Video Display Corporation Letter to Shareholders
ATLANTA, Nov. 26, 2013 (GLOBE NEWSWIRE) -- Video Display Corporation
(Nasdaq:VIDE), a recognized leader in the manufacture and distribution of
simulation, broadcast, defense and industrial display solutions, today is
issuing the CEO's "Annual Letter to Shareholders" containing excerpts from the
11/27/2013 CEO's Address to Shareholders at the Company's Annual Meeting in
Stone Mountain GA and updating the Shareholders on earnings guidance and other
events of significance.
The Company will file a Report on SEC Form 8K detailing the revisions in
guidance for this fiscal year ending Feb. 28, 2014 and attach a full copy of
this Letter thereto.
The Company had issued previous guidance for the fiscal 2014 year end;
however, due to the sale of VDC's Aydin Displays subsidiary, the anticipated
December 2013 sale of its Z-AXIS Inc subsidiary and the potential sale of its
Lexel Imaging subsidiary, the previously issued guidance of the consolidated
operations no longer remains valid and requires revision. Revised guidance,
issued today, recognizes the completion of the August 30^th Aydin Displays
Inc. sale and assumes a December sale of Z-AXIS Inc. Per share earnings
guidance is now revised to reflect such anticipated transactions and is
projected to be in the range of $0.14 - $0.16 per share for fiscal 2014,
excluding the potential gain on the Z-AXIS transaction, based upon achieving
revenue for fiscal 2014 in the range of $40 - $42 million.
The Company further provides guidance for its 2015 fiscal year, assuming no
additional sales of subsidiaries or divisions, for per share earnings in the
range of $0.44 to $0.48 on achievement of fiscal 2015 revenues in the range of
$38 - $40 million.
Our Company's Balance Sheet is currently in the strongest condition of its 38
year history due to the reduction of long term and short term debt from nearly
$28 million to its current level of $1.5 million with an offsetting cash
balance of approximately $2 million. Upon the anticipated closing of the sale
of Z-AXIS transaction, the Company's cash position would increase to be in
excess of $10 million after elimination of all current short term debt.
Subsequent to the sale of the two divisions, the Company will maintain
ownership and operation of the remaining assets and businesses until such time
that the Board of Directors, while continuing to develop all available
alternatives, determines that the best value can be achieved for the
shareholders. The following schedule illustrates the potential values of the
primary remaining assets and divisions of the Company, assuming the completion
of the Z-AXIS Inc transaction, at this time:
Cash & Restricted Cash $10,700,000 $11,200,000
Remaining (4) Subsidiaries $15,500,000 $31,000,000
Company Owned RE Invest. $1,600,000 $2,100,000
CRT Class Action Law Suit $500,000 $1,500,000
Working Capital & WC Adjust. $1,350,000 $4,450,000
Earn-Out Aydin $2,000,000 $6,600,000
Current Term Debt $(1,350,000) $(1,350,000)
Total $32,300,000 $55,500,000
(A) Reflect the low range estimate of value of each of the assets if sold
within 12 months
(B) Reflect the high range estimate of value of each of the assets if sold
within 12 months.
(There can be no assurance that any of the above listed holdings of VDC can be
sold and the values shown cannot be relied upon to be indicative of the
ultimate saleable value. This table is for general illustrative purposes only
and has not been validated by any professional evaluation firm to verify the
information provided therein.)
The following excerpts are from the CEO Address at the 2013 Annual Meeting:
"GOOD MORNING & WELCOME"
"TODAY'S MEETING REPRESENTS THE 29TH ANNUAL MEETING OF VIDEO'S LIFE AS A
PUBLIC COMPANY SINCE THE COMPANY IPO IN JANUARY OF 1985.IT IS VIDEO'S 38th
YEAR OF EXISTENCE AS A SPECIALTY DISPLAY COMPANY.
I EXTEND MY PERSONAL WELCOME TO EACH OF THE NEW ATTENDEES AND A PERSONAL
WELCOME BACK TO OUR REGULAR ATTENDEES.
ALL OF OUR SHAREHOLDER MEETINGS ARE DESIGNED TO BE INFORMAL, BUT THERE ARE
CERTAIN FORMALITIES THAT MUST BE ADHERED TO, AND THUS WE WILL DISPOSE OF THAT
AGENDA FIRST IN ORDER TO MOVE ON TO THE INFORMAL SEGMENT OF THIS SHAREHOLDER'S
OUR ANNUAL MEETINGS ALSO ARE DESIGNED TO GIVE YOU AND OTHER MEMBERS OF VDC,
OUR EMPLOYEES, AND SUPPORTING PROFESSIONALS, A ONCE A YEAR OPPORTUNITY TO
INTRODUCE YOURSELVES OR RENEWACQUAINTANCESWITH EACH OTHER OVER A CUP OF
COFFEE RATHER THAN BY PHONE OR BY EMAILS.SO, PLEASE FEEL AT HOME.THIS IS
THIS YEAR THERE IS ONE IMPORTANT ITEM ON THE AGENDA TO BE VOTED ON OTHER THAN
THE NORMAL ELECTION OF THE PROPOSED DELEGATES TO SERVE ON THE COMPANY'S BOARD
OF DIRECTORS FOR THE UP-COMING YEAR.
MY APOLOGIES TO THOSE WHO HAD TO TRAVEL DURING THE THANKSGIVING HOLIDAY
WEEKEND TO ATTEND.WE WANTED TO GET THE MEETING I SCHEDULED AS EARLY AS WE
COULD, BUT SEC REGS ON TIMING RULED.WE ALSO WANTED IT TO BE AS LATE AS
POSSIBLE TO BE ABLE TO REPORT ON THE PENDING SALES OF THE DIFFERENT
SUBSIDIARIES THAT WE WERE NEGOTIATING.
AS TO MY PRESENTATION:AFTER 28 ANNUAL APPEARANCES IN FRONT OF THIS GROUP, YOU
HAVE LIKELY HEARD IT ALL.AT LAST YEAR'S MEETING I ANNOUNCED THAT I WOULD BE
ASKING FOR THE APPROVAL OF THE BOARD OF DIRECTORS TO SEARCH OUT AND TO SECURE
BIDS FOR THE SALE OF EITHER VDC AS A WHOLE OR ITS INDIVIDUAL PARTS IN AN
EFFORT TO ENHANCE SHAREHOLDER VALUE.AND, WITH THAT INTENT IN MIND, INDICATED
THAT THE 27^TH PUBLIC ANNUAL MEETING OF THE SHAREHOLDERS WOULD BE MY LAST TO
HOST.OBVIOUSLY, I WAS TOO OPTIMISTIC IN MY ESTIMATION OF THE TIME THAT IT
WOULD TAKE TO ACCOMPLISH SUCH A TASK.
WE HAVE, HOWEVER ACCOMPLISHED GIANT STEPS IN THAT DIRECTION:
1:WE HAVE CLOSED ON THE SALE OF AYDIN DISPLAYS INC TO SPARTON CORP
2:WE HAVE PAID DOWN NEARLY 100% OF THE COMPANY'S DEBT AND ELIMINATED PNC BANK
AS OUR LENDER.
3:WE HAVE SIGNED AN AGREEMENT TO SELL THE Z-AXIS, INC SUBSIDIARY WITH A
PROPOSED CLOSING WITHIN THE NEXT 30 DAYS.
4:WE HAVE SIGNED AN AGREEMENT TO SELL LEXEL IMAGING INC. FOR A COMBINATION OF
CASH AND NOTES.THE CLOSING ON THAT SALE IS STILL PENDING AND MAY NOT HAPPEN
DUE TO THE DELAYS IN ARRANGING FINANCING BY THE POTENTIAL BUYER.
EVERYTHING IS SUBSTANTIALLY IN FLUX AT THIS POINT, BUT WITH WHAT I HAVE SEEN
THUS FAR, IT SEEMS PRUDENT TO AMEND ISSUED GUIDANCE FOR THE BALANCE OF THE
CURRENT YEAR AND TO ISSUE NEW GUIDANCE FOR FISCAL 2015.
THE COMPANY HAS ISSUED A PRESS RELEASE AS WELL AS AN 8K FILING AS REQUIRED BY
THE SEC EARLIER IN ORDER TO DISCUSS SUCH NEW GUIDANCE HERE AT THIS MEETING.
PER SHARE EARNINGS GUIDANCE HAS BEEN REVISED TO REFLECT THE SALE OF AYDIN
DISPLAYS, INC AND THE ANTICIPATED DECEMBER 2013 SALE OF Z-AXIS INC AND IS NOW
PROJECTED TO BE IN THE RANGE OF $0.14 - $0.16 PER SHARE FOR FISCAL 2014,
EXCLUDING THE POTENTIAL GAIN ON THE SALE OF Z-AXIS AND BASED UPON ACHIEVING
REVENUE FOR FISCAL 2014 IN THE RANGE OF $40 - $42 MILLION.
THE COMPANY FURTHER PROVIDES NEW GUIDANCE FOR ITS FISCAL 2015 FISCAL YEAR,
ASSUMING NO FURTHER SALES OF OPERATIONS, FOR PER SHARE EARNINGS IN THE RANGE
OF $0.44 TO $0.48 ON ACHIEVEMENT OF REVENUES IN THE RANGE OF $38 - $40
FINANCIALLY, WE ARE IN REASONABLY STRONG CONDITION WHEN COMPARED TO MANY YEARS
IN THE PAST.WE HAVE ABSORBED THE LOSSES OF AVS, ACS AND VDC DISPLAY SYSTEMS
THROUGH THEIR START UPS AND NEW BUSINESS DEVELOPMENT PERIODS.WHILE THE
DEVELOPMENT HAS BEEN AT TIMES PAINFUL, YOU CAN INTERPOLATE THROUGH THE
GUIDANCE GIVEN, THAT THE INVESTMENT SEEMS TO HAVE BEEN WORTHWHILE.WE SEE A
VERY STRONG 2015 FOR BOTH AVS AND DISPLAY SYSTEMS.THE JURY IS STILL OUT ON
AYON CYBERSECURITY, BUT IT SEEMS TO BE TURNING THE CORNER. OUR DISPLAYS ARE
THE "DISPLAY OF CHOICE" IN NUMEROUS PROGRAMS JUST BEING ENACTED OR RAMPED UP
BY MANY OF THE COUNTRY'S LEADING DEFENSE CONTRACTORS AND THE US ARMED FORCES
HOPEFULLY, YOU CAN VISUALIZE THAT THE GROUNDWORK HAS BEEN LAID.IT IS NOW UP
TO US TO DELIVER THE RESULTS THAT I BELIEVE THE COMPANY AND ITS PEOPLE ARE
CAPABLE OF DOING.THE FLOOR IS NOW OPEN FOR QUESTIONS.
I AM A STRONG BELIEVER IN BOTH THE SHORT TERM AND THE LONG TERM FUTURE OF VDC
AND THE POTENTIAL OF ITS LEADERS TO GET THE JOB DONEMY INTENT IS TO REMAIN
IN MY CURRENT POSITION FOR THE TIME BEING UNTIL I AM CONFIDENT THAT BOTH THE
SPIN-OFFS AND THE BASE BUILDING ARE SATISFACTORILY COMPLETED.AT THAT TIME,
AND HOPEFULLY SOON, THAT TASK WILL BE SUBSTANTIALLY COMPLETED AND WE CAN MAKE
THE CHANGES TO BEGIN THE TRANSITIONING OF LEADERSHIP TO A NEW GENERATION OF
I WANT TO THANK YOU FOR ATTENDING TODAY AND THANK YOU FOR SUPPORTING VDC FOR
THE LAST 28 YEARS.WE APPRECIATE YOU.INTRODUCE YOURSELVES TO OTHERS AROUND
YOU, HAVE A SECOND OR THIRD CUP OF COFFEE AND LET'S LOOK FORWARD TO A STRONG
PERFORMANCE FOR THE BALANCE OF FISCAL 2014.
CONTACT: Ronald D. Ordway, Chairman and CEO
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