☒ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
2021.
☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
GEORGIA
1868 TUCKER INDUSTRIAL ROAD, TUCKER, GEORGIA 30084
770-938-2080
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 | ☐ |
May 31, | February 29, | |||||||
2020 | 2020 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 1,225 | $ | 844 | ||||
Trading investments, at fair value | 12 | — | ||||||
Accounts receivable, less allowance for doubtful accounts of $5 and $9 | 654 | 1,305 | ||||||
Notes receivable due from officers and directors (Note 8) | 134 | 189 | ||||||
Inventories, net | 4,009 | 4,480 | ||||||
Contract assets | 655 | — | ||||||
Prepaid expenses and other current assets | 478 | 411 | ||||||
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Total current assets | 7,167 | 7,229 | ||||||
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Property, plant, and equipment | ||||||||
Land | 154 | 154 | ||||||
Buildings | 2,756 | 2,756 | ||||||
Construction in progress | 110 | 106 | ||||||
Machinery and equipment | 4,875 | 4,861 | ||||||
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7,895 | 7,877 | |||||||
Accumulated depreciation | (6,666 | ) | (6,607 | ) | ||||
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Net property, plant, and equipment | 1,229 | 1,270 | ||||||
Right of use assets under operating leases | 1,508 | 1,631 | ||||||
Intangible assets, net | 344 | 387 | ||||||
Other noncurrent assets | 2 | 2 | ||||||
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Total assets | $ | 10,250 | $ | 10,519 | ||||
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May 31, 2021 | February 28, 2021 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 842 | $ | 293 | ||||
Accounts receivable, less allowance for doubtful accounts of $6 and $12 | 434 | 1,314 | ||||||
Inventories, net | 3,929 | 4,027 | ||||||
Contract assets | 1,021 | 1,534 | ||||||
Prepaid expenses and other current assets | 320 | 279 | ||||||
Total current assets | 6,546 | 7,447 | ||||||
Property, plant, and equipment | ||||||||
Buildings | 772 | 766 | ||||||
Construction in progress | — | 130 | ||||||
Machinery and equipment | 5,309 | 5,162 | ||||||
6,081 | 6,058 | |||||||
Accumulated depreciation | (5,042 | ) | (4,979 | ) | ||||
Net property, plant, and equipment | 1,039 | 1,079 | ||||||
Right of use assets under operating leases | 996 | 1,127 | ||||||
Intangible assets, net | 215 | 247 | ||||||
Other noncurrent assets | 2 | 2 | ||||||
Total assets | $ | 8,798 | $ | 9,902 | ||||
May 31, | February 29, | |||||||
2020 | 2020 | |||||||
(unaudited) | ||||||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 895 | $ | 1,256 | ||||
Accrued liabilities | 440 | 499 | ||||||
Customer deposits | 1,719 | 2,338 | ||||||
Notes payable to officers and directors (Note 8) | 1,126 | 1,216 | ||||||
Note payable | 100 | 100 | ||||||
PPP related loans, current | 385 | — | ||||||
Current operating lease liabilities | 557 | 557 | ||||||
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Total current liabilities | 5,222 | 5,966 | ||||||
PPP related loans, noncurrent | 603 | — | ||||||
Long-term operating lease liabilities | 971 | 1,091 | ||||||
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Total liabilities | 6,796 | 7,057 | ||||||
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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 May 31, 2020, and at February 29, 2020 | 7,293 | 7,293 | ||||||
Additional paid-in capital | 281 | 281 | ||||||
Retained earnings | 12,162 | 12,170 | ||||||
Treasury stock, shares at cost; 3,854 at May 31, 2020 and February 29, 2020 | (16,282 | ) | (16,282 | ) | ||||
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Total shareholders’ equity | 3,454 | 3,462 | ||||||
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Total liabilities and shareholders’ equity | $ | 10,250 | $ | 10,519 | ||||
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May 31, 2021 | February 28, 2021 | |||||||
(unaudited) | ||||||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 528 | $ | 602 | ||||
Accrued liabilities | 652 | 728 | ||||||
Customer deposits | 1,667 | 1,717 | ||||||
Note payable | 86 | 100 | ||||||
Current maturities of financing lease obligations | 98 | 98 | ||||||
Current operating lease liabilities | 573 | 601 | ||||||
Total current liabilities | 3,604 | 3,846 | ||||||
PPP related loans, noncurrent | 1,084 | 1,084 | ||||||
Finance lease obligations less current maturities | 124 | 142 | ||||||
Long-term operating lease liabilities | 457 | 556 | ||||||
Total liabilities | 5,269 | 5,628 | ||||||
Shareholders’ Equity | ||||||||
Preferred stock, 0 par value – 10,000 shares authorized; NaN issued and outstanding | 0— | 0— | ||||||
Common stock, 0 par value – 50,000 shares authorized; 9,732 issued and 5,878 outstanding at May 31, 2021, and at February 28, 2021 | 7,293 | 7,293 | ||||||
Additional paid-in capital | 281 | 281 | ||||||
Retained earnings | 12,237 | 12,982 | ||||||
Treasury stock, shares at cost; 3,854 at May 31, 2021 and February 28, 2021 | (16,282 | ) | (16,282 | ) | ||||
Total shareholders’ equity | 3,529 | 4,274 | ||||||
Total liabilities and shareholders’ equity | $ | 8,798 | $ | 9,902 | ||||
Three Months Ended May 31, | ||||||||
2020 | 2019 | |||||||
Net sales | $ | 3,705 | $ | 2,709 | ||||
Cost of goods sold | 2,727 | 2,284 | ||||||
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Gross profit | 978 | 425 | ||||||
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Operating expenses | ||||||||
Selling and delivery | 206 | 165 | ||||||
General and administrative | 997 | 869 | ||||||
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1,203 | 1,034 | |||||||
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Operating loss | (225 | ) | (609 | ) | ||||
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Other income (expense) | ||||||||
Interest (expense) income, net | (15 | ) | — | |||||
Investment (loss) gains, net | (10 | ) | 2 | |||||
Other, net | 242 | 281 | ||||||
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217 | 283 | |||||||
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Loss before income taxes | (8 | ) | (326 | ) | ||||
Income tax expense | — | — | ||||||
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Net loss | $ | (8 | ) | $ | (326 | ) | ||
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Net loss per share: | ||||||||
Net loss per share-basic | $ | (0.00 | ) | $ | (0.06 | ) | ||
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Net loss per share-diluted | $ | (0.00 | ) | $ | (0.06 | ) | ||
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Basic weighted average shares outstanding | 5,878 | 5,878 | ||||||
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Diluted weighted average shares outstanding | 5,878 | 5,878 | ||||||
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Three Months Ended May 31, | ||||||||
2021 | 2020 | |||||||
Net sales | $ | 1,857 | $ | 3,705 | ||||
Cost of goods sold | 1,490 | 2,727 | ||||||
Gross profit | 367 | 978 | ||||||
Operating expenses | ||||||||
Selling and delivery | 158 | 206 | ||||||
General and administrative | 993 | 997 | ||||||
1,151 | 1,203 | |||||||
Operating loss | (784 | ) | (225 | ) | ||||
Other income (expense) | ||||||||
Interest (expense) income, net | (10 | ) | (15 | ) | ||||
Investment (loss) gains, net | — | (10 | ) | |||||
Other, net | 49 | 242 | ||||||
39 | 217 | |||||||
Loss before income taxes | (745 | ) | (8 | ) | ||||
Income tax expense | 0— | 0— | ||||||
Net loss | $ | (745 | ) | $ | (8 | ) | ||
Net loss per share: | ||||||||
Net loss per share-basic | $ | (0.13 | ) | $ | (0.00 | ) | ||
Net loss per share-diluted | $ | (0.13 | ) | $ | (0.00 | ) | ||
Basic weighted average shares outstanding | 5,878 | 5,878 | ||||||
Diluted weighted average shares outstanding | 5,878 | 5,878 | ||||||
Common Shares | Share Amount | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Total Shareholders’ Equity | |||||||||||||||||||
Balance, February 29, 2020 | 5,878 | $ | 7,293 | $ | 281 | $ | 12,170 | $ | (16,282 | ) | $ | 3,462 | ||||||||||||
Net loss | — | — | — | (8 | ) | — | (8 | ) | ||||||||||||||||
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Balance, May 31, 2020 (unaudited) | 5,878 | $ | 7,293 | $ | 281 | $ | 12,162 | $ | (16,282 | ) | $ | 3,454 | ||||||||||||
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Common Shares | Share Amount | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Total Shareholders’ Equity | |||||||||||||||||||
Balance, February 28, 2019 | 5,878 | $ | 7,293 | $ | 274 | $ | 13,376 | $ | (16,282 | ) | $ | 4,661 | ||||||||||||
Net loss | — | — | (326 | ) | — | (326 | ) | |||||||||||||||||
Share based compensation | — | — | 2 | — | — | 2 | ||||||||||||||||||
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Balance, May 31, 2019 (unaudited) | 5,878 | $ | 7,293 | $ | 276 | $ | 13,050 | $ | (16,282 | ) | $ | 4,337 | ||||||||||||
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Common Shares* | Share Amount | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Total Shareholders’ Equity | |||||||||||||||||||
Balance, February 28, 2021 | 5,878 | $ | 7,293 | $ | 281 | $ | 12,982 | $ | (16,282 | ) | $ | 4,274 | ||||||||||||
Net loss | — | — | — | (745 | ) | — | (745 | ) | ||||||||||||||||
Balance, May 31, 2021 (unaudited) | 5,878 | $ | 7,293 | $ | 281 | $ | 12,237 | $ | (16,282 | ) | $ | 3,529 | ||||||||||||
Common Shares* | Share Amount | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Total Shareholders’ Equity | |||||||||||||||||||
Balance, February 29, 2020 | 5,878 | $ | 7,293 | $ | 281 | $ | 12,170 | $ | (16,282 | ) | $ | 3,462 | ||||||||||||
Net loss | — | — | — | (8 | ) | — | (8 | ) | ||||||||||||||||
Balance, May 31, 2020 (unaudited) | 5,878 | $ | 7,293 | $ | 281 | $ | 12,162 | $ | (16,282 | ) | $ | 3,454 | ||||||||||||
* | Common Shares are shown net of Treasury Shares |
Three Months Ended May 31, | ||||||||
2020 | 2019 | |||||||
Operating Activities | ||||||||
Net loss | $ | (8 | ) | $ | (326 | ) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
Depreciation expense | 60 | 56 | ||||||
Amortization of intangible assets | 43 | — | ||||||
Provision for doubtful accounts | (4 | ) | (9 | ) | ||||
Provision for inventory reserve | 15 | 15 | ||||||
Non-cash charge for share based compensation | — | 2 | ||||||
Realized/unrealized loss (gain) on investments | 10 | (2 | ) | |||||
Other | 4 | (2 | ) | |||||
Changes in working capital items: | ||||||||
Accounts receivable | 655 | 398 | ||||||
Inventories | 456 | 179 | ||||||
Prepaid expenses and other assets | (68 | ) | (395 | ) | ||||
Contract assets | (655 | ) | — | |||||
Customer deposits | (619 | ) | 335 | |||||
Accounts payable and accrued liabilities | (420 | ) | 68 | |||||
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Net cash (used in) provided by operating activities | (531 | ) | 319 | |||||
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Investing Activities | ||||||||
Capital expenditures | (19 | ) | (88 | ) | ||||
Purchases of investments | (43 | ) | (9 | ) | ||||
Proceeds from sale of investments | 18 | — | ||||||
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Net cash used in investing activities | (44 | ) | (97 | ) | ||||
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Financing Activities | ||||||||
Repayments of notes payable to officers and directors | (35 | ) | — | |||||
Repayments of long-term debt | — | (23 | ) | |||||
Proceeds from PPP related loans | 988 | — | ||||||
Marginal float borrowings | 3 | — | ||||||
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Net cash provided by (used in) financing activities | 956 | (23 | ) | |||||
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Net change in cash and cash equivalents | 381 | 199 | ||||||
Cash and cash equivalents, beginning of year | 844 | 410 | ||||||
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Cash and cash equivalents, end of period | $ | 1,225 | $ | 609 | ||||
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Three Months Ended May 31, | ||||||||
2021 | 2020 | |||||||
Operating Activities | ||||||||
Net loss | $ | (745 | ) | $ | (8 | ) | ||
Adjustments to reconcile net loss to net | ||||||||
cash provided by (used in) operating activities: | ||||||||
Depreciation expense | 63 | 60 | ||||||
Amortization of intangible assets | 32 | 43 | ||||||
Provision for doubtful accounts | (6 | ) | (4 | ) | ||||
Provision for inventory reserve | 15 | 15 | ||||||
Realized/unrealized loss on investments | — | 10 | ||||||
Other | 4 | 4 | ||||||
Changes in working capital items: | ||||||||
Accounts receivable | 886 | 655 | ||||||
Inventories | 83 | 456 | ||||||
Prepaid expenses and other assets | (41 | ) | (68 | ) | ||||
Contract assets | 513 | (655 | ) | |||||
Customer deposits | (50 | ) | (619 | ) | ||||
Accounts payable and accrued liabilities | (150 | ) | (420 | ) | ||||
Net cash provided by (used in) operating activities | 604 | (531 | ) | |||||
Investing Activities | ||||||||
Capital expenditures | (23 | ) | (19 | ) | ||||
Purchases of investments | — | (43 | ) | |||||
Proceeds from sale of investments | — | 18 | ||||||
Net cash used in investing activities | (23 | ) | (44 | ) | ||||
Financing Activities | ||||||||
Repayments of notes payable to officers and directors | — | (35 | ) | |||||
Repayments of long-term debt | (14 | ) | — | |||||
Repayments on lease financing | (18 | ) | — | |||||
Proceeds from PPP related loans | — | 988 | ||||||
Marginal float borrowings | — | 3 | ||||||
Net cash (used in) provided by financing activities | (32 | ) | 956 | |||||
Net change in cash and cash equivalents | 549 | 381 | ||||||
Cash and cash equivalents, beginning of year | 293 | 844 | ||||||
Cash and cash equivalents, end of period | $ | 842 | $ | 1,225 | ||||
28, 2021.
May 31, 2020 | February 29, 2020 | |||||||
Working capital | $ | 1,945 | $ | 1,263 | ||||
Liquid assets | $ | 1,237 | $ | 844 |
Management28, 2021:
May 31, 2021 | February 28, 2021 | |||||||
Working capital | $ | 2,942 | $ | 3,601 | ||||
Liquid assets | $ | 842 | $ | 293 |
2021
The Financial Accounting Standards Board’s (FASB’s) fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:
Assets measured at fair value on a recurring basis by the Company consist of investment securities held for trading using Level 1 inputs. The following table sets forth financial assets and liabilities that were accounted for at fair value on a recurring basis as of May 31, 2020 (in thousands):
May 31, 2020 | Level 1 Assets and Liabilities | Level 2 Assets and Liabilities | Level 3 Assets and Liabilities | |||||||||||||
Current trading investments: | ||||||||||||||||
Stocks, options and ETF (long) | $ | 15 | $ | 15 | ||||||||||||
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Total value of investments | 15 | 15 | — | — | ||||||||||||
Current liabilities: | ||||||||||||||||
Margin balance | (3 | ) | (3 | ) | ||||||||||||
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Total value of liabilities | (3 | ) | (3 | ) | ||||||||||||
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Total | $ | 12 | $ | 12 | — | — | ||||||||||
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The Company had $2.9 thousand outstanding margin account borrowing as of May 31, 2020 and none as of February 29, 2020. The margin account borrowings are used to purchase marketable equity securities and are netted against the investments in the balance sheet to show net trading investments. The gross investments were $14.6 thousand leaving net investments of $11.7 thousand after the margin account borrowings of $2.9 thousand at May 31, 2020. The margin interest rate is 4.25% at May 31, 2020.
Video Display Corporation and Subsidiaries
May 31, 2020
The Company’s financial instruments which are not measured at fair value on the condensed consolidated balance sheets include cash, accounts receivable, short-term liabilities, and debt. The estimated fair value of these financial instruments approximate cost due to the short period of time to maturity.
Note 4. – Recent Accounting Pronouncements
Effective March 1, 2020 we adopted Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820-10): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which changes the fair value measurement disclosure requirements of ASC Topic 820, Fair Value Measurements and Disclosures. Under this ASU, certain disclosure requirements for fair value measurements are eliminated, amended or added. These changes aim to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies when preparing the disclosures. The guidance is effective for the Company beginning on March 1, 2020 and prescribes different transition methods for the various provisions. The adoption of ASU 2018-13 did not have a material impact on the Company’s financial statements and disclosures.
Recent Accounting Pronouncements Not Yet Adopted
May 31, 2020 | February 29, 2020 | |||||||
Raw materials | $ | 3,536 | $ | 3,497 | ||||
Work-in-process | 363 | 773 | ||||||
Finished goods | 921 | 1,006 | ||||||
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4,820 | 5,276 | |||||||
Reserves for obsolescence | (811 | ) | (796 | ) | ||||
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$ | 4,009 | $ | 4,480 | |||||
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May 31, 2021 | February 28, 2021 | |||||||
Raw materials | $ | 2,880 | $ | 2,888 | ||||
Work-in-process | 933 | 1,166 | ||||||
Finished goods | 929 | 771 | ||||||
4,742 | 4,825 | |||||||
Reserves for obsolescence | (813 | ) | (798 | ) | ||||
$ | 3,929 | $ | 4,027 | |||||
2021
May 31, 2020 | ||||
Assets | ||||
Operating lease right-of-use assets | $ | 1,508 | ||
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Liabilities | ||||
Current portion of operating lease liabilities | $ | 557 | ||
Noncurrent portion of operating lease liabilities | 971 | |||
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Total operating lease liabilities | $ | 1,528 | ||
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May 31, 2021 | ||||
Assets | ||||
Operating lease right-of-use | $ | 996 | ||
Liabilities | ||||
Current portion of operating lease liabilities | $ | 573 | ||
Noncurrent portion of operating lease liabilities | 457 | |||
Total operating lease liabilities | $ | 1,030 | ||
2021.
May 31, | ||||
Weighted average remaining lease term | ||||
Weighted average discount rate | 6 | % | ||
Video Display Corporation and Subsidiaries
May 31, 2020
FY2021 | $ | 430 | ||
FY2022 | 618 | |||
FY2023 | 263 | |||
FY2024 | 190 | |||
FY2025 | 185 | |||
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Total operating lease payments | 1,685 | |||
Less imputed interest | (157 | ) | ||
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Total operating lease liabilities | $ | 1,528 | ||
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FY2022 | $ | 432 | ||
FY2023 | 263 | |||
FY2024 | 190 | |||
FY2025 | 185 | |||
Total operating lease payments | 1,070 | |||
Less imputed interest | (40 | ) | ||
Total operating lease liabilities | $ | 1,030 | ||
2020.
November 30, 2021.
FY2021 | $ | 274 | ||
FY2022 | 370 | |||
FY2023 | 238 | |||
FY2024 | 113 | |||
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Total | $ | 995 | ||
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Note 8. – Notes Receivable and Payable to Officers and Directors (Related Party Transactions)
On March 30, 2016, the
FY2022 | $ | 138 | ||
FY2023 | 12 | |||
Total | $ | 150 | ||
May 31, 2021 | ||||
Financing lease right-of-use | $ | 237 | ||
Current portion of financing lease liabilities | $ | 98 | ||
Noncurrent portion of financing lease liabilities | 124 | |||
Total financing lease liabilities | $ | 222 | ||
In January 2020, to assist the Company in funding the debt assumed resulting from the acquisition of Jaco Displays, LLC, the Company borrowed $505,180 from Ronald D. Ordway, CEO, comprised of cash proceeds received of $148,330 with the remaining $356,850 in debt assumed as the CEO personally funded certain liabilities resulting from the acquisition. The Company combined this amount borrowed with another $438,832 owed to Mr. Ordway in back rent along with $82,838 from previous borrowings, and signed a promissory note for the aggregate balance of $1,026,850 at a six percent interest rate due on or before July 24, 2020 with Mr. Ordway. The Company made a $35,000 payment to Mr. Ordway in March, 2020, leaving a balance of $991,850. This note balance is therefore classified as a current liability on the consolidated balance sheet.
Video Display Corporation and Subsidiaries
May 31, 2020
See
Fiscal Year | Amount | |||
2022 | $ | 78 | ||
2023 | 104 | |||
2024 | 78 | |||
Total finance lease payments | $ | 260 | ||
Less imputed interest | (38 | ) | ||
Total finance lease liabilities | $ | 222 | ||
Note 9.. – Supplemental Cash Flow Information
Three Months Ended May 31, | ||||||||
2020 | 2019 | |||||||
Non-cash activity: | ||||||||
Note receivable paid directly to officer (Z-Axis; Note 8) | $ | 55 | $ | 51 | ||||
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Note payable to officer (Z-Axis; Note 8) | $ | 55 | $ | 51 | ||||
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Imputed interest expense | $ | 4 | $ | 6 | ||||
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Imputed interest income | $ | 4 | $ | 6 | ||||
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Three Months Ended May 31, | ||||||||
2021 | 2020 | |||||||
Cash paid for: | ||||||||
Interest | $ | 7 | $ | — | ||||
Non-cash activity: | ||||||||
Note receivable paid directly to officer | $ | — | $ | 55 | ||||
Note payable to officer | $ | — | $ | 55 | ||||
Imputed interest expense | $ | — | $ | 4 | ||||
Imputed interest income | $ | — | $ | 4 | ||||
Net Loss | Weighted Average Common Shares Outstanding | Loss Per Share | ||||||||||
Three months ended May 31, 2020 | ||||||||||||
Basic | $ | (8 | ) | 5,878 | $ | (0.00 | ) | |||||
Effect of dilution: | ||||||||||||
Options | — | — | — | |||||||||
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Diluted | $ | (8 | ) | 5,878 | $ | (0.00 | ) | |||||
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Three months ended May 31, 2019 | ||||||||||||
Basic | $ | (326 | ) | 5,878 | $ | (0.06 | ) | |||||
Effect of dilution: | ||||||||||||
Options | — | — | — | |||||||||
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Diluted | $ | (326 | ) | 5,878 | $ | (0.06 | ) | |||||
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Video Display Corporation and Subsidiaries
May 31, 2020
Net Loss | Weighted Average Common Shares Outstanding | Loss Per Share | ||||||||||
Three months ended May 31, 2021 | ||||||||||||
Basic | $ | (745 | ) | 5,878 | $ | (0.13 | ) | |||||
Effect of dilution: | ||||||||||||
Options | 0— | 0— | 0— | |||||||||
Diluted | $ | (745 | ) | 5,878 | $ | (0.13 | ) | |||||
Three months ended May 31, 2020 | ||||||||||||
Basic | $ | (8 | ) | 5,878 | $ | (0.00 | ) | |||||
Effect of dilution: | ||||||||||||
Options | 0— | 0— | 0— | |||||||||
Diluted | $ | (8 | ) | 5,878 | $ | (0.00 | ) | |||||
Stock-Based Compensation Plans
For the three-month period ended May 31, 2021 and May 31, 2020, there was no0 expense related to share-based compensation as all options were fully vested. For the period ended May 31, 2019, the Company recognized general and administrative expenses of $2 thousand related to share-based compensation.
The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model, which requires the Company to estimate the expected term of the stock option grants and expected future stock price volatility over the term. The term represents the expected period of time the Company believes the options will remain outstanding based on historical information. Estimates of expected future stock price volatility are based on the historic volatility of the Company’s common stock, which represents the standard deviation of the differences in the weekly stock closing price, adjusted for dividends and stock splits.
NoNaN options were granted for the three month period ending May 31, 20202021 or for the three month period ended May 31, 2019.
2020.
2021.
May 31, 2020 | February 29, 2020 | |||||||
Working capital | $ | 1,945 | $ | 1,263 | ||||
Liquid assets | $ | 1,237 | $ | 844 |
Management28, 2021:
May 31, 2021 | February 28, 2021 | |||||||
Working capital | $ | 2,942 | $ | 3,601 | ||||
Liquid assets | $ | 842 | $ | 293 |
Video Display Corporation and Subsidiaries
May 31, 2020
of the display company, the Company completed the transfer of the remaining CRT operations in Florida to its Lexel Imaging facility in Lexington, KY in order to make room for the new business in its Cocoa facility. This will also reduce expenses in the CRT operation by having that business all under one roof. The Company also moved the corporate accounting functions to the Cocoa, Florida location in fiscal 2020 which allows the Company to become more efficient and save money on reducing redundant operations. The plant move of its subsidiary in Lexington, Kentuckyplan is completed and inventory fromto further reduce expenses by closing the Tucker, Georgia and Cocoa, Florida have been moved to the Kentucky operation. This subsidiary saw a turn -around in the recently completed fiscal year, being the only division to have a profitable year. The plant move at the Florida operations was successfulfacility as soon as the Company completedlease expires in 2022. There is no line of credit outstanding or other financing currently in place other than the merger of its two Florida businessesremaining PPP loans and absorbed the acquisition of the specialized display company. Management continues to explore options to monetize certain long-term assets of the business, including the possible sale of a building in Pennsylvania. If additional and more permanent capital is required to fund the operations of the Company, no assurance can be given that the Company will be able to obtain the capital on terms favorable to the Company, if at all.
$86,000 note payable balance.
have been
Three Months Ended May 31 | ||||||||||||||||
2020 | 2019 | |||||||||||||||
Net Sales | Amount | % | Amount | % | ||||||||||||
Simulation and Training (VDC Display Systems) | 1,801 | 48.6 | % | 944 | 34.9 | % | ||||||||||
Data Display CRT (Lexel and Data Display) | 762 | 20.6 | 643 | 23.7 | ||||||||||||
Cyber Secure Products (AYON Cyber Security) | 865 | 23.3 | 866 | 32.0 | ||||||||||||
Other Computer Products (Unicomp) | 277 | 7.5 | 256 | 9.4 | ||||||||||||
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Total net sales | 3,705 | 100.0 | % | 2,709 | 100.0 | % | ||||||||||
Costs and expenses | ||||||||||||||||
Cost of goods sold | 2,727 | 73.6 | % | 2,284 | 84.3 | % | ||||||||||
Selling and delivery | 206 | 5.6 | 165 | 6.1 | ||||||||||||
General and administrative | 997 | 26.9 | 869 | 32.1 | ||||||||||||
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3,930 | 106.1 | % | 3,318 | 122.5 | % | |||||||||||
Operating loss | (225 | ) | (6.1 | )% | (609 | ) | (22.5 | )% | ||||||||
Interest (expense) income, net | (15 | ) | (0.4 | )% | — | — | % | |||||||||
Investment (loss) gains, net | (10 | ) | (0.3 | ) | 2 | 0.1 | ||||||||||
Other income, net | 242 | 6.6 | 281 | 10.4 | ||||||||||||
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Loss before income taxes | (8 | ) | (0.2 | )% | (326 | ) | (12.0 | )% | ||||||||
Income tax expense | — | — | — | — | ||||||||||||
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Net loss | (8 | ) | (0.2 | )% | (326 | ) | (12.0 | )% | ||||||||
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Three Months Ended May 31 | ||||||||||||||||
2021 | 2020 | |||||||||||||||
Net Sales | Amount | % | Amount | % | ||||||||||||
Simulation and Training (VDC Display Systems) | 1,011 | 54.4 | % | 1,801 | 48.6 | % | ||||||||||
Data Display CRT (Lexel and Data Display) | 232 | 12.5 | 762 | 20.6 | ||||||||||||
Cyber Secure Products (AYON Cyber Security) | 204 | 11.0 | 865 | 23.3 | ||||||||||||
Other Computer Products (Unicomp) | 410 | 22.1 | 277 | 7.5 | ||||||||||||
Total net sales | 1,857 | 100.0 | % | 3,705 | 100.0 | % | ||||||||||
Costs and expenses | ||||||||||||||||
Cost of goods sold | 1,490 | 80.2 | % | 2,727 | 73.6 | % | ||||||||||
Selling and delivery | 158 | 8.5 | 206 | 5.6 | ||||||||||||
General and administrative | 993 | 53.5 | 997 | 26.9 | ||||||||||||
2,641 | 142.2 | % | 3,930 | 106.1 | % |
2021
Operating loss | (784 | ) | (42.2 | )% | (225 | ) | (6.1 | )% | ||||||||
Interest (expense) income, net | (10 | ) | (0.5 | )% | (15 | ) | (0.4 | )% | ||||||||
Investment (loss) gains, net | — | — | (10 | ) | (0.3 | ) | ||||||||||
Other income, net | 49 | 2.6 | 242 | 6.6 | ||||||||||||
Loss before income taxes | (745 | ) | (40.1 | )% | (8 | ) | (0.2 | )% | ||||||||
Income tax expense | — | — | — | — | ||||||||||||
Net loss | (745 | ) | (40.1 | )% | (8 | ) | (0.2 | )% | ||||||||
2020.
2020.
2021
Video Display Corporation and Subsidiaries
Interest2021. The interest expense
was on the lease of TEMPEST equipment and the PPP loans. Interest expense was $15 thousand for the quarter ended May 31, 2020. The2020 and related to interest expense is on thea note payable to the CEO. This note payable is discussed in Note 8 of
Other Income/ expense
rentals. For the three months ended May 31, 2020, the Company earned $148 thousand in royalty income, $90 in rental income, $4 thousand in the sale of discontinued scrap items and had an investment loss of $10 thousand. For the three months ended May 31, 2019, the Company earned $191 thousand in royalty income, rental income of $90 thousand and investment income of $2 thousand.
May 31, 2020 | February 29, 2020 | |||||||
Working capital | $ | 1,945 | $ | 1,263 | ||||
Liquid assets | $ | 1,237 | $ | 844 |
28, 2021:
May 31, 2021 | February 28, 2021 | |||||||
Working capital | $ | 2,942 | $ | 3,601 | ||||
Liquid assets | $ | 842 | $ | 293 |
Video Display Corporation and Subsidiaries
May 31, 2020
specialized displays in the quarter with an additional backlog of $1.2 million in these products. With the acquisition of the display company, the Company completed the transfer of the remaining CRT operations to its Lexel Imaging facility in Lexington, KY in order to make room for the new business in its Cocoa facility. This will also reduce expenses in the CRT operation by having that business all under one roof. The Company also moved the corporate accounting functions to the Cocoa, Florida location in fiscal 2020 which allows the Company to become more efficient and save money on reducing redundant operations. The plant move of its subsidiary in Lexington, Kentucky is completed and inventory from Tucker, Georgia and Cocoa, Florida have been moved to the Kentucky operation. This subsidiary saw a turn -around in the recently completed fiscal year, being the only division to have a profitable year. The plant move at the Florida operations was successful as the Company completed the merger of its two Florida businesses and absorbed the acquisition of the specialized display company. Management continues to explore options to monetize certain long-term assets of the business, including the possible sale of a building in Pennsylvania. If additional and more permanent capital is required to fund the operations of the Company, no assurance can be given that the Company will be able to obtain the capital on terms favorable to the Company, if at all.
divisions. The ability of the Company to continue as a going concern is dependent upon the success of management’s plans to improve revenues, the operational effectiveness of continuing operations, the procurement of suitable financing, or a combination of these. The uncertainty regarding the potential success of management’s plan create substantial doubt about the ability of the Company to continue as a going concern.
There wasalso minimal investing activities for the three months ended May 31, 2020. The Company used $19 thousand on capital assets expenditures and $43 thousand on trading security purchases offset with $18 received from sale of investments. Investing
debt and lease payments. Financing activities provided $1.0 million for the three months ended May 31, 2020 resulting from $1.0 million proceeds received from the PPP Loan discussed in Note 65 of the interim condensed consolidated financial statements marginally offset by repayment of $35 thousand in related party loans. Financing activities used $23 thousand for the quarter ended May 31, 2019 related to the final debt payments made on the Teltron Building.
2021.
Video Display Corporation and Subsidiaries
May 31, 2020
Video Display Corporation and Subsidiaries
May 31, 2020
The Company accounts for uncertain tax positions under the provisions of ASC 740, which contains a2020,2021, the Company did not record any liabilities for uncertain tax positions.
2021.
Item 1. |
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Item 1A. |
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Item 5. |
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Item 6. |
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VIDEO DISPLAY CORPORATION | ||||||
July | By: | /s/ Ronald D. Ordway | ||||
Ronald D. Ordway | ||||||
Chief Executive Officer | ||||||
July | By: | /s/ Gregory L. Osborn | ||||
Gregory L. Osborn | ||||||
Chief Financial Officer |
23