Virco Mfg. Corporation reported financial results for the second quarter and six months ended July 31, 2026, revealing a decline in revenue while maintaining profitability and declaring a quarterly dividend.
For the second quarter of fiscal 2026, net sales totaled $87.5 million, a decrease from $92.1 million in the same period of the prior year. The company reported a gross margin of 40.0% for the quarter and operating income of $10.5 million, which the company noted remains above its long-term average. Through the first six months of the year, net sales were $118.2 million, down 6.1% from $125.8 million in the prior year. Operating income for the six-month period was $6.9 million compared to $15.3 million in the prior year.
Net income for the three months ended July 31, 2026, was $8.6 million, versus $10.2 million in the prior year. For the six months, net income was $5.8 million compared to $10.9 million the year before. The company attributes these declines to uncertainties among school administrators regarding the just-ended budget cycle and cautious spending in the first and second quarters. Management notes that recent trends show a slight improvement in demand following the approval of new budgets for the 2026-2027 school year, but cautions that these trends come at a low point in the annual revenue cycle and are unlikely to meaningfully improve full-year results.
Virco’s balance sheet remains strong, with a current ratio of 2.5 and a year-to-date gross margin of 40.4%. The company also reported that interest expense was flat at $0.3 million for the six months, while selling, general, and administrative expenses were 34.5% of revenue versus 33.1% in the prior year.
In other company news, on September 3, 2026, the Board of Directors declared a cash dividend of $0.025 per share for the third fiscal quarter. The dividend is payable on October 9, 2026, to shareholders of record as of the close of business on September 18, 2026. The company stated that while it currently intends to pay dividends on a quarterly basis, future declarations and payments are subject to the discretion of the Board and restrictive covenants in the company’s lending agreements.
