Edgar Filing: VIDEO DISPLAY CORP

Date: January 23, 2014

VIDEO DISPLAY CORPORATION

/s/ Ronald D. Ordway

Ronald D. Ordway

Chief Executive Officer

8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 16, 2014

VIDEO DISPLAY CORPORATION

(Exact name of registrant as specified in its charter)

Georgia

0-13394

58-1217564

(State of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

1868 Tucker Industrial Road

Tucker, Georgia

30084

(Address of principal executive offices)

(Zip code)

Registrant’s telephone number, including area code: (770) 938-2080

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets.

On January 16, 2014 Video Display Corporation (the “Company”) completed the sale of one hundred percent (100%) of the issued and outstanding shares of the Company’s wholly-owned subsidiary, Z-Axis Inc. (“Z-AXIS”). Z-Axis was sold to Z-AXIS Holdings, Inc., a New York corporation (“Z-AXIS Holdings”) that is controlled by the existing president of Z-AXIS and who was one of the original founders of Z-AXIS for a cash payment of approximately Eight Million, Seven Hundred Thousand Dollars ($8,700,000) and the issuance by Z-AXIS Holdings of its One Million Dollar ($1,000,000) Promissory Note to the Company.

Item 9.01 Financial Statements and Exhibits.

The unaudited pro forma condensed consolidated balance sheet as of November 30, 2013 and the unaudited pro forma condensed consolidated income statements of Video Display Corporation for the nine months ended November 30, 2013 and the year ended February 28, 2013 that give effect to the disposition of the assets and liabilities of Z-Axis Inc., a subsidiary of Video Display Corporation, are attached hereto as Exhibit 99.1 and are incorporated by reference in this item 9.01.

Video Display Corporation

Pro Forma Balance Sheet (unaudited)

November 30, 2013

Historical Results

Pro Forma
Adjustment

Pro Forma
Results

Assets

Current assets

Cash

1,436

8,700

(a)

10,136

Restricted cash

1,200

—

1,200

Accounts receivable, less allowance for doubtful accounts of $91

3,474

(1,208

)(b)

2,266

Other receivables

474

—

474

Inventories, net

19,730

(1,307

)(b)

18,423

Cost and estimated earnings in excess of billings on uncompleted contracts

—

Deferred income taxes

1,679

—

1,679

Income taxes refundable

636

—

636

Prepaid expenses and other

240

(115

)(b)

125

Assets of discontinued operations

—

Total current assets

28,869

6,070

34,939

Property, plant, and equipment

Land

195

(41

)(b)

154

Buildings

3,997

(1,246

)(b)

2,751

Machinery and equipment

13,620

(3,088

)(b)

10,532

17,812

(4,375

)(b)

13,437

Accumulated depreciation and amortization

(14,452

)

2,725

(b)

(11,727

)

Net property, plant, and equipment

3,360

(1,650

)(b)

1,710

Note receivable

690

1,000

(a)

1,690

Intangible assets, net

715

—

715

Deferred income taxes

613

—

613

Other assets

—

Goodwill

917

(917

)(b)

—

Assets of discontinued operations

—

Total assets

35,178

4,503

39,681

Video Display Corporation

Pro Forma Balance Sheet (unaudited)

November 30, 2013

Historical Results

Pro Forma
Adjustment

Pro Forma
Results

Liabilities and Shareholders’ Equity

Current liabilities

Accounts payable

1,397

(514

)(b)

883

Accrued liabilities

1,286

(507

)(b)

779

Billings in excess of cost and estimated earnings on uncompleted contracts

—

Notes payable to officers and directors

—

Lines of credit

—

Current maturities of long-term debt

1,398

Liabilities of discontinued operations

—

Total current liabilities

4,081

(1,021

)

3,060

Long-term debt, less current maturities

245

—

245

Unrecognized gain

1,124

—

1,124

Other long term liabilities

—

Total liabilities

5,450

(1,021

)

4,429

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 7,593 outstanding at August 31, 2013.

7,293

Additional paid-in capital

158

Retained earnings

32,721

5,524

38,245

Treasury stock, shares at cost; 2,139 at August 31, 2013.

(10,444

)

(10,444

)

Total shareholders’ equity

29,728

5,524

35,252

Total liabilities and shareholders’ equity

35,178

4,503

39,681

(a)	Reflects anticipated $8.7 million in cash proceeds and $1.0 million note for the $9.7 million salesprice.

(b)	The elimination of assets and liabilities included in the Z-Axis disposition.

Video Display Corporation

Pro Forma Income Statement (unaudited)

Nine Months Ended November 30, 2013

Historical Results

Pro Forma
Adjustment

Pro Forma
Results

Net sales

23,852

6,698

17,154

Cost of goods sold

20,630

4,550

16,080

Gross profit

3,222

2,148

1,074

Operating expenses

Selling and delivery

1,432

207

1,225

General and administrative

4,062

1,445

2,617

5,494

1,652

3,842

Operating income/(loss)

(2,272

)

496

(2,768

)

Other income (expense)

Interest expense

(709

)

—

(709

)

Other, net

660

658

(49

)

(51

)

Income/(Loss) from continuing operations before income taxes

(2,321

)

498

(2,819

)

Income tax (benefit)

(735

)

169

(c)

(904

)

Net income/(loss)

(1,586

)

329

(1,915

)

Income from discontinued operations, net of taxes

2,234

—

2,234

Net income

648

329

319

Net income per share:

From continuing operations-basic

(.21

)

.04

(.25

)

From continuing operations-diluted

(.21

)

.04

(.25

)

From discontinued operations-basic

.29

—

.31

From discontinued operations-diluted

.29

—

.31

Basic weighted average shares outstanding

7,593

7,593

7,593

Diluted weighted average shares outstanding

7,609

7,609

7,609

(c)	Reflects the income tax rate at the Federal statutory rate of 34%.

Video Display Corporation

Pro Forma Income Statement (unaudited)

Year-Ended February 28, 2013

Historical Results

Pro Forma
Adjustment

Pro Forma
Results

Net sales

49,103

11,739

37,364

Cost of goods sold

36,189

6,913

29,276

Gross profit

12,914

4,826

8,088

Operating expenses

Selling and delivery

5,350

341

5,009

General and administrative

7,375

1,925

5,450

12,725

2,266

10,459

Operating income/(loss)

189

2,560

(2,371

)

Other income (expense)

Interest expense

(713

)

—

(713

)

Other, net

381

146

235

(332

)

146

(478

)

Income/(Loss) from continuing operations before income taxes

(143

)

2,706

(2,849

)

Income tax (benefit)

(151

)

920

(c)

(1,071

)

Net income/(loss)

1,786

(1,778

)

Income from discontinued operations, net of taxes

—

Net income

1,786

(1,778

)

Net income per share:

From continuing operations-basic

.00

.24

(.24

)

From continuing operations-diluted

.00

.24

(.24

)

From discontinued operations-basic

—

From discontinued operations-diluted

—

Basic weighted average shares outstanding

7,570

7,570

7,570

Diluted weighted average shares outstanding

7,623

7,623

7,623

(c)	Reflects the income tax rate at the Federal statutory rate of 34%

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.