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 8/24/2012 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
revisions in guidance for this fiscal year ending Feb. 28, 2013 and
attach a full copy of this Letter thereto.
The Company had issued previous guidance for the fiscal 2013
year end at $0.55 to $0.60 in fully diluted per share earnings. Due
to anticipated slower shipments in the Company's first and second
quarters, revised guidance, issued today, indicates that results
for the August 31, 2012 quarterly period will likely be reported
lower than the previous guidance. Therefore guidance is now revised
to reflect such anticipated quarterly results and is reduced to a
projected level for fiscal 2013 earnings of $0.40 - $0.44 per
share.
The following excerpts are from the CEO Address at the 2012
Annual Meeting:
"GOOD MORNING & WELCOME"
"TODAY'S MEETING REPRESENTS THE 28TH 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."
INCREDIBLE AS IT MAY SEEM, IT IS THAT TIME OF YEAR AGAIN.
IT SEEMS THAT THE ONLY THINGS THAT COME MORE FREQUENTLY THAN
THESE SHAREHOLDER MEETINGS ARE BIRTHDAYS AND CHRISTMAS.
NEVERTHELESS, IT IS ALWAYS GREAT TO HAVE THE OCCASION TO SEE
EVERYONE AGAIN HERE IN STONE MOUNTAIN. I EXTEND MY PERSONAL WELCOME
TO EACH OF THE NEW ATTENDEES AND A PERSONAL WELCOME BACK TO OUR
REGULARS.
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 MEETING.
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 RENEW ACQUAINTANCES
WITH EACH OTHER OVER A CUP OF COFFEE RATHER THAN BY PHONE OR BY
EMAILS. SO, PLEASE FEEL AT EASE. THIS IS YOUR MEETING.
THERE ARE NO MAJOR ITEMS ON THE AGENDA TO BE VOTED ON THIS YEAR
OTHER THAN THE ELECTION OF THE PROPOSED DELEGATES TO SERVE ON THE
COMPANY'S BOARD OF DIRECTORS FOR THE UP-COMING YEAR.
THIS YEAR, I WOULD LIKE TO CHANGE THE FORMAT OF THE INFORMAL
PORTION OF THIS MEETING. I AM GOING TO TURN IT OVER TO DAVE HEIDEN
TO INTRODUCE EACH OF THE 3 DIVISIONAL PRESIDENTS WHO ARE THE KEYS
THAT GENERATED NEARLY $3.6 MILLION IN AFTER TAX PROFITS FOR FISCAL
2012. THEY REALLY MAKE THE COMPANY WHAT IT IS TODAY AND WILL BE IN
THE FUTURE.
ALSO, WITH THE FUTURE IN MIND, I HAVE ADDED A 4TH PRESENTER IN
TOM BURDETTE, WHO HEADS THE AYDIN VISUAL SOLUTIONS OPERATIONS, HERE
IN TUCKE, GA. I AM DOING THIS AS WE HAVE ABSORBED SUBSTANTIAL
LOSSES THIS YEAR FROM HIS OPERATION, WHICH HAVE PARTIALLY REQUIRED
THE DOWNWARD REVISION IN MY 2013 GUIDANCE TO THIS POINT, BUT
WITH THE PROMISE OF GENERATING SUBSTANTIAL FUTURE RETURNS.
I HAVE ASKED EACH PRESENTER TO HOLD HIS DISSERTATION TO 4 OR 5
MINUTES AT MOST; BUT, IN THAT TIME, TO ATTEMPT TO PROVIDE A GOOD
VIEW OF WHAT HE IS CURRENTLY WORKING ON AND QUOTING, THE
PROBABILITY OF WINNING THAT BUSINESS AND THEREFORE AN INSIGHT INTO
WHAT TO EXPECT OUT OF HIS OPERATIONS FOR THE NEXT 12 MONTHS OR
SO.
(PRESENTATIONS GIVEN BY DIVISION)
THANK YOU ART, MIKE AND MARCIAL; FOR WHAT YOU ACCOMPLISHED IN
FISCAL 2012 AND ALL OF YOU FOR SETTING THE FRAMEWORK IN PLACE FOR
BETTER YEARS AHEAD. HOPEFULLY, EVERYONE HAS A CLEARER
UNDERSTANDING OF EACH OF OUR MORE PROMISING BUSINESSES.
AS TO MY PRESENTATION: AFTER 27 ANNUAL APPEARANCES IN FRONT
OF THIS GROUP, YOU HAVE LIKELY HEARD IT ALL. AT LAST YEAR'S
MEETING I GAVE AN UPBEAT FORECAST SAYING THAT EARNINGS COULD BE
BETWEEN $0.40 AND $O.44 PER COMMON SHARE. SUBSEQUENT TO THAT
MEETING, I WAS ABLE TO RAISE THE GUIDANCE TO $0.50 TO $0.55 PER
SHARE. SUBSEQUENTLY, HOWEVER, WE HAD A POOR 4TH QUARTER AND
THE 2012 RESULTS CAME IN AT $0.46 FULLY DILUTED, JUST SLIGHTLY
ABOVE MY ORIGINAL GUIDANCE; NEVERTHELESS, ONE OF OUR BEST YEARS
EVER.
THE SLOWDOWN EXPERIENCED IN THE FISCAL 2012 FOURTH QUARTER
CONTINUED INTO THE FIRST QUARTER OF FISCAL 2013 AND HAS PREVAILED
IN OUR 2ND FISCAL QUARTER OF THIS YEAR AS WELL. THEREFORE,
BASED UPON WHAT I HAVE SEEN THUS FAR, IT SEEMS PRUDENT TO ISSUE
GUIDANCE IN THE SAME RANGE AS I DID AT LAST YEAR'S ANNUAL MEETING,
THAT BEING IN THE RANGE OF $3,000,000 AFTER TAX INCOME OR $0.40 PER
OUTSTANDING SHARE. CERTAINLY WE WILL TRY TO BETTER THAT
NUMBER, BUT I STILL DO NOT HAVE A GOOD HANDLE ON THE TIMING OF THE
CONTRIBUTIONS OF EITHER AYDIN VISUAL OR AYDIN
CYBERSECURITY. BOTH HAVE GREAT PROMISE, BUT THE QUESTION IS
SIMPLY "WHEN?" IT BEGINS TO BE REALIZED.
FINANCIALLY, WE ARE IN REASONABLY STRONG SHAPE. I THINK WE
HAVE IN EXCESS OF $3 MILLION AVAILABLE ON OUR REVOLVER WITH OUR
BANKS, AND WE CONTINUE TO REDUCE THEIR "TERM" DEBT AT NEARLY
$1,000,000 PER YEAR, TO BECOME UNDER $5 MILLION BY THE END OF THIS
YEAR,. LAST YEAR, OUR TOTAL BANK DEBT WAS REDUCED BY $3.2
MILLION; AND BY THE END OF THIS QUARTER, IT WILL HAVE BEEN REDUCED
BY AN ADDITIONAL $800,000, MAKING A TOTAL REDUCTION OF $4 MILLION
OVER AN 18 MONTH PERIOD. DURING THIS SAME PERIOD, WE
HAVE FUNDED THE ACQUISITION OF ACS, ABSORBED THE EXPENSES OF AVS
AND REDUCED THE VDC OUTSTANDING SHARES BY NEARLY ONE MILLION, FROM
8.5 MILLION TO 7.5 MILLION SHARES PRIMARILY FROM WORKING
CAPITAL.
WE RECENTLY SOLD THE CHROMA FACILITIES IN PA. THIS
TRANSACTION RESULTS IN THE ELIMINATION OF APPROXIMATELY A $75,000
QUARTERLY LOSS FROM THAT OPERATION AND CONTRIBUTES A QUARTERLY GAIN
OF NEARLY $25,000; WHICH AMOUNTS TO A REVERSAL OF NEARLY $100,000
EACH QUARTER IN OPERATING RESULTS. WE ARE NOW IN PROCESS OF
ACCOMPLISHING A LIKE TRANSACTION WITH OUR PROJECTION CRT PLANT IN
BOSSIER CITY LA. THE NUMBERS THERE SHOULD BE SIMILAR TO JUST
SLIGHTLY LESS THAN THOSE SEEN IN PA.
AS HAS JUST BEEN DEMONSTRATED IN PRESENTATIONS, 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 AS WELL. WE HAVE ADDED EXEMPLARY NEW
PERSONNEL TO GET VDC MORE INVOLVED IN R&D THROUGH GOVERNMENTAL
SPONSORED SBIR PROGRAMS, TRANSITIONED THE COMPANY TO BECOME THE
PRIME CONTRACTOR ON US DEFENSE PROGRAMS RATHER THAN TO ACT AS SUBS
TO OTHER PRIME CONTRACTORS AND MADE ACQUISITIONS THAT SHOULD ALLOW
VDC TO REGAIN ITS GROWTH PATTERN AS A HIGH END MILITARY, MEDICAL
AND COMMERCIAL/INDUSTRIAL DISPLAY COMPANY.
VDC IS A STRONGER COMPANY TODAY 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.
HOPEFULLY, YOU CAN EASILY SEE 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.
--QUESTION/ANSWERS--
IF THERE ARE NO MORE QUESTIONS, I WOULD LIKE TO END THIS MEETING
ON A PERSONAL NOTE.
I BEGAN THIS MEETING WITH A COMMENT THAT I HAVE SPENT THE LAST
37 YEARS BUILDING VDC. SAYING THAT, I REALIZED THAT THIS IS
MORE THAN HALF OF MY LIFE THUS FAR, MOSTLY WORKING 7 DAYS A WEEK
FOR 52 WEEKS A YEAR. NOW, I UNDERSTAND THAT OUR US PRESIDENT
BELIEVES THAT THE SELF-SERVING POLITICIANS IN WASHINGTON BUILT THIS
BUSINESS, NOT THE PEOPLE WHO RISKED EVERYTHING, MANY OF WHOM WORKED
EVERY DAY OF THOSE 37 YEARS WITH ME, BUT THAT SOMEHOW, IT WAS BUILT
BY WASHINGTON. I DISAGREE WITH HIM.
SO, WITH THOSE 37 YEARS BEHIND ME, ABOUT TO TURN 71 YEARS OF
AGE, THIS IS LIKELY MY FINAL TURN PRESIDING OVER THE VDC ANNUAL
SHAREHOLDERS MEETING. I WILL ASK OUR BOARD OF DIRECTORS
TO APPROVE A RESOLUTION WHEREBY I WILL BE EMPOWERED TO RETAIN AN
INVESTMENT BANKING FIRM TO INVESTIGATE METHODS TO ENHANCE
SHAREHOLDER VALUE. THIS MAY INCLUDE MERGERS, ACQUISITIONS,
SPIN-OFFS, SALE OF THE COMPANY AS A WHOLE OR ANY OTHER METHODS
DEEMED BENEFICIAL. IF NONE OF THESE ARE SUCCESSFUL, IT MAY STILL BE
TIME TO TURN THE REINS OF MANAGEMENT OVER TO A YOUNGER GENERATION
OF ENTREPRENEURS WHO CAN HAVE THE PATIENCE REQUIRED TO WORK WITHIN
THE FRAMEWORK OF THE SOCIALIST SOCIETY NOW BEING PROPAGATED UNDER
THE PRESENT ADMINISTRATION IN THE UNITED STATES GOVERNMENT.
IT'S TRULY SAD THAT THE PEOPLE, WHO HAVE BENEFITED, AND EVEN
FLOURISHED, SO GREATLY FROM LIVING IN THIS COUNTRY FOUNDED ON
STRONG FUNDAMENTALS OF CAPITALISM, AND BUILT BY THE INDIVIDUALS WHO
BELIEVED DEARLY IN SELF WORTH, HAVE NOW SUNK TO THE LEVEL THAT WE
HAVE REACHED TODAY.
I AM A STRONG BELIEVER IN BOTH THE FUTURE OF VDC AND THE
POTENTIAL OF ITS LEADERS, SOME OF WHOM YOU HAVE HAD THE OPPORTUNITY
TO MEET HERE TODAY. MY INTENT IS TO REMAIN IN MY CURRENT
POSITION FOR MOST OF THE NEXT 12 MONTHS, BUT DURING THAT TIME WE
WILL BE MAKING THE CHANGES OR TO BEGIN THE TRANSITION OF LEADERSHIP
TO A NEW GENERATION OF CAPABLE INDIVIDUALS.
I WANT TO THANK YOU FOR ATTENDING TODAY AND THANK YOU FOR
SUPPORTING VDC FOR THE LAST 27 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 SECOND
HALF OF FISCAL 2013.
CONTACT: Ronald D. Ordway, Chairman and CEO
770-938-2080
Video Display (PK) (USOTC:VIDE)
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