Virco Announces Fourth Quarter Results

Virco Announces Fourth Quarter Results

TORRANCE, Calif., April 19, 2013 (GLOBE NEWSWIRE) -- Virco Mfg. Corporation
(Nasdaq:VIRC) today announced fourth quarter and year-end results in the
following letter to stockholders from Robert A. Virtue, President and CEO:

Despite continued softness and volatility in our core K-12 public school
market, the structural changes we made over a year ago allowed us to reduce
our operating loss by almost $10,000,000 in fiscal 2012. For the year, sales
decreased by 4.5% from $166,441,000 to $158,856,000. Our net loss decreased
from $13,803,000 in 2011 to $3,830,000 in 2012.

Results in the fourth quarter reflected the ongoing volatility and weaker
demand in our market.Partly due to internal cost-saving measures including
discretionary plant furloughs in December, shipments for the quarter declined
from $26,294,000 in 2011 to $18,154,000 in 2012.However, incoming order rates
for the quarter were 8% higher than in the fourth quarter of the previous
year, allowing us to enter fiscal 2013 with a larger backlog.As more of our
business shifts to furnishing newly-constructed schools versus day-to-day
replacement of existing classroom furniture, we expect this volatility in
shipments and incoming orders to continue, overlaid as always on our strong
seasonal pattern of peak summer deliveries and lower fall, winter, and spring
shipments.

As previously discussed in the Company's Form 10-K for the year ended January
31, 2012, in the fall of 2011Virco implemented a voluntary separation program
that provided for early retirement and severance payments based on years of
service to employees who voluntarily elected to retire. At the beginning of
the 2011 fiscal year, the Company had approximately 1,045 employees.At
January 31, 2012, after the effect of the voluntary retirement program coupled
with attrition, the Company employed approximately 825 persons, a 20%
reduction.As a result of attrition and other measures, by January 31, 2013
the number of full time employees declined to 760.As noted above, cost
savings from these staff reductions along with pricing initiatives and stable
raw material costs allowed us to reduce operating losses by almost $10,000,000
compared to the prior year. In addition to the improvements in pricing and
cost structure, 2012 results benefited from relative stability for raw
material costs.The stable raw material costs allowed for pricing improvements
and cost reductions to directly benefit gross margin.This stability was a
significant improvement compared to 2011, when steel increased by
approximately 30% during the critical second quarter and certain plastics
increased by nearly 30% over the second and third quarters.

Here are the numbers for the 4^th quarter and the full fiscal year 2012:


                       Three Months Ended          Twelve Months Ended
                       1/31/2013     1/31/2012     1/31/2013    1/31/2012
                       (In thousands, except share data)
                                                             
Net sales               $18,154       $26,294       $158,856     $166,441
Cost of sales           15,754        20,837        107,304      118,283
Gross profit            2,400         5,457         51,552       48,158
Selling, general
administrative & other  11,638        13,484        55,591       61,906
expense
Loss before income      (9,238)       (8,027)       (4,039)      (13,748)
taxes
Income tax expense      (280)         (191)         (209)        55
(benefits)
Net loss                $(8,958)    $(7,836)    $(3,830)   $(13,803)
                                                             
Cash dividend declared  $--        $--         $--       $0.05
                                                             
Net loss per share -    $(0.62)     $(0.55)     $(0.27)    $(0.97)
basic (a)
                                                             
Weighted average shares 14,441        14,285        14,387       14,235
outstanding - basic (a)
                                                             
                                                             
(a)Net loss per share was calculated based on basic shares outstanding due to
the anti-dilutive effect on the inclusion of common stock equivalent shares.
                                                             
                                    1/31/2013                 1/31/2012
Current assets                       $36,962                   $45,808
Non-current assets                   45,201                    48,417
Current liabilities                  24,436                    27,210
Non-current liabilities              30,707                    36,119
Stockholders' equity                 27,020                    30,896

Our efforts are not only limited to cost controls.We continue to focus on
strengthening our balance sheet and our brand.One of our core strategies is
to source as much product as is economically practical from our own U.S.
factories.We note with interest the recent enthusiasm for what has been
variously termed 'onshoring' or 'insourcing.' As a manufacturer who continues
to invest in our domestic factories, we have found innovative ways of adding
value for our customers through the use of quality raw materials, expanded
offerings of custom colors and configurations, and timely delivery.All of
these activities are easier to manage with the shorter supply chain of our
vertical business model.Also, based on recent public bid recapitulations, we
see further confirmation that this U.S.-based vertical model is returning to
global cost leadership.

We cannot predict how long the underlying challenges facing our market will
persist.For this reason, we continue to evaluate cost-saving initiatives in
an effort to return the Company to profitability at reduced sales volumes.As
discussed in prior communications, longer-term underlying demographic trends
remain favorable.Annual births in the U.S. are now slightly above their
average of 4 million during each of the 19 years of the famed "Baby Boom"
(1945-1964).We are encouraged by recent strengthening of the housing
market.New home construction and community development have long been two of
the best proxies for future school furniture and equipment demand, and both
are again trending up.Nonetheless, funding for education and educational
furniture and equipment will likely be constrained until spending priorities
and structural budget challenges are resolved.We support the general
consensus that education is the most positive response to our country's
current challenges and look forward to supplying America's schools with 21^st
Century furniture and equipment solutions.

This news release contains "forward-looking statements" as defined by the
Private Securities Litigation Reform Act of 1995.These statements include,
but are not limited to, statements regarding: business strategies; market
demand and product development; economic conditions; the educational furniture
industry; international markets; product sourcing; raw material costs; state
and municipal bond funding; order rates; shipments; cost control initiatives;
operating efficiencies; supply chains; the Company's domestic factories; new
school construction and seasonality.Forward-looking statements are based on
current expectations and beliefs about future events or circumstances, and you
should not place undue reliance on these statements.Such statements involve
known and unknown risks, uncertainties, assumptions and other factors, many of
which are out of our control and difficult to forecast.These factors may
cause actual results to differ materially from those which are
anticipated.Such factors include, but are not limited to: changes in general
economic conditions including raw material, energy and freight costs; state
and municipal bond funding; state, local and municipal tax receipts; the
seasonality of our markets; the markets for school and office furniture
generally; the specific markets and customers with which we conduct our
principal business; our ability to access cash under our credit facility; and
the competitive landscape, including responses of our competitors to changes
in our prices.See our Annual Report on Form 10-K for the year ended January
31, 2013, and other materials filed with the Securities and Exchange
Commission for a further description of these and other risks and
uncertainties applicable to our business.We assume no, and hereby disclaim
any, obligation to update any of our forward-looking statements.We
nonetheless reserve the right to make such updates from time to time by press
release, periodic reports or other methods of public disclosure without the
need for specific reference to this press release.No such update shall be
deemed to indicate that other statements which are not addressed by such an
update remain correct or create an obligation to provide any other updates.

CONTACT: Robert A. Virtue, President
         Douglas A. Virtue, Executive Vice President
         Robert E. Dose, Vice President Finance
         Virco Mfg. Corporation
         (310) 533-0474

Virco Mfg. Corporation Logo