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Video Display Corp. Reports Operating Results for Fiscal Quarter Ended on 2008-11-30

January 15, 2009 | About:

Video Display Corp. (VIDE) filed Quarterly Report for the period ended 2008-11-30.

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 $74.02 million; its shares were traded at around $7.39 with a P/E ratio of 40.1 and P/S ratio of 0.84.

Highlight of Business Operations:

Display segment margins decreased by 8.3% for the comparable three month period ended November 30, 2008 and decreased by 4.9% for the comparative nine month period ending November 30, 2008 due to holding overhead costs down while sales decreased at a greater rate. Gross margins within the Monitor division were flat due to the increased margin percentages 31.6% to 29.2% for the comparable three month period ending November 30, 2008 and the increased percentages 31.0% to 29.1% for the nine months ended November 30, 2008 even though sales were down. This increase is primarily attributable to the impact of the product mix of sales in the Monitor segment in Fiscal 2009. Display division gross margins increased from 29.2% to 30.7% for the three month comparable period ending November 30, 2008, and decreased from 30.6% for the nine months ended November 30, 2007 to 30.0% for the nine months ended November 30, 2008, due to the impact of the decreased margins at the UK division as it transitioned the business to the Data division in the US. Gross margins in home entertainment CRTs increased from 31.5% to 37.6% for the three month comparable period ending November 30, 2008 and decreased from 42.0% for the nine months ended November 30, 2007 to 27.2% for the nine months ended November 30, 2008, due to the reduction of manufactured tubes at the Chroma division. Gross margins from Component Parts sold increased by 82.8% for the three month comparable period ending November 30, 2008 and increased by 98.7% for the nine months ended November 30, 2008.

The wholesale segment margins increased from 41.3% to 42.1% for the nine months comparable period ended November 30, 2008 and decreased from 40.4% to 26.8% for the comparable three month period ended November 30, 2008 due to the changes in customer mix. Fox sales have increased with high volume low margin accounts while decreasing with a high volume account with better margins.

Operating expenses as a percentage of sales increased from 28.0% to 34.1% for the three month comparable period ending November 30, 2008 and increased from 26.8% for the nine months ended November 30, 2007 to 32.2% for the nine months ended November 30, 2008, primarily due to increased legal and accounting fees and a reduction in sales.

Display segment operating expenses increased from 14.8% to 19.6% for the three month comparable period ending November 30, 2008 and from 13.7% to 17.8% for the nine month period as compared to the comparable prior year period. The expenses have increased primarily due to higher legal fees due to the Barco lawsuit and increased professional fees due to outside help in the IRS audit and in procuring the Research and Experimentation tax credits.

Wholesale Distribution segment operating expenses increased from 13.3% to 14.5% for the three month comparable period ended November 30, 2008 and increased from 13.1% to 14.5% compared to the nine month period a year ago, primarily due to a reduction in sales while expenses held steady.

The effective tax rate for the three month period ended November 30, 2008 and November 30, 2007 was (69.0%) and 30.8%, respectively and for the nine months ended November 30, 2008 and November 30, 2007 was (2.0%) and 27.4%, respectively. The rate for the nine months ended November 30, 2008 differs from the Federal statutory rate primarily due to approximately $175,000 of research and development tax credits applied to the fiscal 2008 tax year and approximately $150,000 of research and development tax credits anticipated for the fiscal 2009 tax year. These amounts were offset partially by an increase of approximately $42,000 related to transfer pricing adjustments.

Read the The complete ReportMore on VIDE:

Gurus buys and sells of VIDE

10-year financial history of VIDE.

Insider buys/sells of VIDE.

Rating: 2.3/5 (4 votes)

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