##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period Ended November 30, 2008.
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Transition Period From  to
 Commission File Number 0-13394
 VIDEO DISPLAY CORPORATION
  GEORGIA
    
    58-1217564(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 1868 TUCKER INDUSTRIAL ROAD, TUCKER, GEORGIA 30084
 770-938-2080
 (Registrants telephone number including area code)
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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##### 



Video Display Corporation and Subsidiaries
Index
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial Statements.Consolidated Balance Sheets 
November 30, 2008 (unaudited) and February 29, 2008
    
    
    3Consolidated Statements of Operations 
Three months and nine months ended November 30, 2008 and 2007 (unaudited)
    
    
    5Consolidated Statement of Shareholders Equity 
Nine months ended November 30, 2008 (unaudited)
    
    
    6Consolidated Statements of Cash Flows 
Nine months ended November 30, 2008 and 2007 (unaudited)
    
    
    7Notes to Consolidated Financial Statements 
November 30, 2008 (unaudited)
    
    
    9Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations.
    
    
    18Item 3. Quantitative and Qualitative Disclosure About Market Risk.
    
    
    26Item 4. Controls and Procedures.
    
    
    26PART II. OTHER INFORMATIONItem 1. Legal Proceedings.
    
    
    27Item 1A. Risk Factors.
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
    
    
    27Item 3. Defaults upon Senior Securities.
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders.
    
    
    27Item 5. Other Information.
    
    
    27Item 6. Exhibits.
    
    
    28SIGNATURES
    
    
    29EX-10.(H)EX-31.1EX-31.2EX-32.1
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##### Table of Contents



ITEM 1. FINANCIAL STATEMENTS
 Video Display Corporation and Subsidiaries
 
 Consolidated Balance Sheets
 (in thousands)
 November 30,
    
    
    February 29,2008
    
    
    2008(unaudited)AssetsCurrent AssetsCash
    
    $
    1,127
    
    
    $
    1,636Accounts receivable, less allowance for
doubtful accounts of $455 and $201
    
    
    10,327
    
    
    
    10,373Inventories, net
    
    
    36,693
    
    
    
    34,550Cost and estimated earnings in excess of
billings on uncompleted contracts
    
    
    1,082
    
    
    
    2,225Deferred income taxes
    
    
    3,838
    
    
    
    2,998Income taxes refundable
    
    
    508
    
    
    
    672Investments
    
    
    414
    
    
    
    Prepaid expenses and other
    
    
    583
    
    
    
    367Total current assets
    
    
    54,572
    
    
    
    52,821Property, plant and equipment:Land
    
    
    585
    
    
    
    585Buildings
    
    
    8,268
    
    
    
    8,258Machinery and equipment
    
    
    21,645
    
    
    
    20,94330,498
    
    
    
    29,786Accumulated depreciation and amortization
    
    
    (23,498
    )
    
    
    (22,470
    )Net property, plant, and equipment
    
    
    7,000
    
    
    
    7,316Goodwill
    
    
    1,381
    
    
    
    1,343Intangible assets, net
    
    
    2,305
    
    
    
    2,954Deferred income taxes
    
    
    354
    
    
    
    192Other assets
    
    
    58
    
    
    
    74Total assets
    
    $
    65,670
    
    
    $
    64,700
  3




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##### Table of Contents



Video Display Corporation and Subsidiaries
Consolidated Balance Sheets (continued)
(in thousands)
 November 30,
    
    
    February 29,2008
    
    
    2008(unaudited)Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    6,755
    
    
    $
    7,334Accrued liabilities
    
    
    5,675
    
    
    
    5,074Billings in excess of cost and estimated
earnings on uncompleted contracts
    
    
    224
    
    
    
    Current maturities of notes payable to officers and
directors
    
    
    297
    
    
    
    648Current maturities of long-term debt
and financing lease obligations
    
    
    499
    
    
    
    789Total current liabilities
    
    
    13,450
    
    
    
    13,845Lines of credit
    
    
    20,012
    
    
    
    15,164Long-term debt, less current maturities
    
    
    1,818
    
    
    
    1,928Financing lease obligations, less current maturities
    
    
    180
    
    
    
    313Notes payable to officers and directors,
less current maturities
    
    
    301
    
    
    
    2,377Other long term liabilities
    
    
    123
    
    
    
    123Total liabilities
    
    
    35,884
    
    
    
    33,750Shareholders EquityPreferred stock, no par value  10,000 shares
authorized; none issued and outstanding
    
    
    
    
    
    
    Common stock, no par value  50,000 shares authorized;
9,707 and 9,233 issued and outstanding at November 30,
2008 and 9,707 and 9,491 issued and outstanding at
February 29, 2008
    
    
    7,293
    
    
    
    7,293Additional paid-in capital
    
    
    142
    
    
    
    127Retained earnings
    
    
    27,015
    
    
    
    26,147Accumulated other comprehensive (loss) income
    
    
    (41
    )
    
    
    85Treasury stock, 533 and 275 shares at cost
    
    
    (4,623
    )
    
    
    (2,702
    )Total shareholders equity
    
    
    29,786
    
    
    
    30,950Total liabilities and shareholders equity
    
    $
    65,670
    
    
    $
    64,700
  4




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##### Table of Contents



Video Display Corporation and Subsidiaries
 
 Consolidated Statements of Operations (unaudited)
 (in thousands, except per share data)
 Three Months Ended
    
    
    Nine Months EndedNovember 30,
    
    
    November 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    18,493
    
    
    $
    21,272
    
    
    $
    57,285
    
    
    $
    65,601Cost of goods sold
    
    
    12,874
    
    
    
    14,221
    
    
    
    37,406
    
    
    
    43,354Gross profit
    
    
    5,619
    
    
    
    7,051
    
    
    
    19,879
    
    
    
    22,247Operating expensesSelling and delivery
    
    
    1,895
    
    
    
    1,898
    
    
    
    5,682
    
    
    
    5,787General and administrative
    
    
    4,402
    
    
    
    4,059
    
    
    
    12,762
    
    
    
    11,7946,297
    
    
    
    5,957
    
    
    
    18,444
    
    
    
    17,581Operating profit (loss)
    
    
    (678
    )
    
    
    1,094
    
    
    
    1,435
    
    
    
    4,666Other income (expense)Interest expense
    
    
    (326
    )
    
    
    (444
    )
    
    
    (894
    )
    
    
    (1,384
    )Other, net
    
    
    150
    
    
    
    293
    
    
    
    310
    
    
    
    498(176
    )
    
    
    (151
    )
    
    
    (584
    )
    
    
    (886
    )Income (loss)
before income
tax expense
    
    
    (854
    )
    
    
    943
    
    
    
    851
    
    
    
    3,780Income tax (benefit) expense
    
    
    (589
    )
    
    
    288
    
    
    
    (17
    )
    
    
    1,034Net income (loss)
    
    $
    (265
    )
    
    $
    655
    
    
    $
    868
    
    
    $
    2,746Basic earnings (loss) per
share of common stock
    
    $
    (.03
    )
    
    $
    .07
    
    
    $
    .09
    
    
    $
    .28Diluted earnings (loss) per
share of common stock
    
    $
    (.03
    )
    
    $
    .07
    
    
    $
    .09
    
    
    $
    .28Basic weighted average
shares outstanding
    
    
    9,276
    
    
    
    9,599
    
    
    
    9,385
    
    
    
    9,627Diluted weighted average
shares outstanding
    
    
    9,276
    
    
    
    9,735
    
    
    
    9,754
    
    
    
    9,718
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Video Display Corporation and Subsidiaries
 
 Consolidated Statement of Shareholders Equity
 Nine Months Ended November 30, 2008 (unaudited)
 (in thousands)
 AccumulatedCommon
    
    
    Common
    
    
    Additional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Compre-Stock
    
    
    Stock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    hensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Stock
    
    
    IncomeBalance, February 29, 2008
    
    
    9,491
    
    
    $
    7,293
    
    
    $
    127
    
    
    $
    26,147
    
    
    $
    85
    
    
    $
    (2,702
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    868
    
    
    
    
    
    
    
    
    
    
    $
    868Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (126
    )
    
    
    
    
    
    
    (126
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    742Repurchase of Treasury Stock
    
    
    (267
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,998
    )Share based compensation
    
    
    9
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    77Balance, November 30, 2008
    
    
    9,233
    
    
    $
    7,293
    
    
    $
    142
    
    
    $
    27,015
    
    
    $
    (41
    )
    
    $
    (4,623
    )
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Video Display Corporation and Subsidiaries
 
 Consolidated Statements of Cash Flows (unaudited)
 (in thousands)
 Nine Months EndedNovember 30,2008
    
    
    2007Operating ActivitiesNet income
    
    $
    868
    
    
    $
    2,746Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    1,750
    
    
    
    1,751Provision for doubtful accounts
    
    
    254
    
    
    
    108Provision for inventory reserve
    
    
    1,034
    
    
    
    1,361Non-cash charge for share based compensation
    
    
    15
    
    
    
    (55
    )Deferred income taxes
    
    
    (1,002
    )
    
    
    (592
    )Interest on convertible note
    
    
    
    
    
    
    69Loss on sale of equipment
    
    
    9
    
    
    
    Change in other assets and liabilities
    
    
    (21
    )
    
    
    Changes in working capital, net of effects
from acquisitions:Accounts receivable
    
    
    (208
    )
    
    
    (1,391
    )Inventories
    
    
    (3,177
    )
    
    
    (2,810
    )Prepaid expenses and other current assets
    
    
    (216
    )
    
    
    79Accounts payable and accrued liabilities
    
    
    21
    
    
    
    561Cost, estimated earnings and billings on
uncompleted contracts
    
    
    1,367
    
    
    
    (181
    )Income taxes refundable
    
    
    163
    
    
    
    Net cash provided by operating activities
    
    
    857
    
    
    
    1,646Investing ActivitiesCapital expenditures
    
    
    (794
    )
    
    
    (544
    )Purchases of
investments
    
    
    (414
    )
    
    
    Net cash used in investing activities
    
    
    (1,208
    )
    
    
    (544
    )
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Video Display Corporation and Subsidiaries
 Consolidated Statements of Cash Flows (unaudited)
  Nine Months EndedNovember 30,2008
    
    
    2007Financing ActivitiesProceeds from long-term debt, lines of credit
and financing lease obligations
    
    
    21,696
    
    
    
    17,596Payments on long-term debt, lines of credit
and financing lease obligations
    
    
    (17,380
    )
    
    
    (15,233
    )Proceeds from loans from officers and directors
    
    
    
    
    
    
    1,103Repayments of loans from officers and directors
    
    
    (2,427
    )
    
    
    (4,033
    )Purchases and retirements of common stock and
purchase of treasury stock
    
    
    (1,921
    )
    
    
    (753
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    9Net cash used in financing activities
    
    
    (32
    )
    
    
    (1,311
    )Effect of exchange rate changes on cash
    
    
    (126
    )
    
    
    74Net decrease in cash
    
    
    (509
    )
    
    
    (135
    )Cash, beginning of period
    
    
    1,636
    
    
    
    1,226Cash, end of period
    
    $
    1,127
    
    
    $
    1,091
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Video Display Corporation and Subsidiaries
 
 Notes to Consolidated Financial Statements (unaudited)
 November 30, 2008
        Fair Values Measurements
 The Fair Value Option for Financial
Assets and Financial Liabilities.
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2008
 Accounting for Uncertainty in
Income Taxes Accounting for Income Taxes
 Business Combinations. purchase method
 Noncontrolling Interest in Consolidated Financial
Statements.
   10




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2008
      November 30,
    
    
    February 29,2008
    
    
    2008Raw materials
    
    $
    21,440
    
    
    $
    19,028Work-in-process
    
    
    7,401
    
    
    
    6,699Finished goods
    
    
    14,030
    
    
    
    14,37442,871
    
    
    
    40,101Reserves for obsolescence
    
    
    (6,178
    )
    
    
    (5,551
    )$
    36,693
    
    
    $
    34,550
   November 30,
    
    
    February 29,2008
    
    
    2008Costs incurred to date on uncompleted contracts
    
    $
    4,713
    
    
    $
    7,325Estimated earnings recognized to date on these contracts
    
    
    407
    
    
    
    1,6175,120
    
    
    
    8,942Billings to date
    
    
    (4,262
    )
    
    
    (6,717
    )Costs and estimated earnings in excess
of billings, net
    
    $
    858
    
    
    $
    2,225Costs and estimated earnings in excess of billings
    
    $
    1,082
    
    
    $
    2,225Billings in excess of costs and estimated earnings
    
    
    (224
    )
    
    
    $
    858
    
    
    $
    2,225
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2008
       November 30, 2008
    
    
    February 29, 2008Accumulated
    
    
    
    
    
    
    AccumulatedCost
    
    
    Amortization
    
    
    Cost
    
    
    AmortizationCustomer lists
    
    $
    3,611
    
    
    $
    2,001
    
    
    $
    3,611
    
    
    $
    1,635Non-compete agreements
    
    
    1,245
    
    
    
    991
    
    
    
    1,245
    
    
    
    803Patents
    
    
    777
    
    
    
    365
    
    
    
    765
    
    
    
    274Other intangibles
    
    
    149
    
    
    
    120
    
    
    
    149
    
    
    
    104$
    5,782
    
    
    $
    3,477
    
    
    $
    5,770
    
    
    $
    2,816
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2008
   November 30,
    
    
    February 29,2008
    
    
    2008Note payable to RBC Centura; interest rate
at LIBOR plus applicable margin as defined
per the loan agreement refinanced September 26, 2008, (2.85% combined rate as of
November 30, 2008); monthly principal
payments of $25 plus accrued interest,
payable through March 2014; collateralized
by all assets of the Company. The Companys debt agreement with
this financial institution contains certain restrictions regarding
investments. As of November 30, 2008 the Company was in
technical violation of a restriction. The Company received a waiver
for the quarter ending November 30, 2008. The Company must divest of these investments by the end of the
quarter ending February 28, 2009.
    
    $
    1,628
    
    
    $
    2,050Mortgage payable to bank; interest rate at
Federal Home Loan Bank Board Index rate
plus 1.95% (7.25% as of November 30, 2008);
monthly principal and interest payments of
$5 payable through October 2021;
collateralized by land and building of
Teltron Technologies, Inc
    
    
    484
    
    
    
    500Other
    
    
    34
    
    
    
    62,146
    
    
    
    2,556Financing lease obligations
    
    
    351
    
    
    
    4742,497
    
    
    
    3,030Less current maturities
    
    
    (499
    )
    
    
    (789
    )$
    1,998
    
    
    $
    2,241
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2008
   Three Months
    
    
    Nine MonthsEnded November 30,
    
    
    Ended November 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net SalesDisplay Segment
    
    $
    11,930
    
    
    $
    14,227
    
    
    $
    39,179
    
    
    $
    42,941Wholesale Distribution Segment
    
    
    6,563
    
    
    
    7,045
    
    
    
    18,106
    
    
    
    22,660$
    18,493
    
    
    $
    21,272
    
    
    $
    57,285
    
    
    $
    65,601Operating (loss) incomeDisplay Segment
    
    $
    241
    
    
    $
    1,187
    
    
    $
    2,135
    
    
    $
    4,261Wholesale Distribution Segment
    
    
    (919
    )
    
    
    (93
    )
    
    
    (700
    )
    
    
    405(678
    )
    
    
    1,094
    
    
    
    1,435
    
    
    
    4,666Interest expense
    
    
    (326
    )
    
    
    (444
    )
    
    
    (894
    )
    
    
    (1,384
    )Other income, net
    
    
    150
    
    
    
    293
    
    
    
    310
    
    
    
    498Income (loss) before income taxes
    
    $
    (854
    )
    
    $
    943
    
    
    $
    851
    
    
    $
    3,780
   Nine MonthsEnded November 30,2008
    
    
    2007Cash Paid for:Interest
    
    $
    911
    
    
    $
    1,421Income taxes, net of refunds
    
    $
    570
    
    
    $
    1,920
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2008
  Net (Loss) Income Per Share
   WeightedAverage
    
    
    Net (Loss)Net (Loss)
    
    
    Common Shares
    
    
    IncomeIncome
    
    
    Outstanding
    
    
    Per ShareThree months ended November 30, 2008Basic
    
    $
    (265
    )
    
    
    9,276
    
    
    $
    (0.03
    )Effect of dilution:Options
    
    
    
    
    
    
    Diluted
    
    $
    ( 265
    )
    
    
    9,276
    
    
    $
    (0.03
    )Three months ended November 30, 2007Basic
    
    $
    653
    
    
    
    9,599
    
    
    $
    0.07Effect of dilution:Options
    
    
    
    
    
    
    136Diluted
    
    $
    653
    
    
    
    9,735
    
    
    $
    0.07Nine months ended November 30, 2008Basic
    
    $
    868
    
    
    
    9,385
    
    
    $
    0.09Effect of dilution:Options
    
    
    
    
    
    
    369Diluted
    
    $
    868
    
    
    
    9,754
    
    
    $
    0.09Nine months ended November 30, 2007Basic
    
    $
    2,744
    
    
    
    9,627
    
    
    $
    0.29Effect of dilution:Options
    
    
    
    
    
    
    90Diluted
    
    $
    2,744
    
    
    
    9,717
    
    
    $
    0.29
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2008
 Stock-Based Compensation Plans
    Stock Repurchase Program
   Reporting Comprehensive Income
 16




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2008
            Accounting for Uncertainty in Income Taxes
 17




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Video Display Corporation and Subsidiaries
November 30, 2008
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
  
    
    Monitors offers a complete range of CRT, flat panel and projection display systems for
use in training and simulation, military, medical and industrial applications.
    
    Data Display CRTSoffers a complete range of CRTs for use in data display screen,
including computer terminal monitors and medical monitoring equipment.
    
    Entertainment CRTS offers a wide range of CRTs and projection tubes for television and
home theater equipment.
    
    Component Parts provides replacement electron guns and other components for CRTs
primarily for servicing the Companys internal needs.
  Inventory management
  18




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Video Display Corporation and Subsidiaries
November 30, 2008
  Interest rate exposure
 Results of Operations
  Three Months
    
    Nine MonthsEnded November 30,
    
    Ended November 30,2008
    
    2007
    
    2008
    
    2007SalesDisplay SegmentMonitors
    
    
    54.4
    %
    
    
    51.7
    %
    
    
    55.2
    %
    
    
    49.0
    %Data Display CRTs
    
    
    8.0
    
    
    
    12.3
    
    
    
    11.0
    
    
    
    13.3Entertainment CRTs
    
    
    1.7
    
    
    
    2.4
    
    
    
    1.8
    
    
    
    2.7Components Parts
    
    
    0.4
    
    
    
    0.5
    
    
    
    0.4
    
    
    
    0.5Total Display Segment
    
    
    64.5
    %
    
    
    66.9
    %
    
    
    68.4
    %
    
    
    65.5
    %Wholesale Distribution Segment
    
    
    35.5
    
    
    
    33.1
    
    
    
    31.6
    
    
    
    34.5100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs and expensesCost of goods sold
    
    
    69.6
    %
    
    
    66.9
    %
    
    
    65.3
    %
    
    
    66.1
    %Selling and delivery
    
    
    10.3
    
    
    
    8.9
    
    
    
    9.9
    
    
    
    8.8General and administrative
    
    
    23.8
    
    
    
    19.1
    
    
    
    22.3
    
    
    
    18.0103.7
    %
    
    
    94.9
    %
    
    
    97.5
    %
    
    
    92.9
    %Income
(loss) from operations
    
    
    (3.7)
    %
    
    
    5.1
    %
    
    
    2.5
    %
    
    
    7.1
    %Interest expense
    
    
    (1.7)
    %
    
    
    (2.1)
    %
    
    
    (1.5)
    %
    
    
    (2.1)
    %Other income, net
    
    
    0.8
    
    
    
    1.4
    
    
    
    0.5
    
    
    
    .8Income (loss) before income taxes
    
    
    (4.6)
    %
    
    
    4.4
    %
    
    
    1.5
    %
    
    
    5.8
    %Provision (benefit) for income taxes
    
    
    (3.2
    )
    
    
    1.4
    
    
    
    0.0
    
    
    
    1.6Net Income (loss)
    
    
    (1.4)
    %
    
    
    3.0
    %
    
    
    1.5
    %
    
    
    4.2
    %
 19




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2008
 Net sales
   Gross margins
    20




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2008
 Operating expenses
    Interest expense
  Income taxes
   Accounting for Uncertainty in Income Taxes
 Foreign currency translation
   Liquidity and Capital Resources
  21




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##### Table of Contents



Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2008
          Critical Accounting Policies
  22




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##### Table of Contents



Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2008
  Reserves on inventories
  Revenue Recognition
     23




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##### Table of Contents



Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2008
 Allowance for doubtful accounts
  Warranty reserves
  Other Accounting Policies
  Recent Accounting Pronouncements
 Fair Values Measurements.
 The Fair Value Option for Financial
Assets and Financial Liabilities.
 Accounting for Uncertainty in
Income Taxes Accounting for Income Taxes
 24




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##### Table of Contents



Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2008
  Business Combinations. purchase method
 Noncontrolling Interest in Consolidated
Financial Statements.
 Forward-Looking Information and Risk Factors
  25




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2008
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
   
 ITEM 4. CONTROLS AND PROCEDURES
   Changes in Internal Controls
   26




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2008
 
 PART II
 
 Legal Proceedings
 Barco Federal Systems, LLC and
Barco N.V., a Belgian corporation Aydin Displays, Inc. a Pennsylvania corporation
  
 Risk Factors
  
 Unregistered Sales of Equity Securities and Use of Proceeds
  
 Defaults upon Senior Securities
  
 Submission of Matters to a Vote of Security Holders
  
 Other information
  27




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2008
 
 Exhibits
 ExhibitNumber
    
    Exhibit Description3(a)
    
    Articles of Incorporation of the Company (incorporated by reference to
Exhibit 3A to the Companys Registration Statement on Form S-18 filed
January 15, 1985).3(b)
    
    By-Laws of the Company (incorporated by reference to Exhibit 3B to the
Companys Registration Statement on Form S-18 filed January 15, 1985).10(d)
    
    $27,500,000 promissory note dated November 10, 2004 between the Company
and Bank of America (holder) (incorporated by reference to Exhibit
10(d) to the Companys 2005 Annual Report on Form 10-K).10(e)
    
    $6,800,000 term note dated February 27, 2006 between the Company and
Ronald D. Ordway (holder) (incorporated by reference to Exhibit 10(e)
to the Companys 2006 Annual Report on Form 10-K) .10(h)
    
    Loan and Security Agreement and
related documents, dated September 26, 2008,
among Video Display Corporation and Subsidiaries and RBC Centura Bank
as lender and RBC Centura Bank as collateral agent.10(i)
    
    $6,000,000 Subordinated Note, dated June 29, 2006, between Video
Display Corporation and Ronald D. Ordway (holder) (incorporated by
reference to Exhibit 10(i) to the Companys Current Report on Form 8-K
dated June 29, 2006).31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 28




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##### Table of Contents



SIGNATURES
  VIDEO DISPLAY CORPORATIONJanuary 14, 2009
    By:
    /s/ Ronald D. OrdwayRonald D. OrdwayChief Executive OfficerJanuary 14, 2009
    By:
    /s/ Gregory L. OsbornGregory L. OsbornChief Financial Officer 29