backlog at march 31 , 2020 is slightly higher than the prior year . with no students on campus , many school facilities may accept deliveries of furniture that otherwise may have been deferred to later dates . executive overview the market for school furniture is traditionally seasonal , with approximately 50 % of annual sales occurring in the months of june , july , and august . the company has traditionally met the seasonal needs with significant overtime and by hiring seasonal temporary labor . the covid-19 pandemic may make hiring seasonal labor more challenging than in recent years . exceedingly generous federal supplements to state unemployment benefits may exacerbate this challenge . the markets that virco serves include the education market ( the company 's primary market ) , which is made up of public and private schools ( preschool through 12th grade ) , junior and community colleges , four-year colleges and universities ; and trade , technical and vocational schools . virco also serves convention centers and arenas ; the hospitality industry , with respect to their banquet and meeting facilities ; government facilities at the federal , state , county and municipal levels ; and places of worship . in addition , the company sells to wholesalers , distributors , retailers , catalog retailers , and internet retailers that serve these same markets . these institutions are frequently characterized by extreme seasonality and or a bid-based purchasing function . the company 's business model , which is designed to support this strategy , is highly integrated . the company purchases coils of steel , plastic resin , particle board , and other raw materials and fabricated finished goods for education market . the company markets and sells direct to the schools and provides project management and logistics . the company primarily sells to schools fob destination , with more than 75 % of sales delivered fob classroom . as part of this integrated business model , the company has developed several competencies to enable superior service to the markets in which virco competes . an important element of virco 's business model is the company 's emphasis on developing and maintaining key manufacturing , warehousing , distribution , delivery , project management and service capabilities . the company has developed a comprehensive product offering for the furniture , fixtures and equipment ( “ ff & e ” ) needs of the k-12 education market , enabling a school to procure all of its ff & e requirements from one source . virco 's product offering consists primarily of items manufactured by virco , complemented with products sourced from other furniture manufacturers . our product offerings are continually enhanced with an ongoing new product development program that incorporates internally developed products as well as product lines developed with accomplished designers . finally , management continues to hone virco 's ability to forecast , finance , manufacture , warehouse , deliver and install furniture within the relatively narrow delivery window associated with the highly seasonal demand for education sales . in fiscal 2020 and 2019 , approximately 53 % and 52 % respectively of the company 's total sales were delivered in june , july and august . average weekly shipments during july and august can be as great as six times the level of average weekly shipments in the winter months . virco 's substantial warehouse space allows the company to build and ship adequate inventories to service this narrow delivery window for the education market . the market and operating environment for school ff & e has been challenging for the last 18 years . the company has seen moderate improvement in its primary market in the last four years , but spending on ff & e is well below the level experienced prior to the recession beginning in 2008. schools suffered significant budgetary pressures from 2002 to 2005 following the “ dot com ” bust and post “ 9/11 ” era , followed by a recovery from 2006 - 2007. following the recession in 2008 , the industry suffered from reduced funding and severe budget shortages impacting years from 2010 through 2014. the budgetary pressures directly impact the demand for the company 's products , as the demand for educational furniture largely depends upon : ( 1 ) available funding in a school 's general operating fund and ( 2 ) the completion of bond-funded projects , which is directly impacted by the amount of bond financing issued to fund new school construction , to renovate older schools , and to fully equip new and renovated schools . approximately 80-85 % of a school 's operating budget is for the salaries and benefits for school teachers and administrators . increasing costs for medical insurance , combined with pressures from unfunded post-retirement medical and pension obligations reduces funds available for other purposes . in response to these budgetary pressures , schools typically elect to retain teachers and spend less on repairs , maintenance and replacement furniture , which in turn reduces the demand for , and 23 sales of , the company 's products . in recent years , there has been an improvement in state and local tax collections , and most state and local governments have seen their tax receipts return to the pre-2008 levels . in response to the 2008 recession , passage of new bond issuances declined , and the related bond-funded project completions decreased materially for several years . in recent years , the completions of bond-funded projects have recovered from the low point subsequent to 2008 , but projects remain well below the pre-2008 levels . in the recent elections , we observed an increase in bond passages . story_separator_special_tag as we have throughout this economic cycle , the company continues to focus on strategies to develop and strengthen its brand with an aggressive product development campaign . we will continue to use our domestic factories to provide greater flexibility for custom specifications such as laminates , colors and on-time delivery . the company will continue to emphasize the value , design , variety of its products , the value of its distribution , delivery , classroom delivery and project management capabilities , and the importance of timely deliveries during the peak-seasonal delivery period . the company plans to increase selling prices to recover increased costs of commodities and to improve gross margins . to increase or maintain market share during fiscal 2021 , when market conditions warrant , the company may selectively compete based on direct prices to build or maintain its market share . estimates of sales volume for the next year will be impacted by the covid-19 pandemic . demand for project business is anticipated to be stable . short term transactional business may decline while schools are closed . the potential impact of government stimulus programs and possible failures of competitors can not be reasonably estimated as of the date of this report . cost of sales cost of sales was 62.5 % of net sales in fiscal 2020 and 66.6 % of sales in fiscal 2019. the decrease in cost of sales as a percentage of sales was primarily attributable to increased selling prices , partially offset by an increase in manufacturing overhead variances related to reduced levels of production . in the first quarter of fiscal 2020 , the company increased selling prices to recover increased costs incurred in fiscal 2019. with the exception of an additional 15 % tariff on chinese raw material components in fiscal 2020 , the cost of commodities was reasonably stable . the company incurred a reduction in unit sales volume , which increased manufacturing overhead variances offsetting a portion of the price increase . during fiscal 2021 , the company anticipates continued uncertainty and volatility in commodity costs , particularly with respect to certain raw materials , transportation , energy and tariffs due to potential macroeconomic events , including the global pandemic caused by covid-19 . due in part to volatile transportation and energy costs , we may incur higher commodity costs in fiscal 2021. for more information , please see the section below entitled “ inflation and future change in prices . ” selling , general and administrative and other expenses selling , general and administrative expenses for fiscal 2020 , increased as a percentage of net sales by approximately 2.1 % to $ 65,726,000 compared to $ 64,751,000 in fiscal 2019 and increased as a percentage of net sales to 34.4 % in fiscal 2020 from 32.3 % in fiscal 2019. service costs , including warehousing , freight and classroom delivery costs decreased $ 1,201,000 but increased by 0.1 % as a percentage of net sales . the slight increase in costs as a percentage of net sales was driven by the company 's efforts to improve upon service levels provided to our customers . selling costs increased in dollars and as a percentage of sales compared to the prior year . increased selling costs were attributable to additional selling and support resources . g & a spending decreased in terms of dollars but increased slightly as a percentage of net sales . g & a spending included a management bonus provision of approximately $ 714,000 in fiscal 2020. no bonus was paid in fiscal 2019. interest expense was $ 271,000 higher in fiscal 2020 compared to fiscal 2019 because of increased interest rates . provision for income taxes the company has a partial valuation allowance of $ 1,183,000 against certain state deferred tax assets that the company does not believe is more-likely-than-not to be realized . 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. for fiscal 2020 the effective tax rate was 12.7 % . this rate was primarily attributable to an adjustment to valuation allowance on certain components for the federal and state net operating loss . 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 27 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 . inflation and future change in prices we commit to annual contracts that determine selling prices for goods and services for periods of one year and occasionally longer . though the company has negotiated flexibility under many of these contracts that may allow the company to increase prices on future orders , the company does not have the ability to raise prices on orders received prior to any announced price increase . due to the intensely seasonal nature of our business , the company may receive significant orders

liquidity and capital resources working capital requirements virco addresses liquidity and working capital requirements in the context of short-term seasonal requirements and long-term capital requirements of the business . the company 's core business of selling furniture to publicly-funded educational institutions is extremely seasonal . the seasonal nature of this business permeates most of virco 's operational , capital and financing decisions . the company 's working capital requirements during and in anticipation of the peak summer season oblige management to make estimates and judgments that affect virco 's assets , liabilities , revenues and expenses . management expends a significant amount of time during the year , and especially in the fourth quarter of the prior year and first quarter of current year , developing a stocking plan and estimating the number of employees , the amount of raw materials and the types of components and products that will be required during the peak season . if management underestimates any of these requirements , virco 's ability to fill customer orders on a timely basis or to provide adequate customer service may be diminished . if management 28 overestimates any of these requirements , the company may be required to absorb higher storage , labor and related costs , each of which may affect profitability . on an on-going basis , management evaluates such estimates , including those related to market demand , labor costs and inventory levels , and continually strives to improve virco 's ability to correctly forecast business requirements during the peak season each year . as part of virco 's efforts to address seasonality , financial performance and quality without sacrificing service or market share , management has been refining the company 's ats operating model . ats is virco 's version of mass-customization , which assembles standard , stocked components into customized configurations before shipment . the company 's ats program reduces the total amount of inventory and working capital needed to support a given level of sales . it does this by increasing the inventory 's versatility , delaying assembly until the last moment and reducing the amount of warehouse space needed to store finished goods .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources working capital requirements virco addresses liquidity and working capital requirements in the context of short-term seasonal requirements and long-term capital requirements of the business . the company 's core business of selling furniture to publicly-funded educational institutions is extremely seasonal . the seasonal nature of this business permeates most of virco 's operational , capital and financing decisions . the company 's working capital requirements during and in anticipation of the peak summer season oblige management to make estimates and judgments that affect virco 's assets , liabilities , revenues and expenses . management expends a significant amount of time during the year , and especially in the fourth quarter of the prior year and first quarter of current year , developing a stocking plan and estimating the number of employees , the amount of raw materials and the types of components and products that will be required during the peak season . if management underestimates any of these requirements , virco 's ability to fill customer orders on a timely basis or to provide adequate customer service may be diminished . if management 28 overestimates any of these requirements , the company may be required to absorb higher storage , labor and related costs , each of which may affect profitability . on an on-going basis , management evaluates such estimates , including those related to market demand , labor costs and inventory levels , and continually strives to improve virco 's ability to correctly forecast business requirements during the peak season each year . as part of virco 's efforts to address seasonality , financial performance and quality without sacrificing service or market share , management has been refining the company 's ats operating model . ats is virco 's version of mass-customization , which assembles standard , stocked components into customized configurations before shipment . the company 's ats program reduces the total amount of inventory and working capital needed to support a given level of sales . it does this by increasing the inventory 's versatility , delaying assembly until the last moment and reducing the amount of warehouse space needed to store finished goods .
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 Suspicious Activity Report : backlog at march 31 , 2020 is slightly higher than the prior year . with no students on campus , many school facilities may accept deliveries of furniture that otherwise may have been deferred to later dates . executive overview the market for school furniture is traditionally seasonal , with approximately 50 % of annual sales occurring in the months of june , july , and august . the company has traditionally met the seasonal needs with significant overtime and by hiring seasonal temporary labor . the covid-19 pandemic may make hiring seasonal labor more challenging than in recent years . exceedingly generous federal supplements to state unemployment benefits may exacerbate this challenge . the markets that virco serves include the education market ( the company 's primary market ) , which is made up of public and private schools ( preschool through 12th grade ) , junior and community colleges , four-year colleges and universities ; and trade , technical and vocational schools . virco also serves convention centers and arenas ; the hospitality industry , with respect to their banquet and meeting facilities ; government facilities at the federal , state , county and municipal levels ; and places of worship . in addition , the company sells to wholesalers , distributors , retailers , catalog retailers , and internet retailers that serve these same markets . these institutions are frequently characterized by extreme seasonality and or a bid-based purchasing function . the company 's business model , which is designed to support this strategy , is highly integrated . the company purchases coils of steel , plastic resin , particle board , and other raw materials and fabricated finished goods for education market . the company markets and sells direct to the schools and provides project management and logistics . the company primarily sells to schools fob destination , with more than 75 % of sales delivered fob classroom . as part of this integrated business model , the company has developed several competencies to enable superior service to the markets in which virco competes . an important element of virco 's business model is the company 's emphasis on developing and maintaining key manufacturing , warehousing , distribution , delivery , project management and service capabilities . the company has developed a comprehensive product offering for the furniture , fixtures and equipment ( “ ff & e ” ) needs of the k-12 education market , enabling a school to procure all of its ff & e requirements from one source . virco 's product offering consists primarily of items manufactured by virco , complemented with products sourced from other furniture manufacturers . our product offerings are continually enhanced with an ongoing new product development program that incorporates internally developed products as well as product lines developed with accomplished designers . finally , management continues to hone virco 's ability to forecast , finance , manufacture , warehouse , deliver and install furniture within the relatively narrow delivery window associated with the highly seasonal demand for education sales . in fiscal 2020 and 2019 , approximately 53 % and 52 % respectively of the company 's total sales were delivered in june , july and august . average weekly shipments during july and august can be as great as six times the level of average weekly shipments in the winter months . virco 's substantial warehouse space allows the company to build and ship adequate inventories to service this narrow delivery window for the education market . the market and operating environment for school ff & e has been challenging for the last 18 years . the company has seen moderate improvement in its primary market in the last four years , but spending on ff & e is well below the level experienced prior to the recession beginning in 2008. schools suffered significant budgetary pressures from 2002 to 2005 following the “ dot com ” bust and post “ 9/11 ” era , followed by a recovery from 2006 - 2007. following the recession in 2008 , the industry suffered from reduced funding and severe budget shortages impacting years from 2010 through 2014. the budgetary pressures directly impact the demand for the company 's products , as the demand for educational furniture largely depends upon : ( 1 ) available funding in a school 's general operating fund and ( 2 ) the completion of bond-funded projects , which is directly impacted by the amount of bond financing issued to fund new school construction , to renovate older schools , and to fully equip new and renovated schools . approximately 80-85 % of a school 's operating budget is for the salaries and benefits for school teachers and administrators . increasing costs for medical insurance , combined with pressures from unfunded post-retirement medical and pension obligations reduces funds available for other purposes . in response to these budgetary pressures , schools typically elect to retain teachers and spend less on repairs , maintenance and replacement furniture , which in turn reduces the demand for , and 23 sales of , the company 's products . in recent years , there has been an improvement in state and local tax collections , and most state and local governments have seen their tax receipts return to the pre-2008 levels . in response to the 2008 recession , passage of new bond issuances declined , and the related bond-funded project completions decreased materially for several years . in recent years , the completions of bond-funded projects have recovered from the low point subsequent to 2008 , but projects remain well below the pre-2008 levels . in the recent elections , we observed an increase in bond passages . story_separator_special_tag as we have throughout this economic cycle , the company continues to focus on strategies to develop and strengthen its brand with an aggressive product development campaign . we will continue to use our domestic factories to provide greater flexibility for custom specifications such as laminates , colors and on-time delivery . the company will continue to emphasize the value , design , variety of its products , the value of its distribution , delivery , classroom delivery and project management capabilities , and the importance of timely deliveries during the peak-seasonal delivery period . the company plans to increase selling prices to recover increased costs of commodities and to improve gross margins . to increase or maintain market share during fiscal 2021 , when market conditions warrant , the company may selectively compete based on direct prices to build or maintain its market share . estimates of sales volume for the next year will be impacted by the covid-19 pandemic . demand for project business is anticipated to be stable . short term transactional business may decline while schools are closed . the potential impact of government stimulus programs and possible failures of competitors can not be reasonably estimated as of the date of this report . cost of sales cost of sales was 62.5 % of net sales in fiscal 2020 and 66.6 % of sales in fiscal 2019. the decrease in cost of sales as a percentage of sales was primarily attributable to increased selling prices , partially offset by an increase in manufacturing overhead variances related to reduced levels of production . in the first quarter of fiscal 2020 , the company increased selling prices to recover increased costs incurred in fiscal 2019. with the exception of an additional 15 % tariff on chinese raw material components in fiscal 2020 , the cost of commodities was reasonably stable . the company incurred a reduction in unit sales volume , which increased manufacturing overhead variances offsetting a portion of the price increase . during fiscal 2021 , the company anticipates continued uncertainty and volatility in commodity costs , particularly with respect to certain raw materials , transportation , energy and tariffs due to potential macroeconomic events , including the global pandemic caused by covid-19 . due in part to volatile transportation and energy costs , we may incur higher commodity costs in fiscal 2021. for more information , please see the section below entitled “ inflation and future change in prices . ” selling , general and administrative and other expenses selling , general and administrative expenses for fiscal 2020 , increased as a percentage of net sales by approximately 2.1 % to $ 65,726,000 compared to $ 64,751,000 in fiscal 2019 and increased as a percentage of net sales to 34.4 % in fiscal 2020 from 32.3 % in fiscal 2019. service costs , including warehousing , freight and classroom delivery costs decreased $ 1,201,000 but increased by 0.1 % as a percentage of net sales . the slight increase in costs as a percentage of net sales was driven by the company 's efforts to improve upon service levels provided to our customers . selling costs increased in dollars and as a percentage of sales compared to the prior year . increased selling costs were attributable to additional selling and support resources . g & a spending decreased in terms of dollars but increased slightly as a percentage of net sales . g & a spending included a management bonus provision of approximately $ 714,000 in fiscal 2020. no bonus was paid in fiscal 2019. interest expense was $ 271,000 higher in fiscal 2020 compared to fiscal 2019 because of increased interest rates . provision for income taxes the company has a partial valuation allowance of $ 1,183,000 against certain state deferred tax assets that the company does not believe is more-likely-than-not to be realized . 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. for fiscal 2020 the effective tax rate was 12.7 % . this rate was primarily attributable to an adjustment to valuation allowance on certain components for the federal and state net operating loss . 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 27 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 . inflation and future change in prices we commit to annual contracts that determine selling prices for goods and services for periods of one year and occasionally longer . though the company has negotiated flexibility under many of these contracts that may allow the company to increase prices on future orders , the company does not have the ability to raise prices on orders received prior to any announced price increase . due to the intensely seasonal nature of our business , the company may receive significant orders

