Video Display Corporation and subsidiaries (the “Company”, ”us” or “we”) is a provider and manufacturer of video products, components, and systems for visual display and presentation of electronic information media in a variety of requirements and environments. The Company designs, engineers, manufactures, markets, distributes and installs technologically advanced display products and systems, from basic components to turnkey systems, for government, military, aerospace, medical, industrial, and commercial organizations. The Company markets its products worldwide primarily from facilities located in the United States. Please read the comments under the caption “Forward looking statements and risk factors” in Item 1A Risk Factors of this Annual Report on Form10-K.
Consolidated net sales decreased 29.5% for year ended February 29, 2020 compared to the year ended February 28, 2019 and decreased 9.0% for the three months ended February 29, 2020 compared to the comparable three months last year. The Company’s AYON Cyber Security (ACS) division is down 63.5% for the year ending February 29, 2020 compared to fiscal year ended February 28, 2019 and decreased 58.0% for the three months ended February 29, 2020 compared to the same three months last year. Their business was down significantly with their two top customers from the prior year.E-Tel remained their top customer, but the business with them was down 56%. ACS’ orders with the State Department decreased by nearly 90%. This is partially due to not being able to ship a $0.9 million order due to delays. Their backlog was $1.5 million at February 29, 2020. ACS did 19% of the Company’s business. The Display Systems division was down by 9.0% for the year ended February 29, 2020 compared to last year, but was up 60.4% for the quarter ended February 29, 2020 compared to the same three months last year. The division had one large sale for a video wall of $1.3 million in the Company’s first quarter and ended the year with a strong quarter due to large sales of Multi Mission Display products to two customers. The division ended the year with a $4.5 million backlog aided by the acquisition of Jaco Displays on January 21, 2020, a small display company out of Tampa, Florida. The Data Display division sales were flat for the year ended February 29, 2020 due to decreases throughout their customer base, but augmented by sales of a specialty product, a direct view storage tube (DVST) to two customers. The Lexel division will be dependent on continued sales of the DVST products and steady sales of its cathode ray tube products (CRTs). Lexel had a decrease of 17.2% for three months ended February 29, 2020 compared to the three months ended February 28, 2019 primarily due to a strong fourth quarter last year. The Company’s keyboard division, posted sales of $1.1 million and $0.3 million for the year and three months ended February 29, 2020 compared to $1.4 million and $0.4 million for the comparable periods last year, respectively. The Company acquired this company in October of 2017. This division is expected to continue at this level of sales each quarter.