Document and Entity Information
Document and Entity Information | 6 Months Ended |
Aug. 31, 2016shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Aug. 31, 2016 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q2 |
Trading Symbol | VIDE |
Entity Registrant Name | VIDEO DISPLAY CORP |
Entity Central Index Key | 758,743 |
Current Fiscal Year End Date | --02-28 |
Entity Filer Category | Smaller Reporting Company |
Entity Common Stock, Shares Outstanding | 5,890,748 |
Interim Condensed Consolidated
Interim Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 31, 2016 | Feb. 29, 2016 |
Current assets | ||
Cash and cash equivalents | $ 455 | $ 491 |
Trading investments, at fair value | 328 | 145 |
Accounts receivable, less allowance for doubtful accounts of $24 and $16 | 2,095 | 1,072 |
Note receivable | 167 | 200 |
Inventories, net | 4,212 | 4,476 |
Prepaid expenses and other | 1,625 | 104 |
Assets of discontinued operations | 3,078 | 3,361 |
Total current assets | 11,960 | 9,849 |
Property, plant, and equipment | ||
Land | 154 | 154 |
Buildings | 2,661 | 2,614 |
Machinery and equipment | 3,468 | 3,507 |
Construction in progress | 94 | |
Total property, plant and equipment | 6,283 | 6,369 |
Accumulated depreciation and amortization | (4,944) | (5,073) |
Net property, plant, and equipment | 1,339 | 1,296 |
Note receivable | 679 | 728 |
Other assets | 24 | 29 |
Assets of discontinued operations | 32 | 42 |
Total assets | 14,034 | 11,944 |
Current liabilities | ||
Accounts payable | 1,649 | 720 |
Accrued liabilities | 499 | 616 |
Current maturities of long-term debt | 53 | 52 |
Customer deposits | 1,844 | |
Current maturities of note payable to officer | 167 | 85 |
Billings in excess of costs | 160 | |
Liabilities of discontinued operations | 1,106 | 1,420 |
Total current liabilities | 5,318 | 3,053 |
Long-term debt, less current maturities | 104 | 131 |
Note payable to officer, less current maturities | 679 | |
Deferred rent | 240 | 300 |
Total liabilities | 6,341 | 3,484 |
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 5,891 outstanding at August 31, 2016 and February 29, 2016. | 7,293 | 7,293 |
Additional paid-in capital | 185 | 182 |
Retained earnings | 16,483 | 17,253 |
Treasury stock, shares at cost; 3,841 at August 31, 2016 and February 29, 2016 | (16,268) | (16,268) |
Total shareholders' equity | 7,693 | 8,460 |
Total liabilities and shareholders' equity | $ 14,034 | $ 11,944 |
Interim Condensed Consolidated3
Interim Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Aug. 31, 2016 | Feb. 29, 2016 |
Accounts receivable, allowance for doubtful accounts | $ 24 | $ 16 |
Preferred stock, par value | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 9,732,000 | 9,732,000 |
Common stock, shares outstanding | 5,891,000 | 5,891,000 |
Treasury stock, shares | 3,841,000 | 3,841,000 |
Interim Condensed Consolidated4
Interim Condensed Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2016 | Aug. 31, 2015 | |
Net sales | $ 1,953 | $ 2,923 | $ 3,813 | $ 5,283 |
Cost of goods sold | 1,669 | 2,673 | 3,497 | 4,969 |
Gross profit | 284 | 250 | 316 | 314 |
Operating expenses | ||||
Selling and delivery | 216 | 251 | 430 | 490 |
General and administrative | 677 | 838 | 1,316 | 1,672 |
Operating Expenses, Total | 893 | 1,089 | 1,746 | 2,162 |
Operating loss | (609) | (839) | (1,430) | (1,848) |
Other income (expense) | ||||
Interest income/ (expense) | (3) | 7 | 10 | |
Investment income/(loss) | 139 | (1,056) | 188 | (1,451) |
Other, net | (6) | 45 | 24 | 76 |
Income (loss) from continuing operations before income taxes | (479) | (1,843) | (1,218) | (3,213) |
Income tax expense/(benefit) | 0 | 0 | 0 | 0 |
Net income (loss) from continuing operations | (479) | (1,843) | (1,218) | (3,213) |
Income from discontinued operations, net of income tax effect | 101 | 477 | 448 | 278 |
Net income (loss) | $ (378) | $ (1,366) | $ (770) | $ (2,935) |
Net income (loss) per share: | ||||
From continuing operations-basic | $ (0.08) | $ (0.31) | $ (0.21) | $ (0.54) |
From continuing operations-diluted | (0.08) | (0.31) | (0.21) | (0.54) |
From discontinued operations-basic | 0.02 | 0.08 | 0.08 | 0.04 |
From discontinued operations-diluted | $ 0.02 | $ 0.08 | $ 0.08 | $ 0.04 |
Basic weighted average shares outstanding | 5,891 | 5,894 | 5,891 | 5,925 |
Diluted weighted average shares outstanding | 5,894 | 5,894 | 5,892 | 5,925 |
Interim Condensed Consolidated5
Interim Condensed Consolidated Statements of Shareholders' Equity - 6 months ended Aug. 31, 2016 - USD ($) $ in Thousands | Total | Common Shares | Additional Paid-in Capital | Retained Earnings | Treasury Stock |
Beginning Balance (in shares) at Feb. 29, 2016 | 5,891,000 | ||||
Beginning Balance at Feb. 29, 2016 | $ 8,460 | $ 7,293 | $ 182 | $ 17,253 | $ (16,268) |
Net loss | $ (770) | $ (770) | |||
Repurchase of treasury stock (in shares) | 0 | 0 | 0 | 0 | 0 |
Repurchase of treasury stock | $ 0 | $ 0 | $ 0 | $ 0 | |
Share based compensation | 3 | ||||
Ending Balance (in shares) at Aug. 31, 2016 | 5,891,000 | ||||
Ending Balance at Aug. 31, 2016 | $ 7,693 | $ 7,293 | $ 185 | $ 16,483 | $ (16,268) |
Interim Condensed Consolidated6
Interim Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2016 | Aug. 31, 2015 | Feb. 29, 2016 | |
Operating Activities | |||||
Net income (loss) | $ (378) | $ (1,366) | $ (770) | $ (2,935) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||
Income from discontinued operations, net of tax | (101) | (477) | (448) | (278) | |
Depreciation and amortization | 109 | 171 | |||
Provision for doubtful accounts | 17 | 26 | |||
Provision for inventory reserve | 183 | 183 | |||
Non-cash charge for share based compensation | 3 | 6 | |||
Deferred rental income | (60) | (60) | |||
Loss on the disposal of an asset | 92 | ||||
Realized/unrealized (gain) loss on investments | (178) | 1,716 | |||
Changes in working capital items: | |||||
Accounts receivable | (1,040) | 651 | |||
Note receivable | 16 | (62) | |||
Inventories | 80 | 1,137 | |||
Prepaid expenses and other assets | (1,517) | 18 | |||
Customer deposits | 1,844 | ||||
Accounts payable and accrued liabilities | 819 | (460) | |||
Cost, estimated earnings and billings on uncompleted contracts | (160) | (346) | |||
Income taxes refundable/payable | (6) | 716 | |||
Net cash provided by (used in) operating activities | (1,016) | 483 | $ 800 | ||
Investing Activities | |||||
Capital expenditures | (244) | (63) | |||
Cash advance from discontinued operations | 428 | 215 | |||
Purchases of investments | (596) | (5,098) | |||
Sales of investments | 793 | 7,393 | |||
Net cash provided by investing activities | 381 | 2,447 | |||
Financing Activities | |||||
Proceeds from related party loans | 912 | 80 | |||
Repayments of related party loans | (85) | (80) | |||
Repayments of long-term debt | (26) | (25) | |||
Purchase of treasury stock | (112) | ||||
Repayment/proceeds of marginal float | (202) | (2,401) | |||
Net cash provided by (used in) financing activities | 599 | (2,538) | |||
Discontinued Operations | |||||
Operating activities | 368 | (6) | |||
Investing activities | (428) | (45) | |||
Net cash provided by (used in) discontinued operations | (60) | (51) | |||
Net change in cash and cash equivalents | (96) | 341 | |||
Cash and cash equivalents, beginning of year | 595 | 172 | 172 | ||
Cash and cash equivalents, end of period | 499 | 513 | 499 | 513 | |
Cash and cash equivalents, discontinued operations | 44 | 59 | 44 | 59 | |
Cash and cash equivalents, continuing operations | $ 455 | $ 454 | $ 455 | $ 454 | $ 595 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Aug. 31, 2016 | |
Summary of Significant Accounting Policies | Note 1. – Summary of Significant Accounting Policies The interim condensed consolidated financial statements include the accounts of Video Display Corporation and its majority-owned subsidiaries (the “Company”) after elimination of all significant intercompany accounts and transactions. As contemplated by the Securities and Exchange Commission (the “SEC” or “Commission”) instructions to Form 10-Q, the following footnotes have been condensed and, therefore, do not contain all disclosures required in connection with annual consolidated financial statements. Reference should be made to the Company’s year-end consolidated financial statements and notes thereto, including a description of the accounting policies followed by the Company, contained in its Annual Report on Form 10-K as of and for the fiscal year ended February 29, 2016, as filed with the Commission. There are no material changes in significant accounting policies during the six months ended August 31, 2016. The interim condensed consolidated financial information included in this report has been prepared by the Company, without audit. In the opinion of management, the interim condensed consolidated financial information included in this report contains all adjustments (all of which are normal and recurring) necessary for a fair presentation of the results for the interim periods. Nevertheless, the results shown for interim periods are not necessarily indicative of results to be expected for the full year. The February 29, 2016 consolidated balance sheet data was derived from the audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (U.S. GAAP). |
Banking & Liquidity
Banking & Liquidity | 6 Months Ended |
Aug. 31, 2016 | |
Banking & Liquidity | Note 2. – Banking & Liquidity The accompanying interim condensed consolidated financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has sustained losses for each of the last two years and has seen a decline in both its working capital and liquid assets during this time. These losses were a combination of low revenues at all divisions without a commensurate reduction of expenses. During the year ended February 29, 2016, the Company operated using cash from operations of $0.8 million, which was primarily generated from a $0.7 million tax refund that was non-recurring in nature. During the six months ended August 31, 2016 operational cash flows used $1.0 million. Related to these operational results the Company’s working capital and liquid asset position are presented below (in thousands) as of the six months ended August 31, 2016 and the year-ended February 29, 2016: August 31, 2016 February 29, Working capital $ 6,646 $ 4,855 Liquid assets $ 783 $ 636 Management has implemented a plan to improve the liquidity of the Company. The Company has been implementing a plan to increase revenues at all the divisions, each structured to the particular division with an increase in the current backlog and growth in revenues. The Company has a plan to reduce expenses at the divisions, as well as at the corporate location with the expectation that expenses will be decreased by more than $1.7 million per year. Management continues to explore options to monetize certain long-term assets of the business, including current negotiations to sell its Lexel Imaging subsidiary, presented as discontinued operations, where a final sale is expected during fiscal year ending February 28, 2017. The Company secured a $500 thousand line of credit on September 14, 2016. 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. 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, to liquidate the subsidiary noted above, 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. |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 6 Months Ended |
Aug. 31, 2016 | |
Fair Value Measurements and Financial Instruments | Note 3. – Fair Value Measurements and Financial Instruments 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: Level 1 Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 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 our financial assets and liabilities that were accounted for at fair value on a recurring basis as of August 31, 2016 and February 29, 2016 (in thousands): August 31, 2016 Level 1 Assets Level 2 Assets Level 3 Assets Current trading investments: Marketable equity securities $ 523 $ 523 — — Total value of investments $ 523 $ 523 — — Current Liabilities: Margin balance (195 ) (195 ) — — Total value of liabilities $ (195 ) $ (195 ) — — Total $ 328 $ 328 — — February 29, 2016 Level 1 Assets Level 2 Assets Level 3 Assets Current trading investments: Marketable equity securities $ 542 $ 542 — — Total value of investments $ 542 $ 542 — — Current Liabilities: Margin balance (397 ) (397 ) — — Total value of liabilities (397 ) (397 ) — — Total $ 145 $ 145 — — The Company’s financial instruments which are not measured at fair value on the 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. Recorded amounts of long-term debt are considered to approximate fair value due to either rates that fluctuate with the market or are otherwise commensurate with the current market. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Aug. 31, 2016 | |
Recent Accounting Pronouncements | Note 4. – Recent Accounting Pronouncements In May, 2014, the FASB issued Accounting Standards Update No. (ASU) 2014-09 “Revenue with Contracts from Customers”. The guidance is effective for annual reporting periods beginning after December 15, 2016 including interim periods within that reporting period; however, a one year delay has been approved with the issuance of ASU 2015-14, “Revenue with Contracts from Customers” In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements. Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to continue as a Going Concern”. In July 2015, the FASB issued ASU 2015-11, “ Simplifying the Measurement of Inventory” In November 2015, the FASB issued ASU 2015-17, “ Balance Sheet Classification of Deferred Taxes”. In February 2016, the FASB issued ASU 2016-02, “Leases” |
Inventories
Inventories | 6 Months Ended |
Aug. 31, 2016 | |
Inventories | Note 5.—Inventories Inventories are stated at the lower of cost (first in, first out) or market and consisted of the following (in thousands): August 31, February 29, Raw materials $ 3,735 $ 3,878 Work-in-process 198 199 Finished goods 1,628 1,669 5,561 5,746 Reserves for obsolescence (1,349 ) (1,270 ) $ 4,212 $ 4,476 |
Costs and Estimated Earnings Re
Costs and Estimated Earnings Related to Billings on Uncompleted Contracts | 6 Months Ended |
Aug. 31, 2016 | |
Costs and Estimated Earnings Related to Billings on Uncompleted Contracts | Note 6. – Costs and Estimated Earnings Related to Billings on Uncompleted Contracts Information relative to contracts in progress consisted of the following: August 31, February 29, Costs incurred to date on uncompleted contracts $ — $ 912 Estimated earnings recognized to date on these contracts — 724 — 1,636 Billings to date — (1,796 ) Costs and estimated earnings in excess of billings, net $ — $ (160 ) Costs and estimated earnings in excess of billings $ — $ — Billings in excess of costs and estimated earnings — (160 ) $ — $ (160 ) Costs and estimated earnings in excess of billings are the results of contracts in progress (jobs) in completing orders to customers’ specifications on contracts accounted for under FASB Accounting Standards Codification Topic No. ASC 605-35, “ Revenue Recognition: Construction-Type and Production-Type Contracts completion and revenue recognition. Any losses identified on contracts are recognized immediately. Contract accounting requires significant judgment relative to assessing risks, estimating contract costs and making related assumptions for schedule and technical issues. With respect to contract change orders, claims, or similar items, judgment must be used in estimating related amounts and assessing the potential for realization. These amounts are only included in contract value when they can be reliably estimated and realization is probable. Billings are generated based on specific contract terms, which might be a progress payment schedule, specific shipments, etc. None of the above contracts in progress contain post-shipment obligations. Changes in job performance, manufacturing efficiency, final contract settlements, and other factors affecting estimated profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined. As of August 31, 2016, there were no production costs that exceeded the aggregate estimated cost of all in process and delivered units relating to long-term contracts. Additionally, there were no claims outstanding that would affect the ultimate realization of full contract values. As of August 31, 2016, there were no progress payments that had been netted against inventory. |
Long-Term Debt and Other Obliga
Long-Term Debt and Other Obligations | 6 Months Ended |
Aug. 31, 2016 | |
Long-Term Debt and Other Obligations | Note 7. – Long-Term Debt and Other Obligations Long-term debt consisted of the following (in thousands): August 31, February 29, Mortgage payable to bank; interest rate at Community Bank base rate plus 0.5% (4.00% as of August 31, 2016); monthly principal and interest payments of $5 thousand payable through October 2021; collateralized by land and building of Teltron Technologies, Inc. 157 183 157 183 Less current maturities (53 ) (52 ) $ 104 $ 131 The Company had outstanding margin account borrowings of $0.2 million as of August 31, 2016 and $0.4 million as of February 29, 2016. 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 $0.5 million leaving net investments of $0.3 million after the margin account borrowings of $0.2 million for the period ending August 31, 2016 and $0.5 million leaving net investments of $0.1 million after the margin account borrowings of $0.4 million for the period ending February 29, 2016, respectively. The margin interest rate is 2%. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Aug. 31, 2016 | |
Related Party Transactions | Note 8. – Related Party Transactions The Company owed the Company’s Chief Executive Officer $85 thousand as of February 29, 2016. This money was borrowed during the Company’s fiscal year ended February 29, 2016 at an eight percent interest rate. The Company repaid the funds during the first quarter ending May 31, 2016. Interest paid on this loan during the quarter was $1 thousand. On March 30, 2016, the Company entered into an assignment with recourse of the note receivable from Z-Axis Inc. (Z-Axis) with Ronald D. Ordway, CEO, and Jonathan R. Ordway, related parties, for the sum of $912 thousand. The note receivable is collateralized by a security interest in the shares of Z-Axis as well as a personal guaranty of its majority shareholder. Z-Axis is current on all scheduled payments regarding this note. The Company retains the right to repurchase the note at any time for 80% of the outstanding principle balance. Also, in the event of default by Z-Axis, the Company is obligated to repurchase the note for 80% of the remaining principle balance plus any accrued interest. Accordingly, the Company has recognized this transaction as a secured borrowing in accordance with the provisions of ASC 860-10. The $ 0.9 million, 9% interest rate, note originated on March 30, 2016, with payments beginning on April 16, 2016 and continuing for 56 months thereafter. The balance of the note at August 31, 2016 was $846 thousand. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Aug. 31, 2016 | |
Supplemental Cash Flow Information | Note 9. – Supplemental Cash Flow Information Supplemental cash flow information is as follows (in thousands): Six Months 2016 2015 Cash paid for: Interest $ 9 $ 40 Income taxes, net of refunds $ 6 $ (718 ) Non-cash activity: Note receivable paid directly to officer $ 65 — Note payable to officer $ (65 ) — Imputed interest expense $ 42 — Imputed interest income $ (42 ) — |
Shareholder's Equity
Shareholder's Equity | 6 Months Ended |
Aug. 31, 2016 | |
Shareholder's Equity | Note 10. – Shareholder’s Equity Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding during each period. Shares issued during the period are weighted for the portion of the period that they were outstanding. Diluted earnings (loss) per share is calculated in a manner consistent with that of basic earnings (loss) per share while giving effect to all potentially dilutive common shares that were outstanding during the period. The following table sets forth the computation of basic and diluted earnings (loss) per share for the three and six month periods ended August 31, 2016 and 2015 (in thousands, except per share data): Net Weighted Earnings (Loss) Share Six months ended August 31, 2016 Basic-continuing operations $ (1,218 ) 5,891 $ (0.21 ) Basic-discontinued operations 448 5,891 0.08 Effect of dilution: Diluted-continuing operations Diluted-discontinued operations — — — Diluted $ (770 ) 5,891 $ (0.13 ) Six months ended August 31, 2015 Basic-continuing operations $ (3,213 ) 5,925 $ (0.54 ) Basic-discontinued operations 278 5,925 0.04 Effect of dilution: Options — — — Diluted $ (2,935 ) 5,925 $ (0.50 ) Three months ended August 31, 2016 Basic-continuing operations $ (479 ) 5,891 $ (0.08 ) Basic-discontinued operations 101 5,891 0.02 Effect of dilution: Diluted-continuing operations Diluted-discontinued operations — — — Diluted $ (378 ) 5,891 $ (0.06 ) Three months ended August 31, 2015 Basic-continuing operations $ (1,843 ) 5,894 $ (0.31 ) Basic-discontinued operations 477 5,894 0.08 Effect of dilution: Options — — — Diluted $ (1,366 ) 5,894 $ (0.23 ) Stock-Based Compensation Plans For the six-month period ended August 31, 2016 and 2015, the Company recognized general and administrative expenses of $2.8 thousand and $6.8 thousand, respectively, related to share-based compensation. The liability for the share-based compensation recognized is presented in the consolidated balance sheet as part of additional paid in capital. As of August 31, 2016, total unrecognized compensation costs related to stock options granted was $1.9 thousand. The unrecognized stock option compensation cost is expected to be recognized over a period of approximately 1 year. 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. No options were granted during the six month periods ended August 31, 2016 and ten thousand options were granted for the six months ended August 31, 2015, respectively. Stock Repurchase Program The Company has a stock repurchase program, pursuant to which it had been authorized to repurchase up to 2,632,500 shares of the Company’s common stock in the open market. On January 20, 2014 the Board of Directors of the Company approved a one-time continuation of the stock repurchase program, and authorized the Company to repurchase up to 1,500,000 additional shares of the Company’s common stock in the open market. There is no minimum number of shares required to be repurchased under the program. For the six months ended August 31, 2016, the Company did not purchase any shares of Video Display Corporation stock. For the six months ended August 31, 2015, the Company purchased 68,531 shares at an average price of $1.63 per share. Under the Company’s stock repurchase program, an additional 502,644 shares remain authorized to be repurchased by the Company at August 31, 2016. |
Income Taxes
Income Taxes | 6 Months Ended |
Aug. 31, 2016 | |
Income Taxes | Note 11. – Income Taxes The effective tax rate for the six months ended August 31, 2016 and 2015 was 0%. The Company lost $0.8 and $2.9 million dollars for the six months ending August 31, 2016 and August 31, 2015, respectively, which resulted in a tax benefit of approximately $0.3 and $1.1 million, respectively. Due to the losses by the Company, a full valuation allowance was allocated to the deferred tax asset created by the loss. The net effect of this allowance was to have zero tax expense for the quarter. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Aug. 31, 2016 | |
Discontinued Operations | Note 12. – Discontinued Operations On March 26, 2014 with an effective date of February 28, 2014, the Company completed the sale of the Company’s wholly-owned subsidiary, Lexel Imaging, Inc. to Citadal Partners, LLC for approximately $3.9 million, consisting of $1.0 million cash payable over 180 days in the form of a note receivable and a guarantee to purchase $2.9 million in inventory over a five year period. The inventory was adjusted to its net realizable value as part of the sale. The Company recognized a loss on the sale of $4.4 million pre-tax during the year ended February 28, 2014. On November 17, 2014 Video Display reacquired Lexel Imaging, Inc. when Citadal Partners, LLC defaulted on two notes payable to Video Display Corporation owed as financing on the original sale of the Lexel Imaging. Lexel Imaging is still presented as discontinued operations as Video Display Corporation is still considering offers for the sale of the entity. Lexel’s net sales, expenses, net profits, operating income and cash flows, are being shown as discontinued operations per ASC 205-20-45 “Reporting Discontinued Operations” The summarized financial information for discontinued operations for the three months and six months ended August 31, 2016, is as follows: Three months ending Six months ending Net sales $ 1,680 $ 3,530 Cost of goods sold 1,374 2,840 Gross profit 306 690 Operating expenses Selling and delivery — 18 General and administrative 202 392 Total operating expenses 202 410 Operating profit from discontinued operations 104 280 Other income (expense) 1 182 Interest expense — — Other, net 1 182 Income from discontinued operations before income taxes 105 462 Income tax expense 4 14 Income from discontinued operations $ 101 $ 448 |
Banking & Liquidity (Tables)
Banking & Liquidity (Tables) | 6 Months Ended |
Aug. 31, 2016 | |
Working Capital and Liquid Asset Position | Related to these operational results the Company’s working capital and liquid asset position are presented below (in thousands) as of the six months ended August 31, 2016 and the year-ended February 29, 2016: August 31, 2016 February 29, Working capital $ 6,646 $ 4,855 Liquid assets $ 783 $ 636 |
Fair Value Measurements and F20
Fair Value Measurements and Financial Instruments (Tables) | 6 Months Ended |
Aug. 31, 2016 | |
Financial Assets and Liabilities Measured on Recurring Basis | The following table sets forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of August 31, 2016 and February 29, 2016 (in thousands): August 31, 2016 Level 1 Assets Level 2 Assets Level 3 Assets Current trading investments: Marketable equity securities $ 523 $ 523 — — Total value of investments $ 523 $ 523 — — Current Liabilities: Margin balance (195 ) (195 ) — — Total value of liabilities $ (195 ) $ (195 ) — — Total $ 328 $ 328 — — February 29, 2016 Level 1 Assets Level 2 Assets Level 3 Assets Current trading investments: Marketable equity securities $ 542 $ 542 — — Total value of investments $ 542 $ 542 — — Current Liabilities: Margin balance (397 ) (397 ) — — Total value of liabilities (397 ) (397 ) — — Total $ 145 $ 145 — — |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Aug. 31, 2016 | |
Inventories | Inventories are stated at the lower of cost (first in, first out) or market and consisted of the following (in thousands): August 31, February 29, Raw materials $ 3,735 $ 3,878 Work-in-process 198 199 Finished goods 1,628 1,669 5,561 5,746 Reserves for obsolescence (1,349 ) (1,270 ) $ 4,212 $ 4,476 |
Costs and Estimated Earnings 22
Costs and Estimated Earnings Related to Billings on Uncompleted Contracts (Tables) | 6 Months Ended |
Aug. 31, 2016 | |
Information Relative to Contracts in Progress | Information relative to contracts in progress consisted of the following: August 31, February 29, Costs incurred to date on uncompleted contracts $ — $ 912 Estimated earnings recognized to date on these contracts — 724 — 1,636 Billings to date — (1,796 ) Costs and estimated earnings in excess of billings, net $ — $ (160 ) Costs and estimated earnings in excess of billings $ — $ — Billings in excess of costs and estimated earnings — (160 ) $ — $ (160 ) |
Long-Term Debt and Other Obli23
Long-Term Debt and Other Obligations (Tables) | 6 Months Ended |
Aug. 31, 2016 | |
Long- Term debt and Finance Lease Obligations | Long-term debt consisted of the following (in thousands): August 31, February 29, Mortgage payable to bank; interest rate at Community Bank base rate plus 0.5% (4.00% as of August 31, 2016); monthly principal and interest payments of $5 thousand payable through October 2021; collateralized by land and building of Teltron Technologies, Inc. 157 183 157 183 Less current maturities (53 ) (52 ) $ 104 $ 131 |
Supplemental Cash Flow Inform24
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Aug. 31, 2016 | |
Supplemental Cash Flow Information | Supplemental cash flow information is as follows (in thousands): Six Months 2016 2015 Cash paid for: Interest $ 9 $ 40 Income taxes, net of refunds $ 6 $ (718 ) Non-cash activity: Note receivable paid directly to officer $ 65 — Note payable to officer $ (65 ) — Imputed interest expense $ 42 — Imputed interest income $ (42 ) — |
Shareholder's Equity (Tables)
Shareholder's Equity (Tables) | 6 Months Ended |
Aug. 31, 2016 | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings (loss) per share for the three and six month periods ended August 31, 2016 and 2015 (in thousands, except per share data): Net Weighted Earnings (Loss) Share Six months ended August 31, 2016 Basic-continuing operations $ (1,218 ) 5,891 $ (0.21 ) Basic-discontinued operations 448 5,891 0.08 Effect of dilution: Diluted-continuing operations Diluted-discontinued operations — — — Diluted $ (770 ) 5,891 $ (0.13 ) Six months ended August 31, 2015 Basic-continuing operations $ (3,213 ) 5,925 $ (0.54 ) Basic-discontinued operations 278 5,925 0.04 Effect of dilution: Options — — — Diluted $ (2,935 ) 5,925 $ (0.50 ) Three months ended August 31, 2016 Basic-continuing operations $ (479 ) 5,891 $ (0.08 ) Basic-discontinued operations 101 5,891 0.02 Effect of dilution: Diluted-continuing operations Diluted-discontinued operations — — — Diluted $ (378 ) 5,891 $ (0.06 ) Three months ended August 31, 2015 Basic-continuing operations $ (1,843 ) 5,894 $ (0.31 ) Basic-discontinued operations 477 5,894 0.08 Effect of dilution: Options — — — Diluted $ (1,366 ) 5,894 $ (0.23 ) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Aug. 31, 2016 | |
Summarized Financial Information for Discontinued Operations | The summarized financial information for discontinued operations for the three months and six months ended August 31, 2016, is as follows: Three months ending Six months ending Net sales $ 1,680 $ 3,530 Cost of goods sold 1,374 2,840 Gross profit 306 690 Operating expenses Selling and delivery — 18 General and administrative 202 392 Total operating expenses 202 410 Operating profit from discontinued operations 104 280 Other income (expense) 1 182 Interest expense — — Other, net 1 182 Income from discontinued operations before income taxes 105 462 Income tax expense 4 14 Income from discontinued operations $ 101 $ 448 |
Banking & Liquidity - Additiona
Banking & Liquidity - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Feb. 29, 2016 | Sep. 14, 2016 | |
Line of Credit Facility [Line Items] | ||||
Cash from (used) in operations | $ (1,016) | $ 483 | $ 800 | |
Tax Refund | 700 | |||
Subsequent Event | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit | $ 500 | |||
Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Expected decrease in expenses per year | $ 1,700 |
Working Capital and Liquid Asse
Working Capital and Liquid Asset Position (Detail) - USD ($) $ in Thousands | Aug. 31, 2016 | Feb. 29, 2016 |
Liquidity And Capital Resources [Line Items] | ||
Working capital | $ 6,646 | $ 4,855 |
Liquid assets | $ 783 | $ 636 |
Financial Assets and Liabilitie
Financial Assets and Liabilities Measured on a Recurring Basis (Detail) - Recurring Basis - USD ($) $ in Thousands | Aug. 31, 2016 | Feb. 29, 2016 |
Current trading investments | ||
Total value of investments | $ 523 | $ 542 |
Current Liabilities: | ||
Margin balance | (195) | (397) |
Total value of liabilities | (195) | (397) |
Total | 328 | 145 |
Marketable Equity Securities | ||
Current trading investments | ||
Current trading investments | 523 | 542 |
Level 1 Assets and Liabilities | ||
Current trading investments | ||
Total value of investments | 523 | 542 |
Current Liabilities: | ||
Margin balance | (195) | (397) |
Total value of liabilities | (195) | (397) |
Total | 328 | 145 |
Level 1 Assets and Liabilities | Marketable Equity Securities | ||
Current trading investments | ||
Current trading investments | $ 523 | $ 542 |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Thousands | Aug. 31, 2016 | Feb. 29, 2016 |
Inventory [Line Items] | ||
Raw materials | $ 3,735 | $ 3,878 |
Work-in-process | 198 | 199 |
Finished goods | 1,628 | 1,669 |
Inventory, Gross | 5,561 | 5,746 |
Reserves for obsolescence | (1,349) | (1,270) |
Inventory, Net | $ 4,212 | $ 4,476 |
Information Relative to Contrac
Information Relative to Contracts in Progress (Detail) - USD ($) $ in Thousands | Aug. 31, 2016 | Feb. 29, 2016 |
Contracts [Line Items] | ||
Costs incurred to date on uncompleted contracts | $ 912 | |
Estimated earnings recognized to date on these contracts | 724 | |
Costs incurred and Estimated earnings of uncompleted contracts | 1,636 | |
Billings to date | (1,796) | |
Costs and estimated earnings in excess of billings, net | (160) | |
Costs and estimated earnings in excess of billings | $ 0 | 0 |
Billings in excess of costs and estimated earnings | (160) | |
Costs and estimated earnings in excess of billings, net | $ (160) |
Costs and Estimated Earnings 32
Costs and Estimated Earnings Related to Billings on Uncompleted Contracts - Additional Information (Detail) | 6 Months Ended |
Aug. 31, 2016USD ($) | |
Uncompleted Contracts [Line Items] | |
Production costs that exceeded the aggregate estimated cost | $ 0 |
Outstanding claims relating to contract values | 0 |
Progress payments that had been netted against inventory | $ 0 |
Long-Term Debt (Detail)
Long-Term Debt (Detail) - USD ($) $ in Thousands | Aug. 31, 2016 | Feb. 29, 2016 |
Debt Instrument [Line Items] | ||
Notes and Mortgage Payable to bank | $ 157 | $ 183 |
Less current maturities | (53) | (52) |
Long-term debt, less current maturities | 104 | 131 |
Mortgage payable to bank | ||
Debt Instrument [Line Items] | ||
Notes and Mortgage Payable to bank | $ 157 | $ 183 |
Long-Term Debt (Parenthetical)
Long-Term Debt (Parenthetical) (Detail) - Mortgage payable to bank $ in Thousands | 6 Months Ended |
Aug. 31, 2016USD ($) | |
Debt Instrument [Line Items] | |
Debt Instrument, interest rate terms | Mortgage payable to bank; interest rate at Community Bank base rate plus 0.5% (4.00% as of August 31, 2016); monthly principal and interest payments of $5 thousand payable through October 2021; collateralized by land and building of Teltron Technologies, Inc. |
Combined rate | 4.00% |
Mortgage Payable to bank monthly principal and interest payments payable | $ 5 |
Debt Instrument Maturity period | 2021-10 |
Base Rate | |
Debt Instrument [Line Items] | |
Interest rate | 0.50% |
Long Term Debt and Other Obliga
Long Term Debt and Other Obligations - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Aug. 31, 2016 | Feb. 29, 2016 | |
Debt Instrument [Line Items] | ||
Outstanding margin account borrowings | $ 200 | $ 400 |
Gross investments | 500 | 500 |
Trading investments, at fair value | $ 328 | $ 145 |
Margin interest rate | 2.00% | 2.00% |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 30, 2016 | May 31, 2016 | Aug. 31, 2016 | Aug. 31, 2015 | Feb. 29, 2016 |
Related Party Transaction [Line Items] | |||||
Note payable to officer | $ 167 | $ 85 | |||
Interest paid | 9 | $ 40 | |||
Chief Executive Officer | |||||
Related Party Transaction [Line Items] | |||||
Note payable to officer | $ 85 | ||||
Debt instrument interest rate stated percentage | 8.00% | ||||
Interest paid | $ 1 | ||||
Z-Axis Inc | |||||
Related Party Transaction [Line Items] | |||||
Notes receivable assigned with recourse | $ 912 | $ 846 | |||
Notes repurchase right, percentage of outstanding principle balance | 80.00% | ||||
Secured borrowing | $ 900 | ||||
Effective interest rate | 9.00% | ||||
Payment period | 56 months | ||||
Date of first required payment | Apr. 16, 2016 |
Supplemental Cash Flow Inform37
Supplemental Cash Flow Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 31, 2016 | Aug. 31, 2015 | |
Cash paid for: | ||
Interest | $ 9 | $ 40 |
Income taxes, net of refunds | 6 | $ (718) |
Non-cash activity: | ||
Note receivable paid directly to officer | 65 | |
Note payable to officer | (65) | |
Imputed interest expense | 42 | |
Imputed interest income | $ (42) |
Reconciliation of Basic Earning
Reconciliation of Basic Earnings (loss) Per Share to Diluted Earnings (loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2016 | Aug. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net Income (Loss), Basic-continuing operations | $ (479) | $ (1,843) | $ (1,218) | $ (3,213) |
Weighted Average Common Shares Outstanding, Basic | 5,891 | 5,894 | 5,891 | 5,925 |
Net Income (Loss), Basic-discontinued operations | $ 101 | $ 477 | $ 448 | $ 278 |
Options | 0 | 0 | ||
Net Income (Loss), Diluted | $ (378) | $ (1,366) | $ (770) | $ (2,935) |
Options | 0 | 0 | ||
Weighted Average Common Shares Outstanding, Diluted earnings per share | 5,894 | 5,894 | 5,892 | 5,925 |
Earnings (Loss) Per Share, Basic-continuing operations | $ (0.08) | $ (0.31) | $ (0.21) | $ (0.54) |
Earnings (Loss) Per Share, Basic-discontinued operations | 0.02 | 0.08 | 0.08 | 0.04 |
Options | 0 | 0 | ||
Earnings (Loss) Per Share, Diluted | $ (0.06) | $ (0.23) | $ (0.13) | $ (0.50) |
Diluted weighted average shares outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted Average Common Shares Outstanding, Diluted earnings per share | 5,891 | 5,891 | ||
Continuing Operations | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted Average Common Shares Outstanding, Basic | 5,891 | 5,894 | 5,891 | 5,925 |
Earnings (Loss) Per Share, Effect of dilution: Diluted-operations | $ 0 | $ 0 | ||
Net Income (Loss), Effect of dilution: | $ 0 | $ 0 | ||
Discontinued Operations | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted Average Common Shares Outstanding, Basic | 5,891 | 5,894 | 5,891 | 5,925 |
Weighted Average Common Shares Outstanding, Effect of dilution | 0 | 0 | ||
Earnings (Loss) Per Share, Effect of dilution: Diluted-operations | $ 0 | $ 0 | ||
Net Income (Loss), Effect of dilution: | $ 0 | $ 0 |
Shareholder's Equity - Addition
Shareholder's Equity - Additional Information (Detail) - USD ($) | 6 Months Ended | |||
Aug. 31, 2016 | Aug. 31, 2015 | May 31, 2016 | Jan. 20, 2014 | |
Stock Based Compensation [Line Items] | ||||
Total unrecognized compensation costs related to stock options and shares of restricted stock granted | $ 1,900 | |||
Unrecognized compensation cost is expected to be recognized over a period | 1 year | |||
Stock options granted | 0 | 10,000 | ||
Authorized stock repurchase | 2,632,500 | |||
Additional authorized stock repurchase | 1,500,000 | |||
Repurchase of treasury stock (in shares) | 0 | 68,531 | ||
Remaining repurchase of shares authorized | 502,644 | |||
Average price of repurchase shares | $ 1.63 | |||
General and Administrative | ||||
Stock Based Compensation [Line Items] | ||||
Share-based compensation | $ 2,800 | $ 6,800 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2016 | Aug. 31, 2015 | |
Income Taxes [Line Items] | ||||
Effective Tax Rate | 0.00% | 0.00% | ||
Net income (loss) | $ (378) | $ (1,366) | $ (770) | $ (2,935) |
Tax benefit | 300 | 1,100 | ||
Income tax expense/(benefit) | $ 0 | $ 0 | $ 0 | $ 0 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - Lexel Imaging, Inc. - USD ($) | Mar. 26, 2014 | Feb. 28, 2014 |
Schedule Of Sale And Divestiture Of Business [Line Items] | ||
Divestiture of business | $ 3,900,000 | |
Value of inventories guaranteed to purchase | $ 2,900,000 | |
Purchase commitment period | 5 years | |
Gain (loss) on sale of business | $ (4,400,000) | |
Collection period for receivable from divestiture of business | 180 days | |
Amount of cash receivable from divestiture of business | $ 1,000,000 |
Summarized Financial Informatio
Summarized Financial Information For Discontinued Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2016 | Aug. 31, 2015 | Aug. 31, 2016 | Aug. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net sales | $ 1,680 | $ 3,530 | ||
Cost of goods sold | 1,374 | 2,840 | ||
Gross profit | 306 | 690 | ||
Operating expenses | ||||
Selling and delivery | 18 | |||
General and administrative | 202 | 392 | ||
Total operating expenses | 202 | 410 | ||
Operating profit from discontinued operations | 104 | 280 | ||
Other income (expense) | 1 | 182 | ||
Interest expense | 0 | 0 | ||
Other, net | 1 | 182 | ||
Income from discontinued operations before income taxes | 105 | 462 | ||
Income tax expense | 4 | 14 | ||
Income from discontinued operations | $ 101 | $ 477 | $ 448 | $ 278 |