Video Display Corp. (VIDE, Financial) filed Quarterly Report for the period ended 2010-08-31.
Video Display Corp. has a market cap of $37.7 million; its shares were traded at around $4.5 with a P/E ratio of 28.1 and P/S ratio of 0.5.
Display segment margins increased by 29.8% for the three month period ended August 31, 2010 over the comparable three month period ended August 31, 2009 and increased by 34.2% for the six month period ended August 31, 2010 over the comparative six month period ended August 31, 2009 due to the increased sales volume. The major growth came from the Companys Monitor division, which saw its gross margin dollars increase by 58.9% for the six months ended August 31, 2010 and its gross margin percentage increase from 26.0% to 28.2%. For the three months ended August 31, 2010 the Monitor divisions gross margin dollars increased by 35.8% compared to the three months ended August 31, 2009 while its gross margin percentage dipped to 27.3% from 29.7%. The Monitor divisions increases are attributable to the beginning of shipments on a number of long term contracts. Data Display division gross margins increased by 33.1% for the three month comparable period ended August 31, 2010, but decreased by 19.4% for the six months ended August 31, 2010 compared to the six months ended August 31, 2009, due to the impact of the decreased margins at the both of the Companys display facilities. The gross margins in home entertainment CRTs and the Component Parts were negligible as both divisions sales continue to decline and are not material to the results of the Company. The Company has reduced the net book value of the Entertainment division in anticipation of its closure and does not anticipate a material loss when the division is closed.
The Wholesale Distribution segment margins increased by 15.5% for the comparable three month period ended August 31, 2010 and decreased by 3.3% for the comparable six month period ended August 31, 2010. The gross margin percentages also increased from 47.1% to 54.4% for the three months comparable period ended August 31, 2010 and decreased from 54.4% to 46.5% for the comparable six month period ended August 31, 2010 due to the changes in customer and product mix.
Operating expenses as a percentage of sales decreased from 33.7% to 24.0% for the three month comparable period ended August 31, 2010 and decreased from 34.4% for the six months ended August 31, 2009 to 24.9% for the six months ended August 31, 2010. Actual operating expenses decreased by 7.3% from the prior year for the six month period ended August 31, 2010. This decrease was primarily due to lower legal fees, research and development fees, and lower amortization costs of intangibles. The Company was also able to control other fixed costs, such as rent and other administrative costs on increased sales volume. The Company expects to continue to contain costs while increasing revenue.
Display segment operating expenses decreased from 26.0% to 16.3% of net sales for the three month comparable period ended August 31, 2010 and from 26.3% to 17.4% for the six month period as compared to the comparable prior year period.
The effective tax rate for the three months ended August 31, 2010 and August 31, 2009 was 30.7% and (36.8%), respectively and for the six months ended August 31, 2010 and August 31, 2009 was 33.2% and 22.9%, 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.
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Video Display Corp. has a market cap of $37.7 million; its shares were traded at around $4.5 with a P/E ratio of 28.1 and P/S ratio of 0.5.
Highlight of Business Operations:
Consolidated gross margins increased by 24.2% for the three months ended August 31, 2010 over the three months ended August 31, 2009 despite a drop in the gross margin percent of 1.1%. The consolidated gross margin increased by 17.3% for the six months ended August 31, 2010 over the six months ended August 31, 2009 due to the increased sales while gross profit margins declined 3.1%.Display segment margins increased by 29.8% for the three month period ended August 31, 2010 over the comparable three month period ended August 31, 2009 and increased by 34.2% for the six month period ended August 31, 2010 over the comparative six month period ended August 31, 2009 due to the increased sales volume. The major growth came from the Companys Monitor division, which saw its gross margin dollars increase by 58.9% for the six months ended August 31, 2010 and its gross margin percentage increase from 26.0% to 28.2%. For the three months ended August 31, 2010 the Monitor divisions gross margin dollars increased by 35.8% compared to the three months ended August 31, 2009 while its gross margin percentage dipped to 27.3% from 29.7%. The Monitor divisions increases are attributable to the beginning of shipments on a number of long term contracts. Data Display division gross margins increased by 33.1% for the three month comparable period ended August 31, 2010, but decreased by 19.4% for the six months ended August 31, 2010 compared to the six months ended August 31, 2009, due to the impact of the decreased margins at the both of the Companys display facilities. The gross margins in home entertainment CRTs and the Component Parts were negligible as both divisions sales continue to decline and are not material to the results of the Company. The Company has reduced the net book value of the Entertainment division in anticipation of its closure and does not anticipate a material loss when the division is closed.
The Wholesale Distribution segment margins increased by 15.5% for the comparable three month period ended August 31, 2010 and decreased by 3.3% for the comparable six month period ended August 31, 2010. The gross margin percentages also increased from 47.1% to 54.4% for the three months comparable period ended August 31, 2010 and decreased from 54.4% to 46.5% for the comparable six month period ended August 31, 2010 due to the changes in customer and product mix.
Operating expenses as a percentage of sales decreased from 33.7% to 24.0% for the three month comparable period ended August 31, 2010 and decreased from 34.4% for the six months ended August 31, 2009 to 24.9% for the six months ended August 31, 2010. Actual operating expenses decreased by 7.3% from the prior year for the six month period ended August 31, 2010. This decrease was primarily due to lower legal fees, research and development fees, and lower amortization costs of intangibles. The Company was also able to control other fixed costs, such as rent and other administrative costs on increased sales volume. The Company expects to continue to contain costs while increasing revenue.
Display segment operating expenses decreased from 26.0% to 16.3% of net sales for the three month comparable period ended August 31, 2010 and from 26.3% to 17.4% for the six month period as compared to the comparable prior year period.
The effective tax rate for the three months ended August 31, 2010 and August 31, 2009 was 30.7% and (36.8%), respectively and for the six months ended August 31, 2010 and August 31, 2009 was 33.2% and 22.9%, 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.
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