Virco reported second-quarter fiscal 2027 net sales of $87.5 million, compared with $92.1 million in the prior-year period, as the U.S. school furniture market continued to rebalance following several years of unusual spending patterns.
Operating income was $10.5 million compared with $15.4 million a year earlier. Virco said the result remained above its long-term average for the second quarter.
Gross margin remained strong at 40% during the quarter.
For the first six months, revenue declined 6.1% to $118.2 million from $125.8 million, while operating income declined to $6.9 million from $15.3 million.
Virco attributed part of the slowdown to uncertainty among school administrators around the recently completed budget cycle, which may have led districts to take a more cautious approach to spending.
The company said more recent order trends have shown a modest improvement following approval of new school budgets for the July 2026 through June 2027 period. However, management cautioned that the improvement is occurring during a seasonal low point and is unlikely to materially improve full-year results.
Shipments plus backlog totaled $162.5 million, approximately 2.1% below the comparable prior-year level, while year-to-date gross margin stood at 40.4%.
Virco is also using its balance-sheet strength and U.S.-based manufacturing infrastructure to develop new revenue streams. Management expects related investments to remain within its typical annual capital expenditure budget of approximately $4 million to $6 million.
The board declared a quarterly cash dividend of $0.025 per share, payable October 9, 2026 to shareholders of record on September 18.
KEY QUOTES:
“As the school delivery season becomes more compressed, the response time of our U.S. factories becomes more of a competitive advantage. We can provide superior quality, customization, and speed of service, while also operating with virtually no debt. While this current year will prove to be challenging in comparison to our recent years of record financial performance, our foundation is very strong and we’re actively using that strength to gain market share and develop new customers. None of this would be possible without our highly experienced workforce, 40% of whom have been with Virco for more than 20 years. The collective know-how and skills we nurtured through many hard years of competing against cheap overseas labor may now be paying off. For us, it was never only about the money. Sustainability isn’t just about the environment although our record there is outstanding. It’s also about our neighbors and communities. By keeping good jobs here we supported workers, families, schools, students, and communities. That our effort is now beginning to generate meaningful financial advantage seems only fair. We look forward to sharing our capabilities with public and private schools and many other customers and organizations who may now be in a position to fully appreciate what Virco has to offer.”
Robert A. Virtue, Chairman and Chief Executive Officer of Virco
