Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 31, 2020 | Apr. 21, 2020 | Jul. 31, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | VIRCO MFG CORPORATION | ||
Entity Central Index Key | 0000751365 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 31, 2020 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --01-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Shell Company | false | ||
Entity Public Float | $ 59 | ||
Entity Common Stock, Shares Outstanding | 15,713,549 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 31, 2020 | Jan. 31, 2019 |
Current assets: | ||
Cash | $ 1,150 | $ 738 |
Trade accounts receivables (net of allowance for doubtful accounts of $200 at January 31, 2020 and 2019) | 11,762 | 13,253 |
Other receivables | 57 | 40 |
Income tax receivable | 298 | 175 |
Inventories, net | 43,329 | 47,289 |
Prepaid expenses and other current assets | 1,746 | 1,616 |
Total current assets | 58,342 | 63,111 |
Property, plant and equipment | ||
Land | 3,731 | 3,731 |
Land improvements | 717 | 688 |
Buildings and building improvements | 51,200 | 51,176 |
Machinery and equipment | 110,610 | 108,253 |
Leasehold improvements | 990 | 830 |
Total property, plant and equipment | 167,248 | 164,678 |
Less accumulated depreciation and amortization | 127,351 | 122,758 |
Net property, plant and equipment | 39,897 | 41,920 |
Operating lease right-of-use assets | 21,325 | 0 |
Deferred income tax assets, net | 11,230 | 9,598 |
Other assets | 8,198 | 8,484 |
Total assets | 138,992 | 123,113 |
Current liabilities: | ||
Accounts payable | 10,587 | 17,760 |
Accrued compensation and employee benefits | 6,392 | 4,568 |
Current portion of long-term debt | 878 | 5,504 |
Current portion operating lease liability | 3,654 | 0 |
Other accrued liabilities | 3,607 | 4,293 |
Total current liabilities | 25,118 | 32,125 |
Non-current liabilities: | ||
Accrued self-insurance | 1,410 | 1,190 |
Accrued retirement benefits | 21,310 | 14,487 |
Income tax payable | 70 | 45 |
Long-term debt, less current portion | 15,818 | 15,910 |
Operating lease liability, less current portion | 19,787 | 0 |
Other long-term liabilities | 661 | 2,329 |
Total non-current liabilities | 59,056 | 33,961 |
Commitments and contingencies | ||
Preferred stock: | ||
Authorized 3,000,000 shares, $.01 par value; none issued or outstanding | 0 | 0 |
Common stock: | ||
Authorized 25,000,000 shares, $.01 par value; issued and outstanding 15,713,549 shares in 2020 and 15,541,956 shares in 2019 | 157 | 155 |
Additional paid-in capital | 118,782 | 118,106 |
Accumulated deficit | (49,810) | (52,192) |
Accumulated other comprehensive loss | (14,311) | (9,042) |
Total stockholders’ equity | 54,818 | 57,027 |
Total liabilities and stockholders’ equity | $ 138,992 | $ 123,113 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jan. 31, 2020 | Jan. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivables | $ 200 | $ 200 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 15,713,549 | 15,541,956 |
Common stock, shares outstanding | 15,713,549 | 15,541,956 |
Consolidated Statements of Oper
Consolidated Statements of Operation - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Income Statement [Abstract] | ||
Net sales | $ 191,063 | $ 200,716 |
Costs of goods sold | 119,388 | 133,635 |
Gross profit | 71,675 | 67,081 |
Selling, general and administrative expenses | 65,726 | 64,751 |
Loss (gain) on sale of property, plant & equipment | 34 | (1) |
Operating income | 5,915 | 2,331 |
Pension expense | 726 | 1,257 |
Interest expense, net | 2,462 | 2,191 |
Income (loss) before income taxes | 2,727 | (1,117) |
Income tax expense | 345 | 497 |
Net income (loss) | $ 2,382 | $ (1,614) |
Net income (loss) per common share: | ||
Basic | $ 0.15 | $ (0.10) |
Diluted | $ 0.15 | $ (0.10) |
Weighted average shares outstanding: | ||
Basic | 15,590 | 15,421 |
Diluted | 15,694 | 15,421 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 2,382 | $ (1,614) |
Other comprehensive (loss) income | ||
Pension adjustments (net of tax benefit (expense) $1,840 and ($76) in 2020 and 2019, respectively) | (5,269) | 217 |
Comprehensive loss | $ (2,887) | $ (1,397) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance (in shares) at Jan. 31, 2018 | 15,357,457 | ||||
Balance at Jan. 31, 2018 | $ 58,712 | $ 154 | $ 117,465 | $ (49,648) | $ (9,259) |
Net income (loss) | (1,614) | (1,614) | |||
Pension adjustments, net of tax effect | 217 | 217 | |||
Cash dividend paid | (930) | (930) | |||
Shares vested and others (in shares) | 184,499 | ||||
Shares vested | (266) | $ 1 | (267) | ||
Stock compensation expense | 908 | 908 | |||
Balance (in shares) at Jan. 31, 2019 | 15,541,956 | ||||
Balance at Jan. 31, 2019 | 57,027 | $ 155 | 118,106 | (52,192) | (9,042) |
Net income (loss) | 2,382 | 2,382 | |||
Pension adjustments, net of tax effect | (5,269) | (5,269) | |||
Cash dividend paid | 0 | ||||
Shares vested and others (in shares) | 171,593 | ||||
Shares vested | (246) | $ 2 | (248) | ||
Stock compensation expense | 924 | 924 | |||
Balance (in shares) at Jan. 31, 2020 | 15,713,549 | ||||
Balance at Jan. 31, 2020 | $ 54,818 | $ 157 | $ 118,782 | $ (49,810) | $ (14,311) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders’ Equity (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Pension adjustment tax effects | $ 1,840 | $ (76) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Operating activities | ||
Net income (loss) | $ 2,382 | $ (1,614) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 5,769 | 5,791 |
Non-cash lease expense | 341 | 0 |
Provision for doubtful accounts | 83 | (3) |
Loss (gain) on sale of property, plant and equipment | 34 | (1) |
Deferred income taxes | 209 | 419 |
Stock-based compensation | 924 | 908 |
Defined benefit plan, recognized net loss due to settlements | 0 | 538 |
Amortization of net actuarial loss for pension plans | 776 | 795 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | 1,408 | (1,868) |
Other receivables | (17) | (10) |
Inventories | 3,960 | (5,232) |
Income taxes | (97) | (3) |
Prepaid expenses and other current assets | 215 | (79) |
Accounts payable and accrued liabilities | (6,228) | 2,722 |
Net cash provided by operating activities | 9,759 | 2,363 |
Investing activities | ||
Capital expenditures | (4,216) | (5,395) |
Proceeds from sale of property, plant and equipment | 17 | 3 |
Proceeds for life insurance | 5 | 5 |
Investments in life insurance | (64) | (61) |
Net cash used in investing activities | (4,258) | (5,448) |
Financing activities | ||
Proceeds from long-term debt | 39,770 | 54,711 |
Repayment of long-term debt | (44,488) | (49,978) |
Tax withholding payments on share-based compensation | (246) | (265) |
Payment on deferred financing costs | (125) | (249) |
Cash dividend paid | 0 | (930) |
Net cash (used in) provided by financing activities | (5,089) | 3,289 |
Net increase in cash | 412 | 204 |
Cash at beginning of year | 738 | 534 |
Cash at end of year | 1,150 | 738 |
Supplemental disclosures of cash flow information | ||
Cash paid during the year for interest | 2,462 | 2,191 |
Cash paid during the year for income tax, net of refunds | $ 81 | $ 96 |
Summary of Business and Signifi
Summary of Business and Significant Accounting Policies | 12 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Business and Significant Accounting Policies | Summary of Business and Significant Accounting Policies Business Virco Mfg. Corporation (the “Company”), which operates in one business segment, is engaged in the design, production and distribution of quality furniture for the commercial and education markets. Over 70 years of manufacturing operations have resulted in a wide product assortment. Major products include mobile tables, mobile storage equipment, desks, computer furniture, chairs, activity tables, folding chairs and folding tables. The Company manufactures its products in Torrance, California, and Conway, Arkansas, for sale primarily in the United States. The Company operates in a seasonal business and requires significant amounts of working capital under its credit facility to fund acquisitions of inventory and finance receivables during the summer delivery season. Restrictions imposed by the terms of the Company’s credit facility may limit the Company’s operating and financial flexibility (see Note 3). Principles of Consolidation The consolidated financial statements include the accounts of Virco Mfg. Corporation and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Management Use of Estimates Preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities - and disclosure of contingent assets and liabilities - at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include, but are not limited to, valuation of inventory; deferred tax assets and liabilities; useful lives of property, plant and equipment; liabilities under pension, warranty, self-insurance and environmental claims; and the accounts receivable allowance for doubtful accounts. Actual results could differ from these estimates. Fiscal Year End Fiscal years 2020 and 2019 refer to the fiscal years ended January 31, 2020 and 2019 , respectively. Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk consist principally of accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. Sales to the Company’s recurring customers are generally made on open account with terms consistent with the industry. Credit is extended based on an evaluation of the customer’s financial condition and payment history. Past due accounts are determined based on how recently payments have been made in relation to the terms granted. Amounts are written off against the allowance in the period that the Company determines that the receivable is not collectable. The Company purchases insurance on receivables from certain commercial customers to minimize the Company’s credit risk. The Company does not typically obtain collateral to secure credit risk. Customers with inadequate credit are required to provide cash in advance or letters of credit. The Company does not assess interest on receivable balances. A substantial percentage of the Company’s receivables come from low-risk government entities. No customer exceeded 10% of the Company’s net sales for fiscal years ended January 31, 2020 and 2019. Foreign net sales were approximately 6.4% and 6.7% of the Company’s net sales for fiscal years 2020 and 2019 , respectively. No single customer accounted for more than 10% of the Company’s accounts receivable at January 31, 2020 or 2019 . Because of the short time between shipment and collection, the net carrying value of receivables approximates the fair value for these assets. Cash Cash consists of cash on hand, and the Company has no cash equivalents. Outstanding checks, representing a book overdraft, are classified in accounts payable on the accompanying consolidated balance sheets and in operating activities in the accompanying consolidated statements of cash flows. Fair Values of Financial Instruments The fair values of the Company’s cash, accounts receivable, and accounts payable approximate their carrying amounts due to their short-term nature. Financial assets and liabilities measured at fair value on a recurring basis are classified in one of the three following categories, which are described below: Level 1 — Valuations based on unadjusted quoted prices for identical assets in an active market. Level 2 — Valuations based on quoted prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. Level 3 — Valuations based on inputs that are unobservable and involve management judgment and our own assumptions about market participants and pricing. Financial assets measured at fair value on a recurring basis include assets associated with the Virco Employees Retirement Plan (see Note 4 ). Inventories Inventory is valued at the lower of cost or net realizable value (determined on a first-in, first-out basis) and includes material, labor and factory overhead. The Company maintains valuation allowances to write off estimated slow moving and obsolete inventory to reflect the difference between the lower of cost of inventory and the net realizable value. Allowances for slow moving and obsolete inventory are determined through a physical inspection of the product in connection with a physical inventory, a review of slow-moving product and consideration of active marketing programs. The market for education furniture is traditionally driven by value, not style and the Company has not typically incurred significant obsolescence expenses. If market conditions are less favorable than those anticipated by management, additional allowances may be required. Due to reductions in sales volume in the past years, the Company’s manufacturing facilities are operating at reduced levels of capacity. The Company records the cost of excess capacity as a period expense, not as a component of capitalized inventory valuation. The following table presents an updated breakdown of the Company’s net inventory (in thousands) as of January 31 : 2020 2019 Finished goods $ 15,401 $ 15,908 Work In Process 15,957 18,820 Raw materials 11,971 12,561 Inventories, net $ 43,329 $ 47,289 Property, Plant and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation and amortization are computed on the straight-line method for financial reporting purposes based upon the following estimated useful lives: Land improvements 5 to 25 years Buildings and building improvements 5 to 40 years Machinery and equipment 3 to 10 years Leasehold improvements shorter of lease or useful life The Company capitalizes the cost of betterments that extend the life of an asset. Repairs and maintenance that do not extend the life of an asset are expensed as incurred. Repair and maintenance expense were $1,960,000 and $2,145,000 for fiscal years ended January 31, 2020 and 2019 , respectively. Property, plant and equipment purchased during the year that remains unpaid as of January 31, 2020 and 2019 was $173,000 and $593,000 , respectively. The Company has established asset retirement obligations related to leased manufacturing facilities in accordance with Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) Topic 410, Asset Retirement and Environmental Obligations . Accrued asset retirement obligations are recorded at net present value and discounted over the life of the lease. Asset retirement obligations, included in other non-current liabilities were $186,000 and $179,000 at January 31, 2020 and 2019 , respectively. January 31, 2020 2019 Balance at beginning of period $ 179,000 $ 170,000 Decrease in obligation — — Accretion expense 7,000 9,000 Balance at end of period $ 186,000 $ 179,000 Impairment of Long-Lived Assets An impairment loss is recognized in the event facts and circumstances indicate the carrying amount of a long-lived asset may not be recoverable, and an estimate of future undiscounted cash flows is less than the carrying amount of the asset. Impairment is recorded based on the excess of the carrying amount of the impaired asset over the fair value. Generally, fair value represents the Company’s expected future cash flows from the use of an asset or group of assets, discounted at a rate commensurate with the risks involved. There were no impairments for fiscal years ended January 31, 2020 and 2019 . Net Income (Loss) per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding. Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding plus the dilutive effect of stock award grants. The following table sets forth the computation of basic and diluted loss per share: January 31, 2020 2019 (In thousands, except per share) Numerator Net income (loss) $ 2,382 $ (1,614 ) Denominator Weighted-average shares — basic 15,590 15,421 Dilutive effect of common stock equivalents from equity incentive plans 104 — Weighted-average shares — diluted (a) $ 15,694 $ 15,421 Net income (loss) per common share Basic $ 0.15 $ (0.10 ) Diluted 0.15 (0.10 ) (a) For fiscal year 2019, approximately 149,000 shares of common stock equivalents were excluded in the computation of diluted net income per share, as the effect would be anti-dilutive since the Company reported a net loss. Environmental Costs The Company is subject to numerous environmental laws and regulations in the various jurisdictions in which it operates that (a) govern operations that may have adverse environmental effects, such as the discharge of materials into the environment, as well as handling, storage, transportation and disposal practices for solid and hazardous wastes, and (b) impose liability for response costs and certain damages resulting from past and current spills, disposals or other releases of hazardous materials. Normal, recurring expenses related to operating the Company's factories in a manner that meets or exceeds environmental laws and regulations are matched to the cost of producing inventory. Despite our efforts to comply with existing laws and regulations, compliance with more stringent laws or regulations or stricter interpretation of existing laws, may require additional expenditures by us, some of which may be material. We reserve amounts for such matters when expenditures are probable and reasonably estimable. Costs incurred to investigate and remediate environmental waste are expensed, unless the remediation extends the useful life of the assets employed at the site. At January 31, 2020 and 2019 , the Company had not capitalized any remediation costs and had not recorded any amortization expense in fiscal years 2020 and 2019 . Advertising Costs Advertising costs are expensed in the period during which the advertising space is run. Selling, general and administrative expenses include advertising costs for the years ended January 31, 2020 and 2019 of $1,030,000 and $1,134,000 , respectively, and are expensed as incurred. Prepaid advertising costs reported as a prepaid asset on the accompanying consolidated balance sheet at January 31, 2020 and 2019 , were $300,000 and $254,000 , respectively. Product Warranty Expense The Company provides a product warranty on most products. The standard warranty offered on products sold through January 31, 2013 is ten years. Effective February 1, 2014 through December 31, 2016, the Company modified its warranty to a limited lifetime warranty. Effective January 1, 2017, the Company modified the warranty offered to provide specific warranty periods by product component, with no warranty period longer than ten years. The Company generally provides that customers can return a defective product during the specified warranty period following purchase in exchange for a replacement product or the repair of the product by the Company at no charge to the customer. The Company determines whether replacement or repair is appropriate in each circumstance. The Company uses historic data to estimate appropriate levels of warranty reserves. Because product mix, production methods and raw material sources change over time, historic data may not always provide precise estimates for future warranty expense. The Company recorded warranty reserves of $800,000 and $700,000 as of January 31, 2020 and 2019 , respectively, as other long-term liabilities in the accompanying consolidated balance sheets. The current portion of the warranty reserve was $325,000 as of January 31, 2020 and 2019 and included in other accrued liabilities in the accompanying consolidated balance sheets. Self-Insurance In fiscal 2020 and 2019 , the Company was self-insured for product and general liability losses up to $250,000 per occurrence, workers’ compensation losses up to $250,000 per occurrence, and auto liability up to $50,000 per occurrence. Actuaries assist the Company in determining its liability for the self-insured component of claims, which have been discounted to their net present value utilizing a discount rate of 4.00% in fiscal 2020 and 4.00% in fiscal 2019 . Stock-Based Compensation Plans The Company recognizes stock-based compensation cost for shares that are expected to vest, on a straight-line basis, over the requisite service period of the award. Virco issued a 10% stock dividend or 3/2 stock split every year beginning in 1983 through 2003. Although the stock dividend had no cash consequences to the Company, the accounting methodology required for 10% dividends affected the equity section of the balance sheet. When the Company recorded a 10% stock dividend, 10% of the market capitalization of the Company on the date of the declaration was reclassified from retained earnings to additional paid-in capital. During the period from 1983 through 2003, the cumulative effect of the stock dividends has been to reclassify over $122 million from retained earnings to additional paid-in capital. The equity section of the balance sheet on January 31, 2020 reflects additional paid-in capital of approximately $119 million and accumulated deficit of approximately $50 million . Other than the losses incurred during 2004-2006, 2011-2014 and 2018-2019, the accumulated deficit is a result of the accounting reclassification and is not the result of accumulated losses. Accumulated Other Comprehensive (Loss) Income, Net of Tax The following table summarizes the changes in accumulated balances of other comprehensive (loss) income for the years ended January 31, 2020 and 2019 : January 31, (in thousands) 2020 2019 Balance as of beginning of year $ (9,042 ) $ (9,259 ) Other comprehensive (loss) income before reclassifications (6,045 ) (1,116 ) Amounts reclassified from AOCI 776 1,333 Net current period other comprehensive income (5,269 ) 217 Balance as of end of year $ (14,311 ) $ (9,042 ) The reclassifications out of accumulated other comprehensive (loss) income of $776,000 and $1,333,000 for the years ended January 31, 2020 and 2019 , respectively, related to amortization of actuarial losses and settlements. Revenue Recognition The Company manufactures, markets and distributes a wide variety of school and office furniture to wholesalers, distributors, educational institutions and governmental entities. Revenue is recorded for promised goods or services when control is transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company's sales generally involve a single performance obligation to deliver goods pursuant to customer purchase orders. Prices for our products are based on published price lists and customer agreements. The Company has determined that the performance obligations are satisfied at a point in time when the Company completes delivery per the customer contract. The majority of sales are free on board ("FOB") destination where the destination is specified per the customer contract and may include delivering the furniture into the classroom, school site or warehouse. Sales of furniture that are sold FOB factory are typically made to resellers of our product who in turn provide logistics to the ultimate customer. Once a product has been delivered per the shipping terms, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the asset. The Company considers control to have transferred upon shipment or delivery in accordance with shipping terms because the Company has a present right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset, and the customer has significant risks and rewards of ownership of the asset. Sales are recorded net of discounts, sales incentives and rebates, sales taxes and estimated returns and allowances. The Company offers sales incentives and discounts through various regional and national programs to our customers. These programs include product rebates, product returns allowances and trade promotions. Variable consideration for these programs is estimated in the transaction price at contract inception based on current sales levels and historical experience using the expected value method, subject to constraint. The Company generates revenue primarily by manufacturing and distributing products through resellers and direct-to-customers. Control transfers to both resellers and direct customers at a point in time when the delivery process is complete as determined by the corresponding shipping terms. Therefore, we do not consider them to be meaningfully different revenue streams given similarities in the nature of the products, performance obligation and distribution processes. Sales are predominately in the United States and to a similar class of customer. We do not manage or evaluate the business based on product line or any other discernable category. For product produced by and sourced from third parties, management has determined that it is the principal in all cases, since it (i) bears primary responsibility for fulfilling the promise to the customer; (ii) bears inventory risk before and/or after the good or service is transferred to the customer; and (iii) has discretion in establishing the price for the sale of good or service to the customer. Delivery Costs For the fiscal years ended January 31, 2020 and 2019 , shipping and classroom delivery costs of approximately $20,552,000 , $22,150,000 , respectively, were included in selling, general and administrative expenses in the accompanying consolidated statements of operations. Accounting for Income Taxes The Company recognizes deferred income taxes under the asset and liability method of accounting for income taxes in accordance with the provisions of FASB ASC Topic 740, Accounting for Income Taxes . Deferred income taxes are recognized for differences between the financial statement and tax basis of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance against deferred tax assets is recorded when it is determined to be more likely than not that the asset will not be realized. |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Jan. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Updates : The Company adopted Accounting Standards Codification (“ASC”) 842 - Leases , as of February 1, 2019, using transition relief to the modified retrospective approach. The transition relief to the modified retrospective approach allows the recording of existing leases at adoption and recognizing a cumulative-effect adjustment to the opening balance of retained earnings on the adoption date. As a result, the Company did not restate comparative periods in transition to ASC 842 and instead reported comparative periods under ASC 840 - Leases . In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. Further, the Company did not elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of right-of-use (“ROU”) assets. The Company has elected to account for leases with an original term of 12 months or less that do not contain a purchase option as short-term leases. Adoption of the new standard resulted in the recording of ROU assets and lease liabilities of approximately $23.9 million and $25.6 million respectively, as of February 1, 2019. The difference between the ROU assets and lease liabilities was due to previous deferred rent balances that were removed and offset against the ROU asset under ASC 842. The adoption of this standard did not materially impact our consolidated statement of operations, shareholders’ equity or cash flows. See Note 7 for additional disclosures. The Company determines if an arrangement is a lease at inception. Operating leases in which the Company is the lessee are included in operating lease ROU assets and operating lease liabilities in the consolidated balance sheet. The Company does not have any finance leases, as a lessee, and no long-term leases for which it is the lessor. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the reasonably certain lease term. As most of the Company’s leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date, such as the lease term and Company specific risk premium, in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and reduced by lease incentives, such as tenant improvement allowances. The Company’s lease terms include options to extend or terminate the lease only when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has elected the practical expedient to account for non-lease components and the lease components to which they relate, as a single lease component for the following asset classes: (i) Buildings, (ii) Equipment, and (iii) Automobiles. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock compensation ( Topic 718 ) which simplifies several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Some of the areas for simplification apply only to nonpublic entities. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers . The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company adopted this ASU effective February 1, 2019. The adoption of the standard did not materially impact the Condensed Consolidated Statements of Operations, Comprehensive Income or Cash Flows and Statement of Stockholders' Equity and Comprehensive Income (Loss). Recently Issued Accounting Updates But Not Yet Adopted: In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes . This update simplifies various aspects related to accounting for income taxes, removes certain exceptions to the general principles in ASC 740, and clarifies and amends existing guidance to improve consistent application. The new standard becomes effective for the Corporation in fiscal 2021. The Corporation is currently evaluating the effect the standard will have on consolidated financial statements and related disclosures. In August 2018, the FASB issued Accounting Standards Update No. 2018-14 (ASU 2018-14 ), Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20) , which amends the current disclosure requirements regarding defined benefit pensions and other post retirement plans , and allows for the removal of certain disclosures, while adding certain new disclosure requirements. This standard is effective for fiscal years beginning after December 15, 2020 and allows for early adoption. We do not expect this new standard to have a significant impact to our disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaces the incurred loss impairment methodology for measuring and recognizing credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The adoption date, as modified by the recently issued ASU 2019-10 discussed below, will be for the fiscal year ending after December 15, 2022 and interim periods therein. The Company does not believe there will be a material impact to the financial statements as a result of adopting this ASU. In November 2019, the FASB issued ASU 2019-10, Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates . ASU 2019-10 moves the effective date for certain previously issued amendments to later dates, depending on the filing status of the respective entity. Specifically, due to the amendment and the Company’s status as a smaller reporting company, the new effective dates for relevant previously issued amendments not yet adopted by the Company relate to ASU 2016-13 as described above. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement ( Topic 820 ) which modifies the disclosure requirements of fair value measurements in Topic 820, Fair Value Measurement . For public companies the ASU removes disclosure requirements for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation process for Level 3 fair value measurements. The ASU modifies the disclosure requirements for investments in certain entities that calculate net asset value and clarifies that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The ASU adds the disclosure requirement for changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2019 including interim periods within that fiscal year. Early adoption is permitted. The Company does not believe there will be a material impact to the financial statements as a result of adopting this ASU. Other recently issued accounting updates are not expected to have a material impact on the Company’s consolidated financial statements. |
Debt
Debt | 12 Months Ended |
Jan. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Outstanding balances (in thousands) for the Company’s long-term debt were as follows: January 31, 2020 2019 Revolving credit line $ 9,969 $ 14,858 Other 6,727 6,556 Total debt 16,696 21,414 Less current portion 878 5,504 Non-current portion $ 15,818 $ 15,910 The Company has a Revolving Credit and Security Agreement (the “Credit Agreement”) with PNC Bank, National Association, as administrative agent and lender (“PNC”). The credit agreement has been amended twenty times since it’s origination in 2011 through fiscal 2020 which, among other things, extended the maturity date of the Credit Agreement for three years until March 19, 2023. The Credit Agreement is an asset-based line of credit that is subject to a borrowing base limitation and generally provides for advances of up to 85% of eligible accounts receivable, plus a percentage equal to the lesser of 60% of the value of eligible inventory or 85% of the liquidation value of eligible inventory, plus $15,000,000 from January 1 through July 31 of each year, minus undrawn amounts of letters of credit and reserves. The Credit Agreement is secured by substantially all of the Borrowers' personal property and certain of the Borrowers' real property. The principal amount outstanding under the Credit Agreement and any accrued and unpaid interest is due no later than March 19, 2023, and the Credit Agreement is subject to certain prepayment penalties upon earlier termination of the Credit Agreement. Prior to the maturity date, principal amounts outstanding under the Credit Agreement may be repaid and reborrowed at the option of the Borrowers without premium or penalty, subject to borrowing base limitations, seasonal adjustments and certain other conditions. The Credit Agreement bears interest, at the Borrowers' option, at either the Alternate Base Rate (as defined in the Credit Agreement) or the Eurodollar Currency Rate (as defined in the Credit Agreement), in each case plus an applicable margin. The applicable margin for Alternate Base Rate loans is a percentage within a range of 0.75% to 1.25% , and the applicable margin for Eurodollar Currency Rate loans is a percentage within a range of 1.75% to 2.25% , in each case based on the adjusted EBITDA (as defined in the Credit Agreement, “EBITDA”) of the Borrowers at the end of each fiscal quarter and may be increased at PNC's option by 2.0% during the continuance of an event of default. Accrued interest with respect to principal amounts outstanding under the Credit Agreement is payable in arrears on a monthly basis for Alternative Base Rate loans, and at the end of the applicable interest period but at most every three months for Eurodollar Currency Rate loans. The interest rate at January 31, 2020 was 6.00% . In March 2019, the Company entered into Amendment No. 19 which, among other things, (i) increased the Maximum Revolving Advance Amount to $65,000,000 with seasonal adjustments to the credit limit and subject to borrowing base limitations, (ii) increased seasonal advance to $15,000,000 from January to July of each year, (iii) increased equipment loan to $2,000,000 , (iv) to reduce borrowings under the line to less than or equal to $10,000,000 for a period of 30 consecutive days during the fourth quarter of each fiscal year (“clean-down provision”). In connection with Amendment No. 19, the Borrowers also agreed to pay to PNC Bank a non-refundable fee of $24,000 . The clean-down provision allows the Company to maintain a minimum outstanding balance to be carried on an uninterrupted period extending beyond one year and ultimately due at the schedule maturity date in March 2023. The Company believes that normal operating cash flow will allow it to meet the clean-down provision requirement with no adverse impact on the Company's liquidity. Events of default (subject to certain cure periods and other limitations) under the Credit Agreement include, but are not limited to, (i) non-payment of principal, interest or other amounts due under the Credit Agreement, (ii) the violation of terms, covenants, representations or warranties in the Credit Agreement or related loan documents, (iii) any event of default under agreements governing certain indebtedness of the Borrowers and certain defaults by the Borrowers under other agreements that would materially adversely affect the Borrowers, (iv) certain events of bankruptcy, insolvency or liquidation involving the Borrowers, (v) judgments or judicial actions against the Borrowers in excess of $250,000 , subject to certain conditions, (vi) the failure of the Company to comply with Pension Benefit Plans (as defined in the Credit Agreement), (vii) the invalidity of loan documents pertaining to the Credit Agreement, (viii) a change of control of the Borrowers and (ix) the interruption of operations of any of the Borrowers' manufacturing facilities for five consecutive days during the peak season or fifteen consecutive days during any other time, subject to certain conditions. For the year ended January 31, 2020, the Company was in compliance with the covenants. For the year ended January 31, 2019, the Company was in violation of the minimum fixed charge coverage ratio resulting in an Event of Default. In April 2019, the Company entered into Amendment No. 20 which, among other things, waived a covenant violation for the fourth quarter of fiscal 2019, amended the minimum EBITDA covenant and the fixed charge coverage ratio for fiscal 2020, and eliminated the Company’s ability to pay dividends or repurchase stock commencing on February 1, 2019. The fixed charge coverage ratio is as follows: (i) for the consecutive two fiscal quarter period ended July 31, 2019, 2.25 to 1.00, and (ii) for each consecutive four fiscal quarter period of Borrowers ending thereafter, 1.10 to 1.00. Minimum EBITDA for the three consecutive fiscal month period ended on April 30, 2019, may not be less than (negative) $5,000,000 . In addition, certain restrictions were placed upon the Company’s capital expenditures limiting the amount: (a) in the first fiscal quarter ended April 30, 2019 in an aggregate amount in excess of $900,000 , (b) in the consecutive two fiscal quarter periods ended July 31, 2019 in an aggregate amount in excess of $1,900,000 , (c) in the consecutive three fiscal quarter period ended October 31, 2019 in an aggregate amount in excess of (i) $3,900,000 , if an only if, the Borrowers’ EBITDA for the consecutive two fiscal quarter period ended July 31, 2019 exceeds $8,500,000 or (ii) $2,900,000 if Borrowers’ EBITDA for such period is less than or equal to $8,500,000 and (d) in the consecutive four fiscal quarter period ended January 31, 2020 or any fiscal year thereafter, in an aggregate amount for all Borrowers in excess of $8,000,000 . In connection with Amendment No. 20 the Borrowers also agreed to pay to PNC Bank a non-refundable fee of $125,000 . As of January 31, 2020, the Company was in compliance with these covenants. Pursuant to the Credit Agreement, substantially all of the Borrowers' accounts receivable are automatically and promptly swept to repay amounts outstanding under the Credit Agreement upon receipt by the Borrowers. Due to this automatic liquidating nature of the Credit Agreement, if the Borrowers breach any covenant, violate any representation or warranty or suffer a deterioration in their ability to borrow pursuant to the borrowing base calculation, the Borrowers may not have access to cash liquidity unless provided by PNC at its discretion. In addition, certain of the covenants and representations and warranties set forth in the Credit Agreement contain limited or no materiality thresholds, and many of the representations and warranties must be true and correct in all material respects upon each borrowing, which the Borrowers expect to occur on an ongoing basis. There can be no assurance that the Borrowers will be able to comply with all such covenants and be able to continue to make such representations and warranties on an ongoing basis. The Company's line of credit with PNC is structured to provide seasonal credit availability during the Company's peak summer season. Approximately $19,936,000 was available for borrowing as of January 31, 2020 . As of January 31, 2020 , long-term debt repayments are approximately as follows (in thousands): Year ending January 31, 2021 $ 878 2022 10,967 2023 229 2024 238 2025 248 Thereafter 4,136 Management believes that the carrying value of debt approximated fair value at January 31, 2020 and 2019 , as all of the long-term debt bears interest at variable rates based on prevailing market conditions. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Jan. 31, 2020 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans Pension Plans The Company maintains two defined benefit pension plans, the Virco Employees Retirement Plan (“Employee Plan”), and the Virco Important Performers Retirement Plan (“VIP Plan”). The annual measurement date for both plans is January 31. The Company and its subsidiaries cover all employees hired prior to December 31, 2003 under the Employee Plan, which is a qualified noncontributory defined benefit retirement plan. Benefits under the Employee Plan are based on years of service and career average earnings. Benefit accruals under the Employee Plan were frozen effective December 31, 2003. All benefits were fully vested on January 31, 2020 and 2019 . The Company also provides a supplementary retirement plan for certain key employees, the VIP Plan. The VIP Plan provides a benefit up to 50% of average compensation for the last five years in the VIP Plan offset by benefits earned under the Employee Plan. Benefit accruals under the VIP Plan were frozen effective December 31, 2003. Substantially all assets, consisting of life insurance contracts, securing the VIP Plan are held in a rabbi trust. The cash surrender values of the life insurance policies are included in other assets and money market funds in the accompanying consolidated balance sheets. The cash surrender values of the life insurance policies securing the VIP Plan were $3,384,000 and $3,469,000 at January 31, 2020 and 2019 , respectively. Death benefits payable under life insurance policies held by the Plan were approximately $8,919,000 and $9,102,000 at January 31, 2020 and 2019 , respectively. Accounting policy regarding pensions requires management to make complex and subjective estimates and assumptions relating to amounts which are inherently uncertain. Three primary economic assumptions influence the reported values of plan liabilities and pension costs. The Company takes the following factors into consideration: discount rate, assumed rate of return and rate of increase in compensation. The discount rate represents an estimate of the rate of return on a portfolio of high-quality, fixed-income securities that would provide cash flows that match the expected benefit payment stream from the plans. When setting the discount rate, the Company utilizes a spot-rate yield curve developed from high-quality bonds currently available which reflects changes in rates that have occurred over the past year. This assumption is sensitive to movements in market rates that have occurred since the preceding valuation date, and therefore, may change from year to year. Discount rate ranges for the Employee Plan and the VIP Plan 3.0% - 3.05% and 3.75% - 4.0% at January 31, 2020 and 2019, respectively. Because the Company’s future benefit accruals for both benefit plans were frozen in 2013, the compensation increase assumption had no impact on pension expense, accumulated benefit obligation or projected benefit obligation for the period ended January 31, 2020 or 2019 . The assumed rate of return on plan assets represents an estimate of long-term returns available to investors who hold a mixture of stocks, bonds and cash equivalent securities. When setting its expected return on plan asset assumptions, the Company considers long-term rates of return on various asset classes (both historical and forecasted, using data collected from various sources generally regarded as authoritative) in the context of expected long-term average asset allocations for its defined benefit pension plan. The Company maintains a trust for and funds the pension obligations for the Employee Plan. The Board of Directors appoints a Retirement Plan Committee that establishes a policy for investment and funding strategies. Approximately 50% of the trust assets are managed by investment advisors and held in common trust funds with the balance managed by the Retirement Plan Committee. The Retirement Plan Committee has established target asset allocations for its investment advisors, who invest the trust assets in a variety of institutional collective trust funds. The Company’s investment advisors have developed a funding strategy that moves fund asset allocation from equity and other investments to fixed income instruments designed to mirror the changes in discount rates as the Plan becomes more fully funded. At January 31, 2020 , approximately 12% of the trust assets were held in these investments. The Retirement Plan Committee receives quarterly reports addressing investment returns, funded status of the plan and progress on the glidepath to fully funded status from the investment advisors and meets periodically with them to discuss investment performance. At January 31, 2020 and 2019 , the amount of the plan assets invested in bond or short-term investment funds was 16% and 16% , respectively, and the balance of the trust was held in equity funds or other investments. The trust does not hold any Company stock. It is the Company's policy to contribute adequate funds to the trust accounts to cover benefit payments under the VIP Plan and to maintain the funded status of the Employee Plan at a level which is adequate to avoid significant restrictions to the Employee Plan under the Pension Protection Act of 2006. Contributions to the Qualified Plan Trust and benefit payments under the VIP Plan totaled $954,000 in fiscal 2020 and $1,080,000 in fiscal 2019. Contributions during fiscal 2021 will depend upon actual investment results and benefit payments but are anticipated to be approximately $0.6 million . At January 31, 2020 , accumulated other comprehensive loss of approximately $14.3 million , net of tax, is attributable to the pension plans. The Company does not anticipate making any significant changes to the pension assumptions in the near future. If the Company were to have used different assumptions in the fiscal year ended January 31, 2020, a 1% reduction in investment return would have increased expense by approximately $221,000 , a 1% change in the rate of compensation increase would have no impact, and a 1% reduction in the discount rate would have increased expense by $167,000 . The following tables set forth (in thousands) the combined funded status of the Company’s pension plans at January 31, 2020 and 2019 : Combined Employee Retirement Plans 1/31/2020 1/31/2019 Change in Benefit Obligation Benefit obligation at beg. of year $ 36,299 $ 40,181 Service cost — — Interest cost 1,382 1,459 Participant contributions — — Amendments — — Actuarial losses (gains) 8,280 (2,044 ) Plan settlement — (2,176 ) Benefits paid (2,669 ) (1,121 ) Benefit obligation at end of year $ 43,292 $ 36,299 Change in Plan Assets Fair value at beg. of year $ 23,527 $ 27,259 Actual return on plan assets 1,806 (1,557 ) Company contributions 990 1,122 Settlements — (2,176 ) Benefits paid (2,669 ) (1,121 ) Fair value at end of year $ 23,654 $ 23,527 Funded Status Unfunded status of the plans $ (19,638 ) $ (12,772 ) Amounts Recognized in Statement of Financial Position Current liabilities $ (314 ) $ (322 ) Non-current liabilities (19,324 ) (12,450 ) Accrued benefit cost $ (19,638 ) $ (12,772 ) Amounts Recognized in Statement of Financial Position and Operations Accrued benefit liability (19,638 ) (12,772 ) Accumulated other compensation loss 15,427 8,319 Net amount recognized $ (4,211 ) $ (4,453 ) Items not yet Recognized as a Component of Net Periodic Pension Expense, Included in AOCI Unrecognized net actuarial loss $ 15,427 $ 8,319 Unamortized prior service costs — — Net initial asset recognition — — $ 15,427 $ 8,319 Combined Employee Retirement Plans 1/31/2020 1/31/2019 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income Net loss $ 7,885 $ 1,039 Prior service cost — — Amortization of loss (776 ) (1,333 ) Amortization of prior service cost (credit) — — Amortization of initial asset — — Total recognized in other comprehensive income (loss) $ 7,109 $ (294 ) Items to be Recognized as a Component of Periodic Pension Cost for next fiscal year Prior service cost $ — $ — Net actuarial loss 1,872 706 $ 1,872 $ 706 Supplemental Data Projected benefit obligation $ 43,292 $ 36,299 Accumulated benefit obligation 43,292 36,299 Fair value of plan assets 23,654 23,527 Components of Net Cost Service cost $ — $ — Interest cost 1,382 1,459 Expected return on plan assets (1,432 ) (1,535 ) Amortization of transition amount — — Recognized (gain) loss due to settlement — — Amortization of prior service cost — — Recognized net actuarial loss 776 1,333 Benefit cost $ 726 $ 1,257 Estimated Future Benefit Payments FYE 01-31-2021 $ 6,114 FYE 01-31-2022 2,992 FYE 01-31-2023 2,641 FYE 01-31-2024 2,549 FYE 01-31-2025 3,067 FYE 01-31-2026 to 2030 11,960 Total $ 29,323 Weighted Average Assumptions to Determine Benefit Obligations at Year-End Discount rate 3.00% - 3.05% 3.75% - 4.0% Rate of compensation increase N/A N/A Weighted Average Assumptions to Determine Net Periodic Pension Cost Discount rate 4.10% 4.25% Expected return on plan assets 6.50% 6.50% Rate of compensation increase N/A N/A The Employee Plan held no Level 2 or 3 investments at January 31, 2020 and 2019. The following table sets for the fair value of the Level 1 investments for the Employee Plan as of January 31, 2020 and 2019 (in thousands): Fair Value Measurements of Plan Assets Employee Plan 1/31/2020 1/31/2019 Level 1 Measurement Common Stock 10,080 9,345 Principal Money Market 799 — PNC Govt Money Fund 175 630 Vanguard INTM Term Investment 250 283 Vanguard LT Investment 1,161 1,304 Ishares Russell 2000 1,560 1,672 Ishares Russell MID-CAP 1,850 1,890 Ishares Emerging Markets 1,103 1,130 Ishares MCSI RAFE 1,577 1,534 Ishares S&P Index 2,252 2,895 Vanguard INTM Term Treasury 250 281 Vanguard LT Treasury 1,183 1,279 Total Level 1 Investments $ 22,240 $ 22,243 In addition to the holdings above, the Employee Plan has a holding in a mutual fund investment, Managed Investment Fund. The mutual fund investment is valued using the net asset value (“NAV”) as a practical expedient and is not required to be categorized in the fair value hierarchy table. The total fair value of this investment was $1,414,000 and $1,284,000 as of January 31, 2020 and January 31, 2019, respectively, and is not included in the table above. In relation to this investment, there is no unfunded commitments and the shares can be redeemed on a daily basis with minimal restrictions. Events that may lead to a restriction to transact with the fund is not considered probable. 401(k) Retirement Plan The Company’s retirement plan, which covers all U.S. employees, allows participants to defer from 1% to 75% of their eligible compensation through a 401(k)-retirement program. Through December 31, 2001, the plan included an employee stock ownership component. The plan continues to include Virco stock as one of the investment options. At January 31, 2020 and 2019 , the plan held 706,654 shares and 648,565 shares of the Company’s common stock, respectively. Effective January 1, 2018 , the Company initiated an employer match. For the fiscal years ended January 31, 2020 and 2019 , the compensation costs incurred for employer match was $765,000 and $738,000 , respectively. Life Insurance The Company provided post-retirement life insurance to certain retired employees under the Dual Option Life Insurance Plan (the "Plan"). Effective January 2004, the Company terminated this plan for active employees. The Company has purchased split-dollar life insurance on the lives of the remaining covered participants. Death benefits due to participants are approximately $2,250,000 . Cash surrender values of these policies, which are included in other assets in the accompanying consolidated balance sheets, were $1,906,000 and $2,098,000 at January 31, 2020 and 2019 , respectively. Death benefits payable under the policies were approximately $3,902,000 and $4,256,000 at January 31, 2020 and 2019 , respectively. Death benefits received under the Plan in excess of the benefit obligation will be retained in the trust and used to secure and fund benefits payable under the VIP Pension Plan. The Company maintains a rabbi trust to hold assets related to the Dual Option Life Insurance Plan. All assets securing this plan are held in the rabbi trust. The following sets forth the Company's change in death benefits payable during the years ended January 31, 2020 and 2019 : 1/31/2020 1/31/2019 Liability beginning of year $ 2,037,000 $ 2,088,000 Accretion expense 49,000 49,000 Death benefits paid (100,000 ) (100,000 ) Liability end of year $ 1,986,000 $ 2,037,000 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jan. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | Stock-Based Compensation Stock Incentive Plans The Company's has one stock plan, the 2011 Employee Stock Incentive Plan (the “2011 Plan”). Under the 2011 Plan, the Company may grant an aggregate of 1,000,000 shares to its employees and non-employee directors in the form of stock options or awards. Restricted stock awards granted under the 2011 Plan are expensed ratably over the vesting period of the awards. The Company determines the fair value of its restricted stock awards and related compensation expense as the difference between the market value of the awards on the date of grant less the exercise price of the awards granted. There were 547,385 awards granted and 223,555 awards were vested during fiscal 2020 . As of January 31, 2020 , there were approximately 804,892 awards available for future issuance under the 2011 Plan. Accounting for the Plans A summary of the Company’s restricted stock unit awards activity, and related information for the following years ended January 31, is as follows: 2020 2019 Restricted stock units Weighted- Average Exercise Price Restricted stock units Weighted- Average Exercise Price Outstanding at beginning of year 501,155 $ 4.44 692,404 $ 4.25 Granted 547,385 4.38 55,555 4.49 Exercised (223,555 ) 4.45 (226,804 ) 4.63 Forfeited (84,000 ) 4.51 (20,000 ) 4.01 Outstanding at end of year 740,985 4.54 501,155 4.44 Weighted-average fair value of restricted stock units granted during the year 4.38 4.49 The aggregate fair value of restricted stock awards vested during fiscal years 2020 and 2019 was $994,820 and $1,050,103 , respectively. The Company recognized compensation expense, net of forfeitures, for the restricted stock awards of $924,000 and $907,000 for fiscal 2020 and 2019, respectively. The Company records forfeitures as incurred. The weighted-average grant-date fair value of restricted stock awards is the quoted market price of the Company’s common stock on the date of grant, as shown in the table above. The weighted-average grant-date fair value of restricted stock awards granted in fiscal 2020 and 2019 was $4.38 per share and $4.49 per share, respectively. As of January 31, 2020, there was $2.7 million of total unrecognized compensation expense related to restricted stock awards. That expense is expected to be recognized over a weighted-average period of 2.92 years . To satisfy employee minimum statutory tax withholding requirements for restricted stock awards that vest, the Company withholds and retires a portion of the vesting common shares, unless an employee elects to pay cash. In fiscal 2020 and 2019, the Company withheld 55,792 and 57,456 common shares, respectively, with a total value of approximately $0.3 million each year. These amounts are presented as a cash outflow from financing activities in the accompanying consolidated statement of cash flows. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax expense for the last two years is reconciled to the statutory federal income tax rates of 21% for the tax years ended January 31, 2020 and 2019, respectively, as follows (in thousands): 2020 2019 Statutory $ 585 $ (235 ) State taxes (net of federal tax) 400 186 Change in valuation allowance (573 ) 831 State rate adjustment (291 ) (222 ) Change in unrecognized tax benefits 20 1 Stock Compensation (28 ) (46 ) Tax cuts and jobs act — (15 ) Expirations of attributes 345 28 Permanent differences (17 ) 8 Return to provision (96 ) (39 ) Income tax expense $ 345 $ 497 Significant components of the expense for income taxes attributed to continuing operations are as follows for the years ended January 31 (in thousands): 2020 2019 Current Federal $ — $ (24 ) State 136 102 136 78 Deferred Federal 442 (247 ) State 340 (165 ) 782 (412 ) Change in valuation allowance (573 ) 831 209 419 Income tax expense $ 345 $ 497 Deferred tax assets and liabilities are comprised of the following as of January 31 (in thousands): 2020 2019 Deferred tax assets Accrued vacation and sick leave $ 1,264 $ 892 Retirement plans 5,448 2,748 Insurance reserves 443 381 Warranty 207 182 Net operating loss carryforwards 3,658 5,303 Right of use liabilities 6,067 — Inventory 1,175 1,320 Business interest expense limitation 224 540 Other 301 765 $ 18,787 $ 12,131 Deferred tax liabilities Tax in excess of book depreciation $ (802 ) $ (720 ) Right of use assets (5,519 ) — Other (53 ) (57 ) $ (6,374 ) $ (777 ) Valuation allowance (1,183 ) (1,756 ) Net long term deferred tax asset $ 11,230 $ 9,598 In assessing the realizability of deferred tax assets, the Company considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income or reversal of deferred tax liabilities during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company has a valuation allowance of $1,183,000 against certain state deferred tax assets that the Company does not believe it is more-likely-than-not to realize. At January 31, 2020 , the Company has net operating loss carryforwards of approximately $9,499,000 for federal and $26,098,000 for state income tax purposes, expiring at various dates through January 31, 2039. The following table summarizes the activity related to our gross unrecognized tax benefits for the years ended January 31 (in thousands): 2020 2019 Balances as of February 1, $ 38 $ 38 Increases related to prior year tax positions 8 — Decreases related to prior year tax positions — (2 ) Increases related to current year tax positions 18 8 Decreases relating to settlements with taxing authorities — — Decreases related to lapsing of statute of limitations (4 ) (6 ) Balance as of January 31, $ 60 $ 38 At January 31, 2020 , the Company’s unrecognized tax benefits associated with uncertain tax positions were $60,000 , of which $47,000 if recognized, would favorably affect the effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense which is consistent with the recognition of the items in prior reporting. The Company had recorded a liability for interest and penalties related to unrecognized tax benefits of $10,000 at January 31, 2020 , and $6,000 at January 31, 2019 . The years ended January 31, 2016 and subsequent years remain open for examination by the IRS and state tax authorities. The Company is currently under IRS examination for fiscal year ended January 31, 2016. The Company is not currently under state examinations. The specific timing of when the resolution of each tax position will be reached is uncertain. As of January 31, 2020 , it is reasonably possible that unrecognized tax benefits will decrease by $5,000 within the next 12 months due to the expiration of the statute of limitations. The Tax Cuts and Jobs Act (“TCJA”) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate to 21% . On December 22, 2017, Staff Accounting Bulletin No. 118 was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. In accordance with SAB 118, we have determined that $4,438,000 of the deferred tax expense recorded in connection with the remeasurement of certain deferred tax assets and liabilities was provisional amount and reasonable estimate at January 31, 2018. We finalized our accounting for the impact of the TCJA during fiscal 2019 with no material adjustments to the previous provisional amounts recognized. On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). The Company has performed an initial analysis of the impact of the CARES Act and have determined that the impact would not be significant. There were several provisions of the CARES Act that impact Company's fiscal 2020 tax filings, but were not included in the determination of the tax provision due to the date of enactment after January 31, 2020 . The CARES Act provides single-employer pension companies additional time to meet the funding obligations. The Company intends to defer the timing of finding contributions to a new due date of January 1, 2021. Consequently, the tax deduction related to such contributions will be deferred until the funding payment is made. The CARES Act also modifies the limitation for business interest expense deduction. The new limitation has increased from 30 to 50 percent of adjusted taxable income. As of the issuance of this report, the Company continues to evaluate the impact of the CARES Act. |
Leases and Commitments
Leases and Commitments | 12 Months Ended |
Jan. 31, 2020 | |
Commitments [Abstract] | |
Leases and Commitments | The Company has operating leases on real property, equipment, and automobiles that expire at various dates. The Company determines if an arrangement is a lease at inception and assesses classification of the lease at commencement. All of the Company’s leases are classified as operating leases, as a lessee. Beginning on the first day of fiscal 2020, the Company adopted ASC 842 to account for its leases. Pursuant to ASC 842, the Company uses the implicit rate when readily determinable, or the incremental borrowing rate. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments using company specific credit spreads. The Company’s lease terms include options to extend or terminate the lease only when it is reasonably certain that we will exercise that option. Lease expense for our operating leases is recognized on a straight-line basis over the lease term. The Company has an operating lease for its corporate office, manufacturing and distribution facility located in Torrance, CA, currently with a remaining lease term through April 30, 2025. The Company leases equipment under a 5 -year operating lease arrangement. The Company has the option of buying the assets at the end of the lease period at a price that does not result in the Company being reasonably certain of exercising the option. In addition, the Company leases trucks, automobiles, and forklifts under operating leases that include certain fleet management and maintenance services. Certain of the leases contain renewal or purchase options and require payment for property taxes and insurance. The Company records lease expense on a straight-line basis based on the contractual lease payments. In accordance with ASC 842, the Company recognizes the present value of the future lease commitments as an operating lease liability, and a corresponding right-of-use asset ("ROU asset"), net of tenant allowances. Tenant improvements and related tenant allowances are recorded as a reduction to the ROU asset. The Company elected to account for leases with an original term of 12 months or less that do not contain a purchase option as short-term leases. Additionally, certain of the leases provide for variable payment for property taxes, insurance, and common area maintenance payments among others. The Company recognizes variable lease expenses for these leases in the period incurred. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. In accordance with ASC 842, quantitative information regarding our leases is as follows: Twelve-Months Ended 1/31/2020 (in thousands) Operating lease cost $ 5,435 Short-term lease cost 149 Short-term sublease income (40 ) Variable lease cost 892 Total lease cost $ 6,436 Other operating leases information: Cash paid for amounts included in the measurement of lease liabilities $ 5,435,000 Right-of-use assets obtained in exchange for new lease liabilities $ 1,613,000 Weighted-average remaining lease term (years) 4.95 Weighted-average discount rate 6.38 % Minimum future lease payments (in thousands) for operating leases in effect as of January 31, 2020, are as follows: Operating Lease Year ending January 31, 2021 $ 5,030 2022 5,636 2023 5,193 2024 5,192 2025 5,347 Thereafter 1,340 Remaining balance of lease payments $ 27,738 Short-term lease liabilities $ 3,654 Long-term lease liabilities 19,787 Total lease liabilities $ 23,441 Difference between undiscounted cash flows and discounted cash flows $ 4,297 In accordance with ASC 840, future minimum lease payments under non-cancelable leases as of January 31, 2019 were as follows (in thousands): Year ending January 31, 2020 $ 5,045 2021 4,405 2022 5,041 2023 5,040 2024 5,192 Thereafter 6,687 Total minimum lease payments $ 31,410 Lease income $ (40 ) $ 31,370 In accordance with ASC 840, rent expense relating to operating leases for the twelve months ended January 31, 2019 was $6,006,000 . |
Contingencies
Contingencies | 12 Months Ended |
Jan. 31, 2020 | |
Contingencies [Abstract] | |
Contingencies | Contingencies The Company and other furniture manufacturers are subject to federal, state and local laws and regulations relating to the discharge of materials into the environment and the generation, handling, storage, transportation and disposal of waste and hazardous materials. The Company has expended, and expects to continue to spend, significant amounts in the future to comply with environmental laws. Normal recurring expenses relating to operating the Company factories in a manner that meets or exceeds environmental laws are matched to the cost of producing inventory. Despite the Company’s significant dedication to operating in compliance with applicable laws, there is a risk that the Company could fail to comply with a regulation or that applicable laws and regulations change. On these occasions, the Company records liabilities for remediation costs when remediation costs are probable and can be reasonably estimated. The Company is subject to contingencies pursuant to environmental laws and regulations that in the future may require the Company to take action to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by the Company or other parties. The Company has a self-insured retention for product and general liability losses up to $250,000 per occurrence, workers’ compensation liability losses up to $250,000 per occurrence and automobile liability losses up to $50,000 per occurrence. The Company has purchased insurance to cover losses in excess of the retention up to a limit of $30,000,000 . The Company has obtained an actuarial estimate of its total expected future losses for liability claims and recorded a liability equal to the net present value of $1,700,000 and $1,265,000 at January 31, 2020 and 2019 , respectively, based upon the Company’s estimated payout period of five years using a 4.0% and 4.0% discount rate, respectively. Workers’ compensation, automobile, general and product liability claims may be asserted in the future for events not currently known by management. Management does not anticipate that any related settlement, after consideration of the existing reserve for claims incurred and potential insurance recovery, would have a material adverse effect on the Company’s financial position, results of operations or cash flows. Estimated payments under the self-insurance programs are as follows (in thousands): Year ending January 31, 2021 $ 300 2022 375 2023 375 2024 375 2025 375 Thereafter — Total $ 1,800 Discount to net present value (100 ) $ 1,700 The Company and its subsidiaries are defendants in various legal proceedings resulting from operations in the normal course of business. It is the opinion of management, in consultation with legal counsel, that the ultimate outcome of all such matters will not materially affect the Company’s financial position, results of operations or cash flows. |
Warranty
Warranty | 12 Months Ended |
Jan. 31, 2020 | |
Standard Product Warranty Disclosure [Abstract] | |
Warranty | Warranty The Company provides a warranty against all substantial defects in material and workmanship. The standard warranty offered on products sold through January 31, 2013 is 10 years. Effective February 1, 2014 the Company modified its warranty to a limited lifetime warranty. The warranty effective February 1, 2014 is not anticipated to have a significant effect on warranty expense. Effective January 1, 2017, the Company modified the warranty offered to provide specific warranty periods by product component, with no warranty period longer than ten years. The Company’s warranty is not a guarantee of service life, which depends upon events outside the Company’s control and may be different from the warranty period. The Company accrues an estimate of its exposure to warranty claims based upon both product sales data and an analysis of actual warranty claims incurred. The following is a summary of the Company’s warranty-claim activity during for the years ended January 31 (in thousands): 2020 2019 Beginning balance $ 700 $ 925 Provision for current year 570 600 Provision for (benefits from) prior year (145 ) (555 ) Costs incurred (325 ) (270 ) Ending balance $ 800 $ 700 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jan. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On March 11, 2020, the World Health Organization declared the current coronavirus (COVID-19) outbreak to be a global pandemic. In response to this declaration and the rapid spread of COVID-19 within the United States, federal, state and local governments throughout the country have imposed varying degrees of restriction on social and commercial activity to promote social distancing in an effort to slow the spread of the illness. In accordance with State of California and local orders that include guidance on the definition and responsibilities of “essential businesses,” the Company, after closing down for one week, has re-opened its Torrance, California facility in order to provide service to public school customers in western states that have decided it is safer and in the best interest of both students and district employees to take delivery of school furniture immediately, while classes are not in session. The Company will be operating its Torrance manufacturing and distribution facility on a voluntary basis to give employees the flexibility to remain at home with children who are out of school or for other personal reasons as they deem necessary. Office employees and others who can work from home will continue to do so. Additional measures are being taken to insure adequate social distancing among employees performing essential on-site operations. Management estimates that the Torrance facility is currently staffed at approximately 50% of its normal level. The Company’s Conway, Arkansas facilities continue to operate at full capacity to support the many school districts in the eastern two-third of the country that are still taking delivery of school furniture in anticipation of re-starting classes within a few weeks or months. As with schools in western states, many districts serviced by the Company’s Conway facility have determined it is safer to accept deliveries while students and credentialed employees are not on campus. As with the Torrance facility, additional social distancing and sanitation protocols are in force at Conway and have been for the past few weeks. While we are not able to estimate the full impact of the COVID-19 outbreak on our financial condition and results of operations, we expect that this situation will have an adverse impact on the Company’s results of operations for the first quarter of fiscal 2021. Should these conditions persist for a prolonged period of time, this may have an adverse impact on our fiscal 2021 financial results. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts (Notes) | 12 Months Ended |
Jan. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts and Reserves | VIRCO MFG. CORPORATION AND SUBSIDIARIES SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR THE YEARS ENDED JANUARY 31, 2020 and 2019 (In Thousands) Col. A Col. B Col. C Col. E Col. F Allowance for doubtful accounts for the period ended: January 31, 2020 $ 200 $ 83 $ 83 $ 200 January 31, 2019 $ 200 $ 3 $ 3 $ 200 Product, general, workers’ compensation and automobile liability reserves for the period ended: January 31, 2020 $ 1,265 $ 1,520 $ 1,085 $ 1,700 January 31, 2019 $ 1,347 $ 1,357 $ 1,439 $ 1,265 All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions, are inapplicable, or are included in the Financial Statements or Notes thereto, and therefore are not required to be presented under this Item. |
Summary of Business and Signi_2
Summary of Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The consolidated financial statements include the accounts of Virco Mfg. Corporation and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Management Use of Estimates | Preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities - and disclosure of contingent assets and liabilities - at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include, but are not limited to, valuation of inventory; deferred tax assets and liabilities; useful lives of property, plant and equipment; liabilities under pension, warranty, self-insurance and environmental claims; and the accounts receivable allowance for doubtful accounts. Actual results could differ from these estimates. |
Fiscal Year End | Fiscal years 2020 and 2019 refer to the fiscal years ended January 31, 2020 and 2019 , respectively. |
Concentration of Credit Risk | Financial instruments, which potentially subject the Company to concentrations of credit risk consist principally of accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. Sales to the Company’s recurring customers are generally made on open account with terms consistent with the industry. Credit is extended based on an evaluation of the customer’s financial condition and payment history. Past due accounts are determined based on how recently payments have been made in relation to the terms granted. Amounts are written off against the allowance in the period that the Company determines that the receivable is not collectable. The Company purchases insurance on receivables from certain commercial customers to minimize the Company’s credit risk. The Company does not typically obtain collateral to secure credit risk. Customers with inadequate credit are required to provide cash in advance or letters of credit. The Company does not assess interest on receivable balances. A substantial percentage of the Company’s receivables come from low-risk government entities. No customer exceeded 10% of the Company’s net sales for fiscal years ended January 31, 2020 and 2019. Foreign net sales were approximately 6.4% and 6.7% of the Company’s net sales for fiscal years 2020 and 2019 , respectively. No single customer accounted for more than 10% of the Company’s accounts receivable at January 31, 2020 or 2019 . Because of the short time between shipment and collection, the net carrying value of receivables approximates the fair value for these assets. |
Cash | Cash consists of cash on hand, and the Company has no cash equivalents. Outstanding checks, representing a book overdraft, are classified in accounts payable on the accompanying consolidated balance sheets and in operating activities in the accompanying consolidated statements of cash flows. |
Fair Values of Financial Instruments | The fair values of the Company’s cash, accounts receivable, and accounts payable approximate their carrying amounts due to their short-term nature. Financial assets and liabilities measured at fair value on a recurring basis are classified in one of the three following categories, which are described below: Level 1 — Valuations based on unadjusted quoted prices for identical assets in an active market. Level 2 — Valuations based on quoted prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. Level 3 — Valuations based on inputs that are unobservable and involve management judgment and our own assumptions about market participants and pricing. Financial assets measured at fair value on a recurring basis include assets associated with the Virco Employees Retirement Plan (see Note 4 ). |
Inventories | Inventory is valued at the lower of cost or net realizable value (determined on a first-in, first-out basis) and includes material, labor and factory overhead. The Company maintains valuation allowances to write off estimated slow moving and obsolete inventory to reflect the difference between the lower of cost of inventory and the net realizable value. Allowances for slow moving and obsolete inventory are determined through a physical inspection of the product in connection with a physical inventory, a review of slow-moving product and consideration of active marketing programs. The market for education furniture is traditionally driven by value, not style and the Company has not typically incurred significant obsolescence expenses. If market conditions are less favorable than those anticipated by management, additional allowances may be required. Due to reductions in sales volume in the past years, the Company’s manufacturing facilities are operating at reduced levels of capacity. The Company records the cost of excess capacity as a period expense, not as a component of capitalized inventory valuation. The following table presents an updated breakdown of the Company’s net inventory (in thousands) as of January 31 : 2020 2019 Finished goods $ 15,401 $ 15,908 Work In Process 15,957 18,820 Raw materials 11,971 12,561 Inventories, net $ 43,329 $ 47,289 |
Property, Plant and Equipment | Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation and amortization are computed on the straight-line method for financial reporting purposes based upon the following estimated useful lives: Land improvements 5 to 25 years Buildings and building improvements 5 to 40 years Machinery and equipment 3 to 10 years Leasehold improvements shorter of lease or useful life The Company capitalizes the cost of betterments that extend the life of an asset. Repairs and maintenance that do not extend the life of an asset are expensed as incurred. Repair and maintenance expense were $1,960,000 and $2,145,000 for fiscal years ended January 31, 2020 and 2019 , respectively. Property, plant and equipment purchased during the year that remains unpaid as of January 31, 2020 and 2019 was $173,000 and $593,000 , respectively. The Company has established asset retirement obligations related to leased manufacturing facilities in accordance with Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) Topic 410, Asset Retirement and Environmental Obligations . Accrued asset retirement obligations are recorded at net present value and discounted over the life of the lease. Asset retirement obligations, included in other non-current liabilities were $186,000 and $179,000 at January 31, 2020 and 2019 , respectively. January 31, 2020 2019 Balance at beginning of period $ 179,000 $ 170,000 Decrease in obligation — — Accretion expense 7,000 9,000 Balance at end of period $ 186,000 $ 179,000 |
Impairment of Long-Lived Assets | An impairment loss is recognized in the event facts and circumstances indicate the carrying amount of a long-lived asset may not be recoverable, and an estimate of future undiscounted cash flows is less than the carrying amount of the asset. Impairment is recorded based on the excess of the carrying amount of the impaired asset over the fair value. Generally, fair value represents the Company’s expected future cash flows from the use of an asset or group of assets, discounted at a rate commensurate with the risks involved. There were no impairments for fiscal years ended January 31, 2020 and 2019 . |
Net Loss per Share | January 31, 2020 2019 (In thousands, except per share) Numerator Net income (loss) $ 2,382 $ (1,614 ) Denominator Weighted-average shares — basic 15,590 15,421 Dilutive effect of common stock equivalents from equity incentive plans 104 — Weighted-average shares — diluted (a) $ 15,694 $ 15,421 Net income (loss) per common share Basic $ 0.15 $ (0.10 ) Diluted 0.15 (0.10 ) (a) For fiscal year 2019, approximately 149,000 shares of common stock equivalents were excluded in the computation of diluted net income per share, as the effect would be anti-dilutive since the Company reported a net loss. |
Environmental Costs | The Company is subject to numerous environmental laws and regulations in the various jurisdictions in which it operates that (a) govern operations that may have adverse environmental effects, such as the discharge of materials into the environment, as well as handling, storage, transportation and disposal practices for solid and hazardous wastes, and (b) impose liability for response costs and certain damages resulting from past and current spills, disposals or other releases of hazardous materials. Normal, recurring expenses related to operating the Company's factories in a manner that meets or exceeds environmental laws and regulations are matched to the cost of producing inventory. Despite our efforts to comply with existing laws and regulations, compliance with more stringent laws or regulations or stricter interpretation of existing laws, may require additional expenditures by us, some of which may be material. We reserve amounts for such matters when expenditures are probable and reasonably estimable. Costs incurred to investigate and remediate environmental waste are expensed, unless the remediation extends the useful life of the assets employed at the site. At January 31, 2020 and 2019 , the Company had not capitalized any remediation costs and had not recorded any amortization expense in fiscal years 2020 and 2019 . |
Advertising Costs | Advertising costs are expensed in the period during which the advertising space is run. Selling, general and administrative expenses include advertising costs for the years ended January 31, 2020 and 2019 of $1,030,000 and $1,134,000 , respectively, and are expensed as incurred. Prepaid advertising costs reported as a prepaid asset on the accompanying consolidated balance sheet at January 31, 2020 and 2019 , were $300,000 and $254,000 , respectively. |
Product Warranty Expense | The Company provides a product warranty on most products. The standard warranty offered on products sold through January 31, 2013 is ten years. Effective February 1, 2014 through December 31, 2016, the Company modified its warranty to a limited lifetime warranty. Effective January 1, 2017, the Company modified the warranty offered to provide specific warranty periods by product component, with no warranty period longer than ten years. The Company generally provides that customers can return a defective product during the specified warranty period following purchase in exchange for a replacement product or the repair of the product by the Company at no charge to the customer. The Company determines whether replacement or repair is appropriate in each circumstance. The Company uses historic data to estimate appropriate levels of warranty reserves. Because product mix, production methods and raw material sources change over time, historic data may not always provide precise estimates for future warranty expense. The Company recorded warranty reserves of $800,000 and $700,000 as of January 31, 2020 and 2019 , respectively, as other long-term liabilities in the accompanying consolidated balance sheets. The current portion of the warranty reserve was $325,000 as of January 31, 2020 and 2019 and included in other accrued liabilities in the accompanying consolidated balance sheets. |
Self-Insurance | In fiscal 2020 and 2019 , the Company was self-insured for product and general liability losses up to $250,000 per occurrence, workers’ compensation losses up to $250,000 per occurrence, and auto liability up to $50,000 per occurrence. Actuaries assist the Company in determining its liability for the self-insured component of claims, which have been discounted to their net present value utilizing a discount rate of 4.00% in fiscal 2020 and 4.00% in fiscal 2019 . |
Share-based Compensation Plans | The Company recognizes stock-based compensation cost for shares that are expected to vest, on a straight-line basis, over the requisite service period of the award. Virco issued a 10% stock dividend or 3/2 stock split every year beginning in 1983 through 2003. Although the stock dividend had no cash consequences to the Company, the accounting methodology required for 10% dividends affected the equity section of the balance sheet. When the Company recorded a 10% stock dividend, 10% of the market capitalization of the Company on the date of the declaration was reclassified from retained earnings to additional paid-in capital. During the period from 1983 through 2003, the cumulative effect of the stock dividends has been to reclassify over $122 million from retained earnings to additional paid-in capital. The equity section of the balance sheet on January 31, 2020 reflects additional paid-in capital of approximately $119 million and accumulated deficit of approximately $50 million . Other than the losses incurred during 2004-2006, 2011-2014 and 2018-2019, the accumulated deficit is a result of the accounting reclassification and is not the result of accumulated losses. |
Accumulated Other Comprehensive Income (Loss), Net of Tax | The following table summarizes the changes in accumulated balances of other comprehensive (loss) income for the years ended January 31, 2020 and 2019 : January 31, (in thousands) 2020 2019 Balance as of beginning of year $ (9,042 ) $ (9,259 ) Other comprehensive (loss) income before reclassifications (6,045 ) (1,116 ) Amounts reclassified from AOCI 776 1,333 Net current period other comprehensive income (5,269 ) 217 Balance as of end of year $ (14,311 ) $ (9,042 ) The reclassifications out of accumulated other comprehensive (loss) income of $776,000 and $1,333,000 for the years ended January 31, 2020 and 2019 , respectively, related to amortization of actuarial losses and settlements. |
Revenue Recognition | The Company manufactures, markets and distributes a wide variety of school and office furniture to wholesalers, distributors, educational institutions and governmental entities. Revenue is recorded for promised goods or services when control is transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company's sales generally involve a single performance obligation to deliver goods pursuant to customer purchase orders. Prices for our products are based on published price lists and customer agreements. The Company has determined that the performance obligations are satisfied at a point in time when the Company completes delivery per the customer contract. The majority of sales are free on board ("FOB") destination where the destination is specified per the customer contract and may include delivering the furniture into the classroom, school site or warehouse. Sales of furniture that are sold FOB factory are typically made to resellers of our product who in turn provide logistics to the ultimate customer. Once a product has been delivered per the shipping terms, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the asset. The Company considers control to have transferred upon shipment or delivery in accordance with shipping terms because the Company has a present right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset, and the customer has significant risks and rewards of ownership of the asset. Sales are recorded net of discounts, sales incentives and rebates, sales taxes and estimated returns and allowances. The Company offers sales incentives and discounts through various regional and national programs to our customers. These programs include product rebates, product returns allowances and trade promotions. Variable consideration for these programs is estimated in the transaction price at contract inception based on current sales levels and historical experience using the expected value method, subject to constraint. The Company generates revenue primarily by manufacturing and distributing products through resellers and direct-to-customers. Control transfers to both resellers and direct customers at a point in time when the delivery process is complete as determined by the corresponding shipping terms. Therefore, we do not consider them to be meaningfully different revenue streams given similarities in the nature of the products, performance obligation and distribution processes. Sales are predominately in the United States and to a similar class of customer. We do not manage or evaluate the business based on product line or any other discernable category. For product produced by and sourced from third parties, management has determined that it is the principal in all cases, since it (i) bears primary responsibility for fulfilling the promise to the customer; (ii) bears inventory risk before and/or after the good or service is transferred to the customer; and (iii) has discretion in establishing the price for the sale of good or service to the customer. |
Delivery Costs | For the fiscal years ended January 31, 2020 and 2019 , shipping and classroom delivery costs of approximately $20,552,000 , $22,150,000 , respectively, were included in selling, general and administrative expenses in the accompanying consolidated statements of operations. |
Accounting for Income Taxes | The Company recognizes deferred income taxes under the asset and liability method of accounting for income taxes in accordance with the provisions of FASB ASC Topic 740, Accounting for Income Taxes . Deferred income taxes are recognized for differences between the financial statement and tax basis of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance against deferred tax assets is recorded when it is determined to be more likely than not that the asset will not be realized. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 12 Months Ended |
Jan. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Updates : The Company adopted Accounting Standards Codification (“ASC”) 842 - Leases , as of February 1, 2019, using transition relief to the modified retrospective approach. The transition relief to the modified retrospective approach allows the recording of existing leases at adoption and recognizing a cumulative-effect adjustment to the opening balance of retained earnings on the adoption date. As a result, the Company did not restate comparative periods in transition to ASC 842 and instead reported comparative periods under ASC 840 - Leases . In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. Further, the Company did not elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of right-of-use (“ROU”) assets. The Company has elected to account for leases with an original term of 12 months or less that do not contain a purchase option as short-term leases. Adoption of the new standard resulted in the recording of ROU assets and lease liabilities of approximately $23.9 million and $25.6 million respectively, as of February 1, 2019. The difference between the ROU assets and lease liabilities was due to previous deferred rent balances that were removed and offset against the ROU asset under ASC 842. The adoption of this standard did not materially impact our consolidated statement of operations, shareholders’ equity or cash flows. See Note 7 for additional disclosures. The Company determines if an arrangement is a lease at inception. Operating leases in which the Company is the lessee are included in operating lease ROU assets and operating lease liabilities in the consolidated balance sheet. The Company does not have any finance leases, as a lessee, and no long-term leases for which it is the lessor. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the reasonably certain lease term. As most of the Company’s leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date, such as the lease term and Company specific risk premium, in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and reduced by lease incentives, such as tenant improvement allowances. The Company’s lease terms include options to extend or terminate the lease only when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has elected the practical expedient to account for non-lease components and the lease components to which they relate, as a single lease component for the following asset classes: (i) Buildings, (ii) Equipment, and (iii) Automobiles. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock compensation ( Topic 718 ) which simplifies several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Some of the areas for simplification apply only to nonpublic entities. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers . The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company adopted this ASU effective February 1, 2019. The adoption of the standard did not materially impact the Condensed Consolidated Statements of Operations, Comprehensive Income or Cash Flows and Statement of Stockholders' Equity and Comprehensive Income (Loss). Recently Issued Accounting Updates But Not Yet Adopted: In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes . This update simplifies various aspects related to accounting for income taxes, removes certain exceptions to the general principles in ASC 740, and clarifies and amends existing guidance to improve consistent application. The new standard becomes effective for the Corporation in fiscal 2021. The Corporation is currently evaluating the effect the standard will have on consolidated financial statements and related disclosures. In August 2018, the FASB issued Accounting Standards Update No. 2018-14 (ASU 2018-14 ), Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20) , which amends the current disclosure requirements regarding defined benefit pensions and other post retirement plans , and allows for the removal of certain disclosures, while adding certain new disclosure requirements. This standard is effective for fiscal years beginning after December 15, 2020 and allows for early adoption. We do not expect this new standard to have a significant impact to our disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaces the incurred loss impairment methodology for measuring and recognizing credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The adoption date, as modified by the recently issued ASU 2019-10 discussed below, will be for the fiscal year ending after December 15, 2022 and interim periods therein. The Company does not believe there will be a material impact to the financial statements as a result of adopting this ASU. In November 2019, the FASB issued ASU 2019-10, Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates . ASU 2019-10 moves the effective date for certain previously issued amendments to later dates, depending on the filing status of the respective entity. Specifically, due to the amendment and the Company’s status as a smaller reporting company, the new effective dates for relevant previously issued amendments not yet adopted by the Company relate to ASU 2016-13 as described above. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement ( Topic 820 ) which modifies the disclosure requirements of fair value measurements in Topic 820, Fair Value Measurement . For public companies the ASU removes disclosure requirements for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation process for Level 3 fair value measurements. The ASU modifies the disclosure requirements for investments in certain entities that calculate net asset value and clarifies that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The ASU adds the disclosure requirement for changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2019 including interim periods within that fiscal year. Early adoption is permitted. The Company does not believe there will be a material impact to the financial statements as a result of adopting this ASU. Other recently issued accounting updates are not expected to have a material impact on the Company’s consolidated financial statements. |
Summary of Business and Signi_3
Summary of Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Inventory, Net | The following table presents an updated breakdown of the Company’s net inventory (in thousands) as of January 31 : 2020 2019 Finished goods $ 15,401 $ 15,908 Work In Process 15,957 18,820 Raw materials 11,971 12,561 Inventories, net $ 43,329 $ 47,289 |
Depreciation and amortization computed on the straight-line method for financial reporting purposes based upon estimated useful lives | Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation and amortization are computed on the straight-line method for financial reporting purposes based upon the following estimated useful lives: Land improvements 5 to 25 years Buildings and building improvements 5 to 40 years Machinery and equipment 3 to 10 years Leasehold improvements shorter of lease or useful life |
Asset retirement obligations related to leased manufacturing facilities | January 31, 2020 2019 Balance at beginning of period $ 179,000 $ 170,000 Decrease in obligation — — Accretion expense 7,000 9,000 Balance at end of period $ 186,000 $ 179,000 |
Computation of basic and diluted loss per share | January 31, 2020 2019 (In thousands, except per share) Numerator Net income (loss) $ 2,382 $ (1,614 ) Denominator Weighted-average shares — basic 15,590 15,421 Dilutive effect of common stock equivalents from equity incentive plans 104 — Weighted-average shares — diluted (a) $ 15,694 $ 15,421 Net income (loss) per common share Basic $ 0.15 $ (0.10 ) Diluted 0.15 (0.10 ) (a) For fiscal year 2019, approximately 149,000 shares of common stock equivalents were excluded in the computation of diluted net income per share, as the effect would be anti-dilutive since the Company reported a net loss. |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in accumulated balances of other comprehensive (loss) income for the years ended January 31, 2020 and 2019 : January 31, (in thousands) 2020 2019 Balance as of beginning of year $ (9,042 ) $ (9,259 ) Other comprehensive (loss) income before reclassifications (6,045 ) (1,116 ) Amounts reclassified from AOCI 776 1,333 Net current period other comprehensive income (5,269 ) 217 Balance as of end of year $ (14,311 ) $ (9,042 ) The reclassifications out of accumulated other comprehensive (loss) income of $776,000 and $1,333,000 for the years ended January 31, 2020 and 2019 , respectively, related to amortization of actuarial losses and settlements. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Debt Disclosure [Abstract] | |
Outstanding balances of long-term debt | Outstanding balances (in thousands) for the Company’s long-term debt were as follows: January 31, 2020 2019 Revolving credit line $ 9,969 $ 14,858 Other 6,727 6,556 Total debt 16,696 21,414 Less current portion 878 5,504 Non-current portion $ 15,818 $ 15,910 |
Schedule of maturities of long-term debt | As of January 31, 2020 , long-term debt repayments are approximately as follows (in thousands): Year ending January 31, 2021 $ 878 2022 10,967 2023 229 2024 238 2025 248 Thereafter 4,136 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of pension plans | The following tables set forth (in thousands) the combined funded status of the Company’s pension plans at January 31, 2020 and 2019 : Combined Employee Retirement Plans 1/31/2020 1/31/2019 Change in Benefit Obligation Benefit obligation at beg. of year $ 36,299 $ 40,181 Service cost — — Interest cost 1,382 1,459 Participant contributions — — Amendments — — Actuarial losses (gains) 8,280 (2,044 ) Plan settlement — (2,176 ) Benefits paid (2,669 ) (1,121 ) Benefit obligation at end of year $ 43,292 $ 36,299 Change in Plan Assets Fair value at beg. of year $ 23,527 $ 27,259 Actual return on plan assets 1,806 (1,557 ) Company contributions 990 1,122 Settlements — (2,176 ) Benefits paid (2,669 ) (1,121 ) Fair value at end of year $ 23,654 $ 23,527 Funded Status Unfunded status of the plans $ (19,638 ) $ (12,772 ) Amounts Recognized in Statement of Financial Position Current liabilities $ (314 ) $ (322 ) Non-current liabilities (19,324 ) (12,450 ) Accrued benefit cost $ (19,638 ) $ (12,772 ) Amounts Recognized in Statement of Financial Position and Operations Accrued benefit liability (19,638 ) (12,772 ) Accumulated other compensation loss 15,427 8,319 Net amount recognized $ (4,211 ) $ (4,453 ) Items not yet Recognized as a Component of Net Periodic Pension Expense, Included in AOCI Unrecognized net actuarial loss $ 15,427 $ 8,319 Unamortized prior service costs — — Net initial asset recognition — — $ 15,427 $ 8,319 Combined Employee Retirement Plans 1/31/2020 1/31/2019 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income Net loss $ 7,885 $ 1,039 Prior service cost — — Amortization of loss (776 ) (1,333 ) Amortization of prior service cost (credit) — — Amortization of initial asset — — Total recognized in other comprehensive income (loss) $ 7,109 $ (294 ) Items to be Recognized as a Component of Periodic Pension Cost for next fiscal year Prior service cost $ — $ — Net actuarial loss 1,872 706 $ 1,872 $ 706 Supplemental Data Projected benefit obligation $ 43,292 $ 36,299 Accumulated benefit obligation 43,292 36,299 Fair value of plan assets 23,654 23,527 Components of Net Cost Service cost $ — $ — Interest cost 1,382 1,459 Expected return on plan assets (1,432 ) (1,535 ) Amortization of transition amount — — Recognized (gain) loss due to settlement — — Amortization of prior service cost — — Recognized net actuarial loss 776 1,333 Benefit cost $ 726 $ 1,257 Estimated Future Benefit Payments FYE 01-31-2021 $ 6,114 FYE 01-31-2022 2,992 FYE 01-31-2023 2,641 FYE 01-31-2024 2,549 FYE 01-31-2025 3,067 FYE 01-31-2026 to 2030 11,960 Total $ 29,323 Weighted Average Assumptions to Determine Benefit Obligations at Year-End Discount rate 3.00% - 3.05% 3.75% - 4.0% Rate of compensation increase N/A N/A Weighted Average Assumptions to Determine Net Periodic Pension Cost Discount rate 4.10% 4.25% Expected return on plan assets 6.50% 6.50% Rate of compensation increase N/A N/A |
Fair value measurements of plan assets | 1/31/2020 1/31/2019 Level 1 Measurement Common Stock 10,080 9,345 Principal Money Market 799 — PNC Govt Money Fund 175 630 Vanguard INTM Term Investment 250 283 Vanguard LT Investment 1,161 1,304 Ishares Russell 2000 1,560 1,672 Ishares Russell MID-CAP 1,850 1,890 Ishares Emerging Markets 1,103 1,130 Ishares MCSI RAFE 1,577 1,534 Ishares S&P Index 2,252 2,895 Vanguard INTM Term Treasury 250 281 Vanguard LT Treasury 1,183 1,279 Total Level 1 Investments $ 22,240 $ 22,243 |
Life insurance liability | The following sets forth the Company's change in death benefits payable during the years ended January 31, 2020 and 2019 : 1/31/2020 1/31/2019 Liability beginning of year $ 2,037,000 $ 2,088,000 Accretion expense 49,000 49,000 Death benefits paid (100,000 ) (100,000 ) Liability end of year $ 1,986,000 $ 2,037,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock and Stock Unit Award Activity | A summary of the Company’s restricted stock unit awards activity, and related information for the following years ended January 31, is as follows: 2020 2019 Restricted stock units Weighted- Average Exercise Price Restricted stock units Weighted- Average Exercise Price Outstanding at beginning of year 501,155 $ 4.44 692,404 $ 4.25 Granted 547,385 4.38 55,555 4.49 Exercised (223,555 ) 4.45 (226,804 ) 4.63 Forfeited (84,000 ) 4.51 (20,000 ) 4.01 Outstanding at end of year 740,985 4.54 501,155 4.44 Weighted-average fair value of restricted stock units granted during the year 4.38 4.49 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income tax expense (benefit) reconciled to statutory rate | The income tax expense for the last two years is reconciled to the statutory federal income tax rates of 21% for the tax years ended January 31, 2020 and 2019, respectively, as follows (in thousands): 2020 2019 Statutory $ 585 $ (235 ) State taxes (net of federal tax) 400 186 Change in valuation allowance (573 ) 831 State rate adjustment (291 ) (222 ) Change in unrecognized tax benefits 20 1 Stock Compensation (28 ) (46 ) Tax cuts and jobs act — (15 ) Expirations of attributes 345 28 Permanent differences (17 ) 8 Return to provision (96 ) (39 ) Income tax expense $ 345 $ 497 |
Significant components of expense (benefit) | Significant components of the expense for income taxes attributed to continuing operations are as follows for the years ended January 31 (in thousands): 2020 2019 Current Federal $ — $ (24 ) State 136 102 136 78 Deferred Federal 442 (247 ) State 340 (165 ) 782 (412 ) Change in valuation allowance (573 ) 831 209 419 Income tax expense $ 345 $ 497 |
Deferred tax assets and liabilities | Deferred tax assets and liabilities are comprised of the following as of January 31 (in thousands): 2020 2019 Deferred tax assets Accrued vacation and sick leave $ 1,264 $ 892 Retirement plans 5,448 2,748 Insurance reserves 443 381 Warranty 207 182 Net operating loss carryforwards 3,658 5,303 Right of use liabilities 6,067 — Inventory 1,175 1,320 Business interest expense limitation 224 540 Other 301 765 $ 18,787 $ 12,131 Deferred tax liabilities Tax in excess of book depreciation $ (802 ) $ (720 ) Right of use assets (5,519 ) — Other (53 ) (57 ) $ (6,374 ) $ (777 ) Valuation allowance (1,183 ) (1,756 ) Net long term deferred tax asset $ 11,230 $ 9,598 |
Unrecognized tax benefits | The following table summarizes the activity related to our gross unrecognized tax benefits for the years ended January 31 (in thousands): 2020 2019 Balances as of February 1, $ 38 $ 38 Increases related to prior year tax positions 8 — Decreases related to prior year tax positions — (2 ) Increases related to current year tax positions 18 8 Decreases relating to settlements with taxing authorities — — Decreases related to lapsing of statute of limitations (4 ) (6 ) Balance as of January 31, $ 60 $ 38 |
Leases and Commitments (Tables)
Leases and Commitments (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Commitments [Abstract] | |
Lease, cost | In accordance with ASC 842, quantitative information regarding our leases is as follows: Twelve-Months Ended 1/31/2020 (in thousands) Operating lease cost $ 5,435 Short-term lease cost 149 Short-term sublease income (40 ) Variable lease cost 892 Total lease cost $ 6,436 Other operating leases information: Cash paid for amounts included in the measurement of lease liabilities $ 5,435,000 Right-of-use assets obtained in exchange for new lease liabilities $ 1,613,000 Weighted-average remaining lease term (years) 4.95 Weighted-average discount rate 6.38 % |
Operating lease | Minimum future lease payments (in thousands) for operating leases in effect as of January 31, 2020, are as follows: Operating Lease Year ending January 31, 2021 $ 5,030 2022 5,636 2023 5,193 2024 5,192 2025 5,347 Thereafter 1,340 Remaining balance of lease payments $ 27,738 Short-term lease liabilities $ 3,654 Long-term lease liabilities 19,787 Total lease liabilities $ 23,441 Difference between undiscounted cash flows and discounted cash flows $ 4,297 |
Minimum future lease payments | In accordance with ASC 840, future minimum lease payments under non-cancelable leases as of January 31, 2019 were as follows (in thousands): Year ending January 31, 2020 $ 5,045 2021 4,405 2022 5,041 2023 5,040 2024 5,192 Thereafter 6,687 Total minimum lease payments $ 31,410 Lease income $ (40 ) $ 31,370 |
Contingencies (Tables)
Contingencies (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Contingencies [Abstract] | |
Estimated payments under the self-insurance programs | Estimated payments under the self-insurance programs are as follows (in thousands): Year ending January 31, 2021 $ 300 2022 375 2023 375 2024 375 2025 375 Thereafter — Total $ 1,800 Discount to net present value (100 ) $ 1,700 |
Warranty (Tables)
Warranty (Tables) | 12 Months Ended |
Jan. 31, 2020 | |
Standard Product Warranty Disclosure [Abstract] | |
Warranty claim activity | The following is a summary of the Company’s warranty-claim activity during for the years ended January 31 (in thousands): 2020 2019 Beginning balance $ 700 $ 925 Provision for current year 570 600 Provision for (benefits from) prior year (145 ) (555 ) Costs incurred (325 ) (270 ) Ending balance $ 800 $ 700 |
Summary of Business and Signi_4
Summary of Business and Significant Accounting Policies (Concentration of Credit risk) (Details) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Concentration Risk [Line Items] | ||
Period of Manufacturing Operations | 70 years | |
Foreign sales revenue by percent | 10.00% | |
Revenue Benchmark | Geographic Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Foreign sales revenue by percent | 6.40% | 6.70% |
Summary of Business and Signi_5
Summary of Business and Significant Accounting Policies (Inventory, net) (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Jan. 31, 2019 |
Accounting Policies [Abstract] | ||
Finished goods | $ 15,401 | $ 15,908 |
Work In Process | 15,957 | 18,820 |
Raw materials | 11,971 | 12,561 |
Inventories, net | $ 43,329 | $ 47,289 |
Summary of Business and Signi_6
Summary of Business and Significant Accounting Policies (Property, Plant, and Equipment) (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Repair and maintenance | $ 1,960,000 | $ 2,145,000 |
Depreciation and amortization expense | 5,769,000 | 5,791,000 |
Short-term sublease income | 40,000 | 40,000 |
Property, Plant And Equipment Included in AP And Accrued Expense | $ 173,000 | $ 593,000 |
Land Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 5 years | |
Land Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 25 years | |
Buildings and building improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 5 years | |
Buildings and building improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 40 years | |
Machinery and equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 3 years | |
Machinery and equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 10 years |
Summary of Business and Signi_7
Summary of Business and Significant Accounting Policies (Asset Retirement Obligations) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Accounting Policies [Abstract] | ||
Asset retirement obligation beginning of period | $ 179 | $ 170 |
Decrease in obligation | 0 | 0 |
Accretion expense | 7 | 9 |
Asset retirement obligation end of period | $ 186 | $ 179 |
Summary of Business and Signi_8
Summary of Business and Significant Accounting Policies (Computation of Basic and Diluted Loss Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Accounting Policies [Abstract] | ||
Net income (loss) | $ 2,382 | $ (1,614) |
Weighted-average shares — basic | 15,590,000 | 15,421,000 |
Dilutive effect of common stock equivalents from equity incentive plans | 104,000 | 0 |
Weighted-average shares — diluted | 15,694,000 | 15,421,000 |
Basic | $ 0.15 | $ (0.10) |
Diluted | $ 0.15 | $ (0.10) |
Shares of common stock equivalents excluded from computation of diluted net income per share (in shares) | 149,000 |
Summary of Business and Signi_9
Summary of Business and Significant Accounting Policies (Advertising Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Accounting Policies [Abstract] | ||
Advertising cost | $ 1,030 | $ 1,134 |
Prepaid advertising costs | $ 300 | $ 254 |
Summary of Business and Sign_10
Summary of Business and Significant Accounting Policies (Product Warranty Expense) (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2018 | |
Warranty [Line Items] | |||
Accrued warranty balance | $ 800,000 | $ 700,000 | $ 925,000 |
Product Warranty Accrual, Current | $ 325,000 | $ 325,000 | |
Minimum [Member] | |||
Warranty [Line Items] | |||
Product warranty period | 10 years | ||
Maximum [Member] | |||
Warranty [Line Items] | |||
Product warranty period | 10 years |
Summary of Business and Sign_11
Summary of Business and Significant Accounting Policies (Self-Insurance) (Details) - USD ($) | Jan. 31, 2020 | Jan. 31, 2019 |
Loss Contingencies [Line Items] | ||
Discount rate | 4.00% | 4.00% |
Product and General Liability [Member] | ||
Loss Contingencies [Line Items] | ||
Self insurance reserve | $ 250,000 | |
Workers Compensation [Member] | ||
Loss Contingencies [Line Items] | ||
Self insurance reserve | 250,000 | |
Automobile Losses [Member] | ||
Loss Contingencies [Line Items] | ||
Self insurance reserve | $ 50,000 |
Summary of Business and Sign_12
Summary of Business and Significant Accounting Policies (Stock-Based Compensation Plans) (Details) $ in Thousands | 12 Months Ended | |||
Jan. 31, 2020USD ($) | Jan. 31, 2019USD ($) | Jan. 31, 2018USD ($) | Jan. 31, 2003USD ($) | |
Accounting Policies [Abstract] | ||||
Stock dividend, return percentage (as a percent) | 10.00% | |||
Stock conversion ratio | 1.5 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stockholders' equity | $ 54,818 | $ 57,027 | $ 58,712 | |
Additional Paid-in Capital | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stockholders' equity | 118,782 | 118,106 | 117,465 | $ 122,000 |
Accumulated Deficit | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stockholders' equity | $ (49,810) | $ (52,192) | $ (49,648) |
Summary of Business and Sign_13
Summary of Business and Significant Accounting Policies (Manufacturing Operations and Shipping Fees) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Accounting Policies [Abstract] | ||
Shipping and classroom delivery costs | $ 20,552 | $ 22,150 |
Summary of Business and Sign_14
Summary of Business and Significant Accounting Policies (Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance as of beginning of year | $ (9,042) | |
Amortization of prior service cost (credit) | 776 | $ 795 |
Net current period other comprehensive income | (5,269) | 217 |
Balance as of end of year | (14,311) | (9,042) |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance as of beginning of year | (9,042) | (9,259) |
Other comprehensive (loss) income before reclassifications | (6,045) | (1,116) |
Amortization of prior service cost (credit) | 776 | 1,333 |
Net current period other comprehensive income | (5,269) | 217 |
Balance as of end of year | $ (14,311) | $ (9,042) |
New Accounting Pronouncements_2
New Accounting Pronouncements (Narrative) (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Feb. 01, 2019 | Jan. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 21,325 | $ 0 | |
Operating lease, liability | $ 23,441 | ||
Accounting Standards Update 2016-02 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 23,900 | ||
Operating lease, liability | $ 25,600 |
Debt (Long-term Debt) (Details)
Debt (Long-term Debt) (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Jan. 31, 2019 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 16,696 | $ 21,414 |
Less current portion | 878 | 5,504 |
Non-current portion | 15,818 | 15,910 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 9,969 | 14,858 |
Other Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 6,727 | $ 6,556 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Apr. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Apr. 30, 2019USD ($) | Jul. 31, 2019USD ($) | Oct. 31, 2019USD ($) | Jan. 31, 2020USD ($) | |
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility bears interest increased | 2.00% | |||||
Interest rate | 6.00% | |||||
Judgments or judicial actions against the borrowers in excess | $ 250,000 | |||||
Accounts receivable [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility borrowing base limitation | 85.00% | |||||
Inventory [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility borrowing base limitation | 60.00% | |||||
Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Line Of Credit Facility, Borrowing Capacity, Term | $ 15,000,000 | |||||
Maximum [Member] | Accounts receivable [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility borrowing base limitation | 85.00% | |||||
Amendment No. 19 to Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Non-refundable Extension Fee | $ 24,000 | |||||
Amendment No. 20 To Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Minimum EBITDA | $ 5,000,000 | $ 5,000,000 | ||||
Maximum fixed charge coverage ratio | 1.10 | 1.10 | 2.25 | |||
Non-refundable Extension Fee | $ 125,000 | |||||
Amendment No. 20 To Credit Facility [Member] | Minimum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt Instrument, Covenant, Capital Expenditures Limit | $ 900,000 | $ 1,900,000 | ||||
Debt Instrument, Covenant, Aggregate Debt | $ 8,000,000 | $ 8,000,000 | ||||
PNC [Member] | Revolving Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Remaining borrowing capacity | $ 19,936,000 | |||||
PNC [Member] | Revolving Credit Facility [Member] | Amendment No. 19 to Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | 65,000,000 | |||||
PNC [Member] | Seasonal Advance [Member] | Amendment No. 19 to Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | 15,000,000 | |||||
PNC [Member] | Equipment Loan [Member] | Amendment No. 19 to Credit Facility [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | 10,000,000 | |||||
Line of credit facility, Equipment financing | $ 2,000,000 | |||||
Eurodollar [Member] | Minimum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility bears interest range of | 1.75% | |||||
Eurodollar [Member] | Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility bears interest range of | 2.25% | |||||
Alternate Base Rate Loans [Member] | London Interbank Offered Rate LIBOR [Member] | Minimum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility bears interest range of | 0.75% | |||||
Alternate Base Rate Loans [Member] | London Interbank Offered Rate LIBOR [Member] | Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving credit facility bears interest range of | 1.25% | |||||
Debt Covenant Term One [Member] | Amendment No. 20 To Credit Facility [Member] | Minimum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt Instrument, Covenant, Capital Expenditures Limit | $ 3,900,000 | |||||
Debt Instrument, Covenant, Capital Expenditure Limit Term On EBITDA | 8,500,000 | |||||
Debt Covenant Term Two [Member] | Amendment No. 20 To Credit Facility [Member] | Minimum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt Instrument, Covenant, Capital Expenditures Limit | 2,900,000 | |||||
Debt Instrument, Covenant, Capital Expenditure Limit Term On EBITDA | $ 8,500,000 |
Debt (Long-term Debt Repayments
Debt (Long-term Debt Repayments) (Details) $ in Thousands | Jan. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 878 |
2022 | 10,967 |
2023 | 229 |
2024 | 238 |
2025 | 248 |
Thereafter | $ 4,136 |
Retirement Plans (Pension Plans
Retirement Plans (Pension Plans, Narrative) (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Liability for Future Policy Benefits, Life | $ 8,919,000 | $ 9,102,000 |
Contribution amount, Qualified plan and VIP plan | 954,000 | 1,080,000 |
Estimated contributions to qualified pension plans for 2021 | 600,000 | |
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), after Tax | 14,300,000 | |
Estimated Impact Of One Percent Change in Investment Return | 221,000 | |
Estimated Impact Of One Percent Change in Discount Rate | $ 167,000 | |
Combined Employee Retirement Plans [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Percentage of trust assets managed | 50.00% | |
Company contributions | $ 990,000 | 1,122,000 |
Accumulated other compensation loss | 15,427,000 | 8,319,000 |
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), after Tax | $ 0 | 0 |
VIP Retirement Plan [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Benefit of average compensation | 50.00% | |
Benefit of average compensation period | 5 years | |
Cash surrender value | $ 3,384,000 | $ 3,469,000 |
Debt Securities [Member] | Combined Employee Retirement Plans [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Short-term investment funds | 16.00% | 16.00% |
Fixed Income Securities [Member] | Combined Employee Retirement Plans [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Percentage of assets held in trust (less than) | 12.00% |
Retirement Plans (Funded Status
Retirement Plans (Funded Status) (Details) - Combined Employee Retirement Plans [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Change in Benefit Obligation | ||
Benefit obligation at beg. of year | $ 36,299 | $ 40,181 |
Service cost | 0 | 0 |
Interest cost | 1,382 | 1,459 |
Participant contributions | 0 | 0 |
Amendments | 0 | 0 |
Actuarial losses (gains) | 8,280 | (2,044) |
Plan settlement | 0 | (2,176) |
Benefits paid | (2,669) | (1,121) |
Benefit obligation at end of year | 43,292 | 36,299 |
Change in Plan Assets | ||
Fair value at beg. of year | 23,527 | 27,259 |
Actual return on plan assets | 1,806 | (1,557) |
Company contributions | 990 | 1,122 |
Settlements | 0 | (2,176) |
Benefits paid | (2,669) | (1,121) |
Fair value at end of year | 23,654 | 23,527 |
Unfunded status of the plans | (19,638) | (12,772) |
Amounts Recognized in Statement of Financial Position | ||
Current liabilities | (314) | (322) |
Non-current liabilities | (19,324) | (12,450) |
Accrued benefit cost | (19,638) | (12,772) |
Amounts Recognized in Statement of Financial Position and Operations | ||
Accrued benefit liability | (19,638) | (12,772) |
Accumulated other compensation loss | 15,427 | 8,319 |
Net amount recognized | (4,211) | (4,453) |
Items not yet Recognized as a Component of Net Periodic Pension Expense, Included in AOCI | ||
Unrecognized net actuarial loss | 15,427 | 8,319 |
Unamortized prior service costs | 0 | 0 |
Net initial asset recognition | 0 | 0 |
Net periodic pension expense, included in AOCI | $ 15,427 | $ 8,319 |
Retirement Plans (Periodic Pens
Retirement Plans (Periodic Pension Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2018 | |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income | |||
Amortization of prior service cost (credit) | $ 776 | $ 795 | |
Total recognized in other Comprehensive Income | 5,269 | (217) | |
Items not yet Recognized as a Component of Net Periodic Pension Expense, Included in AOCI | |||
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), after Tax | 14,300 | ||
Combined Employee Retirement Plans [Member] | |||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income | |||
Net loss | 7,885 | 1,039 | |
Prior service cost | 0 | 0 | |
Amortization of loss | (776) | (1,333) | |
Amortization of prior service cost (credit) | 0 | 0 | |
Amortization of initial asset | 0 | 0 | |
Total recognized in other Comprehensive Income | 7,109 | (294) | |
Items not yet Recognized as a Component of Net Periodic Pension Expense, Included in AOCI | |||
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), after Tax | 0 | 0 | |
Net actuarial loss | 1,872 | 706 | |
Net periodic pension cost | 1,872 | 706 | |
Projected benefit obligation | 43,292 | 36,299 | $ 40,181 |
Accumulated benefit obligation | 43,292 | 36,299 | |
Fair value of plan assets | 23,654 | 23,527 | $ 27,259 |
Components of Net Cost | |||
Service cost | 0 | 0 | |
Interest cost | 1,382 | 1,459 | |
Expected return on plan assets | (1,432) | (1,535) | |
Amortization of transition amount | 0 | 0 | |
Recognized (gain) loss due to settlement | 0 | 0 | |
Amortization of prior service cost | 0 | 0 | |
Recognized net actuarial loss | 776 | 1,333 | |
Benefit cost | 726 | $ 1,257 | |
Estimated Future Benefit Payments | |||
FYE 01-31-2021 | 6,114 | ||
FYE 01-31-2022 | 2,992 | ||
FYE 01-31-2023 | 2,641 | ||
FYE 01-31-2024 | 2,549 | ||
FYE 01-31-2025 | 3,067 | ||
FYE 01-31-2026 to 2030 | 11,960 | ||
Total | $ 29,323 | ||
Weighted Average Assumptions to Determine Net Periodic Pension Cost | |||
Discount rate | 4.10% | 4.25% | |
Expected return on plan assets | 6.50% | 6.50% | |
Minimum [Member] | Combined Employee Retirement Plans [Member] | |||
Weighted Average Assumptions to Determine Benefit Obligations at Year-End | |||
Discount rate | 3.00% | 3.75% | |
Maximum [Member] | Combined Employee Retirement Plans [Member] | |||
Weighted Average Assumptions to Determine Benefit Obligations at Year-End | |||
Discount rate | 3.05% | 4.00% |
Retirement Plans (Fair Value of
Retirement Plans (Fair Value of Employee Plan Assets) (Details) - Combined Employee Retirement Plans [Member] - USD ($) | Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2018 |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 23,654,000 | $ 23,527,000 | $ 27,259,000 |
Managed Investment Fund [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,414,000 | 1,284,000 | |
Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 22,240,000 | 22,243,000 | |
Fair Value, Inputs, Level 1 [Member] | Common Stock [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 10,080,000 | 9,345,000 | |
Fair Value, Inputs, Level 1 [Member] | Principal Money Market [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 799,000 | 0 | |
Fair Value, Inputs, Level 1 [Member] | PNC Government Money Fund [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 175,000 | 630,000 | |
Fair Value, Inputs, Level 1 [Member] | Vanguard INTM Term Investment Fund [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 250,000 | 283,000 | |
Fair Value, Inputs, Level 1 [Member] | Vanguard LT Investment [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,161,000 | 1,304,000 | |
Fair Value, Inputs, Level 1 [Member] | Ishares Russell 2000 [Domain] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,560,000 | 1,672,000 | |
Fair Value, Inputs, Level 1 [Member] | Ishares MID-CAP Fund [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,850,000 | 1,890,000 | |
Fair Value, Inputs, Level 1 [Member] | Ishares Emerging Markets Fund [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,103,000 | 1,130,000 | |
Fair Value, Inputs, Level 1 [Member] | Ishares MCSI RAFE Fund [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,577,000 | 1,534,000 | |
Fair Value, Inputs, Level 1 [Member] | Ishares S&P Index [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2,252,000 | 2,895,000 | |
Fair Value, Inputs, Level 1 [Member] | Vanguard INTM Term Treasury [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 250,000 | 281,000 | |
Fair Value, Inputs, Level 1 [Member] | Vanguard LT Treasury [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 1,183,000 | $ 1,279,000 |
Retirement Plans (401(k) Retire
Retirement Plans (401(k) Retirement Plan) (Details) - UNITED STATES - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Virco stock held in plan | 706,654 | 648,565 |
Company contributions | $ 765,000 | $ 738,000 |
Minimum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Participant deferral percentage allowance | 1.00% | |
Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Participant deferral percentage allowance | 75.00% |
Retirement Plans (Life Insuranc
Retirement Plans (Life Insurance) (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Life Insurance, Corporate or Bank Owned, Amount | $ 2,250,000 | |
Liability beginning of year | 2,037,000 | $ 2,088,000 |
Accretion expense | 49,000 | 49,000 |
Present value of death benefits paid | (100,000) | (100,000) |
Liability end of year | 1,986,000 | 2,037,000 |
Cash surrender value | 1,906,000 | 2,098,000 |
Life Insurance, Death Benefits Payable | $ 3,902,000 | $ 4,256,000 |
Stock-Based Compensation (Textu
Stock-Based Compensation (Textual) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation at cost | $ 2,700 | |
Compensation Cost Not yet Recognized, Period for Recognition | 2 years 9 months 62 days | |
Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stocks granted during period | 547,385 | 55,555 |
Aggregate fair value of stock awards vested during the period | $ 995 | $ 1,050 |
Compensation expense | $ 924 | $ 907 |
Weighted-average grant-date fair value of restricted stock awards granted | $ 4.38 | $ 4.49 |
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | 55,792 | 57,456 |
Payment, Tax Withholding, Share-based Payment Arrangement | $ 300 | $ 300 |
Restricted Stock Units [Member] | 2011 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized (in shares) | 1,000,000 | |
Stock available for future issuance | 804,892 | |
Restricted stocks granted during period | 547,385 | |
Awards vested during the year | 223,555 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock Units) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Summary of restricted stock and stock unit awards | ||
Unrecognized compensation at cost | $ 2,700 | |
Restricted Stock Units [Member] | ||
Summary of restricted stock and stock unit awards | ||
Granted | 547,385 | 55,555 |
Expense for 12 months ended | $ 924 | $ 907 |
Restricted Stock Units | ||
Outstanding at beginning of year | 501,155 | 692,404 |
Granted | 547,385 | 55,555 |
Vested | (223,555) | (226,804) |
Forfeited | (84,000) | (20,000) |
Outstanding at end of year | 740,985 | 501,155 |
Weighted- average fair value of restricted stock units | ||
Outstanding at beginning of year | $ 4.44 | $ 4.25 |
Granted | 4.38 | 4.49 |
Vested | 4.45 | 4.63 |
Forfeited | 4.51 | 4.01 |
Outstanding at end of year | $ 4.54 | $ 4.44 |
2011 Plan [Member] | Restricted Stock Units [Member] | ||
Summary of restricted stock and stock unit awards | ||
Granted | 547,385 | |
Restricted Stock Units | ||
Granted | 547,385 |
Income Taxes (Income Tax Expens
Income Taxes (Income Tax Expense Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Statutory | $ 585 | $ (235) |
State taxes (net of federal tax) | 400 | 186 |
Change in valuation allowance | (573) | 831 |
State rate adjustment | (291) | (222) |
Change in unrecognized tax benefits | 20 | 1 |
Stock Compensation | (28) | (46) |
Tax cuts and jobs act | 0 | (15) |
Expirations of attributes | 345 | 28 |
Permanent differences | (17) | 8 |
Return to provision | (96) | (39) |
Income tax expense (benefit) | $ 345 | $ 497 |
Income Taxes (Components of Inc
Income Taxes (Components of Income Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Current | ||
Federal | $ 0 | $ (24) |
State | 136 | 102 |
Current income tax benefit (expense) | 136 | 78 |
Deferred | ||
Federal | 442 | (247) |
State | 340 | (165) |
Total deferred income taxes | 782 | (412) |
Change in valuation allowance | (573) | 831 |
Deferred income taxes | 209 | 419 |
Income tax expense (benefit) | $ 345 | $ 497 |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Jan. 31, 2019 |
Deferred tax assets | ||
Accrued vacation and sick leave | $ 1,264 | $ 892 |
Retirement plans | 5,448 | 2,748 |
Insurance reserves | 443 | 381 |
Warranty | 207 | 182 |
Net operating loss carryforwards | 3,658 | 5,303 |
Right of use liabilities | 6,067 | 0 |
Inventory | 1,175 | 1,320 |
Business interest expense limitation | 224 | 540 |
Other | 301 | 765 |
Total deferred tax assets | 18,787 | 12,131 |
Deferred tax liabilities | ||
Tax in excess of book depreciation | (802) | (720) |
Right of use assets | (5,519) | 0 |
Other | (53) | (57) |
Total deferred tax liabilities | (6,374) | (777) |
Valuation allowance | (1,183) | (1,756) |
Net long term deferred tax asset | $ 11,230 | $ 9,598 |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning Balance, unrecognized tax benefits | $ 38 | $ 38 |
Increases related to prior year tax positions | 8 | 0 |
Decreases related to prior year tax positions | 0 | (2) |
Increases related to current year tax positions | 18 | 8 |
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | 0 | 0 |
Decreases related to lapsing of statute of limitations | (4) | (6) |
Ending Balance, unrecognized tax benefits | $ 60 | $ 38 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | Dec. 22, 2017 | Jan. 31, 2020 | Jan. 31, 2019 | Jan. 31, 2018 |
Income Tax Disclosure [Abstract] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | ||
Unrecognized tax benefits | $ 60,000 | $ 38,000 | $ 38,000 | |
Unrecognized tax benefits that would favorably impact effective tax rate | 47,000 | |||
Liability for interest and penalties related to unrecognized tax benefits | 10,000 | 6,000 | ||
Unrecognized tax benefit amount that is reasonably possible to decrease | 5,000 | |||
Valuation allowance | 1,183,000 | 1,756,000 | ||
Federal net operating loss carryforward | 9,499,000 | |||
State net operating loss carryforward | 26,098,000 | |||
Stock Compensation | $ (28,000) | $ (46,000) | ||
Provisional amount of the deferred tax expense | $ 4,438,000 |
Leases and Commitments (Lease T
Leases and Commitments (Lease Terms) (Details) | Jan. 31, 2020 |
Commitments [Abstract] | |
Lease length | 5 years |
Leases and Commitments Leases a
Leases and Commitments Leases and Commitments (ASC 842 Quantitative Information) (Details) | 12 Months Ended |
Jan. 31, 2020USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease cost | $ 5,435,000 |
Short-term lease cost | 149,000 |
Short-term sublease income | (40,000) |
Variable lease cost | 892,000 |
Total lease cost | 6,436,000 |
Cash paid for amounts included in the measurement of lease liabilities | 5,435,000 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 1,613,000 |
Weighted-average remaining lease term (years) | 4 years 11 months 12 days |
Weighted-average discount rate | 6.38% |
Leases and Commitments Leases_2
Leases and Commitments Leases and Commitments (Minimum Future Lease Payments 842) (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Jan. 31, 2019 |
Commitments [Abstract] | ||
2021 | $ 5,030 | |
2022 | 5,636 | |
2023 | 5,193 | |
2024 | 5,192 | |
2025 | 5,347 | |
Thereafter | 1,340 | |
Remaining balance of lease payments | 27,738 | |
Short-term lease liabilities | 3,654 | $ 0 |
Long-term lease liabilities | 19,787 | $ 0 |
Total lease liabilities | 23,441 | |
Difference between undiscounted cash flows and discounted cash flows | $ 4,297 |
Leases and Commitments (Minimum
Leases and Commitments (Minimum Future Lease Payments 840) (Details) $ in Thousands | Jan. 31, 2019USD ($) |
Operating Leases, Future Minimum Payments Due | |
Operating leases payments due 2020 | $ 5,045 |
Operating leases payments due 2021 | 4,405 |
Operating leases payments due 2022 | 5,041 |
Operating leases payments due 2023 | 5,040 |
Operating leases payments due 2024 | 5,192 |
Operating leases payments due Thereafter | 6,687 |
Total | 31,370 |
Remaining balance of lease payments | 31,410 |
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals | $ (40) |
Leases and Commitments (Rent Ex
Leases and Commitments (Rent Expense) (Details) | 12 Months Ended |
Jan. 31, 2019USD ($) | |
Commitments [Abstract] | |
Rent expense | $ 6,006,000 |
Contingencies (Details Textual)
Contingencies (Details Textual) - USD ($) | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Loss Contingencies [Line Items] | ||
Liability retention losses | $ 30,000,000 | |
Expected future losses | $ 1,700,000 | $ 1,265,000 |
Estimated payout period | 5 years | |
Discount rate | 4.00% | 4.00% |
Product and General Liability [Member] | ||
Loss Contingencies [Line Items] | ||
Self insurance reserve | $ 250,000 | |
Workers Compensation [Member] | ||
Loss Contingencies [Line Items] | ||
Self insurance reserve | 250,000 | |
Automobile Losses [Member] | ||
Loss Contingencies [Line Items] | ||
Self insurance reserve | $ 50,000 |
Contingencies (Minimum Self Ins
Contingencies (Minimum Self Insurance Payments) (Details) $ in Thousands | Jan. 31, 2020USD ($) |
Self Insurance, Future Estimated Payments Due | |
Estimated self insurance payments due in 2021 | $ 300 |
Estimated self insurance payments due in 2022 | 375 |
Estimated self insurance payments due in 2023 | 375 |
Estimated self insurance payments due in 2024 | 375 |
Estimated self insurance payments due in 2025 | 375 |
Estimated self insurance payments due thereafter | 0 |
Estimated self insurance payments, gross | 1,800 |
Discount to net present value | (100) |
Estimated self insurance payments, net | $ 1,700 |
Warranty (Details)
Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Warranty claim activity | ||
Beginning accrued warranty balance | $ 700 | $ 925 |
Provision | 570 | 600 |
Provision for (benefits from) prior year | (145) | (555) |
Costs incurred | (325) | (270) |
Ending accrued warranty balance | $ 800 | $ 700 |
Minimum [Member] | ||
Warranty [Line Items] | ||
Product warranty period | 10 years | |
Maximum [Member] | ||
Warranty [Line Items] | ||
Product warranty period | 10 years |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Allowance for doubtful accounts | ||
Valuation and Qualifying Accounts Disclosure | ||
Valuation Allowances and Reserves, Beginning Balance | $ 200 | $ 200 |
Valuation Allowances and Reserves, Charged to (Reduced from) Expenses | 83 | 3 |
Valuation Allowances and Reserves, Deductions from Reserves | 83 | 3 |
Valuation Allowances and Reserves, Ending Balance | 200 | 200 |
Product, general, workers’ compensation and automobile liability reserves | ||
Valuation and Qualifying Accounts Disclosure | ||
Valuation Allowances and Reserves, Beginning Balance | 1,265 | 1,347 |
Valuation Allowances and Reserves, Charged to (Reduced from) Expenses | 1,520 | 1,357 |
Valuation Allowances and Reserves, Deductions from Reserves | 1,085 | 1,439 |
Valuation Allowances and Reserves, Ending Balance | $ 1,700 | $ 1,265 |