VIRCO MFG CORPORATIONVIRC

VIRCO MFG CORPORATION Stock Compensation Disclosure

10-KFiled Apr 8, 20262 min read
Stock-Based Compensation
Stock Incentive Plan

Under the Company's 2019 Employee Stock Incentive Plan (the “2019 Plan”), the Company may grant an aggregate of 1,000,000 shares to its employees in the form of restricted stock units and non-employee directors in the form of restricted stock awards. Restricted stock awards granted under the 2019 Plan are expensed ratably over the vesting period of the awards. The Company determines the fair value of its restricted stock units or awards and related compensation expense as the difference between the market value of the units or awards on the date of grant less the exercise price of the units or awards granted. During fiscal year 2026, the Company granted 23,003 awards to non-employee directors, vested 16,066 shares according to their terms and forfeited zero shares under the 2019 Plan. As of January 31, 2026, there were 498,856 shares available for future issuance under the 2019 Plan.

The following table summarizes the stock-based compensation expense related to restricted stock awards recognized in the Company's statement of operations:

January 31,
20262025
(In thousands)
Cost of goods sold$— $37 
Selling, general and administrative expenses208 358 
Total stock-based compensation expense$208 $395 
The following table summarizes the Company’s restricted stock unit awards activity, and related information: 
January 31,
 20262025
Restricted stock unitsWeighted- Average Exercise PriceRestricted stock unitsWeighted- Average Exercise Price
Outstanding at beginning of year16,066 $15.55 164,110 $4.18 
Granted23,003 8.14 16,066 15.55 
Vested(16,066)15.55 (164,110)15.13 
Forfeited— — — — 
Outstanding at end of year23,003 8.14 16,066 15.55 
Weighted-average fair value of restricted stock units granted during the year$187,244 8.14 $249,826 15.55 
Weighted-average fair value of restricted stock units vested during the year$249,826 $2,482,984 
As of January 31, 2026, there was $62,000 of total unrecognized compensation expense related to restricted stock awards. That expense is expected to be recognized over a weighted-average period of 0.3 years. As of January 31, 2025, there was $83,000 of total unrecognized compensation expense related to restricted stock awards. That expense was recognized during fiscal 2026.

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 2026, the Company withheld no common shares. In fiscal 2025, the Company withheld 27,872 common shares, with a value of approximately $412,000. These amounts are presented as a cash outflow from financing activities in the accompanying consolidated statements of cash flows.
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Historical Timeline

Fiscal YearFiled
2026Apr 8, 2026Showing above
2025Apr 14, 2025
2024Apr 12, 2024
2023Apr 28, 2023
2022Apr 28, 2022

About Stock Compensation Disclosures

Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.

Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.

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