalent shares.

See Notes to Condensed Consolidated Financial Statements.

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VIRCO MFG. CORPORATION




CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited (Note 1)

(Dollar amounts in thousands, except per share data)

|                                            |  |                  |            |           |  |   |            | 
|------------------------------------------- |  | ---------------- | ---------- | --------- |  | - | ---------- | 
|                                            |  | Six Months Ended
|                                            |  |                 
|                                            |  | 7/31/2003        |            | 7/31/2002
|                                            |  |                  |            |          
|Net sales                                   |  | $                | 97,041     |           |  | $ | 124,332    | 
|Cost of goods sold                          |  |                  | 65,664     |           |  |   | 79,044     | 
|                                            |  |                  |            |           |  |   |            | 
|Gross profit                                |  |                  | 31,377     |           |  |   | 45,288     | 
|Operating expense                           |  |                  |            |           |  |   |            | 
|Selling, general and administrative expense |  |                  | 38,022     |           |  |   | 40,214     | 
|Separation charges                          |  |                  | 7,788      |           |  |   |           | 
|Interest expense                            |  |                  | 812        |           |  |   | 1,594      | 
|                                            |  |                  |            |           |  |   |            | 
|                                            |  |                  | 46,622     |           |  |   | 41,808     | 
|(Loss)/income before income taxes           |  |                  | (15,245    | )         |  |   | 3,480      | 
|Income tax (benefit)/expense                |  |                  | (2,946     | )         |  |   | 1,357      | 
|                                            |  |                  |            |           |  |   |            | 
|Net (loss)/income                           |  | $                | (12,299    | )         |  | $ | 2,123      | 
|                                            |  |                  |            |           |  |   |            | 
|Amounts per common share(a)                 |  |                  |            |           |  |   |            | 
|Net (loss)/income                           |  | $                | (0.93      | )         |  | $ | 0.16       | 
|                                            |  |                  |            |           |  |   |            | 
|Weighted average shares
outstanding (a)     |  |                  | 13,247,000 |           |  |   | 13,507,000 | 
|Dividend per common share(a)                |  |                  |            |           |  |   |            | 
|Cash                                        |  | $                | 0.04       |           |  | $ | 0.04       | 

(a)  For fiscal year 2003, net loss per share was calculated based on basic shares
outstanding at July 31, 2003, due to the anti-dilutive effect on the inclusion of common
stock equivalent shares.

See Notes to Condensed Consolidated Financial Statements.

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VIRCO MFG. CORPORATION




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited (Note 1)

(Dollar amounts in thousands)

|                                          |                                                                                      |                                           |         |                  |         |   |         |        |         |  
|----------------------------------------- | ------------------------------------------------------------------------------------ | ----------------------------------------- | ------- | ---------------- | ------- | - | ------- | ------ | ------- | -
|                                          |                                                                                      |                                           |         | Six Months Ended
|                                          |                                                                                      |                                           |         |                 
|                                          |                                                                                      | 7/31/2003                                 |         | 7/31/2002       
|                                          |                                                                                      |                                           |         |                 
|Operating activities                      |                                                                                      |                                           |         |                  |         |   |         |       
|                                          | Net (loss)/income                                                                    |                                           | $       | (12,299          | )       |   | $       | 2,123  |        
|                                          | Adjustments to reconcile net (loss)/income
to net cash used in operating activities: |                                           |         |                  |         |   |         |        |        
|                                          | Depreciation                                                                         |                                           |         | 6,030            |         |   |         | 6,847  |        
|                                          | Provision for doubtful accounts                                                      |                                           |         | 102              |         |   |         | 307    |        
|                                          | Loss on sale of fixed assets                                                         |                                           |         | 49               |         |   |         |       |        
|                                          | Changes in assets and liabilities:                                                   |                                           |         |                  |         |   |         |        |        
|                                          |                                                                                      | Accounts and notes receivable             |         |                  | (18,086 | ) |         |        | (26,437 | )
|                                          |                                                                                      | Inventories                               |         |                  | (8,360  | ) |         |        | (11,343 | )
|                                          |                                                                                      | Prepaid expenses and other current assets |         |                  | 930     |   |         |        | 542     |  
|                                          |                                                                                      | Income taxes receivable/payable           |         |                  | (4,457  | ) |         |        | 1,438   |  
|                                          |                                                                                      | Accounts payable and accrued expenses     |         |                  | 8,332   |   |         |        | 10,673  |  
|                                          |                                                                                      |                                           |         |                  |         |   |         |       
|Net cash used in operating activities     |                                                                                      |                                           | (27,759 | )                |         |   | (15,850 | )     
|Investing activities                      |                                                                                      |                                           |         |                  |         |   |         |       
|                                          | Capital expenditures                                                                 |                                           |         | (777             | )       |   |         | (1,517 | )      
|                                          | Acquisition                                                                          |                                           |         |                 |         |   |         | (4,550 | )      
|                                          | Proceeds from sale of assets                                                         |                                           |         |                 |         |   |         | 2      |        
|                                          |                                                                                      |                                           |         |                  |         |   |         |       
|Net cash used in investing activities     |                                                                                      |                                           | (777    | )                |         |   | (6,065  | )     
|Financing activities                      |                                                                                      |                                           |         |                  |         |   |         |       
|                                          | Issuance of debt                                                                     |                                           |         | 30,622           |         |   |         | 25,844 |        
|                                          | Repayment of long-term debt                                                          |                                           |         | (631             | )       |   |         | (1,094 | )      
|                                          | Purchase of treasury stock                                                           |                                           |         | (419             | )       |   |         | (487   | )      
|                                          | Payment of cash dividend                                                             |                                           |         | (525             | )       |   |         | (1,247 | )      
|                                          | Issuance of common stock                                                             |                                           |         | 120              |         |   |         | 137    |        
|                                          |                                                                                      |                                           |         |                  |         |   |         |       
|Net cash provided by financing activities |                                                                                      |                                           | 29,167  |                  |         |   | 23,153  |       
|Net change in cash                        |                                                                                      |                                           | 631     |                  |         |   | 1,238   |       
|Cash at beginning of period               |                                                                                      |                                           | 1,639   |                  |         |   | 1,704   |       
|                                          |                                                                                      |                                           |         |                  |         |   |         |       
|Cash at end of period                     |                                                                                      | $                                         | 2,270   |                  |         | $ | 2,942   |       
|                                          |                                                                                      |                                           |         |                  |         |   |         |       

See Notes to Condensed Consolidated Financial Statements.

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VIRCO MFG. CORPORATION




NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2003



|Note 1: |  | The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with accounting
principles generally accepted in the United States for interim
financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by accounting
principles generally accepted in the United States for complete
financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the six-months ended July 31, 2003, are not
necessarily indicative of the results that may be expected for the
year ending January 31, 2004. The balance sheet at January 31,
2003, has been derived from the audited financial statements at
that date, but does not include all of the information and
footnotes required by accounting principles generally accepted in
the United States for complete financial statements. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Companys annual report on Form
10-K for the year ended January 31, 2003.
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|Note 2. |  | Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       
|        |  | Year end financial statements reflect inventories verified by
physical counts with the material content valued by the LIFO
method. At this interim date, there has been no physical
verification of inventory quantities. Cost of sales is recorded
at current cost. The effect of penetrating LIFO layers is not
recorded at interim dates unless the reduction in inventory is
expected to be permanent. No such adjustment has been made for
the period ended July 31, 2003. Management monitors
production costs, material costs and inventory levels to determine
that interim inventories are fairly stated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       
|Note 3. |  | Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       
|        |  | Effective January 31, 2003, the Company entered into a credit
facility with Wells Fargo Bank that provides a secured revolving
line of credit that ranges from $40,000,000 to $70,000,000. At
July 31, 2003, the Company was in violation of certain of its loan
covenants. In September 2003 Wells Fargo provided the Company
with a waiver of these covenants as of July 31, 2003. However,
based on managements forecasts of operating results for the
remainder of the year, it is considered to be more likely than not
that the Company will violate the loan covenants at the third
quarter ending October 31, 2003. Accordingly, the debt has been
classified as a current liability on the July 31, 2003 balance
sheet. The Company is currently negotiating with Wells Fargo to
restructure the credit facility so that the Company will comply
with the quarterly debt covenants. No assurance can be given that
such negotiations will be successful. If they are not, the
Company would be in default with the bank, which could
significantly affect its liquidity. If additional sources of
financing are not available, the Company plans to continue to
implement measures to conserve cash or reduce costs.                                                 
|       
|Note 4. |  | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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|        |  | Income taxes for the six-month period ended July 31, 2003, were
computed using the effective tax rate estimated to be applicable for
the full fiscal year and the determination of a valuation allowance
for deferred income tax assets. For the three months ended
July 31, 2003, the Company established a $3 million
deferred tax valuation allowance. The allowance was recognized based
on the weight of available evidence that it is more likely than not
that this portion of the Companys deferred tax asset will not
be realized within the next three years, notwithstanding that some of
those assets may have longer lives under applicable tax laws.
Deferred income taxes reflect the net tax effect of temporary
differences between the carrying amounts of assets and liabilities
for financial reporting purposes. The Company believes, based on its
history of prior operating earnings, its actions to reduce costs
(see Note 8), and its expectations of future earnings,
that operating income of the Company will more likely than not be
sufficient to realize the future benefits of the amount classified as
a net deferred tax asset. Future adverse changes in market conditions, poor operating results or a decline in our
projections about future profitability may affect the Company
assessment of the adequacy of the reserve and, consequently, the net
carrying value of net deferred tax assets. In the
event that the Company determines that it is more likely than not
that it would be unable to realize an additional portion of the net
deferred tax asset, an additional adjustment to the deferred tax
asset valuation allowance would be charged to income in the period
such determination was made.
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|Note 5. |  | Reclassifications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       
|        |  | Certain prior year amounts have been reclassified to conform to the current year presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       
|Note 6. |  | Net (Loss)/Income Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

For the quarter ended July 31, 2003, net loss per share was calculated based on
basic shares outstanding at July 31, 2003, due to the anti-dilutive effect on
the inclusion of common stock equivalent shares. The following table sets
forth the computation of basic loss per share:

|                                                                                                      |  |                    |            |                  |  |      |            |      |  |   |             |   |  |   |            | 
|----------------------------------------------------------------------------------------------------- |  | ------------------ | ---------- | ---------------- |  | ---- | ---------- | ---- |  | - | ----------- | - |  | - | ---------- | 
|                                                                                                      |  | Three Months Ended |            | Six Months Ended
|                                                                                                      |  |                    |            |                 
|                                                                                                      |  | July 31            |            | July 31         
|                                                                                                      |  |                    |            |                 
|                                                                                                      |  | 2003               |            | 2002             |  | 2003 |            | 2002
|                                                                                                      |  |                    |            |                  |  |      |            |     
|Net (loss)/income                                                                                     |  | $                  | (8,286,000 | )                |  | $    | 4,260,000  |      |  | $ | (12,299,000 | ) |  | $ | 2,123,000  | 
|                                                                                                      |  |                    |            |                  |  |      |            |      |  |   |             |   |  |   |            | 
|Average shares outstanding                                                                            |  |                    | 13,095,000 |                  |  |      | 13,335,000 |      |  |   | 13,247,000  |   |  |   | 13,377,000 | 
|Net effect of dilutive
stock options  based on
the treasury stock method
using average market price. |  |                    | 15,000     |                  |  |      | 152,000    |      |  |   | 73,000      |   |  |   | 130,000    | 
|                                                                                                      |  |                    |            |                  |  |      |            |      |  |   |             |   |  |   |            | 
|Totals                                                                                                |  |                    | 13,110,000 |                  |  |      | 13,487,000 |      |  |   | 13,320,000  |   |  |   | 13,507,000 | 
|                                                                                                      |  |                    |            |                  |  |      |            |      |  |   |             |   |  |   |            | 
|Net loss per share  basic                                                                            |  | $                  | (0.63      | )                |  | $    | 0.32       |      |  | $ | (0.93       | ) |  | $ | 0.16       | 
|                                                                                                      |  |                    |            |                  |  |      |            |      |  |   |             |   |  |   |            | 
|Net loss per share  diluted                                                                          |  | $                  | (0.63      | )                |  | $    | 0.32       |      |  | $ | (0.93       | ) |  | $ | 0.16       | 
|                                                                                                      |  |                    |            |                  |  |      |            |      |  |   |             |   |  |   |            | 

SFAS No. 123, as amended by SFAS No. 148, requires pro forma information
regarding net income and net income per share to be disclosed for new options
granted after fiscal year 1996. The fair value of these options was determined
at the date of grant using the Black-Scholes option-pricing model. The
estimated fair value of the options is amortized to expense over the options
vesting period for pro forma disclosures. The per share pro forma for the
effects of SFAS No. 123, as amended by SFAS 148, is not indicative of the
effects on reported net income/loss for future years. The Companys reported
and pro forma information for the three and six-month periods ended July 31,
2003 and July 31, 2002 are as follows:

9



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##### Table of Contents



|                                                                                                                                                |  |                    |            |                  |  |      |           |      |  |   |             |   |  |   |           | 
|----------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ---------- | ---------------- |  | ---- | --------- | ---- |  | - | ----------- | - |  | - | --------- | 
|                                                                                                                                                |  | Three Months Ended |            | Six Months Ended
|                                                                                                                                                |  |                    |            |                 
|                                                                                                                                                |  | July 31            |            | July 31         
|                                                                                                                                                |  |                    |            |                 
|                                                                                                                                                |  | 2003               |            | 2002             |  | 2003 |           | 2002
|                                                                                                                                                |  |                    |            |                  |  |      |           |     
|Net (loss)/income, as reported                                                                                                                  |  | $                  | (8,286,000 | )                |  | $    | 4,260,000 |      |  | $ | (12,299,000 | ) |  | $ | 2,123,000 | 
|Deduct: Total stock-based
employee compensation expense
determined under the fair
value based method for all
awards, net of related tax
effects |  |                    | 10,000     |                  |  |      | 9,000     |      |  |   | 20,000      |   |  |   | 18,000    | 
|                                                                                                                                                |  |                    |            |                  |  |      |           |      |  |   |             |   |  |   |           | 
|Pro forma net (loss)/income                                                                                                                     |  | $                  | (8,296,000 | )                |  | $    | 4,251,000 |      |  | $ | (12,319,000 | ) |  | $ | 2,105,000 | 
|                                                                                                                                                |  |                    |            |                  |  |      |           |      |  |   |             |   |  |   |           | 
|Basic and diluted earnings
per share, as reported:                                                                                              |  | $                  | (0.63      | )                |  | $    | 0.32      |      |  | $ | (0.93       | ) |  | $ | 0.16      | 
|                                                                                                                                                |  |                    |            |                  |  |      |           |      |  |   |             |   |  |   |           | 
|Basic and diluted earnings
per share, pro forma:                                                                                                |  | $                  | (0.63      | )                |  | $    | 0.32      |      |  | $ | (0.93       | ) |  | $ | 0.16      | 
|                                                                                                                                                |  |                    |            |                  |  |      |           |      |  |   |             |   |  |   |           | 



|Note 7. |  | Comprehensive (Loss)/Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|        |  | Comprehensive loss for the quarter
ended July 31, 2003 was $8,286,000
compared to comprehensive income of $4,367,000 for the quarter ended
July 31, 2002. Comprehensive loss for the six months ended July 31,
2003 was $12,181,000 compared to comprehensive income of $2,344,000 for
the six months ended July 31, 2002. The difference between results reported
on the statement of operations and comprehensive (loss)/income is primarily
attributable to adjustments in the prior year to account for a
derivative financial investment that expired in March 2003.                                                                                                                                                                                                                                
|       
|        |  | Accumulated comprehensive loss at the quarter ended July 31, 2003 is
primarily composed of minimum pension liability adjustments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       
|Note 8. |  | Separation Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       
|        |  | During June 2003, the Company
implemented a voluntary separation program for those who accepted a
six-month pay package. Costs associated with this voluntary
separation program are reported as separation charges in the
accompanying statements of operations for the three and six-month
periods ended July 31, 2003. Additional pension related charges,
estimated to be approximately $3,000,000, are expected to be recorded
in the second half of fiscal 2003.                                                                                                                                                                                                                                                                                                                                   
|       
|        |  | Subsequent to July 31, 2003,
the Company involuntarily separated an additional 160 employees.
Costs for this separation are expected to total approximately
$2,500,000. Additional pension related charges, estimated to be
approximately $1,000,000, are expected to be recorded in the second
half of fiscal 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|Note 9. |  | New Accounting Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       
|        |  | In January 2003, the Financial Accounting Standards Board, (FASB)
issued Interpretation No. 46 (FIN 46), Consolidation of Variable
Interest Entities. FIN 46 clarifies the application of Accounting
Research Bulletin No. 51 and applies immediately to any variable
interest entities created after January 31, 2003 and to variable
interest entities in which an interest is obtained after that date.
This interpretation requires variable interest entities to be
consolidated if the equity investment at risk is not sufficient to
permit an entity to finance its activities without support from other
parties or the equity investors lack specific characteristics. The
adoption of this Interpretation is not expected to have a material
impact on the Companys financial statements.
|       
|        |  | In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133
on Derivative Instruments and Hedging Activities, which amends and
clarifies financial accounting and reporting derivative instruments,
including certain derivative instruments embedded in other contracts
and for hedging activities under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. This statement is
effective for contracts entered into or modified and for hedging                                                                                                                                                                                                                                                                                                                     

10



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##### Table of Contents





| |  | relationships designated after June 30, 2003. The Company does not
expect the adoption of this statement to have a material impact on its
financial statements.                                                                                                                                                                                                                                                                                                                               
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity, effective for financial instruments entered into or modified
after May 31, 2003, and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003. The impact upon
adoption of SFAS No. 150 is not expected to have a material impact on
the results of operations or the financial position of the Company.

11



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##### Table of Contents



VIRCO MFG. CORPORATION




Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations:

For the second quarter of 2003, the
Company incurred a net loss of $8,286,000
on sales of $65,861,000 compared to a net income of $4,260,000 on sales of
$83,164,000 in the same period last year. Net loss per share was $0.63
compared to net income per share of $0.32 in the same period last year. For
the six months ended July 31, 2003, the Company incurred a net loss of
$12,299,000 on sales of $97,041,000 compared to net income of $2,123,000 on
sales of $124,332,000 in the same period last year. Net loss per share was
$0.93 compared to net income per share of $0.16 in the same period last year.

Sales for the second quarter decreased by $17,303,000, a 21% decrease compared
to the same period last year. For the first six months of 2003 sales decreased
by $27,291,000, a 22% decrease compared to the prior year. Backlog at quarter
end decreased by 14% compared to the prior year.

The decrease in sales is primarily attributable to budgetary pressures on state
and local governments. As more fully discussed in the Presidents Letter
included with our 2002 annual report (page 21), schools obtain funding for
educational furniture from two primary sources. The first source is from bonds
that fund development of new schools and significant refurbishment of older
schools. The availability of funds from bonds is relatively stable compared to
the prior year. The second source of funds is typically provided from a
states general funds. Many of the state governments are facing severe funding
shortages and school officials will curtail expenditures on maintenance,
furniture, and supplies in order to avoid laying off teachers and
administrators. With approximately 80-85% of school budgets spent on teachers
and administrators, the impact on funds available for furniture can be dramatic
when school funding is reduced. In addition to the weakness in the education
market, the market for commercial furniture, which suffered a severe decline in
2001 and 2002, continues to be very weak.

Gross profit for the second quarter, as a percentage of sales, decreased
approximately 5.43% compared to the same period last year. For the first six
months, gross profit as a percentage of sales decreased by
approximately 4.09%
compared to the prior year. The reduction in gross margin is attributable to
increased material costs and reduced production hours. In the prior year, the
Company benefited from favorable raw material costs, especially steel. During
the second half of 2002, the Company incurred higher steel costs, and has had
difficulty passing these costs on to our customers. Material costs, as a
percentage of sales were 2.1% higher in the first quarter, 1.5% higher in the
second quarter, and 1.7% higher for the first six months. In addition to
increased material costs, the Company substantially reduced factory production
in order to control inventory levels. In the second quarter, production hours
decreased by 43% compared to the prior year. This was accomplished using three
tactics. First, the Company implemented a hiring freeze. Second, the Company
has traditionally hired temporary labor in its factories during the summer
months, and did not hire these temporary workers in the current year. Finally,
the Company has traditionally hired temporary workers to perform installations
at customer locations. In the current year, the Company created installation
teams from its factory and warehouse locations. These installation teams
performed a significant number of the installations, allowing the Company to
reduce production hours, reduce money spent on temporary labor services, and
improve customer service at installed jobs.

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##### Table of Contents



Selling, general and administrative expense for the quarter ended July 31, 2003
decreased by $1,710,000 compared to the same period last year, but increased as
a percentage of sales. Selling, general and administrative expense for the six
months ended July 31, 2003 decreased by $2,192,000 compared to the same period
last year.

Interest expense for the quarter ended July 31, 2003 decreased by approximately
$451,000 compared to the same period last year. Interest expense for the six
months ended July 31, 2003 decreased by approximately $782,000 compared to the
same period last year. The reduction is primarily due to lower interest rates.

Income taxes for the six-month period ended July 31, 2003, were
computed using the effective tax rate estimated to be applicable for
the full fiscal year and the determination of a valuation allowance
for deferred income tax assets. For the three months ended
July 31, 2003, the Company established a $3 million
deferred tax valuation allowance. The allowance was recognized based
on the weight of available evidence that it is more likely than not
that this portion of the Companys deferred tax asset will not
be realized within the next three years, notwithstanding that some of
those assets may have longer lives under applicable tax laws.
Deferred income taxes reflect the net tax effect of temporary
differences between the carrying amounts of assets and liabilities
for financial reporting purposes. The Company believes, based on its
history of prior operating earnings, its actions to reduce costs
(see Note 8), and its expectations of future earnings,
that operating income of the Company will more likely than not be
sufficient to realize the future benefits of the amount classified as
a net deferred tax asset. Future adverse changes in market conditions, poor operating results or a decline in our
projections about future profitability may affect the Company
assessment of the adequacy of the reserve and, consequently, the net
carrying value of net deferred tax assets. In the
event that the Company determines that it is more likely than not
that it would be unable to realize an additional portion of the net
deferred tax asset, an additional adjustment to the deferred tax
asset valuation allowance would be charged to income in the period
such determination was made.

During the second quarter, the Company determined that the reduced level of
orders received in the first quarter would likely continue for the rest of the
year and possibly through 2004 as well. In the second quarter the Company
announced a Voluntary Severance Program in addition to other measures that
include voluntary part-time work and voluntary sabbaticals. Under the program,
employees who voluntarily terminated their employment with the Company were
paid six months of severance pay. During the second quarter, nearly 500
employees accepted this offer. Approximately 25% of the workforce severed
their employment in June and July. Including employer taxes, the Company paid
approximately $7.8 million under this plan in the second quarter. In addition
to the severance payments, the Company expects to incur approximately $3
million in pension settlement costs, which is anaticipated to be recorded in
the third and fourth quarters.

Subsequent to the quarter end, the Company elected to further reduce expenses
and head count through a non-voluntary reduction in force. In September, the
Company laid off an additional 160 employees. These employees were given six
months of severance pay in addition to a variety of outplacement service
benefits to help them locate new employment. The Company will incur
approximately $2.5 million of severance costs in the third quarter related to
this reduction in force. In addition to severance costs, the Company will
incur additional pension settlement costs of approximately $1 million which is
anticipated to be recorded in the third and fourth quarters.

As a result of the voluntary and involuntary severance programs, the Company
anticipates salaries and wages in 2004 to decrease by approximately
$22 million compared to 2002, with 2003 being a transition year. In addition
to the reduction in salaries, the Company anticipates it will save the related
costs for retirement, health, and welfare benefits.

Financial Condition:

Net cash used in operating activities for the six months ended July 31, 2003,
was $27,759,000 compared to $15,850,000 for the same period last year. The
increase in cash used in operating activities was primarily due to a large
operating loss combined with an increase in income tax receivable.

13



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##### Table of Contents



As a result of seasonally high sales in the second quarter, accounts receivable
increased by $18,142,000 compared to the year-ended January 31, 2003. In the
prior year, accounts receivable increased by $26,437,000 in the same period.
In anticipation of seasonally higher third quarter deliveries, inventory
increased by $8,360,000 compared to the year-ended January 31, 2003. In the
prior year, inventory increased by $11,343,000 in the same period. This
increase in accounts receivable and inventory was financed through the credit
facility with Wells Fargo Bank.

The Company has established a goal of limiting capital spending to
approximately $5,000,000 to $7,000,000 for 2003, which is approximately
one-half of anticipated depreciation expense. Capital spending for the
six-month period ended July 31, 2003, was $777,000 compared to $1,517,000 for
the same period last year. Capital expenditures are being financed through the
credit facility established with Wells Fargo Bank and operating cash flow.

To facilitate the Companys seasonal working capital requirements, beginning
June 1, 2003, the credit facility with Wells Fargo Bank increased from
$60,000,000 to $70,000,000. This line of credit decreases to $60,000,000 on
September 1, 2003 and to $40,000,000 effective November 1, 2003.

The Company has a traditionally
declared a quarterly $0.02 per share cash dividend and an annual 10%
stock dividend. At the regularly scheduled August 2003 Board of
Directors meeting, the Board suspended the cash and stock dividends
until operations return to profitability and cash flows support
payment of dividends.

As of July 31, 2003, the Company violated certain debt covenants relating to
its revolving line of credit with Wells Fargo Bank. In September 2003 Wells
Fargo provided the Company with a waiver of these covenants. However, based on
managements forecast for operating results for the remainder of the year, it
is considered to be more likely than not that the Company will violate the loan
covenants at the third quarter ending October 31, 2003. Accordingly, the debt
has been classified as a current liability on the July 31, 2003 balance sheet.
The Company is currently negotiating with Wells Fargo to restructure the credit
facility so that the Company will comply with the quarterly debt covenants. No
assurance can be given that such negotiations will be successful. If they are
not, the Company would be in default with the bank, which could significantly
affect its liquidity. If additional sources of financing are not available,
the Company plans to continue to implement measures to conserve cash or reduce
costs.

In April 1998, the Board of Directors approved a stock buyback program. As of
July 31, 2003, the Company has repurchased approximately 1,451,000 shares at a
cost of approximately $18,767,000 since the inception of this program. The
Company intends to continue buying back shares of common stock as long as the
Company believes the shares are undervalued and operating cashflows and
borrowing capacity under the Wells Fargo line allow. Under the current Wells
Fargo line, the Company must limit stock buyback activity to $250,000 for the
period between June 4, 2003 and December 1, 2003.

In May 2002, the Company purchased
certain assets of Furniture FocusTM, Inc.,
an Ohio reseller that offers complete package solutions for the furniture,
fixtures and equipment segments of bond-funded public school construction
projects, primarily in the upper Midwest. The Company paid $2,400,000 in cash
for certain assets of the corporation and recorded goodwill of $2,200,000. The
goodwill is not expected to be deductible for income tax. In addition, the
Company purchased approximately $2,150,000 of accounts receivable. The
additional revenue and operating results from the inception as a result of this
acquisition, did not have a significant effect on the Companys financial
position, operations or cash flows.

The Company believes that upon the successful completion of the refinancing or
restructuring of the Wells Fargo line of credit, funds available under the
restructured or refinanced line, together with cashflows from operations, will
be sufficient to fund the Companys debt service requirements, capital
expenditures and working capital needs.

14



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##### Table of Contents



Critical Accounting Policies and Estimates:

The Companys critical accounting policies are outlined in its Form 10-K for
fiscal year ended January 31, 2003.

Forward-Looking Statements:

From time to time, the Company or its representatives have made and may make
forward-looking statements, orally or in writing, including those contained
herein. Such forward-looking statements may be included in, without
limitation, reports to stockholders, press releases, oral statements made with
the approval of an authorized executive officer of the Company and filings with
the Securities and Exchange Commission. The words or phrases anticipates,
expects, will continue, believes, estimates, projects, or similar
expressions are intended to identify forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. The results
contemplated by the Companys forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to vary materially from
anticipated results, including without limitation, risks and uncertainties
relating to the Companys ability to refinance or restructure its credit line
with Wells Fargo Bank; material availability and cost of materials, especially
steel; the availability and cost of labor; demand for the Companys products;
competitive conditions affecting selling prices and margins; capital costs; and
general economic conditions. Such risks and uncertainties are discussed in
more detail in the Companys Annual Report on Form 10-K for the fiscal year
ended January 31, 2003.

The Companys forward-looking statements represent its judgment only on the
dates such statements were made. By making any forward-looking statements, the
Company assumes no duty to update them to reflect new, changed or unanticipated
events or circumstances.




Item 3. Quantitative and Qualitative Disclosures about Market Risk.

On February 22, 2000, the Company entered into an interest rate swap agreement
with Wells Fargo Bank. The initial notional swap amount was $30,000,000 for the
period February 22, 2000 through February 28, 2001. The notional swap amount
then decreased to $20,000,000 until the end of the swap agreement, March 3,
2003. The swap agreement was in consideration for a fixed rate at 7.23% plus a
fluctuating margin of 1.50% to 2.50%. The swap agreement was not renewed at
expiration.

As of July 31, 2003, the Company had borrowed $57,276,000 under its Wells Fargo
credit facility. The revolving credit facility with Wells Fargo Bank is a
two-year non-amortizing line with interest payable monthly at a fluctuating
rate equal to the Banks prime rate, plus a fluctuating margin of 0.25% -
0.50%. The line also allows the Company the option to borrow under 30- 60- and
90-day fixed term rates at LIBOR plus a fluctuating margin of 1.50% to 2.50%.
Accordingly, a 100 basis point upward fluctuation in the lenders base rate
would cause the Company to incur additional interest charges of approximately
$126,000 and $362,000 for the fiscal quarter and six months ended July 31,
2003, respectively. The Company would benefit from a similar interest savings
if the base rate were to fluctuate downward by a like amount.




Item 4. Controls and Procedures



| | (a) |  | Evaluation of Disclosure Controls and Procedures
| | --- |  | ------------------------------------------------

15



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##### Table of Contents



Our company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in our 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 and communicated to our 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.

We carried out an evaluation, under the supervision and with the participation
of our companys management, including the Companys President and Chief
Executive Officer along with the Companys Chief Financial Officer, of the
effectiveness of the design and operation of the Companys disclosure controls
and procedures as of the end of the period covered by this Quarterly 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 our Company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.



| | (b) |  | Changes In Internal Control Over Financial Reporting
| | --- |  | ----------------------------------------------------

No changes in our internal control over financial reporting have come to
managements attention during the last fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

16



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##### Table of Contents






PART II

VIRCO MFG. CORPORATION

OTHER INFORMATION






|Item 1. |  | Legal Proceedings
|------- |  | -----------------
|       
|        |  | None             






|Item 2. |  | Changes in Securities and Use of Proceeds
|------- |  | -----------------------------------------
|       
|        |  | None                                     






|Item 3. |  | Defaults upon Senior Securities
|------- |  | -------------------------------
|       
|        |  | None                           






|Item 4. |  | Submission of Matters to a Vote of Security Holders                                                                                                 
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|       
|        |  | The following is a description of matters submitted to a vote of
registrants stockholders at the Annual Meeting of Stockholders held
June 10, 2003.
|       
|        |  | Election of three directors whose terms expire in 2006.                                                                                             

|                     |  |           |            |                    |  |  |         | 
|-------------------- |  | --------- | ---------- | ------------------ |  |  | ------- | 
|                     |  | Votes For |            | Authority Withheld
|                     |  |           |            |                   
|Robert A. Virtue     |  |           | 11,199,118 |                    |  |  | 64,569  | 
|Robert K. Montgomery |  |           | 10,864,742 |                    |  |  | 733,321 | 
|Donald A. Patrick    |  |           | 11,198,181 |                    |  |  | 66,443  | 






|Item 5. |  | Other Information
|------- |  | -----------------
|       
|        |  | None             






|Item 6. |  | Exhibits and Reports on Form 8-K                                                                                                                                                                                 
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|        |  | (a) Exhibits                                                                                                                                                                                                     
|       
|        |  | Exhibit 31.1  Certification of Robert A. Virtue, President, pursuant
to Rules 13a-14 and 15d-14 of the Securities Exchange Act, as adopted
pursuant to section 302 of the Sarbanes-Oxley Act of 2002            
|       
|        |  | Exhibit 31.2  Certification of Robert E. Dose, Vice President,
Finance, pursuant to Rules 13a-14 and 15d-14 of the Securities
Exchange Act, as adopted pursuant to section 302 of the
Sarbanes-Oxley Act of 2002

17



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##### Table of Contents





| |  | Exhibit 32.1  Certification of Chief Executive Officer and Chief
Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | (b) Reports on Form 8-K                                                                                                                                                                      
|
| |  | On July 21, 2003, we filed a Current Report on Form 8-K in which we
furnished, pursuant to Item 5, our interim report on business
conditions and cost reduction initiatives.                 

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##### Table of Contents



VIRCO MFG. CORPORATION




SIGNATURES

Pursuant to the requirements 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. CORPORATION  
|      |  |                    |  |                          |  |                   
|Date: |  | September 15, 2003 |  | By:                      |  | /s/ Robert E. Dose
|      |  |                    |  |                          |  |                   
|      |  |                    |  | Robert E. Dose          
|      |  |                    |  | Vice President  Finance

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