Video Display (NASDAQ:VIDE)

Fourth Quarter 2012 Results

• Net revenue for fourth quarter 2012 were $14.6 million vs $14.5 million in prior year period.
• Earnings per share for the fourth quarter 2012 were $0.01 vs $0.03

Company CEO, Ron Ordway, stated, "Fiscal 2012 represented the new and streamlined Video Display Corporation, as results for the Company's revenue and profits reflected in the above reported financial numbers and comparisons exclude the operating results of Fox Electronics Ltd. except in historical data where specified. As we generated a meaningful increase in revenues of 8.7%, we were able to expand gross profit margins for this fiscal year from 26.2% to 31.0%, an increase of 28.7% year over year. This gross profit margin expansion generated a 49% increase in aftertax earnings which, with the added benefit of a 10.3% reduction in shares outstanding, resulted in a 64.3% increase in earnings per share of $0.46 versus $0.28 for the previous fiscal year."

Outlook

Ordway added, "As we look forward, we continue to see opportunities for growth in our markets for military, medical, commercial and industrial displays. Based upon the current level of order booking for orders deliverable in fiscal 2013 and beyond, I believe that improvement in VDC's revenues for fiscal 2013 will be in the same approximate percentage range as we saw in fiscal 2012. During this last fiscal year, the Company has succeeded in closing 2 of the 3 remaining loss generating operations referred to previously and is anticipating a near-term closing on the sale of the physical real estate of the PA location which will further reduce costs.

Ordway further stated, "As we continue to eliminate our non-core assets and the Company becomes a "pure play" in providing our selected military, medical, commercial and industrial markets with high end specialty displays and assemblies, we expect to continue to expand profit margins on the remaining product lines. Based upon achieving our revenue goals and expanded margins for fiscal 2013, we project an annual increase in per share earnings of 20% to 30% or $0.55 - $0.60 per share, versus $0.46 in fiscal 2012, on approximately 7.5 million shares outstanding for the 2013 fiscal year. The larger portion of the fiscal 2013 annual earnings is expected to occur within the final 2 quarterly reporting periods based upon current backlog delivery schedules and anticipated ordering patterns."

"GOOD MORNING & WELCOME"

"TODAY'S MEETING REPRESENTS THE 27TH ANNUAL MEETING OF VIDEO'S LIFE AS A PUBLIC COMPANY SINCE THE COMPANY IPO IN JANUARY OF 1985. IT IS VIDEO'S 37th YEAR OF EXISTENCE AS A SPECIALTY DISPLAY COMPANY."

"ALTHOUGH THE MEETINGS ARE DESIGNED TO BE INFORMAL, THERE ARE STILL CERTAIN FORMALITIES THAT MUST BE ADHERED TO. THE ONLY ITEM ON THE AGENDA TO BE VOTED ON THIS YEAR IS THE ELECTION OF THE NOMINEES TO SERVE ON THE COMPANY'S BOARD OF DIRECTORS FOR THE ENSUING YEAR. THE COMPANY IS SEEKING TO ADD THE EXPERIENCE OF SEASONED PROFESSIONALS IN FIELDS OF LAW, ACCOUNTING AND BUSINESS ACUMEN INTO THE DECISION MAKING PROCESS OF THE BOARD".

"TO THAT END, WE HAVE NOMINATED ATTORNEY DAVID COOPER, WHO HAS SERVED AS A LEGAL ADVISOR TO THE COMPANY FOR THE PAST NEARLY 30 YEARS. WE HAVE ALSO NOMINATED MR. ROGER LUSBY, THE MANAGING PARTNER OF FRAZIER AND DEETER LLC IN ALPHARETTA, GA. THE THIRD NEW NAME ON THE BALLOT THIS YEAR IS MR. GREG OSBORN WHO ALSO SERVES AS THE CHIEF FINANCIAL OFFICER OF VDC."

"I THINK THAT EVERYONE WHO FOLLOWS VIDEO DISPLAY CORPORATION, WHETHER FROM A PROFESSIONAL, BUSINESS OR INVESTMENT ASPECT, WILL ALL AGREE THAT THE COMPANY HAS PROGRESSED SUBSTANTIALLY FROM WHERE WE WERE WHEN WE HELD OUR LAST ANNUAL MEETING. WE EXPECT TO CONTINUE THAT PROGRESS INTO THE YEAR AHEAD. TWO OF THE LARGEST DRAINS ON CORPORATE PROFITS HAVE BEEN ELIMINATED IN THE LAST 6 MONTHS AND OUR BOTTOM LINE NUMBERS REFLECT THOSE ELIMINATIONS. THAT DOES NOT MEAN THAT WE CAN EASE UP. WE STILL HAVE A COUPLE OF LOSING OPERATIONS THAT NEED TO BE DISPOSED OF TO CREATE A CLEANER MORE PROFITABLE COMPANY."  Full Letter

Company CEO Ron Ordway stated, "Fiscal 2010, especially the 4th quarter ended February 28, 2010, represented a dramatic positive turn in Video Display's revenue and profit results as reflected in the above reported financial numbers. The major upswing in revenue in the fourth quarter of $3.2 million to $19.7 million resulted in a 4% increase in the gross profit martin. We were also able to control operating expenses in the quarter with a reduction of 9%, even though revenues were 20% higher, through a $2.5 million expense reduction program implemented in the beginning of fiscal 2010." He further stated, "With the strong 4th quarter, the Company achieved its annual guidance of $0.10 to $0.12 in earnings per share for fiscal 2010.

Based upon the current level of order booking, I believe that VDC's revenues for fiscal 2/28/2011 will be in the range of $78 million to $82 million or an increase of 11% - 15% above revenues reported for fiscal 2010. Although we expect to see higher interest rates on corporate debt as well as higher levels of operating expenses, this should be offset by expanded gross profit margins on increased volume and should result in more than a doubling of Earnings Per Share for the full year in fiscal 2011."