Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
Emerging growth company |
August 31, 2021 |
February 28, 2021 |
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(unaudited) |
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Assets |
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Current assets |
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Cash and cash equivalents |
$ |
$ | ||||||
Accounts receivable, less allowance for doubtful accounts of $ |
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Inventories, net |
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Contract assets |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, plant, and equipment |
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Buildings |
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Construction in progress |
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Machinery and equipment |
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Accumulated depreciation |
( |
) |
( |
) | ||||
Net property, plant, and equipment |
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Right of use assets under operating leases |
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Intangible assets, net |
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Other noncurrent assets |
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Total assets |
$ |
$ | ||||||
August 31, 2021 |
February 28, 2021 |
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(unaudited) |
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Liabilities and Shareholders’ Equity |
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Current liabilities |
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Accounts payable |
$ |
$ | ||||||
Accrued liabilities |
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Customer deposits |
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Note payable |
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Note payable to officer and director |
— | |||||||
Current maturities of financing lease obligations |
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Current operating lease liabilities |
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Total current liabilities |
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PPP related loans, noncurrent |
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Finance lease obligations less current maturities |
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Long-term operating lease liabilities |
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Total liabilities |
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Shareholders’ Equity |
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Preferred stock, |
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Common stock, |
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Additional paid-in capital |
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Retained earnings |
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Treasury stock, shares at cost; |
( |
) |
( |
) | ||||
Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
$ |
$ | ||||||
Three Months Ended August 31, |
Six Months Ended August 31, |
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2021 |
2020 | 2021 |
2020 | |||||||||||||
Net sales |
$ |
$ | $ |
$ | ||||||||||||
Cost of goods sold |
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Gross profit |
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Operating expenses |
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Selling and delivery |
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General and administrative |
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Operating loss |
( |
) |
( |
) | ( |
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( |
) | ||||||||
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Other income (expense) |
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Interest income (expense), net |
( |
) |
( |
) | ( |
) |
( |
) | ||||||||
Investment gains (losses), net |
— |
— |
( |
) | ||||||||||||
Gain on extinguishment of PPP loans |
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Other, net |
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Income (loss) before income taxes |
( |
) | ( |
) |
( |
) | ||||||||||
Income tax expense |
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Net income (loss) |
$ |
$ | ( |
) | $ |
( |
) |
$ | ( |
) | ||||||
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Net income (loss) per share - basic |
$ |
$ | ( |
) | $ |
( |
) |
$ | ( |
) | ||||||
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Net income (loss) per share - diluted |
$ |
$ | ( |
) | $ |
( |
) |
$ | ( |
) | ||||||
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Basic weighted average shares outstanding |
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Diluted weighted average shares outstanding |
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Common Shares* |
Share Amount |
Additional Paid-in Capital |
Retained Earnings |
Treasury Stock |
Total Shareholders’ Equity |
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For the Three Months Ended August 31, 2021 |
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Balance, May 31, 2021 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Balance, August 31, 2021 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
For the Six Months Ended August 31, 2021 |
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Balance, February 28, 2021 (audited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Balance, August 31, 2021 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
For the Three Months Ended August 31, 2020 |
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Balance, May 31, 2020 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Balance, August 31, 2020 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
For the Six Months Ended August 31, 2020 |
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Balance, February 29, 2020 (audited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Balance, August 31, 2020 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
* | Common shares are shown net of Treasury Shares |
Six Months Ended August 31, |
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2021 |
2020 |
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Operating Activities |
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Net loss |
$ |
( |
) |
$ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation expense |
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Amortization of intangible assets |
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Provision for doubtful accounts |
( |
) | ||||||
Provision for inventory reserve |
( |
) |
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Realized/unrealized loss on investments |
— |
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Gain on extinguishment of PPP loans |
( |
) |
— | |||||
Other |
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Changes in working capital items: |
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Accounts receivable |
( |
) | ||||||
Inventories |
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Prepaid expenses and other assets |
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Contract assets |
( |
) | ||||||
Customer deposits |
( |
) |
( |
) | ||||
Accounts payable and accrued liabilities |
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Net cash used in operating activities |
( |
) |
( |
) | ||||
Investing Activities |
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Capital expenditures |
( |
) |
( |
) | ||||
Purchases of investments |
— |
( |
) | |||||
Proceeds from sale of investments |
— |
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Net cash used in investing activities |
( |
) |
( |
) | ||||
Financing Activities |
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Repayments of notes payable to officers and directors |
— |
( |
) | |||||
Repayments of note payable |
( |
) |
— | |||||
Repayments on lease financing |
( |
) |
— | |||||
Proceeds from loans with officers and directors |
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Proceeds from PPP related loans |
— |
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Marginal float borrowings |
— |
( |
) | |||||
Net cash provided by financing activities |
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Net change in cash and cash equivalents |
( |
) |
( |
) | ||||
Cash and cash equivalents, beginning of year |
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Cash and cash equivalents, end of period |
$ |
$ | ||||||
August 31, 2021 |
February 28, 2021 |
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Working capital |
$ | $ | ||||||
Liquid assets |
$ | $ |
August 31, 2021 |
February 28, 2021 |
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Raw materials |
$ |
$ |
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Work-in-process |
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Finished goods |
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Reserves for obsolescence |
( |
) |
( |
) | ||||
$ |
$ |
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August 31, 2021 |
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Assets |
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Operating lease right-of-use |
$ | |||
Liabilities |
||||
Current portion of operating lease liabilities |
$ | |||
Noncurrent portion of operating lease liabilities |
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Total operating lease liabilities |
$ | |||
August 31, 2021 |
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Weighted average remaining lease term |
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Weighted average discount rate |
% |
FY2022 |
$ | |||
FY2023 |
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FY2024 |
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FY2025 |
||||
Total operating lease payments |
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Less imputed interest |
( |
) | ||
Total operating lease liabilities |
$ | |||
FY2022 |
$ | |||
FY2023 |
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Total |
$ | |||
August 31, 2021 |
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Financing lease right-of-use |
$ | |||
Current portion of financing lease liabilities |
$ | |||
Noncurrent portion of financing lease liabilities |
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Total financing lease liabilities |
$ | |||
Fiscal Year |
Amount |
|||
2022 |
$ | |||
2023 |
||||
2024 |
||||
Total finance lease payments |
$ | |||
Less imputed interest |
( |
) | ||
Total finance lease liabilities |
$ | |||
Six Months Ended August 31, |
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2021 |
2020 |
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Cash paid for: |
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Interest |
$ |
$ |
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Non-cash activity: |
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Note receivable paid directly to officer |
$ |
— |
$ |
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Note payable to officer |
$ |
— |
$ |
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Imputed interest expense |
$ |
— |
$ |
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Imputed interest income |
$ |
— |
$ |
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Net Income (Loss) |
Weighted Average Common Shares Outstanding |
Earnings (Loss) Per Share |
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Three months ended August 31, 2021 |
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Basic |
$ |
$ |
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Effect of dilution: |
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Options |
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Diluted |
$ |
$ |
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Three months ended August 31, 2020 |
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Basic |
$ |
( |
) |
$ |
( |
) | ||||||
Effect of dilution: |
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Options |
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Diluted |
$ |
( |
) |
$ |
( |
) | ||||||
Net Income (Loss) |
Weighted Average Common Shares Outstanding |
Earnings (Loss) Per Share |
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Six months ended August 31, 2021 |
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Basic |
$ |
( |
) |
$ |
( |
) | ||||||
Effect of dilution: |
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Options |
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Diluted |
$ |
( |
) |
$ |
( |
) | ||||||
Six months ended August 31, 2020 |
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Basic |
$ |
( |
) |
$ |
( |
) | ||||||
Effect of dilution: |
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Options |
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Diluted |
$ |
( |
) |
$ |
( |
) | ||||||
• | Simulation and Training Products |
• | Cyber Secure Products – |
• | Data Display CRTs– |
• | Other Computer Products – |
August 31, 2021 |
February 28, 2021 |
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Working capital |
$ |
2,166 |
$ | 3,601 | ||||
Liquid assets |
$ |
245 |
$ | 293 |
Three Months Ended August 31, |
Six Months Ended August 31, |
|||||||||||||||
2021 |
2020 | 2021 |
2020 | |||||||||||||
Net Sales |
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Simulation and Training (VDC Display Systems) |
56.4 |
% |
49.8 | % | 55.4 |
% |
49.1 | |||||||||
Data Display CRT (Lexel and Data Display) |
11.4 |
14.8 | 12.0 |
18.4 | ||||||||||||
Broadcast and Control Centers (AYON Visual) |
— |
— | — |
— | ||||||||||||
Cyber Secure Products (AYON Cyber Security) |
16.9 |
22.0 | 13.9 |
22.8 | ||||||||||||
Other Computer Products (Unicomp) |
15.3 |
13.4 | 18.7 |
9.7 | ||||||||||||
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Total net sales |
100.0 |
% |
100.0 | % | 100.0 |
% |
100.0 | |||||||||
Costs and expenses |
||||||||||||||||
Cost of goods sold |
97.3 |
% |
91.9 | % | 88.9 |
% |
80.6 | |||||||||
Selling and delivery |
6.5 |
12.7 | 7.5 |
8.3 | ||||||||||||
General and administrative |
47.4 |
42.6 | 50.4 |
32.9 | ||||||||||||
|
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|
|
|
|
|
|
|||||||||
151.2 |
% |
147.2 | % | 146.8 |
% |
121.8 | ||||||||||
Operating loss |
(51.2 |
)% |
(47.2 | )% | (46.8 |
)% |
(21.8 | ) | ||||||||
Interest income (expense), net |
(0.2 |
)% |
(0.7 | )% | (0.4 |
)% |
(0.5 | ) | ||||||||
Other income (expense), net |
60.0 |
4.2 | 31.7 |
5.5 | ||||||||||||
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|
|
|
|
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|
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Income (loss) before income taxes |
8.6 |
% |
(43.7 | )% | (15.5 |
)% |
(16.8 | ) | ||||||||
Income tax expense |
— |
— | — |
— | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
8.6 |
% |
(43.7 | )% | (15.5 |
)% |
(16.8 | ) | ||||||||
|
|
|
|
|
|
|
|
August 31, 2021 |
February 28, 2021 |
|||||||
Working capital |
$ |
2,166 |
$ | 3,601 | ||||
Liquid assets |
$ |
245 |
$ | 293 |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults upon Senior Securities |
Item 4. | Submission of Matters to a Vote of Security Holders |
Item 5. | Other information |
Item 6. | Exhibits |
VIDEO DISPLAY CORPORATION | ||||||
October 15, 2021 | By: | /s/ Ronald D. Ordway | ||||
Ronald D. Ordway | ||||||
Chief Executive Officer | ||||||
October 15, 2021 | By: | /s/ Gregory L. Osborn | ||||
Gregory L. Osborn | ||||||
Chief Financial Officer |