<PAGE>   1


                       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, 1999      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                    (I.R.S. Employer
     Incorporation or organization)                    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 [ ]


         The number of shares outstanding of each of the issuer's classes of
common stock, as of September 1, 1999

           Common Stock                                10,424,735 *


* Adjusted for 10% stock dividend declared August 17, 1999, date of record
September 3, 1999, payable September 30, 1999.


<PAGE>   2

                     VIRCO MFG. CORPORATION AND SUBSIDIARIES

                                      INDEX

Part I.  Financial Information

     Item 1.      Financial Statements (unaudited)

                  Condensed consolidated balance sheets - July 31, 1999 and
                  January 31, 1999

                  Condensed consolidated statements of income - Three months
                  ended July 31, 1999 and 1998.

                  Condensed consolidated statements of income - Six months ended
                  July 31, 1999 and 1998.

                  Condensed consolidated statements of cash flows - Six months
                  ended July 31, 1999 and 1998.

                  Notes to condensed consolidated financial statements - July
                  31, 1999.

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

Part II. Other Information

     Item 4.      Submission of matters to a vote of Security Holders.

     Item 6.      Exhibits & Reports on Form 8-K.

Signatures


                                       2

<PAGE>   3


                                     PART 1


Item 1. Financial Statements

                     VIRCO MFG. CORPORATION AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                               Unaudited (Note 1)


(Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>
        ASSETS                                      7/31/99         1/31/99
        ------                                      -------         -------
<S>                                               <C>             <C>
Current assets
    Cash                                          $     687       $   1,086

    Accounts and notes receivable                    58,370          30,973
      Less allowance for doubtful accounts             (489)           (200)
                                                  ---------       ---------
      Net accounts and notes receivable              57,881          30,773

    Inventories (Note 2)
      Finished goods                                 33,880          32,211
      Work in process                                10,212           6,713
      Raw materials and supplies                     12,694           9,544
                                                  ---------       ---------
      Total inventories                              56,786          48,468

    Prepaid expenses and deferred income tax          1,979           2,181
                                                  ---------       ---------
      Total current assets                          117,333          82,508


Property, plant and equipment
      Cost                                          115,433         100,035
      Less accumulated depreciation                 (45,414)        (40,715)
                                                  ---------       ---------
      Net property, plant and equipment              70,019          59,320

Other assets                                         10,547           9,552
                                                  ---------       ---------
                                                  $ 197,899       $ 151,380
                                                  =========       =========
</TABLE>


See notes to condensed consolidated financial statements.


                                       3
<PAGE>   4


                     VIRCO MFG. CORPORATION AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                               Unaudited (Note 1)


(Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>
    LIABILITIES AND SHAREHOLDERS' EQUITY                              7/31/99         1/31/99
    ------------------------------------                              -------         -------
<S>                                                                 <C>             <C>
Current liabilities
    Checks released but not yet cleared bank                        $   4,527       $   4,670
    Accounts payable                                                   16,654          14,398
    Income taxes payable                                                2,594           9,156
    Current maturities on long-term debt                                5,429           2,354
    Other current liabilities                                          13,712           4,525
                                                                    ---------       ---------
      Total current liabilities                                        42,916          35,103

Non-current liabilities
    Long term debt (less current portion)                              58,119          21,344
    Other non-current liabilities                                       4,972           4,346
                                                                    ---------       ---------
      Total non-current liabilities                                    63,091          25,690

Deferred income taxes                                                   1,664           1,664

Shareholders' 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; 9,971,537
      shares issued at 7/31/99 and 9,945,014 shares issued at
      1/31/99
                                                                          100             100
    Additional paid-in capital                                         68,457          68,361
    Retained earnings                                                  31,103          26,928
    Less treasury stock at cost (494,505 shares at 7/31/99 and
    301,087 shares at 1/31/99)                                         (8,929)         (5,814)
    Less unearned ESOP shares                                             (97)           (246)
     Less accumulated comprehensive loss                                 (406)           (406)
                                                                    ---------       ---------
      Total shareholders' equity                                       90,228          88,923
                                                                    $ 197,899       $ 151,380
                                                                    =========       =========
</TABLE>


See notes to condensed consolidated financial statements.


                                       4
<PAGE>   5

                     VIRCO MFG. CORPORATION AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                               Unaudited (Note 1)


(Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                 Three Months Ended
                                                                ---------------------
                                                                7/31/99      7/31/98
                                                                -------      -------
<S>                                                             <C>          <C>
Net sales                                                       $88,224      $87,539
Cost of goods sold                                               57,756       58,884
                                                                -------      -------
      Gross profit                                               30,468       28,655

Selling, general and administrative expense                      18,605       17,512
Provision for doubtful accounts                                     266          248
Interest expense                                                    898          530
                                                                -------      -------
                                                                 19,769       18,290

Income before income taxes                                       10,699       10,365

Income taxes                                                      4,172        3,997
                                                                -------      -------

      Net income                                                $ 6,527      $ 6,368
                                                                =======      =======

Earnings per share                                                  .63          .59
Earnings per share - assuming dilution                              .61          .57

Weighted average shares outstanding (a)                          10,441       10,815
Weighted average shares outstanding- assuming dilution (a)       10,636       11,115

Dividend per share
Cash (a)                                                        $   .02      $   .02
</TABLE>


(a) Adjusted for 10% stock dividend declared August 17, 1999.

See notes to condensed consolidated financial statements.


                                       5
<PAGE>   6


                     VIRCO MFG. CORPORATION AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                               Unaudited (Note 1)



(Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                    Six Months Ended
                                                                 ---------------------
                                                                 7/31/99       7/31/98
                                                                 -------       -------
<S>                                                             <C>           <C>
Net sales                                                       $125,703      $132,477
Cost of goods sold                                                83,874        89,147
                                                                --------      --------
      Gross profit                                                41,829        43,330

Selling, general and administrative expense                       32,658        30,524
Provision for doubtful accounts                                      384           387
Interest expense                                                   1,309           780
                                                                --------      --------
                                                                  34,351        31,691

Income before income taxes                                         7,478        11,639

Income taxes                                                       2,916         4,481
                                                                --------      --------

      Net income                                                $  4,562      $  7,158
                                                                ========      ========

Earnings per share                                                   .43           .66
Earnings per share - assuming dilution                               .42           .64

Weighted average shares outstanding (a)                           10,541        10,817
Weighted average shares outstanding- assuming dilution (a)        10,737        11,118

Dividend per share
Cash  (a)                                                       $    .04      $    .03
</TABLE>


(a) Adjusted for 10% stock dividend declared August 17, 1999.

See notes to condensed consolidated financial statements.


                                       6
<PAGE>   7


                     VIRCO MFG. CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                               Unaudited (Note 1)

(Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                               Six Months Ended
                                                                            ----------------------
                                                                            7/31/99        7/31/98
                                                                            -------        -------
<S>                                                                        <C>            <C>
Cash flows from operating activities
    Net income                                                             $  4,562       $  7,158
    Adjustments to reconcile net income to net cash used in
    operating activities:
    Depreciation                                                              4,705          3,394
    Provision for doubtful accounts                                             384            387
    Loss on sales of fixed assets                                                18            128
    Change in assets and liabilities:
      Accounts and notes receivable                                         (27,492)       (18,132)
      Inventories                                                            (8,318)        (8,794)
      Prepaid expenses and deposits                                             202           (944)
      Income taxes receivable/payable                                         1,790          3,169
      Other assets                                                                8           (323)
      Accounts payable and accrued expenses                                   3,574          2,406
                                                                           --------       --------

Net cash used in operating activities                                       (20,567)       (11,551)

Cash flows from investing activities
    Capital expenditures                                                    (15,462)        (7,942)
    Proceeds from sale of assets                                                 41            930
    Net investment in life insurance                                         (1,004)          (990)
                                                                           --------       --------

Net cash used in investing activities                                       (16,425)        (8,002)

Cash flows from financing activities
    Issuance of long-term debt                                               41,132         24,749
    Repayment of long-term debt                                              (1,282)          (371)
    Payment of cash dividend                                                   (386)          (358)
    Purchase of treasury stock                                               (3,051)          (950)
    Issuance of common stocks                                                    31             76
    Loans to ESOP                                                               149            104
                                                                           --------       --------

Net cash provided by financing activities                                    36,593         23,250

Net change in cash                                                             (399)         3,697
Cash at beginning of period                                                   1,086          1,221
                                                                           --------       --------
Cash at end of period                                                      $    687       $  4,918
                                                                           ========       ========
</TABLE>

See notes to condensed consolidated financial statements.


                                       7
<PAGE>   8


                     VIRCO MFG. CORPORATION AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                         July 31, 1999 and July 31, 1998


Note 1:       The accompanying  unaudited condensed  consolidated  financial
              statements have been prepared in accordance with generally
              accepted accounting principles 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 generally accepted
              accounting principles 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 three month and six
              month periods ended July 31, 1999 are not necessarily indicative
              of the results that may be expected for the year ended January 31,
              2000. The balance sheet at January 31, 1999 has been derived from
              the audited financial statements at that date but does not include
              all of the information and footnotes required by the Company's
              generally accepted accounting principles 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, 1999.

Note 2.       Inventory

              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, 1999. Management continually monitors
              production costs, material costs and inventory levels to determine
              that interim inventories are fairly stated.

Note 3.       Income Taxes

              Income taxes for the three month period ended July 31, 1999 were
              computed using the effective tax rate estimated to be applicable
              for the full fiscal year, which is subject to ongoing review and
              evaluation by management.

Note 4.       Significant Accounting Policies

              The Company adopted SFAS No. 128, "Earnings Per Share." SFAS No.
              128, which replaced the calculation of primary and fully diluted
              net income per share with basic and diluted net income per share.
              Basic net income per share is calculated by dividing net income by
              the weighted average number of common shares outstanding. Diluted
              earnings per share is calculated by dividing net income by the
              weighted average number of common shares outstanding plus the
              dilutive effect of convertible securities. All prior year net
              income per share data has been restated in accordance with the new
              standard.



                                       8
<PAGE>   9

               <TABLE>
               <CAPTION>
                                                        3 MONTHS ENDED            6 MONTHS ENDED
                                                        --------------            --------------

              (In thousands, except per              7/31/99      7/31/98      7/31/99      7/31/98
              share data)                            -------      -------      -------      -------
              <S>                                    <C>          <C>          <C>          <C>
              Numerator:
                   Net Income                         $ 6,527      $ 6,368      $ 4,562      $ 7,158

              Denominator:
                   Denominator for basic
                   earnings per share -                10,441       10,815       10,541       10,817
                   weighted average shares

              Dilutive potential
                  common shares                          195          300          196          301
                                                     -------      -------      -------      -------

              Denominator for diluted
                  earnings per share -                10,636       11,115       10,737       11,118
                  adjusted weighted
                  average shares and
                  assumed conversions

              Basic earnings per share               $  0.63      $  0.59      $  0.43      $  0.66

              Diluted earnings per share             $  0.61      $  0.57      $  0.42      $  0.64
              </TABLE>


              In 1998, the Company adopted SFAS No.130 "Reporting Comprehensive
              Income." The Statement established standards for the reporting and
              display of comprehensive income, which comprises certain specific
              items previously reported directly in stockholders' equity.
              Comprehensive income includes net income and minimum pension
              liability adjustments. Comprehensive income was $6,527,000 and
              $6,368,000 for the three months ended July 31, 1999, and 1998,
              respectively. Comprehensive income was $4,562,000 and $7,158,000
              for the six months ended July 31, 1999 and 1998, respectively.

              In 1998, the Company adopted Financial Accounting Standards No.
              131 ("SFAS 131"), "Disclosures about Segments of an Enterprise and
              Related Information," SFAS 131 provides accounting guidance for
              reporting and requires such enterprises to report selected
              information about operating segments in interim financial reports.
              The statement uses a "management approach" to identify operating
              segments and provides specific criteria for operating segments.
              The Company operates in one business segment and is engaged in the
              design, production and distribution of quality furniture for the
              commercial and education markets. Accordingly, the adoption of
              this statement has no impact on the way the Company reports or has
              reported its financial statements.

              In 1999, the Company adopted the AICPA issued SOP 98-1,
              "Accounting for the Costs of Computer Software Developed for or
              Obtained for Internal-use." The SOP requires the capitalization of
              certain costs incurred after the date of adoption in connection


                                       9
<PAGE>   10

              with developing or obtaining software for internal-use. The
              Company has historically been capitalizing costs associated with
              software developed for its own use. The adoption of this SOP 98-1
              has no impact on the way the Company reports or has reported its
              financial statements.

              In June 1998, the Financial Accounting Standards Board issued
              Statement of Financial Accounting Standards No. 133, " Accounting
              for Derivative Instruments and Hedging Activities" (SFAS 133").
              SFAS 133 establishes accounting and reporting standards for
              derivative instruments, including certain derivative instruments
              embedded in other contracts, and hedging activities. SFAS 133 is
              effective for the Company for all fiscal quarters of fiscal years
              beginning February 1, 2001. The adoption of this SFAS has no
              impact on the way the Company reports or has reported its
              financial statements.


                                       10
<PAGE>   11


                       VIRCO MFG. CORPORATION SUBSIDIARIES

                                Other Information


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 15, 1999.

          Election of three directors whose term expire in 2002.

                                                 Votes For
                                                 ---------
          James R. Wilburn                       8,435,296
          Hugh D. Tyler                          8,438,159
          Donald S. Friesz                       8,427,334


Item 6.   Exhibits and Reports on Form 8-K

          None


                                       11
<PAGE>   12


                             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 1999, the Company earned net income of $6,527,000 on
sales of $88,224,000 compared to net income of $6,368,000 on sales of
$87,539,000 in the same period last year. Earnings were $.61 per share compared
to $.57 per share in the same period last year, after giving effect to the 10%
stock dividend declared August 17, 1999. For the six months ended July 31,
1999, the Company earned net income of $4,562,000 on sales of $125,703,000
compared to net income of $7,158,000 on sales of $132,477,000 in the same period
last year. Earnings were $.42 per share compared to $.64 per share in the same
period last year, after giving effect to the 10% stock dividend declared August
17, 1999.

The second quarter and year to date results are consistent with Virco's seasonal
business cycle, which produces diminished first quarter sales followed by strong
second and third quarter deliveries of educational furniture. The seasonal
nature of Virco's sales have intensified due to strategic marketing decisions
and changes in the buying pattern of educational customers. Although second
quarter sales improved slightly, year to date sales have decreased by $6,774,000
compared to the same period last year. While shipments have declined, incoming
orders were approximately level. The combination of stable incoming orders
combined with decreased shipments resulted in an increase in backlog of
approximately $6,000,000. The increase in backlog reflects two trends, which
intensify the effect of the seasonal nature of the Company's business. First,
incoming orders have increased for educational customers. These sales have
historically been seasonal in nature and have become more so as the Company's
educational customers increasingly demand those shipments be made in summer
months. These increasingly seasonal educational orders have replaced less
seasonal shipments to the Company's commercial customers. Second, sales and
orders to commercial markets declined as a result of the continuing
implementation of the Company's strategic decision to reduce sales to mass
merchandisers which provide little gross margin to the Company. The Company
continues to believe that its long-term interests will be served by avoiding
this low-margin commodity business by emphasizing higher margin products and
customers.

Gross profits for the three months ended July 31, 1999, as a percent of sales,
increased by more than 1.5 % compared to the same period last year. The increase
in gross profit is attributable to the Company's efforts to focus on more
profitable products and customers. The improved margins more than offset the
impact of increased spending related to the start up of the new manufacturing
facility. Stable to slightly reduced material costs contributed to the improved
margins.

Selling, general and administrative expense for the quarter ended July 31, 1999
increased both in total dollars and as a percentage of sales compared to the
same period last year. The increase in selling, general and administrative
expense were partially attributable product mix. The reduction in mass merchant
business, which was typically sold FOB factory, has been replaced in part by
sales to educational customers, which typically include freight and
installation. In addition, the Company has incurred additional selling costs,
product development expenses, and information technology expenses relating to
the implementation of a SAP Enterprise Resource Planning System.


                                       12
<PAGE>   13


Interest expense increased by $368,000 due to a higher average borrowing balance
for the quarter ended July 31, 1999 compared to the same period last year. The
increase in borrowings was attributable to an increase in capital spending on
the Conway, Arkansas facility expansion.

Financial Condition:

As a result of seasonally high shipments in the second quarter, accounts
receivable increased by approximately $27,397,000 compared to year-end. The
increase in accounts receivable during the second quarter of 1999 was greater
than the increase in accounts receivable in the comparable quarter last year and
indicates that the seasonal nature of the Company's educational business
continues to intensify. In anticipation of strong third quarter deliveries,
inventory increased by nearly $8,318,000 compared to year-end. This increase in
accounts receivable and inventory was financed through the credit facility with
Wells Fargo Bank.

Capital spending for the quarter ended July 31, 1999 was $15,462,000 compared to
$7,942,000 for the same period last year. The $7,520,000 increase in capital
spending was primarily relating to the Conway, Arkansas facility expansion and
SAP project. The Company believes that its investments in infrastructure and
information systems will ultimately deliver improved operating efficiency. For
further discussions on these two projects, please refer to the Company's 1998
Annual Report. These capital investments and the ongoing capital expenditures
are being financed through credit facilities established with Wells Fargo Bank
and GECC. At July 31, 1999, the Company has approximately $12,000,000 available
under its credit facility with Wells Fargo Bank. Beginning May 1, 1999 through
October 31, 1999, the credit facility with Wells Fargo Bank is expanded to
$70,000,000 from $50,000,000.

Net cash flows used in operating activities for the second quarter and for the
six-month ended July 31, 1999 totaled $6,165,000 and $20,567,000, respectively,
compared to $3,747,000 and $11,551,000, respectively, for the same periods last
year. The net $9,016,000 increase in cash flows used by operating activities for
the six-month period ended July 31, 1999 compared to the same period prior year,
is primarily due to the Company's reduced profits and increased account
receivables. Long term debt was $58,119,000 as of July 31, 1999 compared to
$21,344,000 as of January 31,1999. The $36,775,000 increase in long term debt is
primarily due to the Company's reduced profitability, increased accounts
receivable and increased capital spending.

In April 1998, the Board of Directors approved a stock buyback program giving
authorization to buy back up to $5,000,000 common stock. The amount authorized
was subsequently increased to $14,000,000. As of July 31, 1999, the Company has
incurred approximately $8,299,000 for the buyback. 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.

On August 17, 1999, the Company's Board of Directors authorized a 10% stock
dividend payable on September 30, 1999 to stockholders on record as of September
3, 1999. In the same meeting, the Board also authorized a $0.02 per share cash
dividend payable on October 29, 1999 to stockholders on record as of October 11,
1999. For the six months ended July 31, 1999, the Company paid $386,000 in cash
dividends.

The Company believes that cashflows from operations, together with the Company's
unused borrowing capacity with Wells Fargo Bank will be sufficient to fund the
Company's debt service requirements, capital expenditures and working capital
needs.


                                       13
<PAGE>   14

Year 2000 Compliance:

The year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs or hardware that have date-sensitive software of embedded
chips may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, manufacture product, or engage in similar normal
business activities.

The Company completed an assessment of its primary information systems in early
1997. The Company's legacy mainframe system would require modifications to be
year 2000 compliant. The cost of these modifications was estimated to be
approximately $200,000. As part of this assessment, the Company reviewed various
software packages that would be Year 2000 compliant and improve our information
system capabilities. After extended review, the Company determined that the
benefits attainable by implementing an enterprise resource planning system
justified the additional cost of acquiring and implementing such a system.

In August 1997, the Board of Directors approved the implementation of a SAP
Enterprise Resource Planning System. This implementation was started in October
1997 and Virco contracted with Hewlett Packard and SAP to provide hardware,
software and consulting services related to this implementation. The hardware,
software and operating systems selected were represented to be year 2000
compliant prior to beginning the implementation. Subsequent to year-end, on
March 1, 1999 the Company went live on the SAP system for all required modules
except for payroll, which was converted in April 1999. As part of the Year 2000
effort, the Company has installed, and will continue to install, patches and
upgrades as provided by hardware and software providers to ensure the systems
will be Year 2000 compliant. As of July 31, 1999 the Company has expended
approximately $9,750,000 on the implementation in addition to dedicating
considerable management time and effort to this project. The assessment of the
local area networks, which were installed as part of the SAP project, is
approximately 90% complete. Remediation is approximately 70% complete, while
testing and implementation are approximately 15% complete.

The Company's primary information systems do not have any significant interfaces
with third party vendors. The Company does have remote access with financial
institutions, credit institutions and other parties. The Company has queried the
financial institutions and is not aware of any related Year 2000 issue that
would materially affect the Company.

In addition to the primary information systems, the Company is dependent on
computer-controlled production and manufacturing equipment. Assessment of the
equipment is approximately 95% complete. Remediation is approximately 80%
complete, while testing and implementation are approximately 50% complete. The
Company expects to complete these efforts by the end of the third quarter of
1999.

The Company has queried significant suppliers and vendors that do not share
information systems with the Company (external agents). To date, the Company is
not aware of any external agent with a Year 2000 issue that would materially
impact the Company's results of operations, liquidity, of capital resources.
However, the Company has no means of ensuring that external agents will be Year
2000 ready. The inability of external agents to complete their Year 2000
resolution process in a timely fashion could materially impact the Company. The
effect of non-compliance by external agents is not determinable.

The Company has not queried customers to determine whether they are Year 2000
ready. The Company does not have any one significant customer upon which it is
dependent.


                                       14
<PAGE>   15

With regard to the Company's product line, the Company manufactures furniture,
including furniture designed for computers. There is no software or hardware
embedded in the furniture. Accordingly, the Company believes that there is no
Year 2000 exposure for any products it has sold.

The Company will utilize both internal and external resources to reprogram,
replace, test and implement the software and operating equipment for the Year
2000. The total cost of the Year 2000 project is estimated at $10,000,000. This
includes costs to implement the SAP Enterprise Resource Planning System, which
is expected to significantly enhance the Company's operating capabilities. This
expenditure is being financed with lease financing through GE Capital and
operating cash flows. The projected costs and the date on which the Company
believes it will complete the Year 2000 issues are based on management's best
estimates. There can be no guarantee that these estimates will be achieved and
actual results could differ from those anticipated. Specific factors that might
cause such differences include but are not limited to, the availability and cost
of personnel and the need to modify or replace hardware, software, communication
or manufacturing equipment.

Management of the Company believes it has an effective program in place to
resolve the Year 2000 issue in a timely manner. As noted above, the Company has
not yet completed all necessary phases of the Year 2000 program. In the event
that the Company does not complete any additional phases, the Company could be
unable to manufacture certain products, which are dependent upon automated
production equipment. The Company sells a significant amount of furniture to
publicly funded facilities. While no one customer is significant to the Company,
if a large government agency which funds educational institutions were to have
Year 2000 issues which affected school funding, the Company could incur a
material loss of sales and cash flow. In addition, disruptions in the economy
generally resulting from Year 2000 issues could also materially adversely affect
the Company. The Company could be subject to litigation related to computer
systems failure. The amount of potential liability and lost revenue cannot be
reasonably estimated at this time. The Company does not have a contingency plan
in the event it does not complete all phases of the Year 2000 program. The
Company plans to continually evaluate the status of completion of the program
and prepare a contingency plan if it becomes apparent that the program will not
be completed on a timely basis.

Forward-Looking Statements:

From time to time, the Company or its representatives have made or 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," "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, material costs, demand for
the Company's products, and 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 year ended January 31, 1999.

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.


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<PAGE>   16


                             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, 1999                      By: /s/ ROBERT E. DOSE
     -------------------------------             -------------------------------
                                                 Robert E. Dose
                                                 Vice President - Finance




Date: September 15, 1999                      By: /s/ BASSEY YAU
     -------------------------------             -------------------------------
                                                 Bassey Yau
                                                 Corporate Controller


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