##### 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 August 31, 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
 o þ
  Large accelerated filer oAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company þ o þ




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##### 



Video Display Corporation and Subsidiaries
Index
  
 PagePART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsConsolidated Balance Sheets 
August 31, 2008 (unaudited) and February 29, 2008
    
    
    3Consolidated Statements of Operations 
Three months and six months ended August 31, 2008 and 2007 (unaudited)
    
    
    5Consolidated Statement of Shareholders Equity 
Six months ended August 31, 2008 (unaudited)
    
    
    6Consolidated Statements of Cash Flows 
Six months ended August 31, 2008 and 2007 (unaudited)
    
    
    7Notes to Consolidated Financial Statements 
August 31, 2008 (unaudited)
    
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    17Item 3.
    
    Quantitative and Qualitative Disclosure About Market Risk
    
    
    25Item 4.
    
    Controls and Procedures.
    
    
    25PART II.
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    26Item 1A.
    
    Risk Factors
    
    
    26Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 3.
    
    Defaults upon Senior Securities
    
    
    26Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    26Item 5.
    
    Other Information
    
    
    26Item 6.
    
    Exhibits
    
    
    27SIGNATURES
    
    
    28EX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



ITEM 1.
    
    FINANCIAL STATEMENTS
 
 Video Display Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands)
 August 31,
    
    
    February 29,2008
    
    
    2008(unaudited)AssetsCurrent AssetsCash
    
    $
    1,736
    
    
    $
    1,636Accounts receivable, less allowance for
doubtful accounts of $303 and $201
    
    
    9,827
    
    
    
    10,373Inventories, net
    
    
    34,842
    
    
    
    34,550Cost and estimated earnings in excess of
billings on uncompleted contracts
    
    
    1,165
    
    
    
    2,225Deferred income taxes
    
    
    3,273
    
    
    
    2,998Income Taxes Refundable
    
    
    66
    
    
    
    672Prepaid expenses and other
    
    
    526
    
    
    
    367Total current assets
    
    
    51,435
    
    
    
    52,821Property, plant and equipment:Land
    
    
    585
    
    
    
    585Buildings
    
    
    8,262
    
    
    
    8,258Machinery and equipment
    
    
    21,265
    
    
    
    20,94330,112
    
    
    
    29,786Accumulated depreciation and amortization
    
    
    (23,137
    )
    
    
    (22,470
    )Net property, plant, and equipment
    
    
    6,975
    
    
    
    7,316Goodwill
    
    
    1,376
    
    
    
    1,343Intangible assets, net
    
    
    2,496
    
    
    
    2,954Deferred income taxes
    
    
    323
    
    
    
    192Other assets
    
    
    68
    
    
    
    74Total assets
    
    $
    62,673
    
    
    $
    64,700
  3




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##### Table of Contents



Video Display Corporation and Subsidiaries
Consolidated Balance Sheets (continued)
(in thousands)
 August 31,
    
    
    February 29,2008
    
    
    2008(unaudited)Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    5,001
    
    
    $
    7,334Accrued liabilities
    
    
    4,743
    
    
    
    5,074Billings in excess of cost and estimated
earnings on uncompleted contracts
    
    
    34
    
    
    
    Current maturities of notes payable to officers and
directors
    
    
    633
    
    
    
    648Current maturities of long-term debt
and financing lease obligations
    
    
    795
    
    
    
    789Total current liabilities
    
    
    11,206
    
    
    
    13,845Lines of credit
    
    
    16,535
    
    
    
    15,164Long-term debt, less current maturities
    
    
    1,646
    
    
    
    1,928Financing lease obligations, less current maturities
    
    
    225
    
    
    
    313Notes payable to officers and directors,
less current maturities
    
    
    2,179
    
    
    
    2,377Other long term liabilities
    
    
    122
    
    
    
    123Total liabilities
    
    
    31,913
    
    
    
    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 9,310 issued and outstanding at August 31,
2008 and 9,707 and 9,491 issued and outstanding at
February 29, 2008
    
    
    7,293
    
    
    
    7,293Additional paid-in capital
    
    
    142
    
    
    
    127Retained earnings
    
    
    27,280
    
    
    
    26,147Accumulated other comprehensive income
    
    
    83
    
    
    
    85Treasury stock, 456 and 275 shares at cost
    
    
    (4,038
    )
    
    
    (2,702
    )Total shareholders equity
    
    
    30,760
    
    
    
    30,950Total liabilities and shareholders equity
    
    $
    62,673
    
    
    $
    64,700
  4




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Video Display Corporation and Subsidiaries
Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
 Three Months Ended
    
    
    Six Months EndedAugust 31,
    
    
    August 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    19,287
    
    
    $
    22,864
    
    
    $
    38,792
    
    
    $
    44,329Cost of goods sold
    
    
    12,219
    
    
    
    15,208
    
    
    
    24,532
    
    
    
    29,133Gross profit
    
    
    7,068
    
    
    
    7,656
    
    
    
    14,260
    
    
    
    15,196Operating expensesSelling and delivery
    
    
    1,846
    
    
    
    1,967
    
    
    
    3,787
    
    
    
    3,889General and administrative
    
    
    4,180
    
    
    
    3,850
    
    
    
    8,360
    
    
    
    7,7356,026
    
    
    
    5,817
    
    
    
    12,147
    
    
    
    11,624Operating profit
    
    
    1,042
    
    
    
    1,839
    
    
    
    2,113
    
    
    
    3,572Other income (expense)Interest expense
    
    
    (282
    )
    
    
    (470
    )
    
    
    (568
    )
    
    
    (941
    )Other, net
    
    
    48
    
    
    
    140
    
    
    
    160
    
    
    
    205(234
    )
    
    
    (330
    )
    
    
    (408
    )
    
    
    (736
    )Income before income taxes
    
    
    808
    
    
    
    1,509
    
    
    
    1,705
    
    
    
    2,836Income tax expense
    
    
    255
    
    
    
    272
    
    
    
    572
    
    
    
    746Net income
    
    $
    553
    
    
    $
    1,237
    
    
    $
    1,133
    
    
    $
    2,090Basic earnings per share of
common stock
    
    $
    .06
    
    
    $
    .13
    
    
    $
    .12
    
    
    $
    .22Diluted earnings per share
of common stock
    
    $
    .06
    
    
    $
    .13
    
    
    $
    .12
    
    
    $
    .22Basic weighted average
shares outstanding
    
    
    9,374
    
    
    
    9,637
    
    
    
    9,421
    
    
    
    9,642Diluted weighted average
shares outstanding
    
    
    9,482
    
    
    
    9,687
    
    
    
    9,530
    
    
    
    9,698
  5




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Video Display Corporation and Subsidiaries
Consolidated Statement of Shareholders Equity
Six Months Ended August 31, 2008 (unaudited)
(in thousands)
 AccumulatedCommon
    
    
    Common
    
    
    Additional
    
    
    
    
    
    
    OtherStock
    
    
    Stock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    Stock
    
    
    IncomeBalance, February 29, 2008
    
    
    9,491
    
    
    $
    7,293
    
    
    $
    127
    
    
    $
    26,147
    
    
    $
    85
    
    
    $
    (2,702
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,133
    
    
    
    
    
    
    
    
    
    
    $
    1,133Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,131Repurchase of Treasury Stock
    
    
    (188
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,390
    )Share based compensation
    
    
    7
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    54Balance, August 31, 2008
    
    
    9,310
    
    
    $
    7,293
    
    
    $
    142
    
    
    $
    27,280
    
    
    $
    83
    
    
    $
    (4,038
    )
  6




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Video Display Corporation and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
(in thousands)
 Six Months EndedAugust 31,2008
    
    
    2007Operating ActivitiesNet income
    
    $
    1,133
    
    
    $
    2,090Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    1,198
    
    
    
    1,167Provision for doubtful accounts
    
    
    102
    
    
    
    88Provision for inventory reserve
    
    
    620
    
    
    
    76Non-cash charge for share based compensation
    
    
    69
    
    
    
    (67
    )Deferred income taxes
    
    
    (405
    )
    
    
    (290
    )Interest on convertible note
    
    
    
    
    
    
    50Loss on sale of equipment
    
    
    7
    
    
    
    Change in Other Assets & Liabilities
    
    
    (27
    )
    
    
    -Changes in working capital, net of effects
from acquisitions:Accounts receivable
    
    
    444
    
    
    
    (1,591
    )Inventories
    
    
    (911
    )
    
    
    70Prepaid expenses and other current assets
    
    
    (159
    )
    
    
    83Accounts payable and accrued liabilities
    
    
    (2,665
    )
    
    
    235Cost, estimated earnings and billings on
uncompleted contracts
    
    
    1,093
    
    
    
    (561
    )Income taxes refundable
    
    
    605
    
    
    
    Net cash provided by operating activities
    
    
    1,104
    
    
    
    1,350Investing ActivitiesNet cash used in capital expenditures
    
    
    (407
    )
    
    
    (432
    )Net cash used in investing activities
    
    
    (407
    )
    
    
    (432
    )Financing ActivitiesProceeds from long-term debt, lines of credit
and financing lease obligations
    
    
    8,926
    
    
    
    11,549Payments on long-term debt, lines of credit
and financing lease obligations
    
    
    (7,918
    )
    
    
    (9,602
    )Proceeds from loans from officers and directors
    
    
    
    
    
    
    702Repayments of loans from officers and directors
    
    
    (213
    )
    
    
    (2,224
    )Purchases and retirements of common stock and
purchase of treasury stock
    
    
    (1,390
    )
    
    
    (471
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    9Net cash used in financing activities
    
    
    (595
    )
    
    
    (37
    )Effect of exchange rate changes on cash
    
    
    (2
    )
    
    
    70Net increase in cash
    
    
    100
    
    
    
    951Cash, beginning of period
    
    
    1,636
    
    
    
    1,226Cash, end of period
    
    $
    1,736
    
    
    $
    2,177
  7




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
August 31, 2008
       Fair Values Measurements
 The Fair Value Option for Financial
Assets and Financial Liabilities.
 Accounting for Uncertainty in
Income Taxes Accounting for Income Taxes
 8




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
August 31, 2008
  Business Combinations. purchase method
 Noncontrolling Interest in Consolidated Financial
Statements.
   9




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
August 31, 2008
    August 31,
    
    
    February 29,2008
    
    
    2008Raw materials
    
    $
    20,812
    
    
    $
    19,028Work-in-process
    
    
    6,275
    
    
    
    6,699Finished goods
    
    
    13,692
    
    
    
    14,37440,779
    
    
    
    40,101Reserves for obsolescence
    
    
    (5,937
    )
    
    
    (5,551
    )$
    34,842
    
    
    $
    34,550
   August 31,
    
    
    February 29,2008
    
    
    2008Costs incurred to date on uncompleted contracts
    
    $
    7,689
    
    
    $
    7,325Estimated earnings recognized to date on these contracts
    
    
    1,474
    
    
    
    1,6179,163
    
    
    
    8,942Billings to date
    
    
    (8,032
    )
    
    
    (6,717
    )Costs and estimated earnings in excess
of billings, net
    
    $
    1,131
    
    
    $
    2,225Costs and estimated earnings in excess of billings
    
    $
    1,165
    
    
    $
    2,225Billings in excess of costs and estimated earnings
    
    
    (34
    )
    
    
    $
    1,131
    
    
    $
    2,225
  10




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
August 31, 2008
       August 31, 2008
    
    
    February 29, 2008Cost
    
    
    Accumulated
    
    
    Cost
    
    
    AccumulatedAmortization
    
    
    
    
    
    
    AmortizationCustomer lists
    
    $
    3,611
    
    
    $
    1,909
    
    
    $
    3,611
    
    
    $
    1,635Non-compete agreements
    
    
    1,245
    
    
    
    928
    
    
    
    1,245
    
    
    
    803Patents
    
    
    777
    
    
    
    334
    
    
    
    765
    
    
    
    274Other intangibles
    
    
    149
    
    
    
    115
    
    
    
    149
    
    
    
    104$
    5,782
    
    
    $
    3,286
    
    
    $
    5,770
    
    
    $
    2,816
 11




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
August 31, 2008
   August 31,
    
    
    February 29,2008
    
    
    2008Note payable to bank syndicate (RBC Centura
and Regions Bank); interest rate at LIBOR
plus applicable margin as defined per the
loan agreement, (4.31% combined rate as of
August 31, 2008); monthly principal payments
of $50 plus accrued interest, payable through
July 2011; collateralized by all assets of
the Company.
    
    $
    1,750
    
    
    $
    2,050Mortgage payable to bank; interest rate at
Federal Home Loan Bank Board Index rate plus
1.95% (7.25% as of August 31, 2008); monthly
principal and interest payments of $5 payable
through October 2021; collateralized by land
and building of Teltron Technologies, Inc
    
    
    489
    
    
    
    500Other
    
    
    35
    
    
    
    62,274
    
    
    
    2,556Financing lease obligations
    
    
    392
    
    
    
    4742,666
    
    
    
    3,030Less current maturities
    
    
    (795
    )
    
    
    (789
    )$
    1,871
    
    
    $
    2,241
   12




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
August 31, 2008
   Three Months
    
    
    Six MonthsEnded August 31,
    
    
    Ended August 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net SalesDisplay Segment
    
    $
    13,433
    
    
    $
    14,054
    
    
    $
    27,249
    
    
    $
    28,713Wholesale Distribution Segment
    
    
    5,855
    
    
    
    8,810
    
    
    
    11,543
    
    
    
    15,616$
    19,288
    
    
    $
    22,864
    
    
    $
    38,792
    
    
    $
    44,329Operating profitDisplay Segment
    
    $
    1,093
    
    
    $
    1,356
    
    
    $
    2,138
    
    
    $
    3,074Wholesale Distribution Segment
    
    
    (51
    )
    
    
    483
    
    
    
    (25
    )
    
    
    498Income from Operations
    
    
    1,042
    
    
    
    1,839
    
    
    
    2,113
    
    
    
    3,572Interest expense
    
    
    (282
    )
    
    
    (470
    )
    
    
    (568
    )
    
    
    (941
    )Other income, net
    
    
    48
    
    
    
    140
    
    
    
    160
    
    
    
    205Income before income taxes
    
    $
    808
    
    
    $
    1,509
    
    
    $
    1,705
    
    
    $
    2,836
   Six MonthsEnded August 31,2008
    
    
    2007Cash Paid for:Interest
    
    $
    454
    
    
    $
    902Income taxes, net of refunds
    
    $
    279
    
    
    $
    1,169
 13




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
August 31, 2008
  Earnings Per Share
   WeightedAverageCommon Shares
    
    
    Earnings PerNet Income
    
    
    Outstanding
    
    
    ShareThree months ended August 31, 2008Basic
    
    $
    553
    
    
    
    9,374
    
    
    $
    0.06Effect of dilution:Options
    
    
    
    
    
    
    108Diluted
    
    $
    553
    
    
    
    9,482
    
    
    $
    0.06Three months ended August 31, 2007Basic
    
    $
    1,237
    
    
    
    9,637
    
    
    $
    0.13Effect of dilution:Options
    
    
    
    
    
    
    50Diluted
    
    $
    1,237
    
    
    
    9,687
    
    
    $
    0.13Six months ended August 31, 2008Basic
    
    $
    1,133
    
    
    
    9,421
    
    
    $
    0.12Effect of dilution:Options
    
    
    
    
    
    
    109Diluted
    
    $
    1,133
    
    
    
    9,530
    
    
    $
    0.12Six months ended August 31, 2007Basic
    
    $
    2,090
    
    
    
    9,642
    
    
    $
    0.22Effect of dilution:Options
    
    
    
    
    
    
    56Diluted
    
    $
    2,090
    
    
    
    9,698
    
    
    $
    0.22
 14




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
August 31, 2008
 Stock-Based Compensation Plans
    Stock Repurchase Program
   Reporting Comprehensive Income
 15




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
August 31, 2008
       16




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Video Display Corporation and Subsidiaries
August 31, 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
  17




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Video Display Corporation and Subsidiaries
August 31, 2008
  Interest rate exposure
 Results of Operations
 
 Three Months
    
    
    Six MonthsEnded August 31,
    
    
    Ended August 31,2008
    
    
    2007
    
    
    2008
    
    
    2007SalesDisplay SegmentMonitors
    
    
    56.3
    %
    
    
    49.3
    %
    
    
    55.6
    %
    
    
    47.7
    %Data Display CRTs
    
    
    11.1
    
    
    
    9.3
    
    
    
    12.4
    
    
    
    13.8Entertainment CRTs
    
    
    1.9
    
    
    
    2.6
    
    
    
    1.9
    
    
    
    2.8Components Parts
    
    
    0.4
    
    
    
    0.3
    
    
    
    0.3
    
    
    
    0.5Total Display Segment
    
    
    69.7
    %
    
    
    61.5
    %
    
    
    70.2
    %
    
    
    64.8
    %Wholesale Distribution Segment
    
    
    30.3
    
    
    
    38.5
    
    
    
    29.8
    
    
    
    35.2100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Costs and expensesCost of goods sold
    
    
    63.3
    %
    
    
    66.5
    %
    
    
    63.2
    %
    
    
    65.7
    %Selling and delivery
    
    
    9.6
    
    
    
    8.6
    
    
    
    9.8
    
    
    
    8.8General and administrative
    
    
    21.7
    
    
    
    16.9
    
    
    
    21.6
    
    
    
    17.594.6
    %
    
    
    92.0
    %
    
    
    94.6
    %
    
    
    92.0
    %Income from Operations
    
    
    5.4
    %
    
    
    8.0
    %
    
    
    5.4
    %
    
    
    8.0
    %Interest expense
    
    
    (1.5
    )%
    
    
    (2.0
    )%
    
    
    (1.5
    )%
    
    
    (2.1
    )%Other income, net
    
    
    0.3
    
    
    
    0.6
    
    
    
    .4
    
    
    
    .5Income before income taxes
    
    
    4.2
    %
    
    
    6.6
    %
    
    
    4.3
    %
    
    
    6.4
    %Provision for income taxes
    
    
    1.3
    
    
    
    1.2
    
    
    
    1.4
    
    
    
    1.7Net Income
    
    
    2.9
    %
    
    
    5.4
    %
    
    
    2.9
    %
    
    
    4.7
    %
 18




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##### Table of Contents



Video Display Corporation and Subsidiaries
August 31, 2008
 Net sales
   Gross margins
    19




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##### Table of Contents



Video Display Corporation and Subsidiaries
August 31, 2008
 Operating expenses
    Interest expense
  Income taxes
  Accounting for Uncertainty in Income Taxes
 Foreign currency translation
   Liquidity and Capital Resources
  20




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##### Table of Contents



Video Display Corporation and Subsidiaries
August 31, 2008
        21




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##### Table of Contents



Video Display Corporation and Subsidiaries
August 31, 2008
 Critical Accounting Policies
  Reserves on inventories
  Revenue Recognition
     22




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##### Table of Contents



Video Display Corporation and Subsidiaries
August 31, 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
 23




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##### Table of Contents



Video Display Corporation and Subsidiaries
August 31, 2008
  Business Combinations. purchase method
 Noncontrolling Interest in Consolidated
Financial Statements.
 Forward-Looking Information and Risk Factors
  24




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##### Table of Contents



Video Display Corporation and Subsidiaries
August 31, 2008
 
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
   
 ITEM 4.
    
    CONTROLS AND PROCEDURES
   Changes in Internal Controls
   25




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##### Table of Contents



Video Display Corporation and Subsidiaries
August 31, 2008
 
 PART II
 
 Item 1.
    
    Legal Proceedings
 Barco Federal Systems, LLC and
Barco N.V., a Belgian corporation Aydin Displays, Inc. a Pennsylvania corporation
  
 Item 1A.
    
    Risk Factors
 Information regarding risk factors appears under the caption Forward-Looking
Statements and Risk Factors in Part I, Item 2 of this Form 10-Q and in Part I, Item
1A of our Annual Report on Form 10-K for the fiscal year ended February 29, 2008.
There have been no material changes from the risk factors previously disclosed in our
Annual Report on Form 10-K.
 
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3.
    
    Defaults upon Senior Securities
 None
 
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
 None.
 
 Item 5.
    
    Other information
 None.
 26




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##### Table of Contents



Video Display Corporation and Subsidiaries
August 31, 2008
 
 Item 6.
    
    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 June 14, 2006,
among Video Display Corporation and Subsidiaries and RBC Centura Bank
and Regions Bank as lenders and RBC Centura Bank as collateral agent
(incorporated by reference to Exhibit 10(h) to the Companys Current
Report on Form 8-K dated June 29, 2006).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.
 27




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##### Table of Contents



SIGNATURES
  VIDEO DISPLAY CORPORATIONOctober 15, 2008
    By:
    /s/ Ronald D. OrdwayRonald D. OrdwayChief Executive OfficerOctober 15, 2008
    By:
    /s/ Gregory L. OsbornGregory L. OsbornChief Financial Officer 28