<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, 1998 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, 1998.
Common Stock 9,803,344 Shares *
* Adjusted for 10% stock dividend declared August 11, 1998, date of record
September 4, 1998, payable September 30, 1998.
<PAGE> 2
VIRCO MFG. CORPORATION AND SUBSIDIARIES
INDEX
Part I. Financial Information
Item 1. Financial Statements (unaudited)
Condensed consolidated balance sheets - July 31, 1998 and
January 31, 1998.
Condensed consolidated statements of income - Three months
ended July 31, 1998 and 1997.
Condensed consolidated statements of income - Six months ended
July 31, 1998 and 1997.
Condensed consolidated statements of cash flows - Three months
ended July 31, 1998 and 1997.
Condensed consolidated statements of cash flows - Six months
ended July 31, 1998 and 1997.
Notes to condensed consolidated financial statements - July
31, 1998.
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)
<TABLE>
<CAPTION>
ASSETS 7/31/98 1/31/98
------ ------- -------
<S> <C> <C>
Current assets
Cash $ 4,918 $ 1,221
Accounts and notes receivable 45,017 26,942
Less allowance for doubtful accounts (430) (100)
--------- ---------
Net accounts and notes receivable 44,587 26,842
Inventories (note 2)
Finished goods 34,076 25,467
Work in process 8,471 8,739
Raw materials and supplies 10,109 9,656
--------- ---------
Total inventories 52,656 43,862
Prepaid expenses and deferred income tax 3,238 2,294
--------- ---------
Total current assets 105,399 74,219
Property, plant & equipment
Cost 79,862 75,754
Less accumulated depreciation (37,003) (36,385)
--------- ---------
Net property, plant & equipment 42,859 39,369
Other assets 9,740 8,427
--------- ---------
$ 157,998 $ 122,015
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
3
<PAGE> 4
VIRCO MFG. CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited (Note 1)
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY 7/31/98 1/31/98
------------------------------------ ------- -------
<S> <C> <C>
Current liabilities
Checks released but not yet cleared bank $ 4,460 $ 3,200
Accounts payable 13,832 13,324
Income taxes payable 3,169 --
Current maturities on long-term debt 3,400 3,442
Other current liabilities 10,859 10,221
--------- ---------
Total current liabilities 35,720 30,187
Non-current liabilities
Long term debt (less current portion) 33,879 9,459
Other non-current liabilities 4,053 4,053
--------- ---------
Total non-current liabilities 37,932 13,512
Deferred income taxes 991 991
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; 8,990,032 shares
issued at 7/31/98 and 8,909,183 shares issued at 1/31/98 90 89
Additional paid-in capital 50,673 50,301
Retained earnings 34,223 27,423
Less treasury stock at cost (70,501 Shares) (1,419) (172)
Loan to ESOP trust (212) (316)
--------- ---------
Total shareholders' equity 83,355 77,325
--------- ---------
$ 157,998 $ 122,015
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed 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>
3 Months Ended
--------------
7/31/98 7/31/97
------- -------
<S> <C> <C>
Net sales $ 87,539 $ 83,809
Cost of goods sold 58,884 56,817
----------- -----------
Gross profit 28,655 26,992
Shipping, selling, general and administrative expense 17,512 16,573
Provision for doubtful accounts 248 240
Provision for plant shut down -- 2,600
Interest expense 530 760
----------- -----------
18,290 20,173
Income before income taxes 10,365 6,819
Income taxes 3,997 2,591
----------- -----------
Net income $ 6,368 $ 4,228
=========== ===========
Earnings per share .65 .43
Earnings per share - assuming dilution .63 .42
Weighted average shares outstanding (a) 9,831,463 9,745,388
Weighted average shares outstanding- assuming dilution (a) 10,104,253 10,040,017
Dividend per share
Cash (a) $ .018 $ .015
Stock -- --
</TABLE>
(a) Adjusted for 10% stock dividend declared August 11, 1998.
The accompanying notes are an integral part of these condensed 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>
6 Months Ended
--------------
7/31/98 7/31/97
------- -------
<S> <C> <C>
Net sales $ 132,477 $ 124,767
Cost of goods sold 89,147 84,574
----------- -----------
Gross profit 43,330 40,193
Shipping, selling, general and administrative expense 30,524 28,354
Provision for doubtful accounts 387 367
Provision for plant shut down -- 2,600
Interest expense 780 1,247
----------- -----------
31,691 32,568
Income before income taxes 11,639 7,625
Income taxes 4,481 2,898
----------- -----------
Net income 7,158 $ 4,727
=========== ===========
Earnings per share .73 .49
Earnings per share - assuming dilution .71 .47
Weighted average shares outstanding (a) 9,833,889 9,745,388
Weighted average shares outstanding- assuming dilution (a) 10,107,408 10,001,137
Dividend per share
Cash (a) $ .036 $ .030
Stock -- --
</TABLE>
(b) Adjusted for 10% stock dividend declared August 11, 1998.
The accompanying notes are an integral part of these condensed 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>
3 Months Ended
--------------
7/31/98 7/31/97
------- -------
<S> <C> <C>
Cash flows from operating activities
Net income $ 6,368 $ 4,228
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 1,697 1,699
Provision for doubtful accounts 248 214
(Gain)/loss on sales of fixed assets 128 43
Change in assets and liabilities:
Accounts and notes receivable (20,719) (19,934)
Inventories 3,972 6,716
Prepaid expenses and deposits (755) (188)
Income taxes receivable/payable 2,787 1,866
Other assets (267) --
Accounts payable and accrued expenses 2,794 2,942
-------- --------
Net cash used in operating activities (3,747) (2,414)
Cash flows from investing activities
Capital expenditures (4,968) (1,304)
Proceeds from sale of assets 930 --
Net investment in life insurance (230) (11)
Restricted short term investments -- 229
-------- --------
Net cash used in investing activities (4,268) (1,086)
Cash flows from financing activities
Issuance of long-term debt 13,152 4,514
Repayment of long-term debt (186) (187)
Payment of cash dividend (179) (148)
Purchase of treasury stock (950) --
Issuance of common stocks 43 54
Loans to ESOP 87 (334)
-------- --------
Net cash provided by financing activities 11,967 3,899
Net change in cash 3,952 399
Cash at beginning of quarter 966 1,314
-------- --------
Cash at end of quarter $ 4,918 $ 1,713
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
7
<PAGE> 8
VIRCO MFG. CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited (note 1)
(Dollar amounts in thousands, except per share data)
<TABLE>
<CAPTION>
6 Months Ended
--------------
7/31/98 7/31/97
------- -------
<S> <C> <C>
Cash flows from operating activities
Net income $ 7,158 $ 4,727
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 3,394 3,389
Provision for doubtful accounts 387 334
(Gain)/loss on sales of fixed assets 128 43
Change in assets and liabilities:
Accounts and notes receivable (18,132) (16,025)
Inventories (8,794) (9,839)
Prepaid expenses and deposits (944) (554)
Income taxes receivable/payable 3,169 1,967
Other assets (323) 299
Accounts payable and accrued expenses 2,406 974
-------- --------
Net cash used in operating activities (11,551) (14,685)
Cash flows from investing activities
Capital expenditures (7,942) (3,002)
Proceeds from sale of assets 930 --
Net investment in life insurance (990) (710)
Restricted short term investments -- 224
-------- --------
Net cash used in investing activities (8,002) (3,488)
Cash flows from financing activities
Issuance of long-term debt 24,749 19,911
Repayment of long-term debt (371) (310)
Payment of cash dividend (358) (296)
Purchase of treasury stock (950) --
Issuance of common stocks 76 54
Loans to ESOP 104 (195)
-------- --------
Net cash provided by financing activities 23,250 19,164
Net change in cash 3,697 991
Cash at beginning of period 1,221 722
-------- --------
Cash at end of period $ 4,918 $ 1,713
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
8
<PAGE> 9
VIRCO MFG. CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 31, 1998 and July 31, 1997
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 period
ended July 31, 1998 are not necessarily indicative of the results
that may be expected for the year ended January 31, 1999. For
further information, refer to the consolidated financial
statements and footnotes thereto included in the Registrant
Company and Subsidiaries' annual report on Form 10-K for the year
ended January 31, 1998.
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, 1998. Management continually monitors
production costs, material costs and inventory levels to determine
that interim inventories are fairly stated.
Note 3. Income Taxes
The Company adopted Statement of Financial Accounting Standards
(SFAS) No 109. Income taxes for the six month period ended July
31, 1998 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
In 1997, 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 net income 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.
9
<PAGE> 10
<TABLE>
<CAPTION>
3 MONTHS ENDED 6 MONTHS ENDED
----------------------- ----------------------
7/31/98 7/31/97 7/31/98 7/31/98
------- ------- ------- -------
<S> <C> <C> <C> <C>
Numerator:
Net Income $ 6,367,000 $ 4,228,000 $ 7,157,000 $ 4,727,000
Denominator:
Denominator for basic earnings
per share - weighted-average 9,831,463 9,745,388 9,833,889 9,745,388
shares
Dilutive potential common shares
272,790 294,629 273,519 255,749
----------- ----------- ----------- -----------
Denominator for diluted earnings per share -
adjusted weighted-average shares and assumed 10,104,253 10,040,017 10,107,408 10,001,137
conversions
Basic earnings per share $ 0.65 $ 0.43 $ 0.73 $ 0.49
Diluted earnings per share $ 0.63 $ 0.42 $ 0.71 $ 0.47
</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. Other comprehensive income comprises items such as
unrealized gains and losses on debt and equity securities classified as
available-for-sale securities, minimum pension liability adjustments, and
foreign currency translation adjustments. The Company does not believe adoption
of this SOP will have a material impact on the Company's financial statements.
In June 1997, the Financial Accounting Standards Board issued Statement of
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. SFAS 131 is effective for the year ended
January 31, 1999 and will be required for interim periods in 1999. The adoption
of this SFAS has no impact on the way the Company reports or has reported its
financial statements.
In March 1998, the AICPA issued SOP 98-1, Accounting For the Costs of Computer
Software Developed For or Obtained for Internal-Use. The SOP is effective for
the Company beginning on February 1, 1999. The SOP will require the
capitalization of certain costs incurred after the date of adoption in
connection with developing or obtaining software for internal-use. The Company
currently capitalizes costs associated with software developed for its own use.
The Company does not believe adoption of this SOP will have a material impact on
the Company's future earnings or financial position.
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
PART II
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 23, 1998.
Election of three directors whose term expire in 2001.
<TABLE>
<CAPTION>
Votes For
---------
<S> <C>
George W. Ott 7,466,002
John H. Stafford 7,462,211
Douglas A. Virtue 7,460,860
Approval to amend the Company's Certificate 5,836,155
of Incorporation to increase the number of
authorized shares of common stocks.
</TABLE>
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 1998, the Company earned a net profit of $6,368,000 on
sales of $87,539,000 compared to a net income of $4,228,000 on sales of
$83,809,000 in the same period last year. Earnings were $.63 per share compared
to $.42 per share in the same period last year, after giving effect to the 10%
stock dividend declared August 11, 1998. For the six month period ended July 31,
1998, the Company earned a net profit of $7,158,000 on sales of $132,477,000
compared to a net profit of $4,727,000 on sales of $124,767,000 in the same
period prior year. Earnings were $.71 per share compared to $.47 per share in
the same period prior year, after giving effect to the 10% stock dividend
declared August 11, 1998. Included in the second quarter results for last year
was a pre-tax loss of $2.6 million incurred from the Company's decision to
shutdown the manufacturing facility of the Company's Mexican subsidiary.
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. However, the
educational market are experiencing an increase in seasonality, as more school
customers require deliveries closer to the beginning of the school year, which
falls in the Company's third quarter. The increase in sales for the second
quarter and for the year compared to the prior year is attributable to increases
in volume combined with selected price increases. For the six months ended July
31, 1998, incoming orders have increased by 7%, and at July 31, 1998, sales
backlog was 16% greater than at the same time last year.
Gross profits for the second quarter and year-to-date, as a percent of sales,
improved slightly to 33% from 32% to the same periods prior year. The
improvement in gross profit is in line with the management's expectations.
Marketing, general and administrative expense for the second quarter and
year-to-date, as a percent of sales, remains at 21% and 24%, respectively,
compared to the same periods last year. Interest expense for the second quarter
and year-to-date, decreased by $230,000 and $467,000, respectively, compared to
the same periods last year. The decrease in interest expense is due to lower
average debt.
In May 1998, the Company reached an agreement to sell the manufacturing facility
located in Southern Pines, NC. The sales price of the transaction is $1,000,000
with payment to be made at closing. In the first quarter, the Company made a
$120,000 accrual for the anticipated loss on disposition of this property. The
sale is closed in May 1998.
In addition to the above sale of Southern Pines, NC. manufacturing facility, the
Company had resolved a long-standing dispute over pricing on deliveries made to
the GSA at a cost of $200,000 during the first quarter ended April 30, 1998. The
Company had previously established a reserve of $500,000 on this matter in
recognition of the original GSA demand, which exceeded $1,000,000. This
resolution will enable the Company to again participate in GSA contract
business, as the Company had chosen not to participate in GSA contract business
while the dispute was pending.
Financial Condition:
As a result of seasonally high sales activity, accounts receivable increased by
$18,600,000 compared to January 31, 1998. In anticipation of strong third
quarter educational deliveries, inventory at July 31, 1998 increased by
12
<PAGE> 13
$8,794,000 compared to January 31, 1998. The increases in receivable and
inventory were financed through increased borrowings under our revolving line of
credit with Wells Fargo Bank.
Capital spending for the six-month end July 31, 1998 was $7,942,000 compared to
$3,002,000 for the same period last year. As discussed in the Company's 1997
Annual Report, the Company initiated two large capital projects, which will have
significant cash flow effects on the 1998 fiscal year. Budgeted capital
expenditures for 1998 fiscal year include $25,000,000 for the Conway, AR
expansion, $2,000,000 for the SAP Enterprise Resource Planning System and
$2,000,000 ongoing capital expenditures at the Torrance, CA facility. These
capital investments are being financed through credit facilities established
with Wells Fargo Bank, General Electric Capital Corporation and internally
generated funds. At July 31, 1998, the Company had approximately $18,694,000
available under its credit facility with Wells Fargo Bank and $9,200,000
available under its equipment credit facility with General Electric Capital
Corporation.
Net cash flows used in operating activities for the second quarter and for the
six-month ended July 31, 1998 totaled $3,747,000 and $11,551,000, respectively,
compared to $2,414,000 and $14,685,000, respectively, for the same periods last
year. The net $3,134,000 improvement in cash flows used by operating activities
for the six-month period ended July 31, 1998 compared to the same period prior
year, is primarily due to the Company's improved profits and increased account
payables offset by increased account receivables. Long term debt was $33,879,000
as of July 31, 1998 compared to $41,114,000 for the same period last year. The
$7,235,000 reduction in long term debt is primarily due to the Company's
improved profitability.
The Company completed an assessment of its information systems in early 1997.
The Company's legacy mainframe system would require modification to be Y2K
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 Y2K 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 an SAP
Enterprise Resources Planning System. This implementation was started in October
1997. The go-live date of this system will be timed to coincide with a slow
period of the Company's seasonal business cycle, and is expected to occur
towards the beginning of fiscal year 1999. For the six-month ended July 31,
1998, the Company had incurred approximately $270,000 in training costs.
The SAP implementation and any required modifications to production or
communication equipment are expected to complete by the beginning of fiscal year
1999. The Company believes that by implementing the SAP system and any required
equipment modifications, the Y2K issue will not pose significant operational
problems for the Company. If the implementation of the SAP Enterprise Resources
Planning system or modification to the legacy system is not made on a timely
basis, the Y2K issue could have a material effect on operations.
The project costs and the date on which the Company believes it will complete
the Y2K 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, the
amount of custom modifications and number of modules implemented in the SAP, and
the need to modify or replace communication or manufacturing equipment.
13
<PAGE> 14
The Company is also continuing its efforts to assess the Y2K compliance with key
supplier, customers and service providers. Based on management's best estimates,
to the extent that the Company vendors and customers fail to complete Y2K work
in a timely manner, it could adversely affect the Company's operations, such as,
but not limited to, delays in shipment of products or delivery of services
leading to lost revenues, increased operating costs, loss of customers or
suppliers, or other business interruptions of a material nature, as well as
claims of mismanagement, misrepresentation, or breach of contract.
At the April 21, 1998 Board of Directors' meeting, the Board authorized a stock
re-purchase program under which the Company may re-purchase shares of its
outstanding common stock for an aggregate purchase price of up to $5,000,000.
The stock re-purchase may be made from time to time at prevailing prices over
the subsequent twelve months, by purchases on the market or in private
transactions. Any shares re-purchased will be available for re-issuance in
connection with the Company's stock option plans or for other corporate
purposes. During the second quarter of 1998, the Company purchased 37,900 shares
of its common stock for $950,000 at an average re-purchase price of $25.07 per
share.
On August 11, 1998, the Company's Board of Directors authorized a 10% stock
dividend, payable on September 30, 1998 to stockholders of record September 4,
1998. This resulted in the issuance of 891,213 additional shares of common stock
as of September 4, 1998. All per share and weighted average share amounts have
been restated to reflect this stock dividend. At the same meeting, the Board
also authorized a $.02 per share cash dividend, payable on October 30, 1998 to
shareholders on record October 9, 1998.
The Company believes that cash flow from operations, together with the Company's
unused borrowing capacity with Wells Fargo Bank and General Electric Capital
Corporation, will be sufficient to fund the Company's debt service requirements,
capital expenditures and working capital needs.
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, 1998.
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.
14
<PAGE> 15
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: By:
----------------------------- --------------------------------------
Robert E.Dose
Vice President - Finance
Date: By:
----------------------------- --------------------------------------
Bassey Yau
Corporate Controller
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED STATEMENTS OF EARNINGS AND CONSOLIDATED BALANCE SHEETS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JUL-31-1998
<CASH> 4,918
<SECURITIES> 0
<RECEIVABLES> 45,017
<ALLOWANCES> (430)
<INVENTORY> 52,656
<CURRENT-ASSETS> 105,399
<PP&E> 79,862
<DEPRECIATION> (37,003)
<TOTAL-ASSETS> 157,998
<CURRENT-LIABILITIES> 35,720
<BONDS> 0
0
0
<COMMON> 90
<OTHER-SE> 83,265
<TOTAL-LIABILITY-AND-EQUITY> 157,998
<SALES> 87,539
<TOTAL-REVENUES> 87,539
<CGS> 58,884
<TOTAL-COSTS> 58,884
<OTHER-EXPENSES> 18,290
<LOSS-PROVISION> 248
<INTEREST-EXPENSE> 530
<INCOME-PRETAX> 10,365
<INCOME-TAX> 3,997
<INCOME-CONTINUING> 6,368
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,368
<EPS-PRIMARY> .65<F1>
<EPS-DILUTED> .63
<FN>
<F1>FOR PURPOSES OF THIS EXHIBIT, PRIMARY MEANS BASIC.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED STATEMENTS OF EARNINGS AND CONSOLIDATED BALANCE SHEETS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> JUL-31-1997
<CASH> 1,713
<SECURITIES> 0
<RECEIVABLES> 41,623
<ALLOWANCES> (422)
<INVENTORY> 53,483
<CURRENT-ASSETS> 99,763
<PP&E> 82,612
<DEPRECIATION> (42,564)
<TOTAL-ASSETS> 144,852
<CURRENT-LIABILITIES> 30,486
<BONDS> 0
0
0
<COMMON> 59
<OTHER-SE> 68,196
<TOTAL-LIABILITY-AND-EQUITY> 144,852
<SALES> 83,809
<TOTAL-REVENUES> 83,809
<CGS> 56,817
<TOTAL-COSTS> 56,817
<OTHER-EXPENSES> 20,173
<LOSS-PROVISION> 240
<INTEREST-EXPENSE> 760
<INCOME-PRETAX> 6,819
<INCOME-TAX> 2,591
<INCOME-CONTINUING> 4,228
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,228
<EPS-PRIMARY> .43<F1>
<EPS-DILUTED> .42
<FN>
<F1>FOR PURPOSES OF THIS EXHIBIT, PRIMARY MEANS BASIC.
</FN>
</TABLE>
