<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended November 30, 1999 Commission File Number 0-13394
VIDEO DISPLAY CORPORATION
(Exact name of registrant as specified on its charter)
Georgia 58-1217564
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
1868 Tucker Industrial Drive, Tucker, Georgia 30084
(Address of principal executive offices)
Registrant's telephone number including area code: 770-938-2080
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 of the Securities Exchange Act of 1934 during the
preceding 12 months, and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date:
Class Outstanding at November 30, 1999
- ---------------------------------- --------------------------------
Common Stock, No Par Value 3,913,132
<PAGE>
VIDEO DISPLAY CORPORATION
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated balance sheets - November 30, 1999 and
February 28, 1999 3-4
Consolidated statements of income -
Fiscal quarter and nine months ended November 30,
1999 and 1998 5
Consolidated statements of shareholders' equity and
comprehensive income - Twelve months ended
February 28, 1999 and the nine months ended
November 30, 1999 6
Consolidated statements of cash flows - Nine months
ended November 30, 1999 and 1998 7-8
Notes to consolidated financial statements -
November 30, 1999 9-11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12-14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes is Securities 15
Item 3. Defaults upon its Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and reports on Form 8-K 15
SIGNATURES
2
<PAGE>
Video Display Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
November 30, February 28,
1999 1999
UNAUDITED (NOTE A)
--------- ------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents (including restricted cash
of $34,000) $ 2,793,000 $ 2,150,000
Notes and accounts receivable, less allowance for
possible losses of $316,000 and $360,000 10,264,000 8,022,000
Cost and earnings in excess of billings on contract 376,000 952,000
Inventories (Note B) 25,917,000 28,467,000
Prepaid expenses and deferred income taxes 1,537,000 1,976,000
------------- -----------
Total current assets 40,887,000 41,567,000
Property, plant and equipment:
Land 540,000 540,000
Buildings 4,879,000 4,696,000
Machinery and equipment 15,318,000 15,453,000
---------- ----------
20,737,000 20,689,000
Accumulated depreciation and amortization (14,357,000) (14,336,000)
----------- -----------
6,380,000 6,353,000
Excess of cost over net assets acquired, net of
accumulated amortization of $1,739,000 and
$1,493,000 1,947,000 2,193,000
Other assets 1,367,000 1,528,000
------------ ------------
Total assets $50,581,000 $51,641,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
Video Display Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
November 30, February 28,
1999 1999
UNAUDITED (NOTE A)
------------- -------------
<S> <C> <C>
Liabilities and Shareholders' Equity
Current liabilities:
Lines of credit (Note D) $ 2,970,000 $ 2,970,000
Notes payable to officers and shareholders (Note D) 2,400,000 2,500,000
Accounts payable 5,148,000 4,875,000
Accrued liabilities 2,804,000 2,982,000
Current maturities of long-term debt (Note D) 1,678,000 1,676,000
----------- -----------
Total current liabilities 15,000,000 15,003,000
Line of credit 3,266,000 4,500,000
Long-term debt (Note D) 7,248,000 7,712,000
Subordinated debentures 1,775,000 1,775,000
Deferred income taxes 103,000 102,000
Minority interests 172,000 186,000
Commitments and contingencies --- ---
Shareholders' equity
Preferred stock, no par value - shares authorized 2,000,000;
none issued and outstanding --- ---
Common stock, no par value - shares authorized 10,000,000;
issued and outstanding shares 3,913,000 3,380,000 3,591,000
Additional paid-in capital 92,000 92,000
Retained earnings 21,090,000 20,216,000
Accumulated other comprehensive income (1,545,000) (1,536,000)
----------- -----------
Total shareholders' equity 23,017,000 22,363,000
----------- -----------
Total liabilities and shareholders' equity $50,581,000 $51,641,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
Video Display Corporation
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended November 30, Nine Months Ended November 30,
1999 1998 1999 1998
------------ ------------ -------------- ------------
<S> <C> <C> <C> <C>
Net sales $14,565,000 $13,859,000 $47,797,000 $42,660,000
Cost of goods sold 10,063,000 9,094,000 32,855,000 26,840,000
----------- ----------- ----------- -----------
Gross profit 4,502,000 4,765,000 14,942,000 15,820,000
Operating expenses:
Selling and delivery 814,000 1,091,000 3,764,000 3,353,000
General and administrative 3,314,000 2,827,000 9,253,000 8,411,000
----------- ----------- ----------- -----------
4,128,000 3,918,000 13,017,000 11,764,000
Operating profit 374,000 847,000 1,925,000 4,056,000
Other income (expense)
Interest expense (404,000) (242,000) (1,161,000) (686,000)
Gain on sale of subsidiary (Note C) 436,000 --- 436,000 ---
Other, net 33,000 147,000 (88,000) 55,000
----------- ----------- ----------- -----------
65,000 (95,000) (813,000) (631,000)
Income before minority interest 439,000 752,000 1,112,000 3,425,000
Minority interest expense (income) (2,000) (5,000) (13,000) (13,000)
----------- ----------- ----------- -----------
Income before income taxes 441,000 757,000 1,125,000 3,438,000
Income taxes 12,000 276,000 251,000 1,330,000
----------- ----------- ----------- -----------
Net Income $ 429,000 $ 481,000 $ 874,000 $ 2,108,000
=========== =========== =========== ===========
Basic earnings per share of common stock $ 0.11 $ 0.12 $ 0.22 $ 0.54
=========== =========== =========== ===========
Fully diluted earnings per share of
common stock $ 0.11 $ 0.11 $ 0.22 $ 0.49
=========== =========== =========== ===========
Basic weighted average shares outstanding 3,969,000 3,940,000 3,969,000 3,940,000
=========== =========== =========== ===========
Fully diluted weighted average shares
outstanding 4,392,000 4,427,000 4,392,000 4,427,000
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
Video Display Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
For the Twelve Months Ended February 28, 1999 and
the Nine Months Ended November 30, 1999
<TABLE>
<CAPTION>
Accumulated Current
Other Additional Year
Common Retained Comprehensive Paid In Comprehensive
Stock Earnings Income Capital Income
------------ ----------- -------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Balance at February 29, 1998 $3,465,000 $19,094,000 $(1,505,000) $92,000 $ ---
Net income for year --- 1,122,000 --- --- 1,122,000
Currency translation adjustment --- --- 2,000 --- 2,000
Repurchase of common stock (508,000) --- --- --- ---
Issuance of common stock for
business acquisitions 612,000 --- --- --- ---
Issuance of common stock under stock
option plan 22,000 --- --- --- ---
Unrealized loss on marketable equity
securities --- --- (33,000) --- (33,000)
---------- ----------- ----------- ---------- ----------
Balance at February 28, 1999 $3,591,000 $20,216,000 $(1,536,000) $92,000 $1,091,000
Issuance of common stock under stock
option plan 100,000 --- --- --- ---
Repurchase of 78,000 shares of
common stock (311,000) --- --- --- ---
Net income for period --- 874,000 --- --- 874,000
Currency translation adjustment --- --- --- --- ---
Unrealized loss on marketable equity
securities --- --- (9,000) --- (9,000)
---------- ----------- ----------- ---------- ----------
Balance at November 30, 1999 $3,380,000 $21,090,000 $(1,545,000) $92,000 $ 865,000
========== =========== =========== ========== ==========
</TABLE>
6
<PAGE>
Video Display Corporation
STATEMENTS OF CASH FLOWS
For the Nine Months ended November 30,
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
Net cash provided by operating activities $ 1,928,000 $ 1,045,000
Investing activities
Purchase of property, plant and equipment (1,034,000) (1,486,000)
Purchase of assets of Wintron, Inc. --- (400,000)
Purchase of stock of MII --- (50,000)
Purchase of Aydin Corporation assets --- (6,438,000)
Proceeds on sale of subsidiary (Note C) 1,784,000 ---
Purchase of investment --- (4,000)
Increase in other assets (43,000) (374,000)
------------ ------------
Net cash used in investing activities 707,000 (8,752,000)
Financing activities
Proceeds from long-term debt, lines of credit and notes 12,010,000 36,934,000
Proceeds from exercise of stock option 100,000 22,000
Repurchase of common stock (311,000) (509,000)
Proceeds on note receivable 84,000 77,000
Payments on long-term debt and lines of credit (13,875,000) (28,384,000)
------------ ------------
Net cash provided by (used in) financing activities (1,992,000) 8,140,000
Effect of exchange rates on cash --- 8,000
------------ ------------
Net increase in cash 643,000 441,000
Cash, beginning of period 2,150,000 2,598,000
------------ ------------
Cash, end of period $ 2,793,000 $ 3,039,000
============ ============
Noncash transactions
Issuance of company stock for equity investment in Infodex $ --- 93,000
Issuance of company stock in conjunction of investment in MII --- 446,000
------------ ------------
$ --- $ 539,000
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
7
<PAGE>
Video Display Corporation
STATEMENTS OF CASH FLOWS
For the Nine Months ended November 30,
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Reconciliation of Net Earnings from Continuing
Operations to Net Cash Provided by
Operating Activities
Net earnings from continuing operations $ 874,000 $ 2,108,000
Adjustments to reconcile net earnings to net cash provided
by operations:
Depreciation and amortization 1,059,000 1,048,000
Amortized interest on note receivable (27,000) (27,000)
(Decrease) increase in allowance for doubtful accounts (43,000) 61,000
Loss in equity earnings of investee 103,000 5,000
Gain on sale of subsidiary, net of reserve (432,000) ---
Changes in operating assets and liabilities net of effects
from acquisitions:
(Increase) decrease in accounts receivable (1,834,000) 475,000
(Increase) decrease in inventory 1,654,000 (1,726,000)
Decrease in prepaid expenses 439,000 60,000
(Increase) decrease in accounts payable and accrued expenses 149,000 (947,000)
Increase (decrease) in minority interest (14,000) ( 12,000)
----------- -----------
Net cash provided by continuing operations $ 1,928,000 $ 1,045,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
8
<PAGE>
Video Display Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements include the accounts of the Company and
its majority owned subsidiaries after elimination of all significant
intercompany accounts and transactions.
The balance sheet at February 28, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
In the opinion of management, the accompanying unaudited consolidated financial
statements reflect all adjustments "consisting of only normal accruals"
necessary to present fairly the Company's consolidated financial position as of
November 30, 1999 and the Consolidated Statement of income for the nine months
ended November 30, 1999 and 1998.
NOTE B - INVENTORIES
Inventories are stated at the lower of cost (first in, first out) or market.
Inventories consist of:
<TABLE>
<CAPTION>
November 30, February 28,
1999 1999
------------ ------------
<S> <C> <C>
Raw materials $ 3,272,000 $ 6,136,000
Finished goods 22,645,000 22,331,000
----------- -----------
$25,917,000 $28,467,000
=========== ===========
</TABLE>
NOTE C - ACQUISITIONS AND SALE OF SUBSIDIARY STOCK
In June 1998, the Company purchased the common stock of MII and in November
1998, the Company acquired the assets and assumed certain liabilities of the
displays division of Aydin, Inc., and in February 1999 the Company acquired the
assets of the MegaScan division of Access Radiology.
The following table summarized the unaudited pro forma consolidated results of
operations of the Company, assuming the acquisitions and dispositions had
occurred at the beginning of the following fiscal period. The pro forma
financial information is not necessarily indicative of what would have occurred
had the acquisitions been made as of that date, nor is it indicative of future
results of operations.
9
<PAGE>
Video Display Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The pro forma amounts give effect to appropriate adjustments for the fair value
of the net assets acquired, amortization of the excess of the purchase price
over the net assets acquired interest expense and income taxes.
<TABLE>
<CAPTION>
Three months ended Nine months ended
November 30, November 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $14,565,000 $17,732,000 $47,797,000 $53,080,000
Earnings from continuing operations $ 374,000 $ 251,000 $ 1,925,000 $ 218,000
Net earnings (loss) $ 429,000 $ (115,000) 874,000 $(1,730,000)
Basic earnings (loss) per share $ 0.11 $ (0.03) $ 0.22 $ (0.43)
Fully diluted earnings (loss) per share $ 0.11 $ (0.03) $ 0.22 $ (0.43)
</TABLE>
In September 1999, the Company sold its investment in the common stock of its
subsidiary, Vanco International, Inc., for cash proceeds of $1,784,000. The
Company has recognized a capital gain of $432,000 net of a $90,000 reserve for
purchase price settlements utilizing a capital loss carry forward, the net after
tax earnings is $391,000 or $0.09 fully diluted earnings per share.
NOTE D - LONG-TERM DEBT
<TABLE>
<CAPTION>
Long-term debt consisted of the following: November 30, February 28,
1999 1999
---------- -----------
<S> <C> <C>
Term loan facility; floating interest rate based on an
adjusted LIBOR rate (8.5% as of November 30, 1999),
quarterly principal payments commencing December
1999 and maturing November 2005; collateralized by
assets of Aydin Displays, Inc. $7,500,000 $7,500,000
Mortgage payable to bank; monthly principal payments of
$13,000 plus interest not to exceed 7.5% maturing
December 2003; collateralized by land and
building. 757,000 774,000
Term loan facility with bank; monthly payments of $67,000
including interest at 7.25%, maturing August 1999;
collateralized by certain equipment. --- 400,000
Other 669,000 714,000
---------- ------------
$8,926,000 $9,388,000
Less current portion 1,678,000 1,676,000
---------- ------------
$7,248,000 $7,712,000
========== ============
</TABLE>
10
<PAGE>
Video Display Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE E - LINES OF CREDIT
During early 1998, the Company refinanced its loan agreement ("Agreement") to
provide for a $4,500,000 line of credit with its primary bank and $3,500,000
with a second bank secured by substantially all assets of the Company. In
conjunction with this refinancing, the Company borrowed $2,800,000 from the CEO
to pay down the original line of credit. The Company amended its Primary Line to
extend the termination date to July 1, 2000 and to lower the interest rate to a
fixed rate of 7.25% per annum. The commitment fee of 1/2% on the unused portion
of the Primary line was also eliminated. All other terms of the Primary Line
remained the same as the original line of credit. The Secondary Line was
extended to January 15, 2000 with the interest rate and all other terms
remaining the same, including a commitment fee of 1/2% charged on the unused
portion. Borrowing under the Lines are limited by eligible accounts receivable
and inventory, as defined. As of November 30, 1999, the outstanding balances on
the Primary Line and Secondary Line were $3,266,000 and $2,970,000,
respectively. The additional availability under the Primary and Secondary Lines
were $2,234,000 and $59,000, respectively as of November 30, 1999. The Line
agreements contain affirmative and negative covenants including requirements
related to tangible net worth, indebtedness to tangible net worth and cash flow
coverage. Additionally, dividend payments, capital expenditures and acquisitions
have certain restrictions.
In May 1999, the Company increased the Primary Line by $1,000,000 to $5,500,000.
The Company does not anticipate problems in placing the line of credit with the
second bank that expires January 15, 2000.
During the current fiscal year, the Company has borrowed $200,000 from a
Director. The note is payable upon demand and accrues interest at prime plus one
percent. Additionally, the Company has repaid $300,000 to the CEO.
NOTE F - SUPPLEMENTAL CASH FLOW INFORMATION
November 30, November 30,
1999 1998
---- ----
Cash paid for:
Interest $1,161,000 $ 242,000
========== ==========
Income taxes, net of refunds $ 337,000 $3,140,000
========== ==========
11
<PAGE>
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
- ---------------------
The following table sets forth, for the nine months ended November 30, 1999
and 1998, the percentages which selected items in the Statements of Income bear
to total revenues:
<TABLE>
<CAPTION>
Fiscal Quarter Nine Months
Ended November 30, Ended November 30,
1999 1998 1999 1998
----------------------- ------------------------
<S> <C> <C> <C> <C>
Sales
CRT and components 74.5% 61.7% 73.3% 61.5%
Wholesale electronic parts 25.5 38.3 26.7 38.5
----- ----- ----- -----
100.0% 100.0% 100.0% 100.0%
Cost and expenses
Cost of goods sold 69.1% 65.6% 68.7% 62.9
Selling and delivery 5.6 7.9 7.9 7.9
General and administrative 22.8 20.4 19.4 19.7
----- ----- ----- -----
97.5 93.9 96.0 90.5
Income from Operations 2.5 6.1 4.0 9.5
Interest expense (2.7) (1.7) (2.4) (1.6)
Other income (expense) 3.2 1.1 0.8 0.1
----- ----- ----- -----
Income before income taxes 3.0 5.5 2.4 8.0
Provision for income taxes 0.1 2.0 0.6 3.1
----- ----- ----- -----
Net income 2.9% 3.5% 1.8% 4.9%
===== ===== ===== =====
</TABLE>
Net Sales
- ---------
Consolidated net sales increased $706,000 or 5.1% and $5,137,000 or 12.0% for
the three months and nine months ended November 30, 1999 as compared to the same
periods ended November 30, 1998. Net sales for the CRT division increased
$2,308,000 or 27.0% and $8,806,000 or 33.6% for the three and nine months ended
November 30, 1999 as compared to one year ago. Net sales for the wholesale
division decreased $1,603,000 or 30.2% and $3,669,000 or 22.3% for the three and
nine months ended November 30, 1999 as compared to one year ago.
The net increases of sales in the CRT division is primarily attributed to the
internal growth of the Company's newest acquisitions added in the fourth quarter
of fiscal year ended February 1999. Those acquisitions added $3,742,000 and
$12,029,000 to the three and nine month periods ended November 1999 over the
same periods one year ago. The offsetting declines of approximately $1,434,000
for the
12
<PAGE>
quarter ended and $3,223,000 for the nine months ended November 30, 1999 are
spread across all of the CRT division segments. In the nine month comparative
periods the entertainment display segment declined $1,693,000, the data display
segment declined $605,000, the monitor segment declined $363,000 and the
components segment declined $562,000. Within the television segment, declines
can be traced to decreased volume as a result of fulfillment of a customer
backlog demand.
The decline in revenues in the wholesale parts division includes a decline in
the sales of the Company's Vanco International, Inc. ("Vanco") subsidiary which
was sold September 30, 1999. Included in the three and nine month sales ended
November 30, 1999 were $295,000 and $2,130,000, respectively, pertaining to
Vanco. The same period one year reflected sales for Vanco of $1,034,000 and
$3,101,000. The remaining declines in the wholesale parts segment of $864,000
for the quarter and $2,698,000 for the nine months ended November 30, 1999 as
compared to November 30, 1998 is primarily the result of declines in revenues
from reduction of orders from major electronics distributors who have sought
alternative methods of stocking including direct buys from the major
manufacturers.
Gross margins
- -------------
Consolidated gross margins declined from 34.4% to 30.9% for the three month
comparative periods ended November 30, 1999 and 1998 and from 37.1% to 31.3% for
the same nine month comparative periods. The CRT division margins were down 9.2%
for the comparative nine month periods primarily due to one of the Company's
newest CRT division acquisitions, Aydin Displays. Aydin Displays has provided
$10,748,000 in sales but at a lower gross margin than the other CRT segment
locations have historically provided. During the last quarter of fiscal 1999 and
through this nine month period to date, the Company has realigned several of its
manufacturing locations within the CRT divisions in efforts to streamline its
production, provide for better plant utilization, and to reduce production
overhead costs. During this process, costs have been incurred as materials have
had to be relocated and personnel trained. Order backlog, which has been reduced
during the third quarter, still remains as a result of the manufacturing
locations adjusting to volume changes and the expenses related thereto.
Operating expenses
- ------------------
Operating expenses are flat both in dollars and percentage of sales for the
three and nine month comparative periods ended November 30, 1999. Included in
these expenses is $2,765,000 for the nine months that relate to newly added
locations. The wholesale parts division has reduced $780,000 of operating
expenses in the nine month comparative period through the elimination of two
locations and a reduction of home office personnel.
Interest expense
- ----------------
Interest expense has increased $162,000 and $475,000 for the three and nine
month comparative periods, respectively. The increase can be attributed to the
interest due on the $7,500,000 debt that was entered into in conjunction with
the Aydin Displays acquisition.
During the second quarter of the current fiscal year, the Company paid off the
term note with its primary bank and on September 30, 1999 the Company sold its
subsidiary, Vanco International, and used the proceeds to pay down its revolver.
13
<PAGE>
Income taxes
- ------------
The effective tax rate for the nine months ended November 30, 1999 was 22.3% as
compared to 38.7% one year ago. There is a tax benefit of $123,000 or 10.9%
reflected in the nine months ended November 30, 1999 attributed to a capital
loss carry forward that is to be applied to the $432,000 capital gain realized
on the sale of the Company's subsidiary, Vanco International, Inc. An additional
benefit from foreign operation losses is also reflected.
Foreign Currency Translation
- ----------------------------
The Company's Mexican subsidiary reports on the basis of the functional currency
as being the US dollar. Any exchange gains or losses due to the actual exchange
of pesos and US dollars is currently reflected in the Company's income
statement. There were no significant gains or losses for the current fiscal
year.
Liquidity and capital resources
- -------------------------------
Working capital declined from $26,564,000 as of February 28, 1999 to $25,887,000
as of November 30, 1999. The declines are primarily attributed to the sale of
Vanco whereby the proceeds received were applied to the revolver which is
classified as long term debt. Other changes are attributed to normal ongoing
operations.
The Company is in the process of renegotiating its revolving line with its
secondary bank. The Company does not anticipate problems placing the revolver
with a bank.
The Company does not anticipate significant capital acquisitions for the balance
of fiscal year 2000.
Year 2000 Disclosure
- --------------------
As of the date of the filing of this report, the Company has not experienced any
issues arising from the Year 2000 issue. All internal processing, production,
and receipt of goods from outside suppliers has occurred without problem. The
Company will continue to monitor the progress as we reach other critical dates
including the first month end processing and the leap year, but at this time the
Company has no indications that any problem will arise.
Forward-looking Information
- ---------------------------
This report contains forward-looking statements and information that is based on
management's beliefs, as well as assumptions made by, and information currently
available to management. When used in this document, the words "anticipate",
"believe", "estimate", "intends", "will", and "expect" and similar expressions
are intended to identify forward-looking statements. Such statements involve a
number of risks and uncertainties. Among the factors that could cause actual
results to differ materially are the following: business conditions, rapid or
unexpected technological changes, product development, inventory risks due to
shifts in product demand, competition, domestic and foreign government
relations, fluctuations in foreign exchange rates, rising costs for components
or unavailability of components, the timing of orders booked, lender
relationships and the risk factors listing from time to time in the Company's
reports filed with the Commission.
14
<PAGE>
PART II
Item 1. Legal Proceedings
No new legal proceedings or material changes in existing litigation
occurred during the quarter ending November 30, 1999.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other information
None
Item 6. Exhibits and Reports on Form 8-K
None
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
VIDEO DISPLAY CORPORATION
January 17, 2000 By: /s/ Ronald D. Ordway
-------------------------------
Ronald D. Ordway
Chief Executive Officer
By: /s/ Carol D. Franklin
-------------------------------
Carol D. Franklin
Chief Financial Officer and Secretary
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-28-2000
<PERIOD-START> MAR-01-1999
<PERIOD-END> NOV-30-1999
<CASH> 2,793,000
<SECURITIES> 0
<RECEIVABLES> 10,956,000
<ALLOWANCES> 316,000
<INVENTORY> 25,917,000
<CURRENT-ASSETS> 40,887,000
<PP&E> 20,737,000
<DEPRECIATION> 14,357,000
<TOTAL-ASSETS> 50,581,000
<CURRENT-LIABILITIES> 15,000,000
<BONDS> 12,564,000
0
0
<COMMON> 3,380,000
<OTHER-SE> 19,637,000
<TOTAL-LIABILITY-AND-EQUITY> 50,581,000
<SALES> 47,797,000
<TOTAL-REVENUES> 47,797,000
<CGS> 32,855,000
<TOTAL-COSTS> 45,872,000
<OTHER-EXPENSES> (361,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,161,000
<INCOME-PRETAX> 1,125,000
<INCOME-TAX> 251,000
<INCOME-CONTINUING> 874,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 874,000
<EPS-BASIC> 0.22
<EPS-DILUTED> 0.22
</TABLE>
