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UNITED STATES 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 April 30, 2007
 Commission File Number 1-8777
 VIRCO MFG. CORPORATION
  Delaware
    
    95-1613718(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 2027 Harpers Way, Torrance, CA
    
    90501(Address of principal executive offices)
    
    (Zip Code)
 (310) 533-0474
   þ o
  o þ o
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Part I. Financial InformationItem 1. Financial StatementsCondensed consolidated balance sheets  April 30, 2007, January 31, 2007 and April 30, 2006Condensed consolidated statements of operations  Three months ended April 30, 2007 and 2006Condensed consolidated statements of cash flows  Three months ended April 30, 2007 and 2006Notes to condensed consolidated financial statements  April 30, 2007Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures about Market RiskItem 4. Controls and ProceduresPart II. Other InformationItem 6. ExhibitsExhibit 4.1  Amendment to Stockholders Rights PlanExhibit 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.Exhibit 32.1  Certification of Principal Executive Officer and Principal Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.EXHIBIT 4.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
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PART I
 
 Item 1. Financial Statements
  
  4/30/2007
    
    1/31/2007
    
    4/30/2006(In thousands, except share data)AssetsCurrent assetsCash
    
    $
    1,523
    
    
    $
    1,892
    
    
    $
    752Trade accounts receivable
    
    
    14,133
    
    
    
    18,796
    
    
    
    18,247Less allowance for doubtful accounts
    
    
    208
    
    
    
    200
    
    
    
    234Net trade accounts receivable
    
    
    13,925
    
    
    
    18,596
    
    
    
    18,013Other receivables
    
    
    85
    
    
    
    228
    
    
    
    224InventoriesFinished goods, net
    
    
    20,443
    
    
    
    11,651
    
    
    
    19,641Work in process, net
    
    
    25,376
    
    
    
    19,690
    
    
    
    22,816Raw materials and supplies, net
    
    
    7,031
    
    
    
    6,496
    
    
    
    9,19452,850
    
    
    
    37,837
    
    
    
    51,651Prepaid expenses and other current assets
    
    
    1,767
    
    
    
    1,479
    
    
    
    1,041Total current assets
    
    
    70,150
    
    
    
    60,032
    
    
    
    71,681Property, plant and equipment:Land and land improvements
    
    
    3,596
    
    
    
    3,596
    
    
    
    3,591Buildings and building improvements
    
    
    49,555
    
    
    
    49,555
    
    
    
    49,581Machinery and equipment
    
    
    110,607
    
    
    
    109,730
    
    
    
    106,981Leasehold improvements
    
    
    1,338
    
    
    
    1,323
    
    
    
    1,302165,096
    
    
    
    164,204
    
    
    
    161,455Less accumulated depreciation and amortization
    
    
    117,728
    
    
    
    116,116
    
    
    
    111,374Net property, plant and equipment
    
    
    47,368
    
    
    
    48,088
    
    
    
    50,081Goodwill and other intangible assets, net
    
    
    2,308
    
    
    
    2,311
    
    
    
    2,323Other assets
    
    
    5,846
    
    
    
    5,846
    
    
    
    8,727Total assets
    
    $
    125,672
    
    
    $
    116,277
    
    
    $
    132,812
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4/30/2007
    
    1/31/2007
    
    4/30/2006(In thousands, except share data)LiabilitiesCurrent liabilitiesChecks released but not yet cleared bank
    
    $
    1,664
    
    
    $
    2,563
    
    
    $
    2,276Accounts payable
    
    
    13,414
    
    
    
    14,463
    
    
    
    23,474Accrued compensation and employee benefits
    
    
    5,860
    
    
    
    8,094
    
    
    
    5,063Current portion of long-term debt
    
    
    5,074
    
    
    
    5,074
    
    
    
    5,012Other accrued liabilities
    
    
    6,367
    
    
    
    6,844
    
    
    
    5,974Total current liabilities
    
    
    32,379
    
    
    
    37,038
    
    
    
    41,799Non-current liabilitiesAccrued self-insurance retention and other
    
    
    4,911
    
    
    
    3,962
    
    
    
    3,104Accrued pension expenses
    
    
    16,248
    
    
    
    15,949
    
    
    
    15,024Long-term debt, less current portion
    
    
    25,866
    
    
    
    10,190
    
    
    
    36,511Total non-current liabilities
    
    
    47,025
    
    
    
    30,101
    
    
    
    54,639Deferred income taxes, net
    
    
    260
    
    
    
    260
    
    
    
    Commitments and contingenciesStockholders equity:Preferred stockAuthorized 3,000,000 shares, $.01 par
value; none issued or outstandingCommon stockAuthorized 25,000,000 shares, $.01 par
value; issued 14,379,506 shares at
4/30/2007 and 1/31/2007, and 13,137,288
shares at 4/30/2006
    
    
    143
    
    
    
    143
    
    
    
    131Additional paid-in capital
    
    
    113,847
    
    
    
    113,737
    
    
    
    108,684Accumulated deficit
    
    
    (60,416
    )
    
    
    (57,436
    )
    
    
    (68,248
    )Accumulated comprehensive loss
    
    
    (7,566
    )
    
    
    (7,566
    )
    
    
    (4,193
    )Total stockholders equity
    
    
    46,008
    
    
    
    48,878
    
    
    
    36,374Total liabilities and stockholders equity
    
    $
    125,672
    
    
    $
    116,277
    
    
    $
    132,812
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Three months ended4/30/2007
    
    4/30/2006(In thousands, except share data)Net sales
    
    $
    31,122
    
    
    $
    34,515Costs of goods sold
    
    
    19,572
    
    
    
    23,021Gross profit
    
    
    11,550
    
    
    
    11,494Selling, general and administrative expenses and other
    
    
    13,986
    
    
    
    13,875Interest expense
    
    
    544
    
    
    
    886Loss before income taxes
    
    
    (2,980
    )
    
    
    (3,267
    )Provision for income taxes
    
    
    
    
    
    
    Net loss
    
    $
    (2,980
    )
    
    $
    (3,267
    )Net loss per common shareBasic
    
    $
    (0.21
    )
    
    $
    (0.25
    )Weighted average shares outstandingBasic
    
    
    14,380
    
    
    
    13,137
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Three months ended4/30/2007
    
    4/30/2006(In thousands)Operating activitiesNet loss
    
    $
    (2,980
    )
    
    $
    (3,267
    )Adjustments to reconcile net loss to net cash used in operating activitiesDepreciation and amortization
    
    
    1,730
    
    
    
    1,861Provision for doubtful accounts
    
    
    8
    
    
    
    25Gain on sale of property, plant and equipment
    
    
    (17
    )
    
    
    Stock based compensation
    
    
    110
    
    
    
    294Changes in operating assets and liabilitiesTrade accounts receivable
    
    
    4,663
    
    
    
    (768
    )Other receivables
    
    
    143
    
    
    
    153Inventories
    
    
    (15,013
    )
    
    
    (20,034
    )Income taxes
    
    
    2
    
    
    
    10Prepaid expenses and other current assets
    
    
    (288
    )
    
    
    452Accounts payable and accrued liabilities
    
    
    (3,423
    )
    
    
    6,086Net cash used in operating activities
    
    
    (15,065
    )
    
    
    (15,188
    )Investing activitiesCapital expenditures
    
    
    (997
    )
    
    
    (519
    )Proceeds from sale of property, plant and equipment
    
    
    17
    
    
    
    Net cash used in investing activities
    
    
    (980
    )
    
    
    (519
    )Financing activitiesIssuance of long-term debt
    
    
    15,694
    
    
    
    14,970Repayment of long-term debt
    
    
    (18
    )
    
    
    Net cash provided by financing activities
    
    
    15,676
    
    
    
    14,970Net decrease in cash
    
    
    (369
    )
    
    
    (737
    )Cash at beginning of year
    
    
    1,892
    
    
    
    1,489Cash at end of year
    
    $
    1,523
    
    
    $
    752Supplemental disclosures of cash flow informationNon-cash activitiesDeferred compensation
    
    $
    
    
    
    $
    247
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Three Months Ended4/30/2007
    
    4/30/2006(In thousands, except per share data)Numerators:Numerator for both basic and diluted net loss per share
    
    $
    (2,980
    )
    
    $
    (3,267
    )Denominators:
    
    
    14,380
    
    
    
    13,137Denominator for basic net loss per share
weighted-average common shares outstandingPotentially dilutive shares from stock option plans
    
    
    
    
    
    
    Denominator for diluted net loss per share
    
    
    14,380
    
    
    
    13,137Net loss per share  basic
    
    $
    (0.21
    )
    
    $
    (0.25
    )
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Three Months Ended April 30,Non-Employee DirectorsPension Plan
    
    VIP Retirement Plan
    
    Retirement Plan2007
    
    2006
    
    2007
    
    2006
    
    2007
    
    2006Service cost
    
    $
    41
    
    
    $
    43
    
    
    $
    50
    
    
    $
    53
    
    
    $
    6
    
    
    $
    6Interest cost
    
    
    345
    
    
    
    352
    
    
    
    90
    
    
    
    85
    
    
    
    7
    
    
    
    6Expected return on plan assets
    
    
    (224
    )
    
    
    (246
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of transition amount
    
    
    (9
    )
    
    
    (9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    117
    
    
    
    117
    
    
    
    (134
    )
    
    
    (134
    )
    
    
    6
    
    
    
    22Recognized net actuarial (Gain) or loss
    
    
    49
    
    
    
    41
    
    
    
    30
    
    
    
    34
    
    
    
    (7
    )
    
    
    (7
    )Settlement and curtailment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net periodic pension cost
    
    $
    319
    
    
    $
    298
    
    
    $
    36
    
    
    $
    38
    
    
    $
    12
    
    
    $
    27
    April 30,2007
    
    2006Beginning balance
    
    $
    1,750
    
    
    $
    1,500Provision
    
    
    345
    
    
    
    206Costs incurred
    
    
    (245
    )
    
    
    (206
    )Ending balance
    
    $
    1,850
    
    
    $
    1,500
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures
  13




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Internal Control Over Financial Reporting
  14




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PART II
     
      15




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VIRCO MFG. CORPORATIONDate: June 8, 2007
    
    By:
    
    /s/ Robert E. DoseRobert E. DoseVice President  Finance
 16