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Video Display Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: October 15, 2009 02:00PM

Video Display Corp. (VIDE) filed Quarterly Report for the period ended 2009-08-31. VIDEO DISPLAY CORP. principally manufactures and distributes cathode ray tubes in the worldwide replacement market for use in television sets and data display screens including computer monitors medical monitoring equipment and various other data display applications. The Company also acts as a wholesale distributor of electronic parts and CRTs purchased from domestic and foreign manufacturers. The Company also manufactures and distributes electron guns and associated parts which are significant components in new and recycled CRTs. Video Display Corp. has a market cap of $30.92 million; its shares were traded at around $3.5894 with a P/E ratio of 123.11 and P/S ratio of 0.42.

Highlight of Business Operations:

Consolidated gross margins decreased from 37.2% for the three months ended August 31, 2008 to 35.4% for the three months ended August 31, 2009 and decreased from 37.3% for the six months ended August 31, 2008 to 35.6% for the six months ended August 31, 2009.

Display segment margins decreased from 31.1% to 30.5% for the comparable three month period ended August 31, 2009 and decreased from 30.8% to 27.7% for the comparative six month period ended August 31, 2009 due to the absorption of the fixed overhead costs on lower sales volume. Gross margins within the Monitor division decreased from 32.0% to 29.7% for the comparable three month period ended August 31, 2009 and decreased from 30.8% to 26.0% for the six months ended August 31, 2009. This decrease is primarily attributable to the impact of lower sales in the Monitor division in Fiscal 2010. Data Display division gross margins increased from 28.6% to 36.7% for the three month comparable period ended August 31, 2009, and increased from 29.7% for the six months ended August 31, 2008 to 36.1% for the six months ended August 31, 2009, due to the impact of the increased margins at the Company’s Clinton Displays facility. Gross margins in home entertainment CRTs decreased from 0.5% to (13.6%) for the three month comparable period ended August 31, 2009 and decreased from 22.6% for the six months ended August 31, 2008 to (11.4%) for the six months ended August 31, 2009, due to the reduction of manufactured tubes at the Chroma division. Gross margins from Component Parts sold increased from 114.3% to 128.6% for the three month comparable period ended August 31, 2009 and increased from 124.1% for the six months ended August 31, 2008 compared to 191.2% for the six months ended August 31, 2009.

The Wholesale Distribution segment margins decreased from 52.1% to 47.1% for the three months comparable period ended August 31, 2009 and increased from 53.5% to 54.4% for the comparable six month period ended August 31, 2009 due to the changes in customer and product mix.

Operating expenses as a percentage of sales increased from 31.7% to 33.7% for the three month comparable period ended August 31, 2009 and increased from 31.8% for the six months ended August 31, 2008 to 34.4% for the six months ended August 31, 2009, due to a reduction in sales from the prior year. Actual operating expenses decreased from the prior year for the six month period ended August 31, 2009.

Display segment operating expenses increased from 23.9% to 26.0% of net sales for the three month comparable period ended August 31, 2009 and from 23.0% to 26.3% for the six month period as compared to the comparable prior year period.

The effective tax rate for the three months ended August 31, 2009 and August 31, 2008 was (36.8%) and 31.5%, respectively and for the six months ended August 31, 2009 and August 31, 2008 was 22.9% and 33.6%, respectively. These rates differ from the Federal statutory rate primarily due to the effect of state taxes, the permanent non-deductibility of certain expenses for tax purposes and research and experimentation tax credits.

Read the The complete Report



Stocks Discussed: VIDE,
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