Virco Announces First Quarter Results

Virco Announces First Quarter Results

TORRANCE, Calif., June 12, 2013 (GLOBE NEWSWIRE) -- Virco Mfg. Corporation
(Nasdaq:VIRC) today announced first quarter results in the following letter to
stockholders from Robert A. Virtue, President and CEO:

Our first quarter results reflect the continued softness in public school
funding. Sales declined by 16% from $23,668,000 in the first quarter of fiscal
2012 to $19,890,000 in the first quarter of fiscal 2013. Although sales
declined, pre-tax operating loss improved in the first quarter of fiscal 2013
compared to the comparable period of the prior year from $(4,817,000) to
$(4,484,000).

Publicly funded entities are continuing to suffer severe budget challenges.
Although tax revenues are recovering to pre-recession levels, structural
spending deficits continue to adversely impact budgets for education spending,
typically the largest line item in a state budget. Most states, cities,
counties, and school districts are facing continued constraints in operating
budgets requiring cutbacks in personnel and services, leaving less money for
replacement furniture. Completed bond funded construction projects, for which
furniture is typically purchased and installed, are expected to decline
modestly in 2013 compared to 2012.

As discussed more fully in the Company's annual report on Form 10-K for the
year ended January 31, 2013, the Company has made substantial reductions in
its cost structure over the last two years, enabling the Company to reduce
operating losses for our traditionally slow first quarter despite a reduction
in revenue.A voluntary early retirement program in the fall of 2011, normal
attrition of employees who were not replaced, and a small reduction in force
completed in May of 2013 have contributed to this reduced cost structure.The
Company is entering the summer of 2013 with approximately 30% fewer employees
compared to the summer of 2011. This reduction in force was concentrated in
manufacturing, and included both direct labor and indirect positions.The
intent of the Company is to meet the seasonal demand for production and
distribution through more aggressive use of temporary seasonal
workers.Aggressive use of seasonal labor will enable the Company to reduce
structural spending during the traditionally slow first and fourth quarters.

Monthly order rates during the first quarter of 2013 have been extremely
volatile compared to the prior year.Orders were very slow and below last year
during the first two months, and picked up noticeably in April with more
orders in April 2013 than April of the prior year.Orders for the first
quarter of 2013 were 24% less than the first quarter of 2012.Order backlog at
April 30, 2013 was approximately 9.5% less than at April 30, 2012.The
improvement in order rates experienced in April continued for May of 2013,
with May 2013 orders and order backlog as of May 31, 2013 each exceeding that
of May of the prior year.

We remind investors that our first quarter is seasonally light and therefore
not a proportional representation for the full year.Our market remains highly
volatile and current trends could deteriorate or improve as the year
progresses.Here are our results for the first quarter ended April 30, 2013,
and the comparable period last year:

                                           Three Months Ended
                                           4/30/2013        4/30/2012
                                           (In thousands, except share data)
                                                           
Net sales                                   $19,890          $23,668
Cost of sales                               13,481           16,701
Gross profit                                6,409            6,967
Selling, general administrative             10,893           11,784
& other expense
Loss before income taxes                    (4,484)          (4,817)
Income tax expense (benefits)              (37)             16
Net loss                                    $ (4,447)        $ (4,833)
                                                           
Net loss per share - basic (a)              $ (0.31)         $ (0.34)
                                                           
Weighted average shares outstanding - basic  14,441           14,296
(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.
                                                           
                               4/30/2013    1/31/2013        4/30/2012
Current assets                  $50,406      $37,037          $53,981
Non-current assets              44,930       45,201           47,516
Current liabilities             35,389       24,511           38,101
Non-current liabilities         37,232       30,707           37,105
Stockholders' equity            22,715       27,020           26,291
                                                           

Despite a reduction in first quarter sales, our first quarter operating
results showed improvement.Gross profit improved to 32.2% of net sales from
29.4% due to a combination of increased selling prices, reduced factory
spending, stable costs for raw materials and stable levels of factory
utilization.Our cost control efforts also enabled us to reduce our selling,
general and administrative expenses.

Longer term, underlying demographic trends remain favorable.Despite
underlying demographic strength, the domestic market for classroom furniture
seems likely to remain soft until the economy and the related state and local
tax receipts support increased spending on education.

We continue to aggressively pursue all profitable business in our market, and
we continue to bring new products to market in an effort to gain market
share.Despite a significant reduction in headcount, our direct sales force
has been substantially unaffected and the Company is increasing spending for
certain marketing initiatives.We have effectively controlled our balance
sheet, specifically inventory.Along with our ongoing sales to public,
private, and charter schools, the Company continues to accelerate efforts to
increase sales to certain international markets.To complement these efforts,
Virco is increasing its outreach to customers in colleges and universities
nationwide.

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; order rates; economic conditions; the
educational furniture industry; including the domestic market for classroom
furniture; state and municipal bond funding; the rate of completion of bond
funded construction projects; cost control initiatives; structural spending;
pricing; use of temporary workers; seasonality; marketing initiatives; and
international markets.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; order rates;
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; the impact of cost-saving initiatives on our business; the
competitive landscape, including responses of our competitors and customers to
changes in our prices; demographics; and the terms and conditions of available
financing sources.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

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