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) |
Registrants 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 Companys 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 |
14 | | 14 | |||||||||
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 | 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 | 7,293 | ||||||||||
Additional paid-in capital |
158 | 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 | 2 | 658 | |||||||||
|
|
|
|
|
|
|||||||
(49 | ) | 2 | (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) |
$ | 8 | 1,786 | (1,778 | ) | |||||||
Income from discontinued operations, net of taxes |
| | | |||||||||
Net income |
$ | 8 | $ | 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.
Date: January 23, 2014 | VIDEO DISPLAY CORPORATION | |||||
By: | /s/ Ronald D. Ordway | |||||
Ronald D. Ordway | ||||||
Chief Executive Officer |