Virco Reports Revenue Decline in Second Quarter

TORRANCE, Calif., Virco Mfg. Corporation, a leading manufacturer and direct supplier of moveable furniture and equipment for educational environments and public spaces, reported a decline in revenue for the six months ended July 31, 2026, as the company continues to navigate the ongoing rebalancing of the school furniture market.

Revenue for the second quarter of 2026 was $87.5 million, down from $92.1 million in the same quarter last year. Operating income for the quarter stood at $10.5 million, slightly below the $15.4 million recorded in the previous year. The company noted that revenue quality remained strong, with a gross margin of 40.0% for the quarter.

For the six-month period, net sales decreased to $118.2 million from $125.8 million. Operating income was $6.9 million, compared to $15.3 million in the same period last year. Virco attributed the decline to uncertainties among school administrators regarding the recently concluded budget cycle. Despite the challenges, the company reported a modest improvement in recent trends, with new budgets for the 2026-2027 school year showing some positive signs.

"Even though these trends are encouraging, they come at a low point in the annual revenue cycle and are unlikely to significantly impact our full-year results," said Robert Virtue, Chairman and CEO of Virco.

The company’s strong domestic fabrication and service model continued to deliver on cost control and inventory management, with an interest expense of $0.3 million and a selling, general, and administrative expense ratio of 34.5% of revenue, compared to 33.1% in the previous year. Net income for the three months ended July 31, 2026, was $8.6 million, a 15.4% decrease from $10.2 million in the same period last year. Through six months, net income was $5.8 million, down 46.5% from $10.9 million.

Looking ahead, Virco expects the impact of global supply chain rebalancing on its core market to remain fluid. The company is investing in new products and “platform processes,” such as tube mills, panel processing, injection molding, and metal finishing, as it nears cost parity with domestic manufacturers. According to Virtue, these investments will fall within the company’s typical $4 to $6 million annual capital expenditure budget.

“While this current year will be challenging, our strong foundation is allowing us to gain market share and develop new customers,” Virtue added. “We are committed to supporting our local communities and providing superior quality and service, which now seems to be generating meaningful financial benefits.”

In other developments, Virco’s Board of Directors declared a cash dividend of $0.025 per share, payable on October 9, 2026, to stockholders of record as of September 18, 2026.

Founded in 1950, Virco is the largest manufacturer and supplier of moveable educational furniture and equipment for the preschool through 12th grade market in the United States. The company’s products are also used in convention centers, arenas, the hospitality industry, government facilities, and places of worship.