☒ |
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
☐ |
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
GEORGIA
|
58-1217564
| |
(State or other jurisdiction of
|
(I.R.S. Employer
| |
incorporation or organization)
|
Identification No.)
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange
on which registered
| ||
Common Stock, no par value
|
VIDE
| OTCMKTS |
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
| |||
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☒
| |||
Emerging growth company
|
☐
|
Page
| ||||||||
PART I. FINANCIAL INFORMATION
| ||||||||
Item 1.
| ||||||||
3
| ||||||||
5
| ||||||||
6
| ||||||||
7
| ||||||||
8
| ||||||||
Item 2.
|
15
| |||||||
Item 3.
|
21
| |||||||
Item 4.
|
21
| |||||||
Item 1.
|
23
| |||||||
Item 1A.
|
23
| |||||||
Item 2.
|
23
| |||||||
Item 3.
|
23
| |||||||
Item 4.
|
23
| |||||||
Item 5.
|
23
| |||||||
Item 6.
|
23
| |||||||
24
| ||||||||
31.1
| ||||||||
31.2
| ||||||||
32
|
November 30,
|
February 28,
| |||||||
2021
|
2021
| |||||||
(unaudited)
| ||||||||
Assets
| ||||||||
Current assets
| ||||||||
Cash and cash equivalents
|
$
|
215
| $ | 293 | ||||
Accounts receivable, less allowance for doubtful accounts of $14 and $12
|
703
| 1,314 | ||||||
Inventories
|
3,088
| 4,027 | ||||||
Contract assets
|
792
| 1,534 | ||||||
Employee retention credit refund receivable
|
796
|
-
| ||||||
Prepaid expenses and other current assets
|
305
| 279 | ||||||
Total current assets
|
5,899
| 7,447 | ||||||
Property, plant, and equipment
| ||||||||
Buildings
|
778
| 766 | ||||||
Construction in progress
|
20
| 130 | ||||||
Machinery and equipment
|
5,316
| 5,162 | ||||||
6,114
| 6,058 | |||||||
Accumulated depreciation
|
(5,179
|
)
| (4,979 | ) | ||||
Net property, plant, and equipment
|
935
| 1,079 | ||||||
Right of use assets under operating leases
|
729
| 1,127 | ||||||
Intangible assets, net
|
151
| 247 | ||||||
Other noncurrent assets
|
2
| 2 | ||||||
Total assets
|
$
|
7,716
| $ | 9,902 | ||||
November 30,
|
February 28,
| |||||||
2021
|
2021
| |||||||
(unaudited)
| ||||||||
Liabilities and Shareholders' Equity
| ||||||||
Current liabilities
| ||||||||
Accounts payable
|
$
|
962
| $ | 602 | ||||
Accrued liabilities
|
809
| 728 | ||||||
Customer deposits
|
1,668
| 1,717 | ||||||
Note payable
|
26
| 100 | ||||||
Note payable to officer and director
|
458
| - | ||||||
Current maturities of financing lease obligations
|
98
| 98 | ||||||
Current operating lease liabilities
|
351
| 601 | ||||||
Total current liabilities
|
4,372
| 3,846 | ||||||
PPP related loans, noncurrent
|
-
| 1,084 | ||||||
Finance lease obligations less current maturities
|
85
| 142 | ||||||
Long-term operating lease liabilities
|
372
| 556 | ||||||
Total liabilities
|
4,829
| 5,628 | ||||||
Shareholders' Equity
| ||||||||
Preferred stock, no par value - 10,000 shares authorized; none issued and outstanding
|
-
| - | ||||||
Common stock, no par value - 50,000 shares authorized; 9,732 issued and 5,878 outstanding at November 30, 2021 and February28, 2021
|
7,293
| 7,293 | ||||||
Additional
paid-in
capital
|
281
| 281 | ||||||
Retained earnings
|
11,595
| 12,982 | ||||||
Treasury stock, shares at cost; 3,854 at November 30, 2021 and February 28, 2021 |
(16,282
|
)
| (16,282 | ) | ||||
Total shareholders' equity
|
2,887
| 4,274 | ||||||
Total liabilities and shareholders' equity
|
$
|
7,716
| $ | 9,902 | ||||
Three Months Ended
November 30,
|
Nine Months Ended
November 30,
| |||||||||||||||
2021
|
2020
|
2021
|
2020
| |||||||||||||
Net sales
|
$
|
1,616
| $ | 2,861 |
$5,377
| $8,858 | ||||||||||
Cost of goods sold
|
2,171
| 1,913 |
5,514
| 6,747 | ||||||||||||
Gross (loss)
profit
|
(555
|
)
| 948 |
(137
|
)
| 2,111 | ||||||||||
Operating expenses
| ||||||||||||||||
Selling and delivery
|
126
| 126 |
408
| 622 | ||||||||||||
General and administrative
|
978
| 947 |
2,873
| 2,920 | ||||||||||||
1,104
| 1,073 |
3,281
| 3,542 | |||||||||||||
Operating loss
|
(1,659
|
)
| (125 | ) |
(3,418
|
)
| (1,431 | ) | ||||||||
Other income (expense)
| ||||||||||||||||
Interest expense, net
|
(6
|
)
| (4 | ) |
(20
|
)
| (35 | ) | ||||||||
Investment gains, net
|
-
| 11 |
-
| 5 | ||||||||||||
Gain on extinguishment of PPP loans
|
-
|
216
|
1,084
|
216
| ||||||||||||
Gain on sale of assets
|
-
|
1,724
|
-
|
1,724
| ||||||||||||
Employee retention credit income
|
796
|
-
|
796
|
-
| ||||||||||||
Other, net
|
63
| 58 |
171
| 393 | ||||||||||||
853
| 2,005 |
2,031
| 2,303 | |||||||||||||
(Loss) income
before income taxes
|
(806
|
)
| 1,880 |
(1,387
|
)
| 872 | ||||||||||
Income tax expense
|
-
| - |
-
| - | ||||||||||||
Net
(loss)
income
|
$
|
(806
|
)
| $ | 1,880 |
$
|
(1,387
|
)
| $ | 872 | ||||||
Net
(loss)
income per share - basic
|
$
|
(0.14
|
)
| $ | 0.32 |
$
|
(0.24
|
)
| $ | 0.15 | ||||||
Net
(loss)
income per share - diluted
|
$
|
(0.14
|
)
| $ | 0.31 |
$
|
(0.24
|
)
| $ | 0.14 | ||||||
Basic weighted average shares outstanding
|
5,878
| 5,878 |
5,878
| 5,878 | ||||||||||||
Diluted weighted average shares outstanding
|
5,878
| 6,078 |
5,878
| 6,078 | ||||||||||||
Common
Shares*
|
Share
Amount
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Treasury
Stock
|
Total Shareholders' Equity | |||||||||||||||||||
For the Three Months Ended November 30, 2021
| ||||||||||||||||||||||||
Balance, August 31, 2021 (unaudited)
| 5,878 | $ | 7,293 | $ | 281 | $ | 12,401 | $ | (16,282 | ) | $ | 3,693 | ||||||||||||
Net loss
| - | - | - | (806 | ) | - | (806 | ) | ||||||||||||||||
Balance, November 30, 2021 (unaudited)
| 5,878 | $ | 7,293 | $ | 281 | $ | 11,595 | $ | (16,282 | ) | $ | 2,887 | ||||||||||||
For the Nine Months Ended November 30, 2021
| ||||||||||||||||||||||||
Balance, February 28, 2021 (audited)
| 5,878 | $ | 7,293 | $ | 281 | $ | 12,982 | $ | (16,282 | ) | $ | 4,274 | ||||||||||||
Net loss
| - | - | - | (1,387 | ) | - | (1,387 | ) | ||||||||||||||||
Balance, November 30, 2021 (unaudited)
| 5,878 | $ | 7,293 | $ | 281 | $ | 11,595 | $ | (16,282 | ) | $ | 2,887 | ||||||||||||
For the Three Months Ended November 30, 2020
| ||||||||||||||||||||||||
Balance, August 31, 2020 (unaudited)
| 5,878 | $ | 7,293 | $ | 281 | $ | 11,162 | $ | (16,282 | ) | $ | 2,454 | ||||||||||||
Net income
| - | - | - | 1,880 | - | 1,880 | ||||||||||||||||||
Balance, November 30, 2020 (unaudited)
| 5,878 | $ | 7,293 | $ | 281 | $ | 13,042 | $ | (16,282 | ) | $ | 4,334 | ||||||||||||
For the Nine Months Ended November 30, 2020
| ||||||||||||||||||||||||
Balance, February 29, 2020 (audited)
| 5,878 | $ | 7,293 | $ | 281 | $ | 12,170 | $ | (16,282 | ) | $ | 3,462 | ||||||||||||
Net income
| - | - | - | 872 | - | 872 | ||||||||||||||||||
Balance, November 30, 2020 (unaudited)
| 5,878 | $ | 7,293 | $ | 281 | $ | 13,042 | $ | (16,282 | ) | $ | 4,334 | ||||||||||||
*
|
Common shares are shown net of Treasury Shares
|
Nine Months Ended
November 30,
| ||||||||
2021
|
2020
| |||||||
Operating Activities
| ||||||||
Net (loss) income
|
$
|
(1,387
| ) | $ | 872 | |||
Adjustments to reconcile net (loss) income to net cash used in operating activities:
| ||||||||
Depreciation expense
|
200
| 163 | ||||||
Amortization of intangible assets
|
96
| 107 | ||||||
Provision for doubtful accounts
|
2
| 6 | ||||||
Inventory related charges
|
827
| 45 | ||||||
Realized/unrealized gain on investments
|
-
| (5 | ) | |||||
Gain on sale of assets
|
-
| (1,724 | ) | |||||
Gain on extinguishment of PPP loans
|
(1,084
|
)
| (216 | ) | ||||
Other, net
|
(36
|
)
| 4 | |||||
Changes in working capital items:
| ||||||||
Accounts receivable
|
609
| 65 | ||||||
Inventories
|
112
| (813 | ) | |||||
Prepaid expenses and other assets
|
(26
|
)
| 193 | |||||
Contract assets
|
742
| (904 | ) | |||||
Employee retention credit refund receivabl
e
|
(796
|
)
|
-
| |||||
Customer deposits
|
(49
|
)
| (596 | ) | ||||
Accounts payable and accrued liabilities
|
441
| 105 | ||||||
Net cash used in operating activities
|
(349
|
)
| (2,698 | ) | ||||
Investing Activities
| ||||||||
Capital expenditures
|
(56
|
)
| - | |||||
Proceeds from sale of assets |
-
|
2,028
| ||||||
Purchases of investments
|
-
| (47 | ) | |||||
Proceeds from sale of investments
|
-
| 50 | ||||||
Net cash (used in) provided by investing activities
|
(56
|
)
| 2,031 | |||||
Financing Activities
| ||||||||
Repayments of notes payable to officers and directors
|
-
| (1,227 | ) | |||||
Repayments of note payable
|
(74
|
)
| - | |||||
Repayments on lease financing
|
(57
|
)
| - | |||||
Proceeds from loans with officers and directors
|
458
| 400 | ||||||
Proceeds from PPP related loans
|
-
| 988 | ||||||
Change in marginal float
|
-
| 4 | ||||||
Net cash provided by financing activities
|
327
| 165 | ||||||
Net change in cash and cash equivalents
|
(78
|
)
| (502 | ) | ||||
Cash and cash equivalents, beginning of year
|
293
| 844 | ||||||
Cash and cash equivalents, end of period
|
$
|
215
| $ | 342 | ||||
November 30,
2021
|
February 28, 2021 | |||||||
Working capital
|
$
| 1,527 | $ | 3,601 | ||||
Liquid assets
|
$
| 215 | $ | 293 |
November 30,
|
February 28,
| |||||||
2021
|
2021
| |||||||
Raw materials
|
$
|
1,719
|
$
|
2,888
| ||||
Work-in-process
|
969
|
1,166
| ||||||
Finished goods
|
400
|
771
| ||||||
3,088
|
4,825
| |||||||
Reserves for obsolescence
|
-
|
(798
|
)
| |||||
$
|
3,088
|
$
|
4,027
| |||||
November 30, 2021 | ||||
Assets
| ||||
Operating lease
right-of-use
assets
| $ | 729 | ||
Liabilities
| ||||
Current portion of operating lease liabilities
| $ | 351 | ||
Noncurrent portion of operating lease liabilities
| 372 | |||
Total operating lease liabilities
| $ | 723 | ||
November 30, 2021 | ||||
Weighted average remaining lease term
| 1.2 years | |||
Weighted average discount rate
| 6 | % |
FY2022
| $ | 143 | ||
FY2023
| 262 | |||
FY2024
| 190 | |||
FY2025
| 185 | |||
Total operating lease payments
| 780 | |||
Less imputed interest
| (57 | ) | ||
Total operating lease liabilities
| $ | 723 | ||
FY2022
| $ | 46 | ||
FY2023
| 12 | |||
Total
| $ | 58 | ||
November 30,2021
| ||||
Financing lease
right-of-use
assets
| $ | 195 | ||
Current portion of financing lease liabilities
| $ | 98 | ||
Noncurrent portion of financing lease liabilities
| 85 | |||
Total financing lease liabilities
| $ | 183 | ||
Fiscal Year
|
Amount
| |||
2022
| $ | 26 | ||
2023
| 104 | |||
2024
| 78 | |||
Total finance lease payments
| $ | 208 | ||
Less imputed interest
| (25 | ) | ||
Total finance lease liabilities
| $ | 183 | ||
Nine Months
| ||||||||
Ended November 30,
| ||||||||
2021
|
2020
| |||||||
Cash paid for:
| ||||||||
Interest
|
$
|
21
|
$
|
1
| ||||
Non-cash
activity:
| ||||||||
Note receivable paid directly to officer
|
$
|
-
|
$
|
170
| ||||
Note payable to officer
|
$
|
-
|
$
|
170
| ||||
Forgiveness of PPP loans (Note 5
)
|
$
|
1,084
|
$
|
216
| ||||
Equipment finance lease (Note 6
)
|
$
|
-
|
$
|
277
| ||||
Imputed interest expense
|
$
|
-
|
$
|
8
| ||||
Imputed interest income
|
$
|
-
|
$
|
8
| ||||
Net (Loss) Income |
Weighted Average Common Shares Outstanding |
(Loss) Earnings Per Share | ||||||||||
Three months ended November 30, 2021
| ||||||||||||
Basic
| $ | (806 | ) | 5,878 | $ | (0.14 | ) | |||||
Effect of dilution:
| ||||||||||||
Options
| - | - | - | |||||||||
Diluted
| $ | (806 | ) | 5,878 | $ | (0.14 | ) | |||||
Three months ended November 30, 2020
| ||||||||||||
Basic
| $ | 1,880 | 5,878 | $ | 0.32 | |||||||
Effect of dilution:
| ||||||||||||
Options
| - | 200 | - | |||||||||
Diluted
| $ | 1,880 | 6,078 | $ | 0.31 | |||||||
Net (Loss) Income |
Weighted Average Common Shares Outstanding |
(Loss)
Earnings
Per Share | ||||||||||
Nine months ended November 30, 2021
| ||||||||||||
Basic
| $ | (1,387 | ) | 5,878 | $ | (0.24 | ) | |||||
Effect of dilution:
| ||||||||||||
Options
| - | - | - | |||||||||
Diluted
| $ | (1,387 | ) | 5,878 | $ | (0.24 | ) | |||||
Nine months ended November 30, 2020
| ||||||||||||
Basic
| $ | 872 | 5,878 | $ | 0.15 | |||||||
Effect of dilution:
| ||||||||||||
Options
| - | 200 | - | |||||||||
Diluted
| $ | 872 | 6,078 | $ | 0.14 | |||||||
• |
Simulation and Training Products
- offers a wide range of projection display systems for use in training and simulation, military, medical, entertainment and industrial applications.
|
• |
Cyber Secure Products -
offers advanced TEMPEST technology, and EMSEC products. This business also provides various contract services including the design and testing solutions for defense and niche commercial uses worldwide.
|
• |
Data Display
CRTs-
offers a wide range of CRTs for use in data display screens, including computer terminal monitors and medical monitoring equipment.
|
• |
Other Computer Products -
offers a variety of keyboard products.
|
November 30,
2021
|
February 28, 2021 | |||||||
Working capital
|
$
|
1,527
| $ | 3,601 | ||||
Liquid assets
|
$
|
215
| $ | 293 |
Three Months
|
Nine Months
| |||||||||||||||
Ended November 30,
|
Ended November 30,
| |||||||||||||||
2021
| 2020 |
2021
| 2020 | |||||||||||||
Net Sales
| ||||||||||||||||
Simulation and Training (VDC Display Systems)
|
63.8
|
%
| 77.9 | % |
57.9
|
%
| 58.4 | |||||||||
Data Display CRT (Lexel and Data Display)
|
15.9
| 7.1 |
13.2
| 14.7 | ||||||||||||
Broadcast and Control Centers (AYON Visual)
|
-
| - |
-
| - | ||||||||||||
Cyber Secure Products (AYON Cyber Security)
|
1.7
| 2.6 |
10.3
| 16.3 | ||||||||||||
Other Computer Products (Unicomp)
|
18.6
| 12.4 |
18.6
| 10.6 | ||||||||||||
Total net sales
|
100.0
|
%
| 100.0 | % |
100.0
|
%
| 100.0 |
Costs and expenses
| ||||||||||||||||
Cost of goods sold
|
134.3
|
%
| 66.9 | % |
102.6
|
%
| 76.2 | |||||||||
Selling and delivery
|
7.8
| 4.4 |
7.6
| 7.0 | ||||||||||||
General and administrative
|
60.5
| 33.1 |
53.4
| 33.0 | ||||||||||||
202.6
|
%
| 104.4 | % |
163.6
|
%
| 116.2 | ||||||||||
Operating loss
|
(102.6
|
)%
| (4.4 | )% |
(63.6
|
)%
| (16.2 | ) | ||||||||
Interest expense, net
|
(0.4
|
)%
| (0.1 | )% |
(0.3
|
)%
| (0.4 | ) | ||||||||
Other income (expense), net
|
53.2
| 70.2 |
38.2
| 26.4 | ||||||||||||
Income (loss) before income taxes
|
(49.9
|
)%
| 65.7 | % |
(25.8
|
)%
| 9.8 | |||||||||
Income tax expense
|
-
| - |
-
| - | ||||||||||||
Net income (loss)
|
(49.9
|
)%
| 65.7 | % |
(25.8
|
)%
| 9.8 | |||||||||
November 30,
2021
|
February 28, 2021 | |||||||
Working capital
|
$
|
1,527
| $ | 3,601 | ||||
Liquid assets
|
$
|
215
| $ | 293 |
Item 1. |
Legal Proceedings
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3. |
Defaults upon Senior Securities
|
Item 4. |
Submission of Matters to a Vote of Security Holders
|
Item 5. |
Other information
|
Item 6. |
Exhibits
|
Exhibit Number |
Exhibit Description
| |||
3(a) |
Articles of Incorporation of the Company (incorporated by reference to Exhibit 3A to the Company's Registration Statement on Form
S-18
filed January 15, 1985). (P)
| |||
3(b) |
By-Laws
of the Company (incorporated by reference to Exhibit 3B to the Company's Registration Statement on Form
S-18
filed January 15, 1985). (P)
| |||
10(a) | Lease dated April 1, 2015 by and between Registrant (Lessee) and Ronald D. Ordway (Lessor) with respect to premises located at 1868 Tucker Industrial Road, Tucker, Georgia. (incorporated by reference to Exhibit 10(c) to the Company's 2015 Annual Report on Form10-K.) | |||
10(b) | Lease dated February 19, 2015 by and between Registrant (Lessee) and Ordway Properties LLC (Lessor) with respect to premises located at 5155 King Street, Cocoa, FL. (incorporated by reference to Exhibit 10(g) to the Company's 2015 Annual Report on Form10-K.) | |||
10(c) | Video Display Corporation 2006 Stock Incentive Plan. (incorporated by reference to Appendix A to the Company's 2006 Proxy Statement on Schedule 14A) | |||
31.1 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
31.2 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||
101.INS | XBRL Instance Document | |||
101.SCH | XBRL Taxonomy Extension Schema Document | |||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
VIDEO DISPLAY CORPORATION | |||||
January 14, 2022 | By: |
/s/ Ronald D. Ordway
| |||
Ronald D. Ordway | |||||
Chief Executive Officer |
January 14, 2022 | By: |
/s/ Gregory L. Osborn
| |||
Gregory L. Osborn | |||||
Chief Financial Officer |
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Disclaimer
VDC - Video Display Corporation published this content on 14 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 January 2022 14:11:06 UTC.