Video Display Corporation (Nasdaq:VIDE), a recognized leader in the
manufacture and distribution of defense, medical and industrial
display solutions, today is issuing the CEO's "Annual Letter to
Shareholders" containing excerpts from the 8/30/2011 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 Form 8K detailing the upward
revisions in guidance for this fiscal year ending February 28, 2012
and attach a full copy of this Letter thereto.
The Company had recently issued previous guidance for the fiscal
2012 year end at $0.50 to $0.55 in fully diluted per share
earnings. Due to higher September and October results, revised
guidance, issued today, indicates that results will likely exceed
the high end of the previous guidance by as much as 10%. Therefore
guidance is now revised to reflect the actual higher monthly
results and is increased to a projected level for fiscal 2012
earnings of $0.55 - $0.60 per share.
The following excerpts are from the CEO Address at the
2011 Annual Meeting:
"GOOD MORNING & WELCOME"
"TODAY'S MEETING REPRESENTS THE 27TH ANNUAL MEETING OF VIDEO'S
LIFE AS A PUBLIC COMPANY SINCE THE COMPANY IPO IN JANUARY OF 1985.
IT IS VIDEO'S 37th YEAR OF EXISTENCE AS A SPECIALTY DISPLAY
COMPANY."
"ALTHOUGH THE MEETINGS ARE DESIGNED TO BE INFORMAL, THERE ARE
STILL CERTAIN FORMALITIES THAT MUST BE ADHERED TO. THE ONLY ITEM ON
THE AGENDA TO BE VOTED ON THIS YEAR IS THE ELECTION OF THE NOMINEES
TO SERVE ON THE COMPANY'S BOARD OF DIRECTORS FOR THE ENSUING
YEAR. THE COMPANY IS SEEKING TO ADD THE EXPERIENCE OF SEASONED
PROFESSIONALS IN FIELDS OF LAW, ACCOUNTING AND BUSINESS ACUMEN INTO
THE DECISION MAKING PROCESS OF THE BOARD".
"TO THAT END, WE HAVE NOMINATED ATTORNEY DAVID COOPER, WHO HAS
SERVED AS A LEGAL ADVISOR TO THE COMPANY FOR THE PAST NEARLY 30
YEARS. WE HAVE ALSO NOMINATED MR. ROGER LUSBY, THE MANAGING
PARTNER OF FRAZIER AND DEETER LLC IN ALPHARETTA, GA. THE THIRD
NEW NAME ON THE BALLOT THIS YEAR IS MR. GREG OSBORN WHO ALSO SERVES
AS THE CHIEF FINANCIAL OFFICER OF VDC."
"I THINK THAT EVERYONE WHO FOLLOWS VIDEO DISPLAY CORPORATION,
WHETHER FROM A PROFESSIONAL, BUSINESS OR INVESTMENT ASPECT, WILL
ALL AGREE THAT THE COMPANY HAS PROGRESSED SUBSTANTIALLY FROM WHERE
WE WERE WHEN WE HELD OUR LAST ANNUAL MEETING. WE EXPECT TO
CONTINUE THAT PROGRESS INTO THE YEAR AHEAD. TWO OF THE LARGEST
DRAINS ON CORPORATE PROFITS HAVE BEEN ELIMINATED IN THE LAST 6
MONTHS AND OUR BOTTOM LINE NUMBERS REFLECT THOSE
ELIMINATIONS. THAT DOES NOT MEAN THAT WE CAN EASE UP. WE
STILL HAVE A COUPLE OF LOSING OPERATIONS THAT NEED TO BE DISPOSED
OF TO CREATE A CLEANER MORE PROFITABLE COMPANY."
"AS OF YESTERDAY, THE COMPANY RESOLVED ITS OUTSTANDING
LEGAL CASE WITH CLINTON ELECTRONICS WHICH HAS ALSO BEEN DRAINING
COMPANY CASH DUE TO HIGH LEGAL COSTS. IT WAS DETERMINED BY THE
BOARD THAT THE PRUDENT WAY TO GO WAS TO SETTLE THE DIFFERENCES AND
MOVE ON. THE COMPANY HAD PREVIOUSLY RESERVED AGAINST ANY
POTENTIAL COURT LOSSES SO THE EFFECT OF THE RESOLUTION WILL BE
NEGLIGIBLE ON VDC'S FINANCIAL RESULTS FOR THIS YEAR".
"LAST YEAR WE DISCUSSED THE NEED TO GET CURRENT WITH OUR
PAYABLES, REDUCING OUR DEBT, DECREASING OUR LAST TIME BUY
INVENTORIES AND CONVERTING THEM BACK TO CASH; GENERATING STRONG
EBITDA AND CASH FLOW. WE HAVE ACCOMPLISHED THAT THIS
YEAR."
"OUR DISPLAYS ARE STILL 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 AS WELL. I CAN
ASSURE YOU WE ARE HERE, A STRONGER COMPANY THAN WE HAVE BEEN FOR
SEVERAL YEARS, WITH AN EXTREMELY BRIGHT FUTURE FOR ALL OF OUR
STAKEHOLDERS. THE ANTICIPATION THAT GOOD THINGS ARE ABOUT TO
HAPPEN HAS ALWAYS KEPT THE MANAGEMENT OF VDC LOOKING FORWARD TO
REACHING THE LONG TERM GOALS THAT WE ENVISION."
"VDC HAS PERFORMED QUITE ADMIRABLY BOTH ON AN INDEPENDENT
BASIS AND ESPECIALLY WHEN COMPARED TO MANY OTHER INVESTMENT
OPPORTUNITIES AS A WHOLE. MY OPINION OF THE FUTURE PROMISE OF
VIDEO DISPLAY CORPORATION REMAINED HIGH AT THE LAST ANNUAL
MEETING. BASED UPON WHAT YOU HAVE JUST HEARD DURING TODAY'S
PRESENTATIONS, IT IS, WITHOUT A DOUBT, EQUALLY AS HIGH FOR 2012 AND
BEYOND."
"I HAVE, AS HAVE OTHERS IN VDC MANAGEMENT AND THE DIRECTOR'S
RANKS, AS SHOWN IN SEC REPORTS, CONTINUED TO PURCHASE SHARES OF THE
COMPANY'S COMMON STOCK IN THE OPEN MARKET. ALTHOUGH THE
COMPANY ITSELF HAS BEEN RESTRICTED FROM REPURCHASING ADDITIONAL
SHARES UNTIL WE HAVE ATTAINED SPECIFIC LEVELS OF PERFORMANCE SET BY
OUR BANK, I BELIEVE THAT WE HAVE MET THOSE PARAMETERS AND HAVE
REQUESTED THAT WE BE ALLOWED TO REINSTATE THAT PROGRAM."
"WE HAVE MADE NO ACQUISITIONS OF SIGNIFICANCE SINCE THE
LAST ANNUAL MEETING, BUT SEVERAL INTERESTING ONES HAVE BEEN
PRESENTED TO US FOR REVIEW RECENTLY. IT IS A GREAT TIME FOR
CONSIDERING SUCH OPPORTUNITIES BUT, THE FINANCING THE OPPORTUNITIES
AS THEY ARISE IS STILL A STUMBLING BLOCK AS LONG AS OUR STOCK PRICE
LANGUISHES HERE AT ABOUT $4.00 PER SHARE."
"ALL IN ALL, THE ACCOMPLISHMENTS OF FISCAL 2011 CAN BE
SUMMED UP AS: A YEAR OF SOLID PROGRESS. WE ARE MORE THAN
"STILL HERE". WE HAVE BUILT A SIGNIFICANT BACKLOG OF ORDERS
FOR PRODUCTS, BOTH NEW AND LEGACY. WE CONTINUE TO ESTABLISH
NEW SUPPLIER RELATIONSHIPS AND CUSTOMER RELATIONSHIPS THAT SHOULD
STAND US IN GOOD STEAD FOR MANY YEARS TO COME."
"USING THE BEST CURRENT INFORMATION AVAILABLE TO ME, IT APPEARS
THAT VDC WILL CONTINUE TO MAKE STRONG PROGRESS THROUGHOUT THE
REMAINDER OF THIS 2012 FISCAL YEAR. THE COMPANY HAS INCREASED
ITS INITIAL GUIDANCE A COUPLE OF TIMES THIS YEAR AND THE CURRENT
GUIDANCE TO THE STREET WAS SET AT ABOUT $0.40TO $0.44 FOR THIS
FISCAL YEAR BASED UPON $60 MILLION TO $65 MILLION IN NET
REVENUE. WE WERE ABLE TO ADJUST UPWARD TO THOSE LEVELS DUE TO
LARGER THAN EXPECTED FIRST QUARTER RESULTS."
"BASED UPON THE RESULTS OF THE FIRST TWO MONTHS OF THE SECOND
QUARTER, I CONTINUE TO BELIEVE THAT THE CURRENT GUIDANCE IS
ATTAINABLE. THEREFORE, IF THE TARGETS ARE ACHIEVED, THE COMPANY
EXPECTS PER SHARE EARNINGS FROM CONTINUING OPERATIONS FOR FISCAL
2012 TO EXCEED THOSE OF FISCAL 2011 BY APPROXIMATELY 43% TO
57%. AS YOU CAN EASILY SEE, THE GROUNDWORK HAS BEEN
LAID. IT IS NOW UP TO US TO DELIVER THE RESULTS THAT I BELIEVE
THE FIRM AND ITS PEOPLE ARE CAPABLE OF DOING."
Subsequent to the August 30, 2011 meeting, progress has
continued in several of the above areas.
a: VDC has shown further
improvement in 2012 financial results as detailed above and has
therefore increased its earnings guidance to reflect the
improvement to $0.55 - $0.60.
b: Our commercial bankers
have authorized the company to reinstitute the corporate share
buyback program. The amount of shares to be purchased remains
restricted within certain guidelines set by the banks and shall not
exceed 10% in dollar value of the company's cumulative after tax
net income for the current fiscal year. Since the program was
reinstituted on September 1, 2012, the company has repurchased
41,863 shares.
c: VDC's directors and
management have also continued to purchase shares of the company as
reflected in SEC forms filings, for their personal investment
holding accounts, reflecting their belief that VDC shares are
undervalued at this time.
d: The company has entered
into an agreement to sell its plant and real estate in White Mills,
PA. Should the sale be consummated, the company will incur a
onetime gain from the sale, which gain has not been considered when
calculating the above earnings guidance. The gain, if the sale
is consummated, is created by the recapture of past recorded
depreciation on the Pennsylvania real estate.
e: On the merger and
acquisition front, the company continues to review potential
candidates to increase the company's presence in the arena of niche
market displays, display assemblies and components. It has
submitted indications of interest to several possible
candidates. VDC also has, on several occasions, received
inquiries from companies that have a potential interest in
acquiring all, or specific divisions of VDC. Although there
have been no realistic or definitive offers presented to the board
of directors, the company has participated in, and will continue to
be responsive to, such discussions of interest when, and if, such
inquiries are determined to be valid.
As always, I thank you for your continued support of Video
Display Corporation.
Ronald D. Ordway, CEO, 770-938-2080
CONTACT: Ronald D. Ordway, CEO, 770-938-2080
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