##### 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, 2007.
 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
  þ o
  o o þ
 o þ




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##### 



Video Display Corporation and Subsidiaries
Index
 PagePART I.
    

FINANCIAL
INFORMATIONItem 1.
    
    Financial Statements.Consolidated Balance Sheets 
November 30, 2007 (unaudited) and February 28, 2007
    
    
    3Consolidated Statements of Operations 
Three months and nine months ended November 30, 2007
and 2006 (unaudited)
    
    
    5Consolidated Statement of Shareholders Equity 
Nine months ended November 30, 2007 (unaudited)
    
    
    6Consolidated Statements of Cash Flows 
Nine months ended November 30, 2007 and 2006 (unaudited)
    
    
    7Notes to Consolidated Financial Statements 
November 30, 2007 (unaudited)
    
    
    9Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations.
    
    
    20Item 3.
    
    Quantitative and Qualitative Disclosure About Market Risk.
    
    
    28Item 4.
    
    Controls and Procedures.
    
    
    28PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings.
    
    
    29Item 1A.
    
    Risk Factors.
    
    
    29Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
    
    
    29Item 3.
    
    Defaults Upon Senior Securities.
    
    
    29Item 4.
    
    Submission of Matters to a Vote of Security Holders.
    
    
    29Item 5.
    
    Other Information.
    
    
    29Item 6.
    
    Exhibits.
    
    
    29SIGNATURES
    
    
    31EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATIONS OF THE CEO AND CFO
  2




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##### Table of Contents



ITEM 1. FINANCIAL STATEMENTS
 
 Item 1. Financial Statements
 
 Video Display Corporation and Subsidiaries
Consolidated Balance Sheets 
(in thousands)
 November 30,
    
    
    February 28,2007
    
    
    2007(unaudited)AssetsCurrent AssetsCash
    
    $
    1,104
    
    
    $
    1,226Accounts receivable, less allowance for
doubtful accounts of $566 and $458
    
    
    11,792
    
    
    
    10,497Inventories, net
    
    
    34,798
    
    
    
    33,344Cost and estimated earnings in excess of
billings on uncompleted contracts
    
    
    3,297
    
    
    
    2,963Deferred income taxes
    
    
    3,432
    
    
    
    3,042Prepaid expenses and other
    
    
    711
    
    
    
    737Total current assets
    
    
    55,134
    
    
    
    51,809Property, plant and equipment:Land
    
    
    585
    
    
    
    585Buildings
    
    
    8,255
    
    
    
    8,223Machinery and equipment
    
    
    20,709
    
    
    
    20,19629,549
    
    
    
    29,004Accumulated depreciation and amortization
    
    
    (22,132
    )
    
    
    (21,084
    )Net property, plant, and equipment
    
    
    7,417
    
    
    
    7,920Goodwill
    
    
    1,343
    
    
    
    1,343Intangible assets, net
    
    
    3,189
    
    
    
    3,894Deferred income taxes
    
    
    136
    
    
    
    Other assets
    
    
    68
    
    
    
    121Total assets
    
    $
    67,287
    
    
    $
    65,087
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##### Table of Contents



Video Display Corporation and Subsidiaries
Consolidated Balance Sheets (continued)
(in thousands)
 November 30,
    
    
    February 28,2007
    
    
    2007(unaudited)Liabilities and Shareholders EquityCurrent LiabilitiesAccounts payable
    
    $
    6,116
    
    
    $
    6,325Accrued liabilities
    
    
    4,851
    
    
    
    4,054Billings in excess of cost and estimated
earnings on uncompleted contracts
    
    
    187
    
    
    
    34Current maturities of notes payable to officers and
directors
    
    
    409
    
    
    
    446Convertible notes payable, net of discount of $6 and $75
    
    
    994
    
    
    
    1,175Income taxes payable
    
    
    45
    
    
    
    61Current maturities of long-term debt
and financing lease obligations
    
    
    719
    
    
    
    726Total current liabilities
    
    
    13,321
    
    
    
    12,821Lines of credit
    
    
    16,746
    
    
    
    13,593Long-term debt, less current maturities
    
    
    2,083
    
    
    
    2,550Financing lease obligations, less current maturities
    
    
    202
    
    
    
    269Notes payable to officers and directors,
less current maturities
    
    
    2,726
    
    
    
    5,619Other long term liabilities
    
    
    623
    
    
    
    623Deferred income taxes
    
    
    
    
    
    
    71Total liabilities
    
    
    35,701
    
    
    
    35,546Shareholders EquityPreferred stock, no par value  10,000 shares
authorized; none issued and outstanding
    
    
    
    
    
    
    Common stock, no par value  50,000 shares authorized;
9,859 and 9,571 issued and outstanding, respectively,
at November 30, 2007 and 9,766 and 9,600
issued and
outstanding, respectively, at February 28, 2007
    
    
    7,293
    
    
    
    7,284Additional paid-in capital
    
    
    116
    
    
    
    171Retained earnings
    
    
    26,120
    
    
    
    23,376Accumulated other comprehensive income
    
    
    195
    
    
    
    95Treasury stock, 263 and 166 shares at cost
    
    
    (2,138
    )
    
    
    (1,385
    )Total shareholders equity
    
    
    31,586
    
    
    
    29,541Total liabilities and shareholders equity
    
    $
    67,287
    
    
    $
    65,087
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Video Display Corporation and Subsidiaries
Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
 Three Months Ended
    
    
    Nine Months EndedNovember 30,
    
    
    November 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    21,272
    
    
    $
    22,298
    
    
    $
    65,601
    
    
    $
    60,728Cost of goods sold
    
    
    14,221
    
    
    
    14,313
    
    
    
    43,354
    
    
    
    40,369Gross profit
    
    
    7,051
    
    
    
    7,985
    
    
    
    22,247
    
    
    
    20,359Operating expensesSelling and delivery
    
    
    1,898
    
    
    
    2,033
    
    
    
    5,787
    
    
    
    5,853General and administrative
    
    
    4,059
    
    
    
    3,744
    
    
    
    11,794
    
    
    
    10,9245,957
    
    
    
    5,777
    
    
    
    17,581
    
    
    
    16,777Operating profit
    
    
    1,094
    
    
    
    2,208
    
    
    
    4,666
    
    
    
    3,582Other income (expense)Interest expense
    
    
    (444
    )
    
    
    (527
    )
    
    
    (1,384
    )
    
    
    (1,650
    )Other, net
    
    
    293
    
    
    
    (35
    )
    
    
    498
    
    
    
    14(151
    )
    
    
    (562
    )
    
    
    (886
    )
    
    
    (1,636
    )Income before income taxes
    
    
    943
    
    
    
    1,646
    
    
    
    3,780
    
    
    
    1,946Income tax expense
    
    
    290
    
    
    
    630
    
    
    
    1,036
    
    
    
    780Net income
    
    $
    653
    
    
    $
    1,016
    
    
    $
    2,744
    
    
    $
    1,166Basic earnings per share of
common stock
    
    $
    .07
    
    
    $
    .11
    
    
    $
    .29
    
    
    $
    .12Diluted earnings per share
of common
stock
    
    $
    .07
    
    
    $
    .10
    
    
    $
    .28
    
    
    $
    .12Basic weighted average
shares outstanding
    
    
    9,599
    
    
    
    9,675
    
    
    
    9,628
    
    
    
    9,659Diluted weighted average
shares outstanding
    
    
    9,735
    
    
    
    9,848
    
    
    
    9,718
    
    
    
    9,858
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Video Display Corporation and Subsidiaries
Consolidated Statements of Shareholders Equity
Nine Months Ended November 30, 2007 (unaudited)
(in thousands)
 AccumulatedCommon
    
    
    Common
    
    
    Additional
    
    
    
    
    
    
    OtherStock
    
    
    Stock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    Stock
    
    
    IncomeBalance, February 28, 2007
    
    
    9,600
    
    
    $
    7,284
    
    
    $
    171
    
    
    $
    23,376
    
    
    $
    95
    
    
    $
    (1,385
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,744
    
    
    
    
    
    
    
    
    
    
    $
    2,744Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    100Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,844Issuance of common stock
under stock option plan
    
    
    68
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Repurchase of Treasury Stock
    
    
    (97
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (753
    )Share based compensation
    
    
    
    
    
    
    
    
    
    
    (55
    )
    
    
    
    
    
    
    
    
    
    
    Balance, November 30, 2007
    
    
    9,571
    
    
    $
    7,293
    
    
    $
    116
    
    
    $
    26,120
    
    
    $
    195
    
    
    $
    (2,138
    )
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Video Display Corporation and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
(in thousands)
 Nine Months EndedNovember 30,2007
    
    
    2006Operating ActivitiesNet income
    
    $
    2,744
    
    
    $
    1,166Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    1,753
    
    
    
    1,647Provision for doubtful accounts
    
    
    108
    
    
    
    200Provision for inventory reserve
    
    
    1,361
    
    
    
    1,165Non-cash charge for share based compensation
    
    
    (55
    )
    
    
    51Deferred income taxes
    
    
    (596
    )
    
    
    (330
    )Interest on convertible note
    
    
    69
    
    
    
    19Changes in working capital, net of effects
from acquisitions:Accounts receivable
    
    
    (1,403
    )
    
    
    (489
    )Inventories
    
    
    (2,815
    )
    
    
    1,939Prepaid expenses, other current assets, and other assets
    
    
    79
    
    
    
    934Accounts payable and accrued liabilities
    
    
    571
    
    
    
    (611
    )Cost, estimated earnings and billings on
uncompleted contracts
    
    
    (181
    )
    
    
    (2,457
    )Net cash provided by operating activities
    
    
    1,635
    
    
    
    3,234Investing ActivitiesCapital expenditures
    
    
    (546
    )
    
    
    (193
    )Cash paid for acquisition
    
    
    
    
    
    
    (550
    )Proceeds from the sale of property, plant and equipment
    
    
    
    
    
    
    159Net cash used in investing activities
    
    
    (546
    )
    
    
    (584
    )
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Video Display Corporation and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
(in thousands)
 Nine Months EndedNovember 30,2007
    
    
    2006Financing ActivitiesProceeds from long-term debt, lines of credit
and financing lease obligations
    
    
    17,596
    
    
    
    44,664Payments on long-term debt, lines of credit
and financing lease obligations
    
    
    (15,233
    )
    
    
    (46,208
    )Proceed from notes payable to officers and directors
    
    
    1,103
    
    
    
    3,220Repayments of notes payable to officers and directors
    
    
    (4,033
    )
    
    
    (3,985
    )Purchases of treasury stock
    
    
    (753
    )
    
    
    (484
    )Proceeds from exercise of stock options
    
    
    9
    
    
    
    77Net cash used in financing activities
    
    
    (1,311
    )
    
    
    (2,716
    )Effect of exchange rate changes on cash
    
    
    100
    
    
    
    267Net (decrease) increase in cash
    
    
    (122
    )
    
    
    201Cash, beginning of period
    
    
    1,226
    
    
    
    1,577Cash, end of period
    
    $
    1,104
    
    
    $
    1,778
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2007
       How Taxes Collected from Customers and Remitted to Governmental
Authorities Should Be Presented in the Income Statement (That is, Gross versus Net Presentation).
 Accounting for Uncertainty in Income
Taxes
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2007
  Fair Values Measurements
 The Fair Value Option for Financial
Assets and Financial Liabilities.
 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, 2007
     11




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2007
    November 30,
    
    
    February 28,2007
    
    
    2007Raw materials
    
    $
    19,787
    
    
    $
    19,540Work-in-process
    
    
    6,103
    
    
    
    4,210Finished goods
    
    
    14,581
    
    
    
    14,98040,471
    
    
    
    38,730Reserves for obsolescence
    
    
    (5,673
    )
    
    
    (5,386
    )$
    34,798
    
    
    $
    33,344
   November 30,
    
    
    February 28,2007
    
    
    2007Costs incurred to date on uncompleted contracts
    
    $
    6,459
    
    
    $
    9,733Estimated earnings recognized to date on these contracts
    
    
    2,403
    
    
    
    6,7698,862
    
    
    
    16,502Billings to date
    
    
    (5,752
    )
    
    
    (13,573
    )Costs and estimated earnings in excess
of billings, net
    
    $
    3,110
    
    
    $
    2,929Costs and estimated earnings in excess of billings
    
    $
    3,297
    
    
    $
    2,963Billings in excess of costs and estimated earnings
    
    
    (187
    )
    
    
    (34
    )$
    3,110
    
    
    $
    2,929
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2007
       November 30, 2007
    
    
    February 28, 2007Accumulated
    
    
    
    
    
    
    AccumulatedCost
    
    
    Amortization
    
    
    Cost
    
    
    AmortizationCustomer lists
    
    $
    3,611
    
    
    $
    1,499
    
    
    $
    3,611
    
    
    $
    1,089Non-compete agreements
    
    
    1,245
    
    
    
    740
    
    
    
    1,245
    
    
    
    552Patents
    
    
    765
    
    
    
    244
    
    
    
    765
    
    
    
    154Other intangibles
    
    
    149
    
    
    
    98
    
    
    
    149
    
    
    
    81$
    5,770
    
    
    $
    2,581
    
    
    $
    5,770
    
    
    $
    1,876
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2007
   November 30,
    
    
    February 28,2007
    
    
    2007Note payable to bank syndicate (RBC Centura
and Regions Bank); interest rate at LIBOR
plus applicable margin as defined per the
loan agreement, (6.82% combined rate as of
November 30, 2007); monthly principal
payments of $50 plus accrued interest,
payable through July 2011; collateralized
by all assets of the Company.
    
    $
    2,200
    
    
    $
    2,650Mortgage payable to bank; interest rate at
Federal Home Loan Bank Board Index rate
plus 1.95% (7.25% as of November 30, 2007);
monthly principal and interest payments of
$5 payable through October 2021;
collateralized by land and building of
Teltron Technologies, Inc
    
    
    505
    
    
    
    521Other
    
    
    
    
    
    
    162,705
    
    
    
    3,187Financing lease obligations
    
    
    299
    
    
    
    3583,004
    
    
    
    3,545Less current maturities
    
    
    (719
    )
    
    
    (726
    )$
    2,285
    
    
    $
    2,819
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2007
   Three Months
    
    
    Nine MonthsEnded November 30,
    
    
    Ended November 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net SalesDisplay Segment
    
    $
    14,227
    
    
    $
    15,801
    
    
    $
    42,941
    
    
    $
    43,620Wholesale Distribution Segment
    
    
    7,045
    
    
    
    6,497
    
    
    
    22,660
    
    
    
    17,108$
    21,272
    
    
    $
    22,298
    
    
    $
    65,601
    
    
    $
    60,728Operating profitDisplay Segment
    
    $
    1,187
    
    
    $
    2,167
    
    
    $
    4,261
    
    
    $
    3,483Wholesale Distribution Segment
    
    
    (93
    )
    
    
    41
    
    
    
    405
    
    
    
    99Income from Operations
    
    
    1,094
    
    
    
    2,208
    
    
    
    4,666
    
    
    
    3,582Interest expense
    
    
    (444
    )
    
    
    (527
    )
    
    
    (1384
    )
    
    
    (1,650
    )Other income, net
    
    
    293
    
    
    
    (35
    )
    
    
    498
    
    
    
    14Income before income taxes
    
    $
    943
    
    
    $
    1,646
    
    
    $
    3,780
    
    
    $
    1,946
   Nine MonthsEnded November 30,2007
    
    
    2006Cash Paid for:Interest
    
    $
    1,421
    
    
    $
    1,589Income taxes, net of refunds
    
    $
    1,920
    
    
    $
    109Non-cash Transactions:Assets acquired in exchange for assumption of
debt
    
    $
    
    
    
    $
    678Assets acquired in exchange for common stock
    
    $
    
    
    
    $
    250
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2007
  Earnings Per Share
   WeightedAverageCommon Shares
    
    
    Earnings PerNet Income
    
    
    Outstanding
    
    
    ShareThree months ended November 30, 2007Basic
    
    $
    653
    
    
    
    9,599
    
    
    $
    0.07Effect of dilution:Options
    
    
    
    
    
    
    136Diluted
    
    $
    653
    
    
    
    9,735
    
    
    $
    0.07Three months
ended November 30, 2006Basic
    
    $
    1,016
    
    
    
    9,675
    
    
    $
    0.11Effect of dilution:Options
    
    
    
    
    
    
    173Diluted
    
    $
    1,016
    
    
    
    9,848
    
    
    $
    0.10Nine months ended November 30, 2007Basic
    
    $
    2,744
    
    
    
    9,628
    
    
    $
    0.29Effect of dilution:Options
    
    
    
    
    
    
    90Diluted
    
    $
    2,744
    
    
    
    9,718
    
    
    $
    0.28Nine months ended November 30, 2006Basic
    
    $
    1,166
    
    
    
    9,659
    
    
    $
    0.12Effect of dilution:Options
    
    
    
    
    
    
    199Diluted
    
    $
    1,166
    
    
    
    9,858
    
    
    $
    0.12
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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2007
 Stock-Based Compensation Plans
    Stock Repurchase Program
  17




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2007
  Reporting Comprehensive Income
       18




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Video Display Corporation and Subsidiaries
Notes to Consolidated Financial Statements (unaudited)
November 30, 2007
    19




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Video Display Corporation and Subsidiaries
November 30, 2007
 
 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.During Fiscal 2008, management of the Company is focusing key resources on strategic efforts
to dispose of unprofitable operations and seek acquisition opportunities that enhance the
profitability and sales growth of the Companys more profitable product lines. In addition, the
Company plans to seek new products through acquisitions and internal development that complement
existing profitable product lines. Challenges facing the Company during these efforts include:
 Inventory
management
  20




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Video Display Corporation and Subsidiaries
November 30, 2007
  Interest rate exposure
 Results of Operations
  Three Months
    
    Nine MonthsEnded November 30,
    
    Ended November 30,2007
    
    2006
    
    2007
    
    2006SalesDisplay SegmentMonitors
    
    
    51.7
    %
    
    
    56.4
    %
    
    
    49.0
    %
    
    
    56.4
    %Data Display CRTs
    
    
    12.3
    
    
    
    11.0
    
    
    
    13.3
    
    
    
    11.6Entertainment CRTs
    
    
    2.4
    
    
    
    3.1
    
    
    
    2.7
    
    
    
    3.3Components Parts
    
    
    0.5
    
    
    
    0.4
    
    
    
    0.5
    
    
    
    0.5Total Display Segment
    
    
    66.9
    
    
    
    70.9
    
    
    
    65.5
    
    
    
    71.8Wholesale Distribution Segment
    
    
    33.1
    
    
    
    29.1
    
    
    
    34.5
    
    
    
    28.2100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Costs and expensesCost of goods sold
    
    
    66.9
    
    
    
    64.2
    
    
    
    66.1
    
    
    
    66.5Selling and delivery
    
    
    8.9
    
    
    
    9.1
    
    
    
    8.8
    
    
    
    9.6General and administrative
    
    
    19.1
    
    
    
    16.8
    
    
    
    18.0
    
    
    
    18.094.9
    
    
    
    90.1
    
    
    
    92.9
    
    
    
    94.1Income from Operations
    
    
    5.1
    
    
    
    9.9
    
    
    
    7.1
    
    
    
    5.9Interest expense
    
    
    (2.1
    )
    
    
    (2.4
    )
    
    
    (2.1
    )
    
    
    (2.7
    )Other income, net
    
    
    1.4
    
    
    
    (0.2
    )
    
    
    0.8
    
    
    
    0.0Income before income taxes
    
    
    4.4
    
    
    
    7.3
    
    
    
    5.8
    
    
    
    3.2Provision for income taxes
    
    
    1.4
    
    
    
    2.8
    
    
    
    1.6
    
    
    
    1.3Net Income
    
    
    3.0
    %
    
    
    4.5
    %
    
    
    4.2
    %
    
    
    1.9
    %
 21




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2007
 Net sales
   Gross margins
    22




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2007
 Operating expenses
    Interest expense
  Income taxes
  Accounting for Uncertainty in Income Taxes
 Foreign currency translation
  Liquidity and Capital Resources
  23




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2007
         Critical Accounting Policies
  24




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2007
  Reserves on inventories
  Revenue Recognition
     25




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2007
 Allowance for doubtful accounts
  Warranty reserves
  Other Accounting Policies
  Recent Accounting Pronouncements
 How Taxes Collected from Customers and Remitted to Governmental
Authorities Should Be Presented in the Income Statement (That is, Gross versus Net Presentation).
 Accounting for Uncertainty in Income
Taxes
 26




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2007
  The Fair Value Option for Financial
Assets and Financial Liabilities.
 Business Combinations. purchase method
 Noncontrolling Interest in Consolidated Financial
Statements.
 27




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2007
 Forward-Looking Information and Risk Factors
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
   
 ITEM 4. CONTROLS AND PROCEDURES
   Changes in Internal Controls
  28




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2007
 
 PART II
 
 Legal Proceedings
  
 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
  
 Exhibits
 29




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##### Table of Contents



Video Display Corporation and Subsidiaries
November 30, 2007
 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.
 30




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##### Table of Contents



SIGNATURES
  VIDEO DISPLAY CORPORATIONJanuary 14, 2008
    By:
    /s/ Ronald D. OrdwayRonald D. OrdwayChief Executive OfficerJanuary 14, 2008
    By:
    /s/ Gregory L. OsbornGregory L. OsbornChief Financial Officer 31