Core Insights - Virco Mfg. Corporation reported a net loss of $1.3 million in Q3 2025, a significant decline from a net profit of $8.4 million in Q3 2024, with sales dropping from $82.6 million to $47.6 million [2][10] - For the nine months ending October 31, 2025, net income was $9.6 million on sales of $173.5 million, down from $27.4 million on sales of $237.8 million in the same period last year [3][10] - The company’s gross profit margin decreased from 44.4% to 38.0% in Q3 and from 45.1% to 43.2% over the nine-month period [2][3] Financial Performance - Q3 sales were $47.6 million, down 42.4% year-over-year, while gross profit for the quarter was $18.1 million [2][28] - SG&A expenses in Q3 decreased to $19.8 million, representing 41.5% of sales, compared to 30.9% in the same period last year [2] - For the nine months, SG&A expenses totaled $61.4 million, or 35.4% of sales, compared to 30.0% last year [3] Market Conditions - The decline in operating metrics was primarily due to lower sales and production levels, with a noted downturn of approximately 30% in the market for moveable school furniture over the last two years [4][5] - The expiration of pandemic recovery stimulus funds (ESSER funds) is identified as a key factor contributing to the slowdown, alongside a cautious mood among school administrators [6][10] Order and Backlog Trends - Incoming order rates have begun to stabilize, with the unshipped backlog nearly even with the prior year's backlog by the end of Q3 [7] - The preferred measure of overall business velocity, "Shipments Plus Backlog," declined 25% from $265 million to $199 million year-to-date [7] Future Outlook - Management anticipates a potential recovery similar to post-pandemic patterns, with a focus on maintaining a strong balance sheet to respond to new opportunities [9][15] - The company is actively exploring opportunities in adjacent public and private markets, viewing the current environment as a chance for growth [16] Dividend Declaration - The Board declared a quarterly cash dividend of $0.025 per share, payable on January 9, 2026, to shareholders of record as of December 19, 2025 [10][12]