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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549

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FORM 10-Q/A

QUARTERLY REPORT UNDER SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934

|For Quarter EndedNovember 30, 2002 |  | Commission File Number0-13394
|---------------------------------- |  | -----------------------------

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VIDEO DISPLAY CORPORATION(Exact name of registrant as specified on its charter)

|Georgia(State or other jurisdiction of
incorporation or organization)                       |  | 58-1217564(I.R.S.Employer
Identification No.)
|------------------------------------------------------------------------------------------- |  | ---------------------------------------------
|1868 Tucker Industrial Drive, Tucker, Georgia 30084(Address of principal executive offices)
|Registrant's telephone number including area code:                                          |  | 770-938-2080                                 

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Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by section 13 of the Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No o

Indicate
the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date:

|Class                      |  | Outstanding at November 30, 2002
|-------------------------- |  | --------------------------------
|Common Stock, No Par Value |  | 4,761,833                       

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Video Display Corporation and Subsidiaries

INDEX

|                                                                                       |  |                                                                                                                  |  |                                                                                                                                                                                         |  | Page
|-------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|PART I.                                                                                |  | FINANCIAL INFORMATION                                                                                            |  |                                                                                                                                                                                        
|                                                                                       |  | Item 1.    Financial Statements                                                                                  |  |                                                                                                                                                                                        
|                                                                                       |  |                                                                                                                  |  | Consolidated balance sheetsNovember 30, 2002 (unaudited) and February 28, 2002 (audited)                                                                                               |  | 3-4 
|                                                                                       |  |                                                                                                                  |  | Consolidated statements of operationsThree and nine months ended November 30, 2002 and 2001 (unaudited)                                                                                |  | 5   
|                                                                                       |  |                                                                                                                  |  | Consolidated statements of shareholders' equity and comprehensive income (loss)Twelve months ended February 28, 2002 (audited) and the nine months ended November 30, 2002 (unaudited) |  | 6   
|                                                                                       |  |                                                                                                                  |  | Consolidated statements of cash flowsNine months ended November 30, 2002 and 2001 (unaudited)                                                                                          |  | 7   
|                                                                                       |  |                                                                                                                  |  | Notes to consolidated financial statementsNovember 30, 2002 (unaudited)                                                                                                                |  | 8-13
|                                                                                       |  | Item 2.    Management's Discussion and Analysis of Financial Condition and
                Results of Operations |  | 14-18                                                                                                                                                                                  
|                                                                                       |  | Item 3.    Quantitative and Qualitative Disclosure About Market Risk                                             |  | 19                                                                                                                                                                                     
|                                                                                       |  | Item 4.    Controls and Procedures                                                                               |  | 19                                                                                                                                                                                     
|PART II.                                                                               |  | OTHER INFORMATION                                                                                                |  |                                                                                                                                                                                        
|                                                                                       |  | Item 1.    Legal Proceedings                                                                                     |  | 20                                                                                                                                                                                     
|                                                                                       |  | Item 2.    Changes in Securities and Use of Proceeds                                                             |  | 20                                                                                                                                                                                     
|                                                                                       |  | Item 3.    Defaults upon its Senior Securities                                                                   |  | 20                                                                                                                                                                                     
|                                                                                       |  | Item 4.    Submission of Matters to a Vote of Security Holders                                                   |  | 20                                                                                                                                                                                     
|                                                                                       |  | Item 5.    Other Information                                                                                     |  | 20                                                                                                                                                                                     
|                                                                                       |  | Item 6.    Exhibits and Reports on Form 8-K                                                                      |  | 20                                                                                                                                                                                     
|SIGNATURES                                                                             |  | 21                                                                                                              
|CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002                |  | 22-23                                                                                                           
|CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (Exhibit 99.1) |  | 24                                                                                                              

2

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Video Display Corporation and Subsidiaries        Consolidated Balance Sheets

|                                   |                                                                                  | November 30,
2002 |            | February 28,
2002 |  
|---------------------------------- | -------------------------------------------------------------------------------- | ----------------- | ---------- | ----------------- | -
|
|Assets                             |                                                                                  |                   |            |                   |  
|Current assets                     |                                                                                  |                   |            |                   |  
|                                   | Cash and cash equivalents                                                        |                   | $          | 1,894,000         |  
|                                   | Accounts receivable, less allowance for possible losses of $515,000 and $343,000 |                   |            | 12,609,000        |  
|                                   | Inventories (Note D)                                                             |                   |            | 29,978,000        |  
|                                   | Prepaid expenses                                                                 |                   |            | 4,203,000         |  
|                                   |                                                                                  |                   |            |                   |  
|Total current assets               |                                                                                  |                   | 48,684,000 |                   |  
|                                   |                                                                                  |                   |            |                   |  
|Property, plant and equipment:     |                                                                                  |                   |            |                   |  
|                                   | Land                                                                             |                   |            | 600,000           |  
|                                   | Buildings                                                                        |                   |            | 7,050,000         |  
|                                   | Machinery and equipment                                                          |                   |            | 18,323,000        |  
|                                   |                                                                                  |                   |            |                   |  
|                                   |                                                                                  |                   | 25,973,000 |                   |  
|                                   | Accumulated depreciation and amortization                                        |                   |            | (17,222,000       | )
|                                   |                                                                                  |                   |            |                   |  
|Net property, plant, and equipment |                                                                                  |                   | 8,751,000  |                   |  
|                                   |                                                                                  |                   |            |                   |  
|Other assets                       |                                                                                  |                   | 2,344,000  |                   |  
|                                   |                                                                                  |                   |            |                   |  
|Total assets                       |                                                                                  | $                 | 59,779,000 |                   | $
|                                   |                                                                                  |                   |            |                   |  

The
accompanying notes are an integral part of these statements.

3

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Video Display Corporation and Subsidiaries        Consolidated Balance SheetsContinued

|                                                       |                                                                                                         | November 30,
2002 |            | February 28,
2002 |  
|------------------------------------------------------ | ------------------------------------------------------------------------------------------------------- | ----------------- | ---------- | ----------------- | -
|
|Liabilities and Shareholders' Equity                   |                                                                                                         |                   |            |                   |  
|Current liabilities                                    |                                                                                                         |                   |            |                   |  
|                                                       | Accounts payable                                                                                        |                   | $          | 7,141,000         |  
|                                                       | Accrued liabilities                                                                                     |                   |            | 4,147,000         |  
|                                                       | Accrued foreign currency translation loss                                                               |                   |            | 1,296,000         |  
|                                                       | Lines of credit (Note F)                                                                                |                   |            | 9,191,000         |  
|                                                       | Notes payable to shareholders                                                                           |                   |            | 7,617,000         |  
|                                                       | Current maturities of long-term debt (Note E)                                                           |                   |            | 2,739,000         |  
|                                                       |                                                                                                         |                   |            |                   |  
|Total current liabilities                              |                                                                                                         |                   | 32,131,000 |                   |  
|Convertible subordinated debentures                    |                                                                                                         |                   | 1,000,000  |                   |  
|Lines of credit (Note F)                               |                                                                                                         |                   |           |                   |  
|Long-term debt, less current maturities (Note E)       |                                                                                                         |                   | 5,965,000  |                   |  
|Notes payable to shareholders, less current maturities |                                                                                                         |                   | 151,000    |                   |  
|Deferred income taxes                                  |                                                                                                         |                   | 113,000    |                   |  
|                                                       |                                                                                                         |                   |            |                   |  
|Total liabilities                                      |                                                                                                         |                   | 39,360,000 |                   |  
|                                                       |                                                                                                         |                   |            |                   |  
|Minority interests                                     |                                                                                                         |                   | 188,000    |                   |  
|Redeemable common stock                                |                                                                                                         |                   | 100,000    |                   |  
|Commitments                                            |                                                                                                         |                   |           |                   |  
|Shareholders' Equity                                   |                                                                                                         |                   |            |                   |  
|                                                       | Preferred stock, no par value2,000,000 shares authorized; none issued and outstanding                  |                   |            |                  |  
|                                                       | Common stock, no par value10,000,000 shares authorized; 4,762,000 and 4,749,000 issued and outstanding |                   |            | 3,791,000         |  
|Additional paid in capital                             |                                                                                                         |                   | 92,000     |                   |  
|Retained earnings                                      |                                                                                                         |                   | 17,906,000 |                   |  
|Accumulated other comprehensive loss                   |                                                                                                         |                   | (1,658,000 | )                 |  
|                                                       |                                                                                                         |                   |            |                   |  
|Total shareholders' equity                             |                                                                                                         |                   | 20,131,000 |                   |  
|                                                       |                                                                                                         |                   |            |                   |  
|Total liabilities and shareholders' equity             |                                                                                                         | $                 | 59,779,000 |                   | $
|                                                       |                                                                                                         |                   |            |                   |  

The
accompanying notes are an integral part of these statements.

4

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Video Display Corporation and Subsidiaries        Consolidated Statements of Operations (unaudited)

|                                            |                                              | Three Months Ended
November 30, |            | Nine Months Ended
November 30, |  
|------------------------------------------- | -------------------------------------------- | ------------------------------- | ---------- | ------------------------------ | -
|
|Net sales                                   |                                              | $                               | 18,240,000 |                                | $
|Cost of goods sold                          |                                              |                                 | 17,281,000 |                                |  
|                                            |                                              |                                 |            |                                |  
|                                            | Gross profit                                 |                                 |            | 959,000                        |  
|                                            |                                              |                                 |            |                                |  
|Operating expenses                          |                                              |                                 |            |                                |  
|                                            | Selling and delivery                         |                                 |            | 1,926,000                      |  
|                                            | General and administrative                   |                                 |            | 3,714,000                      |  
|                                            | Recognized foreign currency translation loss |                                 |            | 1,296,000                      |  
|                                            |                                              |                                 |            |                                |  
|                                            |                                              |                                 | 6,936,000  |                                |  
|                                            |                                              |                                 |            |                                |  
|                                            | Operating profit (loss)                      |                                 |            | (5,977,000                     | )
|                                            |                                              |                                 |            |                                |  
|Other income (expense)                      |                                              |                                 |            |                                |  
|                                            | Interest expense                             |                                 |            | (447,000                       | )
|                                            | Other, net                                   |                                 |            | 66,000                         |  
|                                            |                                              |                                 |            |                                |  
|                                            |                                              |                                 | (381,000   | )                              |  
|                                            |                                              |                                 |            |                                |  
|                                            | Income (loss) before minority interest       |                                 |            | (6,358,000                     | )
|Minority interest expense                   |                                              |                                 | 18,000     |                                |  
|                                            |                                              |                                 |            |                                |  
|                                            | Income (loss) before income taxes            |                                 |            | (6,376,000                     | )
|                                            |                                              |                                 |            |                                |  
|Income tax expense (benefit)                |                                              |                                 | (1,452,000 | )                              |  
|                                            |                                              |                                 |            |                                |  
|Net income (loss)                           |                                              | $                               | (4,924,000 | )                              | $
|                                            |                                              |                                 |            |                                |  
|Basic earnings per share of common stock    |                                              | $                               | (1.03      | )                              | $
|                                            |                                              |                                 |            |                                |  
|Diluted earnings per share of common stock  |                                              | $                               | (1.03      | )                              | $
|                                            |                                              |                                 |            |                                |  
|Basic weighted average shares outstanding   |                                              |                                 | 4,761,000  |                                |  
|                                            |                                              |                                 |            |                                |  
|Diluted weighted average shares outstanding |                                              |                                 | 4,761,000  |                                |  
|                                            |                                              |                                 |            |                                |  

The
accompanying notes are an integral part of these statements.

5

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Video Display Corporation and Subsidiaries        Consolidated Statements of Shareholders' Equity and Comprehensive Income (Loss)        for the Twelve Months Ended February 28, 2002 (audited) and
    the Nine Months Ended November 30, 2002 (unaudited)

|                                                 |                                                       | Common
Stock |                            | Additional
Paid In
Capital |   | Accumulated
Other
Comprehensive
Loss |   | Retained
Earnings |            | Current
Period
Comprehensive
Income (Loss) |  
|------------------------------------------------ | ----------------------------------------------------- | ------------ | -------------------------- | -------------------------- | - | ------------------------------------ | - | ----------------- | ---------- | ------------------------------------------ | -
|Balance at February 28, 2001                     |                                                       | $            | 3,034,000                  |                            | $ | 92,000                               |   | $                 | (1,479,000 | )                                          | $
|                                                 | Net income for the year                               |              |                            |                           |   |                                      |  |                   |            |                                           |  
|                                                 | Unrealized loss on marketable equity securities       |              |                            |                           |   |                                      |  |                   |            | (2,000                                     | )
|                                                 | Foreign currency translation adjustment               |              |                            |                           |   |                                      |  |                   |            | 88,000                                     |  
|                                                 |                                                       |              |                            |                            |   |                                      |   |                   |            |                                            |  
|                                                 |                                                       |              | Total comprehensive income |                            |   |                                      |   |                   |            |                                            |  
|                                                 |                                                       |              |                            |                            |   |                                      |   |                   |            |                                            |  
|                                                 | Issuance of common stock under stock option plan      |              |                            | 17,000                     |   |                                      |  |                   |            |                                           |  
|                                                 | Conversion of subordinated debentures to common stock |              |                            | 775,000                    |   |                                      |  |                   |            |                                           |  
|                                                 |                                                       |              |                            |                            |   |                                      |   |                   |            |                                            |  
|Balance at February 28, 2002                     |                                                       |              | 3,826,000                  |                            |   | 92,000                               |   |                   | (1,393,000 | )                                          |  
|Net loss for the period                          |                                                       |              |                           |                            |   |                                     |   |                   |           |                                            |  
|Unrealized loss on marketable equity securities  |                                                       |              |                           |                            |   |                                     |   |                   | (4,000     | )                                          |  
|Foreign currency translation adjustment          |                                                       |              |                           |                            |   |                                     |   |                   | (261,000   | )                                          |  
|                                                 |                                                       |              |                            |                            |   |                                      |   |                   |            |                                            |  
|                                                 |                                                       |              | Total comprehensive loss   |                            |   |                                      |   |                   |            |                                            |  
|                                                 |                                                       |              |                            |                            |   |                                      |   |                   |            |                                            |  
|Issuance of common stock under stock option plan |                                                       |              | 11,000                     |                            |   |                                     |   |                   |           |                                            |  
|Repurchase of common stock                       |                                                       |              | (46,000                    | )                          |   |                                     |   |                   |           |                                            |  
|                                                 |                                                       |              |                            |                            |   |                                      |   |                   |            |                                            |  
|Balance at November 30, 2002                     |                                                       | $            | 3,791,000                  |                            | $ | 92,000                               |   | $                 | (1,658,000 | )                                          | $
|                                                 |                                                       |              |                            |                            |   |                                      |   |                   |            |                                            |  

The accompanying notes are an integral part of these statements.

6

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Video Display Corporation and Subsidiaries        Consolidated Statements of Cash Flows (unaudited)

|                                                                                    |  | Nine Months Ended
November 30, |            
|----------------------------------------------------------------------------------- |  | ------------------------------ | -----------
|
|Reconciliation of Net Income to Net Cash Provided by (Used in) Operating Activities |  |                                |            
|Net (loss) income                                                                   |  | $                              | (4,228,000 
|Adjustments to reconcile net income (loss) to net cash used in operations:          |  |                                |            
|Depreciation and amortization                                                       |  |                                | 1,152,000  
|Provision for inventory reserves and write-downs                                    |  |                                | 4,397,000  
|Provision for bad debts                                                             |  |                                | 542,000    
|Loss on disposal of fixed assets                                                    |  |                                | 725,000    
|Deferred income taxes                                                               |  |                                | (55,000    
|Recognized foreign currency translation loss                                        |  |                                | 1,296,000  
|Net income allocated to minority interests                                          |  |                                | 30,000     
|Changes in working capital, net of effects from acquisitions:                       |  |                                |            
|Accounts receivable                                                                 |  |                                | (439,000   
|Inventories                                                                         |  |                                | (2,355,000 
|Prepaid expenses and other assets                                                   |  |                                | (872,000   
|Accounts payable and accrued liabilities                                            |  |                                | 1,680,000  
|                                                                                    |  |                                |            
|Net cash provided by (used in) operating activities                                 |  |                                | 1,873,000  
|                                                                                    |  |                                |            
|Investing activities                                                                |  |                                |            
|Capital expenditures                                                                |  |                                | (1,123,000 
|Purchase of assets of Christie, Inc.                                                |  |                                |           
|Other investing activities                                                          |  |                                | 158,000    
|                                                                                    |  |                                |            
|Net cash used in investing activities                                               |  |                                | (965,000   
|                                                                                    |  |                                |            
|Financing activities                                                                |  |                                |            
|Proceeds from long-term debt and lines of credit                                    |  |                                | 11,456,000 
|Repayments of long-term debt and lines of credit                                    |  |                                | (12,096,000
|Proceeds from exercise of stock options                                             |  |                                | 11,000     
|Repurchase of shares of common stock                                                |  |                                | (46,000    
|                                                                                    |  |                                |            
|Net cash (used in) provided by financing activities                                 |  |                                | (675,000   
|                                                                                    |  |                                |            
|Effect of exchange rates on cash                                                    |  |                                | 46,000     
|                                                                                    |  |                                |            
|Net change in cash and cash equivalents                                             |  |                                | 279,000    
|Cash and cash equivalents, beginning of period                                      |  |                                | 1,615,000  
|                                                                                    |  |                                |            
|Cash and cash equivalents, end of period                                            |  |                                | 1,894,000  
|                                                                                    |  |                                |            

The
accompanying notes are an integral part of these statements.

7

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Video Display Corporation and Subsidiaries        Notes to Consolidated Financial Statements (unaudited)

NOTE ASUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principals for interim financial
information and in accordance with instructions for Form 10-Q as found in Article 10 of Regulation S-X. Accordingly, such consolidated financial statements
do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments necessary
for a fair presentation of the results of operations for the periods covered have been reflected in the statements. The accompanying consolidated financial statements should be read in conjunction
with the audited financial statements and notes thereto for the year ended February 28, 2002 included in the Company's Annual Report on Form 10-K.

The
consolidated financial statements included the accounts of the Company and its majority owned subsidiaries after elimination of all significant intercompany accounts and
transactions.

Assets
and liabilities of foreign subsidiaries are translated using the exchange rate in effect at the end of the period. Revenues and expenses are translated using the average of the
exchange rates in effect during the period. Translation adjustments and transaction gains and losses related to long-term intercompany transactions are accumulated as a separate component
of shareholders' equity. The Company has a subsidiary in the U.K., which is not material, and uses the British pound as its functional currency.

The
Company reported its Mexican subsidiary on the basis of the functional currency being the U.S. dollar, effective January 1, 1997, as over 90% of the subsidiary's sales and
purchases were with the parent with accounts receivable and accounts payable settled in U.S. dollars. Due to the winding down
of the Mexican operations, cumulative foreign currency translation losses of $1,296,000 were recognized in operating expense in the third quarter of fiscal 2003 to reflect the impairment of the
Company's investment in the Mexican subsidiary.

NOTE BADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (the "FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141,
"Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS
No. 141 requires the use of the purchase method of accounting and prohibits the use of the pooling-of-interests method of accounting for business combinations initiated
after June 30, 2001. This statement also requires that the Company recognize acquired intangible assets apart from goodwill if the acquired intangible assets meet certain criteria. SFAS
No. 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually.

In
addition, SFAS No. 142 requires that the Company identify reporting units for purposes of assessing potential future impairments of goodwill, reassess the useful lives of other
existing recognized finite-lived intangible assets, and cease amortization of intangible assets with an indefinite useful life. An intangible asset with an indefinite useful life should be tested for
impairment in accordance with the guidance in SFAS No. 142. This statement is required to be applied in fiscal years beginning after December 15, 2001, to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were initially recognized. SFAS No. 142 requires the Company to complete a transitional goodwill impairment test
within six months from the date of adoption and reassess the useful lives of other intangible assets within the first interim quarter after adoption.

8

---

The
Company adopted SFAS Nos. 141 and 142 on March 1, 2002, and accordingly, ceased amortization of goodwill at that time. Goodwill amortization expense of $81,000 and $243,000
was included in the consolidated financial statements for the three and nine months ended November 30, 2001, respectively. Had goodwill amortization expense not been recognized in 2001, basic
earnings per share would have increased from $0.10 per share to $0.11 per share for the three months ended November 30, 2001, and from $0.22 per share to $0.27 per share for the nine months
ended November 30, 2001.

As
of November 30, 2002, the Company completed the first phase of transitional testing for the potential impairment of goodwill relating to its Monitor division. The Company used
a mulitple of EBITDA (earnings before interest, taxes, depreciation and amortization expense) in evaluating the fair value of the Monitor division. As a result of such testing, the Company determined
there was no impairment of goodwill that should be included in the accompanying financial statements. At November 30, 2002, the net book value recorded for goodwill was $1,142,000.

NOTE CACCOUNTING STANDARDS NOT YET ADOPTED

In June 2001, the FASB approved the issuance of SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS 143 establishes accounting standards for the recognition and measurement of legal obligations associated with the retirement of tangible
long-lived assets and requires recognition of a liability for an asset retirement obligation in the period in which it is incurred. The provisions of this statement are effective for
financial statements issued for fiscal years beginning after June 15, 2002. The Company currently anticipates that adoption of this statement will not have a material impact on its consolidated
financial statements.

In
October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets."
SFAS 144 addresses financial accounting for the impairment or disposal of long-lived assets. The provisions of this statement are effective for financial statements issued for
fiscal years beginning after December 15, 2001. The Company currently anticipates that adoption of this statement will not have a material impact on its consolidated financial statements.

In
April 2002, the FASB issued SFAS No. 145, "Rescission of SFAS No. 4, 44, 64, Amendment of SFAS No. 13, and Technical
Corrections." SFAS 4, which was amended by SFAS 64, required all gains and losses from the extinguishment of debt to be aggregated and, if material, classified as an
extraordinary item, net of related income tax effect. As a result, the criteria in Opinion 30 will now be used to classify those gains and losses. SFAS 13 was amended to eliminate an
inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. The Company has not entered into any sale-leaseback transactions and management anticipates the adoption of SFAS 145 will not have a
material impact on the Company's consolidated financial statements.

In
July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." Generally,
SFAS 146 provides that defined exit costs (including restructuring and employee termination costs) are to be recorded on an incurred basis rather than on a commitment basis as is presently
required. SFAS 146 is effective for exit or disposal activities initiated after December 31, 2002. The Company currently anticipates that adoption of this statement will not have a
material impact on its consolidated financial statements.

9

---

In
December 2002, the FASB issued SFAS No. 148,"Accounting for Stock-Based CompensationTransition and
Disclosure."SFAS 148 amends the transition and disclosure requirements of SFAS No. 123,"Accounting for Stock-Based
Compensation."Certain of the disclosure requirements are required for all companies, regardless if the fair value method or intrinsic value
method is used to account for stock-based employee compensation arrangements. The Company continues to account for its incentive stock option plan under the intrinsic value method in accordance with
the recognition and measurement principles of APB Opinion No. 25,"Accounting for Stock Issued to Employees."The amendments to SFAS 123
will be effective for financial statements for fiscal years ended after December 15, 2002 and for interim periods beginning after December 15, 2002. The Company anticipates that the
adoption of SFAS 148 will not have an impact on the Company's consolidated financial statements.

NOTE
DINVENTORIES

Inventories
are stated at the lower of cost (first in, first out) or market.

Inventories
consist of:

November 30,
2002

February 28,
2002Raw materials and work-in-process

$
7,501,000

$
14,478,000Finished goods


24,547,000


19,082,00032,048,000


33,560,000Reserves for obsolescence


(2,070,000
)

(1,640,000
)$
29,978,000

$
31,920,000


10

---

NOTE ELONG-TERM DEBT

Long-term debt consisted of the following:

November 30,
2002

February 28,
2002Term loan facility; floating interest rate based on an adjusted LIBOR rate (4.25% as of November 30, 2002), quarterly principal payments of $313,000 through November 2005; collateralized by assets of
Aydin Display, Inc.

$
3,750,000

$
4,375,000Term loan facility (converted from line of credit on August 1, 2002); interest rate of prime (4.25% as of November 30, 2002) plus 1.75%, monthly principal payments of $57,000 payable through July 31, 2004; collateralized by the receivables
and inventory of Fox International, Ltd., Inc.


2,582,000


Note payable to bank; interest rate of prime (4.25% as of November 30, 2002) plus 1.5% monthly, principal payments of $9,000 payable through May 2010; collateralized by assets of XKD Corporation.


608,000


656,000Mortgage note payable to bank; interest not to exceed 7.5% and maturing December 2003; collateralized by land and building of Fox International, Ltd., Inc.


600,000


627,000Mortgage note payable to bank; interest rate of prime plus 0.5%; monthly principal and interest payments of $5,000 commenced in May 2002 and payable through October 2021; collateralized by land and building of Teltron Technologies, Inc.


591,000


509,000Other


573,000


231,0008,704,000


6,398,000Less current maturities


(2,739,000
)

(1,443,000
)$
5,965,000

$
4,955,000


NOTE FLINES OF CREDIT

In May 2001, the Company and its primary bank agreed to consolidate an existing line of credit and term note payable into a $10,000,000 credit facility.
The interest rate on the line of credit is based on a floating LIBOR rate (3.9% at November 30, 2002), based on a ratio of debt to EBITDA, as defined. The note matures on July 1, 2003,
and accordingly has been classified as current on the November 30, 2002 balance sheet. The amount of credit available for advance was reduced by $500,000 on July 1, 2001. A second
scheduled reduction of $500,000 scheduled for July 1, 2002 was extended indefinitely while the company currently negotiates changes to the line of credit. Advance rates remain the same as under
the previous line, including a commitment fee of 0.25% for the unused portion. The agreement contains affirmative and negative covenants, including requirements related to tangible net worth and debt
service coverage. Additionally, dividend payments, capital expenditures and acquisitions

11

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have
certain restrictions. Substantially all of the Company's retained earnings are restricted based upon these covenants. As of November 30, 2002, the Company was not in compliance with
certain covenants due to the third quarter adjustment and write-off of inventories, equipment, and other assets as a result of the internal reorganization and closure of three facilities.
Subsequent to November 30, 2002, the bank has waived those covenant violations with respect to the fiscal quarter ended November 30, 2002. As of November 30, 2002, the outstanding
balance on the line of credit was $9,191,000.

On
August 1, 2002, the Company converted its wholesale consumer parts (Fox International) line of credit facility to a term loan facility.

NOTE GSUPPLEMENTAL CASH FLOW INFORMATION

Cash Paid for:

Nine Months EndedNovember 30,
2002

November 30,
2001Interest

$
759,000

$
1,213,000Income taxes, net of refunds

$
477,000

$
1,306,000Non-cash Transactions:Issuance of redeemable common stock for purchase of inventory

$
100,000

$
Conversion of convertible debentures to common stock

$


$
775,000


NOTE HEARNINGS PER SHARE

Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of shares outstanding during each year.
Shares issued or repurchased during the year are weighted for the portion of the year that they were outstanding. Diluted earnings per share is calculated by dividing net income (adjusted for interest
savings, net of tax, on assumed subordinated debenture conversion) by the actual shares outstanding and share equivalents that would arise from the exercise of stock options and the assumed conversion
of debentures when such assumption have a dilutive effect on the calculation. Out-of-the-money (exercise price higher than market price) stock options are excluded
from the calculation because they are anti-dilutive.

12

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The
following table sets forth the computation of basic and diluted earnings per share for the three and nine-month periods ended November 30, 2002 and 2001:

|                             |                                                                   | Three Months Ended
November 30, |   | Nine Months Ended
November 30,
|---------------------------- | ----------------------------------------------------------------- | ------------------------------- | - | ------------------------------
|
|Numerator for basic EPS:     |                                                                   |                                 |   |                               
|                             | Net income (loss)                                                 |                                 | $ | (4,924,000                    
|Denominator for Basic EPS:   |                                                                   |                                 |   |                               
|                             | Beginning shares outstanding                                      |                                 |   | 4,764,000                     
|                             | Additional shares issued                                          |                                 |   |                              
|                             | Repurchased shares                                                |                                 |   | (3,000                        
|                             | Weighted average shares outstandingBasic                         |                                 |   | 4,761,000                     
|Numerator for diluted EPS:   |                                                                   |                                 |   |                               
|                             | Net income (loss)                                                 |                                 | $ | (4,924,000                    
|                             | Interest savings, net of tax, on assumed conversion of debentures |                                 |   |                              
|                             | Adjusted net income                                               |                                 | $ | (4,924,000                    
|Denominator for diluted EPS: |                                                                   |                                 |   |                               
|                             | Weighted average shares outstandingBasic                         |                                 |   | 4,761,000                     
|                             | Effect of dilutive stock options                                  |                                 |   |                              
|                             | Assumed conversion of debentures                                  |                                 |   |                              
|                             | Weighted average shares outstandingDiluted                       |                                 |   | 4,761,000                     

For
the three and nine months ended November 30, 2002, stock options and assumed conversion of debentures were not included in the diluted earning per share calculations as their
inclusion would have been anti-dilutive because of the net losses experienced in those respective periods.

13

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Video Display Corporation and Subsidiaries

PART I

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the attached interim consolidated financial statements and with the Company's 2002 Annual Report to
Stockholders, which included audited financial statements and notes thereto for the fiscal year ended February 28, 2002, as well as Management's Discussion and Analysis of Financial Condition
and Results of Operations.

Results of Operations

The following table sets forth, for the three and nine months ended November 30, 2002 and 2001, the percentages which selected items in the Statements of
Operations bear to total sales:

|                              |                                              | Three Months
Ended November 30, |                   | Nine Months
Ended November 30, |     
|----------------------------- | -------------------------------------------- | ------------------------------- | ----------------- | ------------------------------ | ----
|
|Sales                         |                                              |                                 |                   |                                |     
|                              | CRT Segment                                  |                                 |                   |                                |     
|                              |                                              | Data Display CRT's              |                   | 13.5                           | %   
|                              |                                              | Entertainment CRT's             |                   | 7.8                            |     
|                              |                                              | Electron Guns and Components    |                   | 2.2                            |     
|                              |                                              | Monitors                        |                   | 52.6                           |     
|                              |                                              |                                 |                   |                                |     
|                              |                                              |                                 | Total CRT Segment |                                | 76.1
|                              | Wholesale Consumer Parts Segment             |                                 | 23.9              |                                | 18.7
|                              |                                              |                                 |                   |                                |     
|                              |                                              | 100.0                           | %                 | 100.0                          | %   
|Costs and expenses            |                                              |                                 |                   |                                |     
|                              | Cost of goods sold                           |                                 | 94.7              | %                              | 66.0
|                              | Selling and delivery                         |                                 | 10.6              |                                | 9.4 
|                              | General and administrative                   |                                 | 20.4              |                                | 18.1
|                              | Recognized foreign currency translation loss |                                 | 7.1               | %                              |    
|                              |                                              |                                 |                   |                                |     
|                              |                                              | 132.8                           | %                 | 93.5                           | %   
|Income (loss) from operations |                                              | (32.8                           | )%                | 6.5                            | %   
|Interest expense              |                                              | (2.5                            | )%                | (1.9                           | )%  
|Other income (expense)        |                                              | 0.3                             |                   | (0.2                           | )   
|                              |                                              |                                 |                   |                                |     
|Income before income taxes    |                                              | (35.0                           | )%                | 4.4                            | %   
|Provision for income taxes    |                                              | (8.0                            | )                 | 1.7                            |     
|                              |                                              |                                 |                   |                                |     
|Net income (loss)             |                                              | (27.0                           | )%                | 2.7                            | %   
|                              |                                              |                                 |                   |                                |     

Net sales

Consolidated net sales increased $1,206,000 and $3,332,000 for the three and nine months ended November 30, 2002 as compared to the same period ended
November 30, 2001. CRT segment sales increased $34,000 and $944,000 for the three and nine months comparative periods ended

14

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November 30,
2002. The wholesale parts segment increased $1,172,000 and $2,388,000 for the three and nine months comparative periods ended November 30, 2002.

Overall
CRT segment sales were flat for the third quarter ended November 30, 2002 as compared to one year ago. The data display division sales for the quarter increased $406,000.
There were offsetting declines in sales for the quarter within this segment in the entertainment and monitor divisions of $171,000 and $212,000, respectively. The component division sales were
relatively flat for the comparative periods.

The
increase in comparative quarterly sales for the data display division is primarily attributed to increases within the European market. The Company's UK location posted increases to
sales of $343,000 for the quarter.

The
decline of entertainment sales is the net result of declines in television tube sales of $301,000 offset by increases in projection tube sales of $130,000. The Company continues to
expand its marketing efforts of projection tubes for use in home theater and commercial applications through greater direct sales contact and internet marketing. While the Company continues to
maintain its majority of the market share of the television tube replacement market, there continues to be declines due to depressed overall economic conditions. The Company's entertainment sales
revenues have been negatively impacted by the reduced volume requirements of two of its largest customers of replacement tubes.

The
monitor division's overall decline reflects the impact of the closure of the Wolcott facility and the continued loss of sales at the MegaScan facility accounting for $905,000 of the
$212,000 overall decline for the nine month period. The Lexel operations, based in Kentucky, had a decline in sales in the comparable quarter of $699,000, but for the nine month period showed an
increase of $747,000 over last year. Lexel had to locate a new source for certain raw materials used in production and had to make adjustments to a manufacturing process that delayed shipments during
the third quarter. Lexel began to ship in the latter part of the third quarter against the increased backlog that arose from these delays. The Company's Florida location, which supplies projection
display products used in simulation, commercial and home theatre applications, continues to contribute increased revenues in the monitor
division. The Florida location increased its sales by $1,359,000 and $3,653,000 for the three and nine months comparatives, respectively.

The
wholesale consumer parts segment reflects growth as well in the three and nine month periods ended November 30, 2002. This segment's growth is attributed to the additions of
the Applica and Norelco distribution agreements. These distribution agreements added $1,037,000 and $2,900,000 for the three and nine month periods as compared to one year ago.

Gross margins

Consolidated gross profit margins decreased from 34.0% and 31.9% to 5.3% and 22.5% for the three and nine months ended November 30, 2002 as compared to
November 30, 2001. Included in the third quarter of fiscal 2003 are write-downs and write-offs of inventories and manufacturing equipment in the amount of $4,896,000 related to the
closing of operations in Mexico, Wolcott, MegaScan, and Aydin UK operations. These locations, which during the past few years had experienced reduced sales volume, lower margins due to aging product
lines with limited potential for future product development and high overhead were part of an internal restructuring of operations. Other locations within the Company with excess capacity and newer,
complementary product lines were determined to be the successors of these related customer bases. As such, certain raw materials inventories and equipment used in the manufacturing process of these
closed locations were written down or off as the Company has been able to more affordably source these products from overseas vendors or to shift the processes to more efficient locations within the
Company. Management determined it cost prohibitive to physically transfer the related materials and equipment to other Company locations. Included in the

15

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above
charge to cost of sales in the third quarter of fiscal 2003 was a write-down of $1,082,000, which reflects the carrying cost of inventories previously manufactured by the Mexican
operation to current net realizable value as well as the write-off of older or large quantity stocks.

The
remainder of the decrease in CRT segment margins is primarily attributed to the margin reductions of the Florida location which declined from 50.2% to 38.7% for the nine months ended
November 30, 2002 as compared to November 30, 2001. This decline is due to the fact that products sold in the previous year included inventories acquired at significantly reduced costs
related to the acquisition of the Marquee product line in the third quarter of fiscal 2002. As these inventories have been sold, replacement items have been purchased at current market
costs and, thus, have increased the cost of items produced. Margins in the current year of 38.7% are more reflective of what is expected in the future.

The
wholesale consumer parts segment increased to 46.4% from 39.0% and to 44.5% from 37.4% for the same comparative periods. The increase in the wholesale consumer parts segment margins
is largely attributable to the Applica Inc. and Norelco distribution agreements. The revenues associated with these agreements include primarily handling charges and shipping income, which
accounts for an approximately 79% profit margin before the effects of offsetting operating expenses.

Operating expenses

Operating expenses as a percentage of sales increased from 27.5% to 38.0% and from 26.4% to 30.0% for the three and nine months ended November 30, 2002 as
compared to November 30, 2001. Included in operating expenses for the third quarter were write-offs of accounts receivable and other assets in the amount of $572,000 related to the
Mexico manufacturing location that was in the process of being shut down. A non-cash charge of $1,296,000 was recognized in the third quarter ended November 30, 2002 for the
cumulative foreign currency translation adjustment to reflect the impairment of the Company's investment in the Mexican subsidiary. Offsetting these increases, the Company adopted SFAS No. 142
at the beginning of fiscal 2003, and, accordingly, ceased amortization of goodwill at that time. Goodwill amortization expense was $81,000 and $243,000 for the three and nine months ended
November 30, 2001, respectively.

The
wholesale parts segment operating expenses were up $1,018,000 for the nine month comparative periods, but as a percentage of sales it increased from 40.0% to 40.9%. The increase is a
factor of the increased delivery, labor and commission expenses associated with the Applica and Norelco revenue increases.

Interest expense

Interest expense increased $123,000 and decreased $99,000 for the three and nine months ended November 30, 2002 as compared to a year ago. The Company
maintains various debt agreements with differing interest rates, most of which are based on the prime rate or LIBOR. LIBOR and prime rates were slightly lower during the comparable periods. While
overall debt decreased from November 30, 2001 to November 30, 2002 by approximately $620,000, the mix of interest rates changed. There were increased borrowings of $700,000 from an
officer of the Company which carries an interest rate of prime plus 1%.

Income taxes

The effective rate for the nine months ended November 30, 2002 as compared to November 30, 2001 is a benefit of 19.7% as compared to charge of
38.6%. The effective tax rate for the nine months ended November 30, 2002 was lower than the Federal Statutory rate due to differences between income tax and financial reporting purposes
relating primarily to the abandonment of Mexican net operating losses and the effect of state income taxes.

16

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Liquidity and capital resources

As of November 30, 2002, the Company had total cash and cash equivalents of $1,894,000. The Company's working capital was $16,553,000 and $27,569,000 at
November 30, 2002 and February 28, 2002, respectively. Included in the decrease in working capital of $11,016,000 were effects of reclassifications of the line of credit from
long-term to current due to the July 1, 2003 maturity date and the conversion of another line of credit previously reported as current, to a term note maturing in 2004. These
reclassifications reduced working capital by $5,998,000 for the comparative periods. Additionally, decreases in working capital are a direct result of the fiscal 2003 third quarter adjustment of
$3,472,000 (net of tax benefit) of inventories and other current assets resulting from the internal reorganization of the Company and the $1,296,000 cumulative foreign currency translation adjustment
related to the closure of the Mexican operations. The remaining declines in working capital of $280,000 are primarily the result of increases to inventory funded by increases to accounts payable
offset by better collection of accounts receivable as compared to a year ago.

Cash
provided by operations for the nine-month period ended November 30, 2002 was $1,873,000 as compared to cash used in operations of $262,000 in the same period a
year ago. Net losses for the nine months ended November 30, 2002, adjusted for non-cash items provided cash of $3,859,000. Increases in inventories used cash of $2,355,000 for the
nine months ended November 30, 2002. Increases in accounts receivables and prepaid expenses used cash of $1,311,000. Increases in accounts payable and accrued liabilities provided cash of
$1,680,000. During the nine months ended November 30, 2001, net income adjusted for non-cash items provided $2,672,000. Increases in inventories, prepaids and accounts receivable
used cash of $2,596,000. Decreases in accounts payable used cash of $338,000. Fluctuations in receivables and inventories are primarily a function of sales levels and better collection results during
the first nine months of fiscal 2003.

Investing
activities used $965,000 for the nine months ended November 30, 2002. Included in this amount was $1,123,000 of additions to property, plant and equipment. Constructions
costs for a building addition represented $479,000 of this total.

Financing
activities used cash of $675,000 for the nine month period ended November 30, 2002. Of this amount, $46,000 was used to repurchase Company common stock and the remainder
was used to repay long-term debt.

The
Company has completed the process of consolidating its Horsham, PA location into the newly enlarged Birdsboro, PA facility. Total construction costs included in the nine months ended
November 30, 2002 was $157,000. The Company obtained $371,000 of low interest financing from the Pennsylvania Industrial Development Authority to finance these costs. Additional financing in
the amount of approximately $175,000 is expected to be completed by the end of the fiscal year. This financing will be used to offset costs already incurred by the Company.

The
Company continues to examine its operating cash needs and is currently investigating financing opportunities to ease its current cash and debt situations. The Company has experienced
growth in certain divisions, requiring investment in inventories. Additionally, the Company has had to fund costs associated with shutdowns and relocations of three facilities. The Company has
obtained financing from the CEO to assist in this short term situation but is in negotiations with its current lender to expand its current line to meet the future operating needs of the Company.

Critical Accounting Policies

Management's Discussion and Analysis of Results of Operations and Financial Condition are based upon the Company's consolidated financial statements. These
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the use of estimates and assumptions that
affect amounts reported and disclosed in

17

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the
financial statements and related notes. The accounting policies that may involve a higher degree of judgments, estimates, and complexity include reserves on inventories, the allowance for bad
debts and warranty reserves. The Company uses the following methods and assumptions in determining its estimates:

Reserves on inventories

Reserves on inventories result in a charge to operations when the estimated net realizable value declines below cost. Management regularly reviews the Company's
investment in inventories for declines in value and establishes reserves when it is apparent that the expected realizable value of the
inventory falls below its original cost. The age of the inventory is not as significant as is the projected demand for CRTs. Management is able to identify consumer buying trends, such as size and
application, well in advance of supplying replacement CRTs. Thus, the Company is able to adjust inventory-stocking levels according to the projected demand. The average life of a CRT is five to seven
years, at which time the Company's replacement market develops. These reviews include observations of product development trends of the OEM's, new products being marketed, and technological advances
relative to the product capabilities of the Company's existing inventories.

Allowance for bad debts

The allowance for bad debts is determined by reviewing known customer exposures and applying historical credit loss experience to the current receivable portfolio
with consideration given to the current condition of the economy, assessment of the financial position of the creditors and overall trends in past due accounts compared to established thresholds. The
company monitors credit exposure and assesses the adequacy of the allowance for bad debts on a regular basis.

Warranty reserves

The warranty reserve is determined by recording a specific reserve for known warranty issues and a general reserve based on historical claims experience. Actual
claims incurred could differ from the original estimates, requiring adjustments to the reserve.

Other Accounting Policies

Other loss contingencies are recorded as liabilities when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable.
Disclosure is required when there is a reasonable possibility that the ultimate loss will exceed the recorded provision. Contingent liabilities are often resolved over long time periods. Estimating
probable losses requires analysis of multiple factors that often depend on judgments about potential actions by third parties.

Forward-Looking Information

This report contains forward-looking statements and information that is based on management's beliefs, as well as assumptions made by, and information currently
available to management. When used in this document, the words "anticipate", "believe", "estimate", "intends", "will", and "expect" and similar expressions are intended to identify forward-looking
statements.

Such
statements involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: business conditions, rapid or
unexpected technological changes, product development, inventory risks due to shifts in product demand, competition, domestic and foreign government relations, fluctuations in foreign exchange rates,
rising costs for components or unavailability of components, the timing of orders booked, lender relationships, and the risk factors listed from time to time in the Company's reports filed with the
Commission.

18

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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company's primary market risks include fluctuations in interest rates and variability in interest rate spread relationships, such as prime to LIBOR spreads.
Approximately $26,663,000 of outstanding debt at November 30, 2002 related to long-term indebtedness under variable rate debt. Interest on the outstanding balance of this debt will
be charged based on a variable rate related to the prime rate or the LIBOR rate. Both rate bases are incremented for margins specified in their agreements. Thus, the Company's interest rate is subject
to market risk in the form of fluctuations in interest rates. The effect of a hypothetical one percentage point increase across all maturities of variable rate debt would result in an decrease of
approximately $267,000 in pre-tax net income assuming no further changes in the amount of borrowings subject to variable rate interest from amounts outstanding at November 30, 2002.
The Company does not trade in derivative financial instruments.

The
Company has a subsidiary in the U.K., which is not material, but uses the British pound as its functional currency. Due to its limited operations outside of the U.S., the Company's
exposure to changes in foreign currency exchange rates between the U.S. dollar and foreign currencies or to weakening economic conditions in foreign markets is not expected to significantly effect the
Company's financial position.

Beginning
January 1, 1997, the Company reported its Mexican subsidiary on the basis of the functional currency being the U.S. dollar as over 90% of the subsidiary's sales and
purchases were with the parent with accounts receivable and accounts payable settled in U.S. dollars. Due to the winding down of the Mexican subsidiary operations in the third quarter of fiscal 2003,
cumulative foreign currency translation losses of $1,296,000 previously included as a separate component of shareholders' equity were recognized in operating expense. These translation losses
accumulated prior to January 1, 1997, when the functional currency of this subsidiary was the Mexican peso.

ITEM 4.    CONTROLS AND PROCEDURES



19

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Video Display Corporation and Subsidiaries

PART II

Item 1.    Legal Proceedings

No new legal proceedings or material changes in existing litigation occurred during the quarter ended November 30, 2002.

Item 2.    Changes in Securities and Use of Proceeds

None.

Item 3.    Defaults upon Senior Securities

None.

Item 4.    Submission of Matters to a Vote of Security Holders

None.

Item 5.    Other information

None

Item 6.    Exhibits and Reports on Form 8-K

No reports on Form 8-K were filed or required to be filed during the quarter ended November 30, 2002.

20

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereto duly authorized.

|              |  | VIDEO DISPLAY CORPORATION
|------------- |  | -------------------------
|June 13, 2003 |  | By:                      
|              |  | By:                      

21

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CERTIFICATION PURSUANT TO  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I,
Ronald D. Ordway, certify that:

|Date: June 13, 2003 |  | /s/RONALD D. ORDWAYRonald D. Ordway Chief Executive
Officer
|------------------- |  | -----------------------------------------------------------

22

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CERTIFICATION PURSUANT TO  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I,
Carol D. Franklin, certify that:

|Date: June 13, 2003 |  | /s/CAROL D. FRANKLINCarol D. Franklin Chief Financial
Officer
|------------------- |  | -------------------------------------------------------------

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