VIDEO DISPLAY CORPORATION
 

 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
OMB APPROVAL
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SEC FILE NUMBER:
000-13394
     
CUSIP NUMBER:
926555103


                     
(Check one):
  þ Form 10-K   o Form 20-F   o Form 11-K   o Form 10-Q   o Form 10-D
    o Form N-SAR   o Form N-CSR            
                     
    For Period Ended: February 28, 2007
                     
    o Transition Report on Form 10-K
                     
    o Transition Report on Form 20-F
                     
    o Transition Report on Form 11-K
                     
    o Transition Report on Form 10-Q
                     
    o Transition Report on Form N-SAR
                     
    For the Transition Period Ended:  

Read Instructions (on back page) Before Preparing Form. Please Print or Type.
Nothing in this form shall be construed to imply that the Commission has verified any information contained herein.
 
If the notification relates to a portion of the filing checked above, identify the Item(s) to which the notification relates:
 
PART I — REGISTRANT INFORMATION
Video Display Corporation
 
Full Name of Registrant
 
 
Former Name if Applicable
1868 Tucker Industrial Road
 
Address of Principal Executive Office (Street and Number)
Tucker, Georgia 30084
 
City, State and Zip Code
PART II — RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or expense and the registrant seeks relief pursuant to Rule 12b-25(b), the following should be completed. (Check box if appropriate)
 
 

 


 

           
þ     (a)   The reason described in reasonable detail in Part III of this form could not be eliminated without unreasonable effort or expense
    (b)   The subject annual report, semi-annual report, transition report on Form 10-K, Form 20-F, Form 11-K, Form N-SAR or Form N-CSR, or portion thereof, will be filed on or before the fifteenth calendar day following the prescribed due date; or the subject quarterly report or transition report on Form 10-Q or subject distribution report on Form 10-D, or portion thereof, will be filed on or before the fifth calendar day following the prescribed due date; and
    (c)   The accountant’s statement or other exhibit required by Rule 12b-25(c) has been attached if applicable.
PART III — NARRATIVE
State below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR, N-CSR, or the transition report or portion thereof, could not be filed within the prescribed time period.
     
SEC 1344 (03-05)
  Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
The Registrant is unable to file its annual Report on Form 10-K for the period ended February 28, 2007, within the prescribed time period, due to unforeseen delays in the collection and review of information and documents affecting disclosures in the Report on Form 10-K. Accordingly, the additional time is requested to compile all information necessary to accurately complete the Form 10-K within the time period permitted by Rule 12b-25 of the Securities and Exchange Act of 1934. The Registrant expects to file the subject report no later than the fifteenth calendar date following the prescribed due date for the report.
 

 


 

(Attach extra Sheets if Needed)
PART IV — OTHER INFORMATION
(1)   Name and telephone number of person to contact in regard to this notification
         
Ronald D Ordway   770   938-2080
         
(Name)   (Area Code)   (Telephone Number)
(2)   Have all other periodic reports required under Section 13 or 15(d) of the Securities Exchange Act of 1934 or Section 30 of the Investment Company Act of 1940 during the preceding 12 months or for such shorter period that the registrant was required to file such report(s) been filed ? If answer is no, identify report(s).
þ Yes     o No
 
(3)   Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof?
þ Yes     o No
    If so, attach an explanation of the anticipated change, both narratively and quantitatively, and, if appropriate, state the reasons why a reasonable estimate of the results cannot be made.
Explanation of Anticipated Changes
The financial results for the fiscal year ended February 28, 2007 summarized below are subject to change when the audit of the Registrant’s financial statements has been completed.
All statements other than statements of historical facts included in this Form 12b-25 are statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. The words “expect”, “estimate”, “anticipate”, “predict”, “believe” and similar expressions and variations thereof are intended to identify forward-looking statements. Such statements appear in a number of places in this Form and include statements regarding the intent, belief or current expectations of the Registrant, its directors or its officers with respect to, among other things: (i) trends affecting the Registrant’s financial condition or results of operations; (ii) the Registrant’s financing plans; (iii) the Registrant’s business and growth strategies, including potential acquisitions; and (iv) other plans and objectives for future operations. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those predicted in the forward-looking statements or which may be anticipated from historical results or trends.
Net sales
     Consolidated net sales decreased $1.9 million or 2.4% to $81.9 million for fiscal 2007, compared to $83.9 million for fiscal 2006. Display Segment sales decreased 11.1% or $7.2 million to $57.9 million for fiscal 2007, compared to $65.1 million for fiscal 2006. Wholesale Distribution Segment sales increased 22.4% or $5.3 million from $18.8 million for fiscal 2006 to $24.1 million for fiscal 2007.

 


 

     The net decrease in Display Segment sales for fiscal 2007 is primarily attributed to declines in Monitor, Data Display CRTs, Entertainment CRT and Component sales, as compared to fiscal 2006. The Monitor revenues declined $4.8 million primarily due to the fulfillment of a military contract for replacement CRTs early in fiscal 2006, which has not been renewed and reduced demand for new flight training systems for commercial and military flight training. Data Display sales in fiscal 2006 benefited from a concentration of new orders for certain projection tubes as production transferred to the Company’s facilities from the original equipment manufacturer. After this initial spike, sales of these projection tubes leveled off at lower, but steady levels, resulting in a $0.9 reduction in sales for fiscal 2007. Entertainment CRT net sales continued its trend and declined $1.1 million in fiscal 2007 compared to fiscal 2006.
     Components Parts sales declined $0.3 million from fiscal 2006 to fiscal 2007. Electron Gun and Components revenues have generally declined in recent years due to weaker demand for electron gun and stem sales as consumers move towards purchasing new technology as opposed to repairing existing sets.
     Wholesale Distribution Segment net sales growth is attributed to an expansion of the call center in fiscal 2006.
Gross Margins
     Consolidated gross margins increased to 33.7% for fiscal 2007 from 29.2% for fiscal 2006.
     Display Segment margins increased from 22.7% for fiscal 2006 to 28.6% for fiscal 2007. Gross margins within the Monitor operation increased to 30.1% for fiscal 2007 compared to 25.4% for fiscal 2006. This increase is primarily attributable to continued streamlining of operational facilities and cost reduction efforts as well as the one time impact of certain relocation and integration costs incurred in fiscal 2006. Data Display gross margins increased to 22.1% for fiscal 2007 compared to 8.2% for fiscal 2006. This improvement in margins is primarily attributed to improved selling prices of certain CRT products. Gross margins in Entertainment CRTs decreased from 34.8% for fiscal 2006 to 30.3% for fiscal 2007 due to the impact of the reduced sales volume. Gross margins from Component Parts increased to 2.8% for fiscal 2007 from a negative margin of (8.3%) for fiscal 2006, primarily reflecting the disposal of the unprofitable Wintron facility in May 2006.
     The Wholesale Distribution segment gross margins decreased from 51.9% for fiscal 2006 to 45.9% for fiscal 2007, primarily due to the impact of increased sales volume of lower margin call center “service sales” during fiscal 2007. Expenses for the call center are classified as operating expenses.
Operating Expenses
     Operating expenses as a percentage of sales increased from 26.7% for fiscal 2006 to 27.8% for fiscal 2007 primarily reflecting the impact of reduced sales during fiscal 2007.
     Display Segment operating expenses decreased $1.2 million or 9.3% to $11.7 million for fiscal 2007 compared to $12.9 million in fiscal 2006. This reduction is primarily due to cost savings derived from management’s efforts to consolidate facilities, reduce overhead personnel and disposal of unprofitable operations, and decreases in corporate legal and professional fees.

 


 

     Wholesale Distribution Segment operating expenses increased $1.6 million or 16.8% to $11.1 million for fiscal 2007 compared to $9.5 million in fiscal 2006, primarily due to additional expenses associated with the call center which was expanded late in fiscal 2006. These expenses (primarily payroll) are classified in general and administrative expense in the consolidated financial statements.
Interest Expense
     Interest expense increased $0.6 million or 40.0% to $2.1 million for fiscal 2007 compared to $1.5 million in fiscal 2006. The Company maintains various debt agreements with different interest rates, most of which are based on the prime rate or LIBOR. These increases in interest expense primarily reflect a higher proportion of subordinated debt, which has a higher effective interest rate, and higher market interest rates in effect during Fiscal 2007 compared to Fiscal 2006.
Income Taxes
     The effective tax rate for fiscal 2007 was 41.7% compared to 40.7 % for fiscal 2006, reflecting the impact of an increase in permanent differences in taxable income and foreign taxes.
 

 


 

Video Display Corporation
 
(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned hereunto duly authorized.
         
         
Date  May 29, 2007 By   /s/  Ronald D Ordway  
    Ronald D Ordway  
    Chief Executive Officer  
 
INSTRUCTION: The form may be signed by an executive officer of the registrant or by any other duly authorized representative. The name and title of the person signing the form shall be typed or printed beneath the signature. If the statement is signed on behalf of the registrant by an authorized representative (other than an executive officer), evidence of the representative’s authority to sign on behalf of the registrant shall be filed with the form.
     
  ATTENTION  
 
Intentional misstatements or omissions of fact constitute Federal Criminal Violations (See 18 U.S.C. 1001).