|New Threads Only:|
|New Threads & Replies:|
Forum List » Business News and Headlines|
SEC Filings, Earing Reports, Press Releases
Video Display Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: January 14, 2011 05:19PM
Video Display Corp. (VIDE) filed Quarterly Report for the period ended 2010-11-30.
Highlight of Business Operations:
Liquidity - On December 23, 2010, the Company and its subsidiaries executed a new Credit Agreement with RBC Bank and Community and Southern Bank to provide new financing to the Company to replace the existing credit agreement with RBC Bank which terminated in conjunction with this Agreement. The new Agreement provides for a line of credit of up to $17.5 million and two term loans of $3.5 million and $3.0 million. The outstanding balance at November 30, 2010 of the prior lines of credit was $19.6 million and the balance of the prior term loan was $0.7 million. These previous credit lines had been extended to December 31, 2010, and accordingly are classified under short-term liabilities on the Companys balance sheet as of November 30, 2010. A copy of the new Credit Agreement was filed on an 8-K document with the Securities and Exchange Commission on December 30, 2010. These loans are secured by all assets and personal property of the Company and a limited guarantee of the Chief Executive Officer of $3,000,000. The agreement contains covenants, including requirements related to tangible cash flow, ratio of debt to cash flow and asset coverage. The agreement also includes restrictions on the incurrence of additional debt or liens, investments (including Company stock), divestitures and certain other changes in the business. The Agreement does not expressly quantify these restrictions in terms of dollar amounts: however, in general the Company cannot take such actions other than to a limited extent in the ordinary course of business. The Agreement expires on December 1, 2013. The interest rate on these loans is a floating LIBOR rate based on a fixed charge coverage ratio, minimum 4.0%, as defined in the loan documents. The restructure of the debt classification due to this agreement will be reflected in the Companys fourth quarter.
Consolidated net sales decreased $0.6 million for the three months ended November 30, 2010 and increased $8.7 million for the nine months ended November 30, 2010 as compared to the three and nine months ended November 30, 2009, respectively. Display segment sales increased $0.5 million for the three month comparative period and increased $8.5 million for the nine-month comparative period. Sales within the Wholesale Distribution segment decreased $1.2 million for the three month comparative period primarily due to procurement issues with one of their primary suppliers and increased $0.1 million for the nine-month comparative period. The issues with the supplier have been resolved and shipments are now flowing regularly.
$0.1 million for the comparable three month period and decreased $0.6 million to the comparable nine-month period primarily due to the sluggish CRT orders in the flight simulation segment of the business. The entertainment revenues were flat for the three month period and decreased $0.2 million for the nine month period.
As of November 30, 2010, the Company had total cash of $2.0 million. The Companys working capital was $22.4 million and $21.8 million at November 30, 2010 and February 28, 2010, respectively. In recent years, the Company has financed its growth and cash needs primarily through income from operations, borrowings under revolving credit facilities, advances from the Companys Chief Executive Officer and long-term debt. Liquidity provided by operating activities of the Company is reduced by working capital requirements, largely inventories and accounts receivable, debt service, capital expenditures, product line additions and dividends.
On December 23, 2010, the Company and subsidiaries executed a Credit Agreement with RBC Bank and Community and Southern Bank to provide new financing to the Company to replace the existing credit agreement with RBC Bank. The new agreement provides for a line of credit of up to $17.5 million and two term loans of $3.5 million and $3.0 million. The agreement expires on December 1, 2013. The interest rate on these loans is a floating LIBOR rate based on a fixed charge coverage ratio, minimum 4%, as defined in the loan documents.
Cash provided by operations for the nine months ended November 30, 2010 was $3.9 million as compared to cash provided by operations of $0.7 million for the nine months ended November 30, 2009. This net increase in cash provided