<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20552

                                   FORM 10-K

               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended                      Commission file number
February 28, 1999                                    0-13394

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

Georgia                                               58-1217564
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                    Identification No.)

              1868 Tucker Industrial Drive, Tucker, Georgia 30084
             (address of principal executive offices and zip code)

Registrant's telephone number, including area code:          (770) 938-2080

Securities Registered Pursuant to Section 12(b) of the Act:  NONE

Securities Registered Pursuant to Section 12(g) of the Act:

                                                        Name of each exchange
Title of each class                                      of which registered

Common stock (no par value)                                  NASDAQ/NMS

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) 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 X     No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of the
registrant at May 19, 1999 is $10,714,885.

The number of shares outstanding of the registrant's Common Stock as of May 19,
1999 is 3,920,027.

                  DOCUMENTS INCORPORATED BY REFERENCE HEREIN

Certain exhibits which were filed with the Securities and Exchange Commission as
part of the registrant's Registration Statement on Form S-18 (Commission File
No. 2-94626-A) are incorporated by reference into Part IV.

Portions of the proxy statement for the annual 1999 shareholders meeting are
incorporated by reference into Part III.
<PAGE>

                                    PART I

ITEM 1.   BUSINESS

General

Video Display Corporation (the "Company") principally manufactures and
distributes cathode ray tubes ("CRTs") in the worldwide replacement market for
use in television sets and data display screens for medical, military and
industrial monitoring systems as well as manufacturing and distributing electron
optic parts which are significant components in new and recycled CRTs and
monitors. The Company also manufactures low and high-end monochrome and color
CRT and AMLCD monitor displays for use in specialty high performance and
ruggedized applications. The Company also acts as a wholesale distributor of
electronic parts and CRTs purchased from domestic and foreign manufacturers. The
Company's operations are principally located in the US; however, the Company
does have subsidiary operations located in Mexico, the UK and the Netherlands.


Description of Principal Business

Video Display Corporation was incorporated in the State of Connecticut in 1975,
and through a tax free reorganization became a Georgia corporation in 1984.  The
Company began its operations as a single recycling plant in Stone Mountain,
Georgia providing replacement CRTs for color and black/white television sets.
Beginning in 1983, with the growth of the computer industry, the Company
expanded to meet the needs of the replacement market for computer monitors and
other data display screens.  To accomplish this objective, the Company acquired
production equipment and customers from other smaller CRT remanufacturers. In
fiscal 1993, the Company, through its Mexican subsidiary Video Electronics S.A.
de C.V. ("Video Electronics"), obtained the CSA (Canadian Standards Association)
and UL (Underwriters Laboratory) safety approvals for its recycled products.
The Company and its plants in Louisiana, Pennsylvania, Georgia, Texas, New York,
Massachusetts and Monterrey, Mexico combine to form a national CRT-OEM (original
equipment manufacturer) manufacturing and distribution network with recycling
capabilities and years of OEM production experience.

In November 1998, the Company acquired the assets and assumed certain
liabilities of the U.S. and U.K. Display Divisions of Aydin Corporation
("Aydin").  Aydin offers a complete line of high-resolution commercial and
ruggedized CRT monitors, AMLCD flat panel displays and monitors used by the
public and private sector industries including medical diagnostic or treatment
centers, utility and financial companies, and the military industry.  In late
February 1999, the Company purchased the net assets of MegaScan Corporation
("MegaScan") which offers a complete line of high-resolution monochrome CRT
monitors to the medical display industry.

During June 1998, the Company acquired 100% of the outstanding common stock of
Mengel Industries, Inc. ("MII") located in Sanatoga, Pennsylvania. MII supplies
independent, OEM and hospital service personnel with CRTs, camera tubes and
other components for medical imaging within the healthcare industry.

In March 1998, the Company acquired the net assets of Wintron, Inc. ("Wintron").
Wintron manufactures high quality custom designed deflection components, high
voltage power supplies, coils and flyback transformers and other CRT drive
circuitry for airborne, commercial and military applications.

In fiscal 1996, the Company acquired the assets and assumed certain of the
liabilities of Teltron Technologies, Inc. ("Teltron") and the stock of Z-Axis,
Inc. ("Z-Axis").  Teltron is involved in the development and production of new
and recycled camera and cathode ray tubes and special purpose sensors.
Teltron's products are used in camera tube applications including nuclear
inspection, UV sensing,

                                       1
<PAGE>

x-ray and astronomy; military applications including avionics instrument
displays, marine radar displays, helmet mounted displays, vehicular displays,
and target monitoring image tubes; and in cathode ray tube applications
including OEM displays, flying spot scanners, photo typesetting and
electrostatic deflection tube applications. Z-Axis is involved in the design and
production of color and monochrome video display monitors. Z-Axis' monitors are
used in industrial control, medical instruments, test equipment, visual aid
devices, on-board tracking systems, point-of-sale terminals and naval tactical
displays.

The Company, through its acquisitions of Southwest Vacuum Devices, Inc.
("Southwest") formerly of Tucson, Arizona, now located in Atlanta, Georgia; a
majority interest in English based Video Display (Europe) Ltd. ("VDC, Ltd.") and
the majority of the outstanding shares of Apex Electronics, Inc. ("Apex") of
Passaic, New Jersey is involved in the manufacturing, marketing and distribution
of electron guns and related hardware.  The electron gun is the main component
of a CRT and these companies give Video Display the ability to supply virtually
all of its electron gun requirements.

In the late 1980's, the Company entered the market of wholesale distribution of
consumer electronic parts and consumer products and accessories with the
acquisitions of Fox International Ltd., Inc. ("Fox") of Cleveland, Ohio and
Vanco International, Inc. of Chicago, Illinois.  Fox later added locations in
Chicago, Illinois; Dallas, Texas; Setauket, New York and Orlando, Florida (New
York and Florida subsequently closed) by acquiring assets and existing leases of
operating distributors.  Upon acquiring these locations, Fox increased the total
inventory lines and implemented the Company's operating policies so that all
locations of Fox operate on a similar basis.  Fox is involved in the wholesale
distribution of consumer electronic parts for most major U.S. and foreign
electronic manufacturers.

Video Display Corporation continues to explore opportunities to expand the
products offered in the replacement market.  This expansion will be achieved by
adding new products to its inventory or by acquiring existing companies which
enhance the Company's position in the electronic replacement market.  Research
and development primarily consists of establishing the interchangeability of
products from various manufacturers and when advantageous, manufacturing
products to replace original electronic parts.

Industry Segments

This information is provided in the notes to consolidated financial statements,
Note 11, Page F-19.

Products

Cathode Ray Tubes ("CRTs")

Since its organization in 1975, Video Display Corporation has been engaged in
the distribution and manufacture of CRTs using new and recycled CRT glass bulbs,
primarily in the replacement market, for use in data display screens, including
computer terminal monitors, medical monitoring equipment and various other data
display applications and in television sets.  The Company currently markets CRTs
in over 3,000 types and sizes.

The Company's CRT operations are conducted at its facilities near Atlanta,
Georgia, and at facilities located in White Mills, Pennsylvania (Chroma);
Bossier City, Louisiana (Novatron); Monterrey, Mexico (Video Electronics);
Dallas, Texas (Magna View); Warwickshire, England (VDC, Ltd.); and Amsterdam,
Netherlands (VDC-Netherlands).  At each North American facility, the Company
manufactures new or recycles CRTs to meet original specifications. European
locations are sales and distribution facilities only.

The recycling process for monochrome CRTs involves the cleaning and
reconditioning of the glass bulb and the insertion of new electronic components,
which are purchased from original equipment manufacturers and the Company's
electron gun subsidiaries.  The Company's Atlanta and Monterrey, Mexico
facilities

                                       2
<PAGE>

also assemble monochrome CRTs using new glass bulbs obtained from suppliers in
standard sizes where customer requirements warrant the higher cost of new glass.
The recycling of color CRTs involves the insertion of new electronic components,
while leaving the original display screen intact. All CRTs manufactured by the
Company are tested for quality in accordance with standards approved by
Underwriter's Laboratories, Inc. and are shipped to customers or warehoused to
meet future customer demand. The Company provides one-year limited warranties on
its computer and other data display CRTs and two-year limited warranties on its
color television components. Management believes that the Company is the largest
recycler of CRTs in the domestic replacement markets for both television and
data display uses.

The Company also distributes new CRTs and other electronic tubes purchased from
original manufacturers, both domestic and international.  Some of these
manufacturers offer large quantities of overstocked original manufactured tubes
from time to time at significant price reductions.  The Company acquires these
tubes when the existing replacement market demonstrates adequate future demand
and the purchase price allows a reasonable profit for the risk.  However, these
purchased inventories sometimes do not turn as quickly as other inventories.  In
fiscal 1999, distribution of new CRTs purchased from domestic and foreign
manufacturers accounted for approximately seventy percent (70%) of the Company's
data display CRT sales.

The Company markets its products through approximately 250 independent wholesale
electronics distributors located throughout the U.S. and sells directly to
original equipment manufacturers and their service organizations.  The Company
also supplies, under private-brand labeling, many of the replacement tubes
marketed by several national brand name television set manufacturers.

In late fiscal 1996, the Company obtained a contract from a prime contractor
with the United States government to provide CRT assemblies for the AWACS
military aircraft.  Through February 28, 1999, the Company recognized $1.5
million in revenues under this contract, which is essentially complete.

In addition to factors affecting the overall market for such products, the
Company's sales volumes in both the color television and the data display CRT
replacement markets are dependent upon the Company's ability to provide prompt
response to customers' orders, while maintaining quality control and competitive
pricing.  While the Company's manufacturing activities are scheduled primarily
around orders received, it also manufactures a wide variety of CRTs for stock
inventory in anticipation of customer demand.

With its most recent acquisitions, the Company has begun to position itself to
compete in the design and manufacture of complete monitor units for use in the
healthcare, military and industrial sectors.

The Company's monitor operations are conducted at Phelps, New York (Z-Axis);
Birdsboro, Pennsylvania (Teltron); Horsham, Pennsylvania (Aydin); Sanatoga,
Pennsylvania (MII); and Billerica, Massachusetts (MegaScan).

The Company's monitor segment involves the design, engineering and manufacture
of a complete monochrome or color monitor unit using new CRTs or flat panel
displays.  The Company will customize these monitors for specific applications,
including ruggedization for military uses or size reduction due to space
limitations in industrial and medical applications.  Because of the Company's
flexible and cost efficient manufacturing, it is able to handle low volume
orders that generate higher margins.

Electron Guns and Components

The Company, through its electron gun manufacturing subsidiaries Southwest and
Apex, manufacture electron gun assemblies comprised of small metal and ceramic
parts in a glass housing.  The assembly process is highly labor intensive.
While the particular electron guns being sold are of the Company's own

                                       3
<PAGE>

design, most are replacements for electron guns previously designed for original
equipment CRTs used in television sets and computer monitors. Therefore, the
total amount of research and development expense is not significant and is not
segregated in the consolidated financial statements, but is instead included in
cost of sales. Raw materials consist of glass and metal stamped parts.

The electron gun division markets electron gun component parts to OEMs who
manufacture high resolution and specialty tubes for unique applications.  The
majority of electron guns produced by this division is consumed internally among
the Company's own CRT manufacturing facilities.  Sales to these related
divisions, which have been eliminated in the consolidated financial statements,
amounted to approximately $520,000 in fiscal 1999, 1998, and 1997, respectively.

Electron gun sales are historically dependent upon the demand by domestic and
foreign television CRT remanufacturers.  The Company continues to seek
alternative, growth-oriented markets to fully utilize its electron gun and
component assembly facilities.

The Company, through its acquisition of Wintron located in Howard, Pennsylvania,
has added another component parts manufacturer to its CRT family of products.
Wintron produces flyback transformers, coils and power transformers.
Intercompany sales transactions were only $10,000 for fiscal 1999 but may become
more significant as the Company's monitor segment grows.

Electronic Parts

Fox distributes consumer electronic parts of most major consumer electronics
manufacturers, both foreign and domestic.  Fox resells these products to major
electronic distributors, retail electronic repair facilities, third party
contractual repair shops and directly to consumers.  In its relationship with
consumer electronic manufacturers, Fox receives the right, frequently exclusive,
to ship parts to authorized dealers.  Many of the manufacturers also direct
inquiries for replacement parts to Fox.  Each manufacturer requires a
distributor to stock its most popular parts and monitors the order fill ratio to
insure that their customers have access to sufficient replacement parts.  Fox
maintains very high fill ratios in order to secure favored distributor status
from the manufacturers, requiring a significant investment in inventories.  To a
limited extent, Fox has the ability to rotate its stock with certain vendors to
mitigate any risk of investment in inventories.

The Company also imports, packages and distributes consumer electronic
accessories for mobile and home audio, video, telephone, CB radio and general
electronic usage through Vanco of Waukegan, Illinois.  Approximately 95% of
Vanco's product are purchased in bulk from various vendors in Southeast Asia and
repackaged for distribution.  Vanco primarily markets its products to retail
electronic repair facilities, third party contractual repair shops and directly
to the consumer.  Manufacturers refer many of their customers.  Vanco also
publishes a catalog that is primarily aimed at the small shop owner and the
personal consumer.  Some of the their products are resold by other distributors
of electronic parts under the Vanco and Marmac product names.

Research and Development

The objective of the Company's research and development activities is to
increase efficiency and quality in its manufacturing and assembly operations and
to enhance its products by implementing new developments in cathode ray and
electron optic technology.  The Company's commercial and military divisions
continue their research and development in advanced infrared imaging ("FLIR").
Recently, the Company has funded additional FLIR research in partnership with
the University of Rhode Island.  Potential future markets for FLIR include
military and security surveillance, target acquisition, fire fighting, and
industrial and medical thermography.  Through fiscal 1999 the Company  has not
incurred significant costs for basic research or new product development and
therefore, has not segregated them as a separate item but are included in the

                                       4
<PAGE>

consolidated financial statements as a part of costs of goods sold.  As the
Company continues to increase its development of new technology, these costs
will be monitored and separately categorized, if material.

Employees

As of February 28, 1999, the Company employed a total of 588 persons on a full
time basis.  Of these, 106 are employed in executive, administrative, and
clerical positions, 59 are employed in sales and distribution, and 423 are
employed in manufacturing operations.  Of the Company's 588 employees, 197 are
employed at the Company's Mexican subsidiary. Thirteen employees are represented
by a union. The Company believes its employee relations to be satisfactory.

Competition

Although the Company believes that it is the largest domestic recycler and
distributor of recycled CRTs in the United States CRT replacement market, it
competes with other CRT manufacturers, as well as OEMs, many of which have
greater financial resources than the Company.  The Company believes it is the
only company that offers complete service in replacement markets with its
manufacturing and recycling capabilities.  As a wholesale distributor of
original equipment purchased from other manufacturers, the Company also competes
with numerous other distributors, as well as the manufacturers' own distribution
centers, many of which are larger and have substantially greater financial
resources than the Company.  The Company's ability to compete effectively in
this market is dependent upon its continued ability to respond promptly to
customer orders and to offer competitive pricing.  The Company expects that
competition may increase, especially in the computer and other display
replacement markets, should domestic and foreign competitors expand their
presence in the domestic replacement markets.

Compared to domestic manufacturing prices on new CRTs, the Company's prices are
competitive due to lower manufacturing costs associated with recycling the glass
portion of previously used tubes which the Company obtains from customers and
others at a fraction of the cost of new glass.  The Company has, to date, been
able to maintain competitive pricing with respect to imported CRTs because,
generally, the CRT replacement market is characterized by customers requiring a
variety of types of CRTs in quantities not sufficiently large enough to absorb
the additional transportation costs incurred by foreign CRT manufacturers.

The Company believes it has a competitive advantage in providing CRTs to the
U.S. government through its Teltron subsidiary as this operation has over thirty
years experience in providing reliable products and services to the U.S.
government.

The Company believes that it has a competitive advantage in the monitor industry
due to its flexibility to handle lower volume orders as well as its ability to
provide internally produced component parts. As a result, the Company can offer
more customization in the design and engineering of new products.

The Company's competition in the consumer electronics parts segment comes
primarily from other parts distributors.  Many of these distributors are smaller
than the Company but a few are of equal or greater sales size.  Prices for major
manufacturers' products can be directly affected by the manufacturers' suggested
resale price.  The Company feels that its service to customers and warehousing
and shipping network give it a competitive advantage.  Growth is expected in the
product lines as the Company utilizes its advantages of offering a complete
inventory of parts and service to all of its different customer groups.

                                       5
<PAGE>

ITEM 2.  PROPERTIES

The Company leases its corporate headquarters at 1868 Tucker Industrial Drive in
Tucker, Georgia (within the Atlanta metropolitan area) and occupies
approximately 10,000 square feet of the total 59,000 square feet at this
location.  The remainder is utilized as warehouse and assembly facilities.  This
location as well as several others is leased from related parties at current
market rates. See "Item 13 - Certain Relationships and Related Transactions".

The following table details manufacturing, warehouse, and administrative
facilities:

<TABLE>
<CAPTION>

                Location        Square Feet        Lease Expires
                --------        -----------        -------------
<S>                             <C>                <C>
CRT and Electron Gun Manufacturing
          and Warehouse Facilities
----------------------------------

Tucker, Georgia                   59,000           October 31, 2003
Stone Mountain, Georgia           51,000           February 29, 2000
Stone Mountain, Georgia           45,000           December 31, 2001
Tucker, Georgia                   40,000           January 2, 2006
White Mills, Pennsylvania        110,000           Company Owned
Bossier City, Louisiana           26,000           Company Owned
Passaic, New Jersey               15,000           October 30, 1999
Dallas, Texas                     24,000           January 31, 2000
Monterrey, Mexico                129,000           Month to Month
Warwickshire, England              4,000           March 1, 2005
Phelps, New York                  20,000           Month to Month
Birdsboro, Pennsylvania           10,000           Company Owned
Phelps, New York                  32,000           Company Owned
Howard, Pennsylvania              19,000           Company Owned
Sanatoga, Pennsylvania             4,200           Month to Month
Horsham, Pennsylvania             84,000           March 31, 2002
Billerica, Massachusetts           7,900           March 31, 2000

Wholesale Electronic Parts Distribution
---------------------------------------

Solon, Ohio                       19,000           November 30, 2001
Bedford Heights, Ohio             60,000           Company Owned
Richardson, Texas                 10,000           Month to Month
Chicago, Illinois                 10,000           Month to Month
Waukegan, Illinois                25,000           December 30, 2000
</TABLE>

ITEM 3.    LEGAL PROCEEDINGS

None.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of the Company's security holders during the
fiscal year ended February 28, 1999 .

                                       6
<PAGE>

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
SHAREHOLDER MATTERS

The Company's common stock is traded on the over-the-counter market under the
symbol VIDE.

The following table shows the range of prices for the Company's common stock as
reported by the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") for each quarterly period beginning on March 1, 1997.

<TABLE>
<CAPTION>
                                                      For Fiscal Years Ended
                              --------------------------------------------------------------------
                                       February 28, 1999                 February 28, 1998
                              --------------------------------------------------------------------
Quarter Ended                        High              Low             High              Low
-------------
<S>                           <C>                     <C>             <C>               <C>
May                                 12.250            9.500            4.625            3.500
August                              12.250            7.000            6.750            4.000
November                             8.750            5.250            9.625            5.938
February                             8.500            5.188           14.500            8.125
</TABLE>

There were approximately 1,300 holders of record of the Company's common stock
as of April 20, 1999.

The Company has issued options to purchase shares of its common stock.  For more
specific information concerning the outstanding options, see "Item 11 -
Executive Compensation" and the notes to the consolidated financial statements.

The Company has not paid dividends in the past.  Payment of dividends in the
future will be dependent upon the earnings and financial condition of the
Company and other factors which the Board of Directors may deem appropriate.
The Company is restricted by certain loan agreements regarding the payout of
dividends.

                                       7
<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA

The following table sets forth certain selected financial data with respect to
the Company's last five fiscal years.

Data relating to the five fiscal years ended February 28, 1999 is derived from
the Consolidated Financial Statements appearing elsewhere in this Report or in
previous reports which have been audited by BDO Seidman, LLP, independent
certified public accountants. The selected consolidated financial data should be
read in conjunction with, and is qualified in its entirety by reference to, the
consolidated financial statements of the Company, the notes thereto and the
report thereon included elsewhere in this Report.

<TABLE>
<CAPTION>
                                                                    For Fiscal Years Ended
                                             ------------------------------------------------------------------
                                                 Feb. 28     Feb. 28,      Feb. 28,     Feb. 29,     Feb. 28,
                                                  1999         1998          1997         1996         1995
                                             ------------------------------------------------------------------
                                                            (In Thousands, Except Per Share Data)
<S>                                          <C>             <C>           <C>          <C>          <C>
Income Statement Data
Net sales                                       $58,889      $57,913       $53,865      $48,112      $48,440
Operating profit                                  3,594        6,941         3,970        3,704        1,227
Net income                                        1,122        3,541         1,898        1,779           10
                                             ------------------------------------------------------------------

Net income per share - basic                    $  0.28      $  0.90       $  0.49      $  0.45      $  0.00
Net income per share - diluted                  $  0.27      $  0.82       $  0.47      $  0.45      $  0.00
Average number of shares
  outstanding - basic                             3,941        3,921         3,907        3,968        4,129
Average number of shares
   outstanding - diluted                          4,448        4,455         4,197        3,969        4,129
                                             ------------------------------------------------------------------

Balance Sheet Data
Total assets                                    $51,641      $40,582       $40,887      $34,419      $34,161
Working capital                                  26,564       16,441        13,784       11,996       10,713
Long-term obligations (a)                        13,987        2,791         3,962        2,340        3,717
</TABLE>

(a)  Includes convertible debentures of $1,775,000 in fiscal 1999 and 1998 and
     $2,000,000 in 1997.

                                       8
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Safe Harbor Statement under the Private Securities Litigation Reform Act: Except
for the historical information contained herein, the matters discussed herein
are forward-looking statements that involve risk and uncertainties, including
but not limited to (i) economic, competitive, governmental and technological
factors affecting the Company's operations, markets, products, services and
prices, and (ii) other factors discussed in the Company's filings with the
Securities and Exchange Commission.

Results of Operations

The following table sets forth, for the fiscal years indicated, the percentages
which selected items in the Statements of Income bear to total revenues:

<TABLE>
<CAPTION>
                                              1999                         1998                        1997
                                   ------------------------     ------------------------     ----------------------
                                                           (in thousands, except percentages)

                                   Amount           %           Amount           %           Amount            %
<S>                                <C>           <C>            <C>           <C>            <C>            <C>
Sales:
CRT segment
 Data display CRTs                 $11,791        20.0%         $13,716        23.7%         $12,903         24.0%
 Entertainment CRTs                 11,651        19.8           11,428        19.7            9,063         16.7
 Electron guns and components        2,631         4.5            1,032         1.8              965          1.8
 Monitors                           11,311        19.2            8,126        14.0            5,254          9.8
Wholesale distribution segment
 Consumer electronic parts          21,505        36.5           23,611        40.8           25,680         47.7
                                   ------------------------     ------------------------     ----------------------
                                    58,889       100.0           57,913       100.0           53,865        100.0
                                   ------------------------     ------------------------     ----------------------

Costs and expenses:
Cost of goods sold                  38,897        66.1           35,951        62.1           35,509         65.9
Selling and delivery                 4,749         8.1            4,258         7.3            4,487          8.3
General and administrative          11,649        19.7           10,763        18.6            9,899         18.4
                                   ------------------------     ------------------------     ----------------------
                                    55,295        93.9           50,972        88.0           49,895         92.6
                                   ------------------------     ------------------------     ----------------------
Operating profit                     3,594         6.1            6,941        12.0            3,970          7.4
                                   ------------------------     ------------------------     ----------------------

Interest expense, net               (1,161)       (2.0)          (1,222)       (2.0)          (1,290)        (2.4)
Other income (expense)                (143)       (0.2)              30         0.0              (10)         0.0
                                   ------------------------     ------------------------     ----------------------
Income before income taxes           2,290         3.9            5,749        10.0            2,670          5.0
Provision for income taxes           1,168         2.0            2,208         3.8              772          1.4
                                   ------------------------     ------------------------     ----------------------
Net income                         $ 1,122         1.9%         $ 3,541         6.2%         $ 1,898          3.6%
                                   ========================     ========================     ======================
</TABLE>

Fiscal 1999 Compared to Fiscal 1998

Net Sales

Consolidated net sales for fiscal 1999 increased $976,000 or 1.7% over fiscal
1998 net sales.  Of this increase, the CRT segment sales increased $3,082,000 or
9.0%, which was offset by declines in sales of the wholesale distribution of
consumer electronic parts segment of $2,106,000 or 8.9%.

                                       9
<PAGE>

Within the CRT segment, data display CRT sales were down $1,925,000 or 14.0%,
television CRT sales were up $223,000 or 2.0%, electron gun sales were up
$1,599,000 or 155.0% and monitor sales were up $3,185,000 or 39.2%.

Data display CRT sales decreased $500,000 due to the completion of the AWACS
military contract during fiscal 1999. Additionally, there were reductions of
sales in the Company's U.K. facility of $508,000 from 1998 fiscal sales.  U.K.
sales have been impacted by market demands and a restructuring of the sales and
marketing organization.

Entertainment CRT sales were up slightly from fiscal 1998.  Projection TV sales
within this segment were down approximately $270,000.  Fiscal 1998 reflected
higher television CRT sales due to the increased fill rate of backorders of a
new customer, while fiscal 1999 sales to that customer were more in line with
normal expectations.

Component part sales were up $1.6 million.  This is attributable to one of the
Company's acquisitions during fiscal 1999, Wintron, which provided $1.8 million
to sales in the current year.  Excluding this acquisition, sales of the division
fell short of last year by $221,000.

Monitor segment sales were up for the comparative period by $3.2 million.  The
Company's 1999 acquisition of Aydin accounted for an increase of $3.9 million.
The offsetting decreases are due to completion of certain contracts for orders
for military and industrial sectors during fiscal 1999.  Additionally, there was
a decline in business as a major subsidiary, Z-Axis, was relocating to a newly
constructed company-owned facility during the fourth quarter.

The wholesale consumer electronic parts segment sales decreased from the prior
year by approximately $2.1 million or 8.9%. There was an overall decline in
sales to major electronics distributors of $1,009,000 or 4.3%.  Additionally,
this division continued to see trends of small distribution and consumer shops
being absorbed or eliminated by large discount chains.  The Company is seeking
other opportunities to increase higher margin consumer electronic sales. Fox
implemented an electronic parts inquiry and order system in fiscal 1999,
enabling customers to purchase via the Internet.

Gross Margins

Consolidated gross profit margin percentages decreased 10.5% in 1999 to 33.9%
from 37.9% in 1998. CRT segment profit percentages declined 15.0% to 32.8% and
the wholesale consumer electronics parts segment declined 3.0% to 35.3%.

During fiscal 1999, inventory was reduced $1.7 million due to changes in
estimates of realizability of certain products requiring a write down in value,
as well as reserves for obsolescence.  These adjustments negatively impacted
consolidated margins 2.9% and CRT segment margins 4.5% for fiscal 1999.

The decline in wholesale margins continues to be impacted by OEMs dictating
margins with set resale prices on in-warranty merchandise as well as overall
competition for the high volume accounts.  The Company continues to seek margin-
increasing lines of business, primarily through consumer sales via the Internet.

Operating Expenses

In fiscal 1999, operating expenses increased $1,377,000 or 9.2% over expenses in
fiscal 1998.  Included in these expenses is $1,455,000 of operating expenses
related to businesses acquired in fiscal 1999.  Excluding the acquisitions,
selling, general and administrative expenses were relatively flat in both dollar
amounts and as a percentage to sales.

                                       10
<PAGE>

Interest Expense

Interest expense declined $61,000 to $1,161,000 in fiscal 1999 while overall
debt has increased $9,257,000 from $11,945,000 in fiscal 1998 to $21,202,000 in
fiscal 1999. The increase in debt occurred primarily in the fourth quarter of
fiscal 1999 due to the acquisition of Aydin and the funding of that new
business. In addition, the Company increased debt for the February 1999
acquisition of MegaScan. The Company sought lower interest rates on this new
debt and currently pays a variable rate below prime on the new $7,500,000 debt
and renegotiated the rate on the line of credit and term note with its primary
bank to a fixed 7.25%. The rate on the line of credit with the secondary bank is
still prime plus 1/2%.

Income Taxes

The effective tax rate for fiscal 1999 was 51% compared to 38% in fiscal 1998.
Excluding the effect of foreign taxes primarily from the Company's Mexican
subsidiary, the effective rate is 40.3%, which is attributable to non-deductible
amortization of certain intangible assets.

Fiscal 1998 Compared to Fiscal 1997

Net Sales

Consolidated net sales for fiscal 1998 increased $4,048,000 or 7.5% over fiscal
1997 net sales. Of this increase, the CRT segment sales increased $6,117,000 or
21.7%, which was offset by declines in sales of the combined distribution of
consumer electronic parts segment of $2,069,000 or 8.1%.

Within the CRT segment, data display CRT sales were up $4,193,000 or 21.8%,
television CRT sales were up $1,857,000 or 23.1% and electron gun sales were up
$67,000 or 6.9%. All divisions comprising the CRT segment contributed to the
sales increases. One of the largest gains occurred within the television CRT
market with the Company being awarded a significant contract to perform the in
warranty and out of warranty service of replacement parts. Additionally, sales
increased at the Company's two newest data display division subsidiaries as they
continued to expand their corresponding market share of commercial and military
monitors. Also, the Company increased marketing efforts for projection and
commercial data display tubes which benefited sales $1.5 million in 1998.

The wholesale consumer electronic parts segment sales decreased from the prior
year. There was an overall decline in sales to major electronics distributors
during the year of approximately $500,000. Additionally, this division continued
to see declining trends of small distribution and consumer shops being absorbed
or eliminated by large discount chains.

Gross Margins

Consolidated gross profit margins increased 11.1% in fiscal 1998 to 37.9% from
34.1% in fiscal 1997. CRT segment margins increased 14.9% to 38.6% and wholesale
consumer electronics parts segment increased 5.2% to 36.4%.

The CRT segment margins are healthier due to the Company's ability to make
significant bulk purchases of tubes, primarily television tubes, at
significantly reduced prices and sell these tubes during the year. These tubes
are purchased from OEMs at the end of their production runs for use in the
replacement market. Additionally, the CRT segment had a higher plant utilization
at several of its locations where an increase in volume did not correspondingly
increase overhead rates and, in some facilities, direct labor costs, resulting
in a favorable impact to the Company's margins.

                                       11
<PAGE>

The increase in margins within the wholesale consumer electronic parts division
has been impacted due to two factors; bulk purchases of merchandise at reduced
prices as well as overall price increases within the consumer electronics
accessories product line. Included within these higher margins were increases to
the Company's inventory obsolescence reserve of $197,000 for the CRT segment and
$85,000 for the wholesale segment.

Operating Expenses

Operating expenses increased $324,000 or 2.0% considering the effect of the
annualization of expenses of the two subsidiaries acquired in fiscal 1997.
However, overall, operating expenses decreased in fiscal 1998 4.4% to 25.9% as a
percentage of sales.

Selling and delivery expenses decreased to $4,258,000 in spite of the increase
in sales due to increased productivity of the sales staff without correlating
increases in compensation as well as decreases in delivery expenses due to the
Company's focus on less expensive delivery practices, especially within the
wholesale parts division. Considering the effect of annualization discussed
above, general and administrative expenses remained flat.

Interest Expense

Interest expense declined $75,000 even though debt has declined from $15,832,000
at February 28, 1997 to $11,945,000 at February 28, 1998 . The major reduction
in the debt occurred in the latter half of the year. In conjunction with the
restructuring of the debt with banks, a portion of the debt was refinanced at a
slightly higher rate of prime plus 1% rather than prime plus 1/2%. Subsequent to
fiscal 1998, a significant portion of the higher interest rate debt was paid
down and a significant portion of long term debt was refinanced at a fixed rate
of 7.25%. Additionally, twelve months of interest expense was recognized in 1998
related to the subordinated debentures whereas only nine months impacted 1997.

Income Taxes

The effective tax rate for fiscal 1998 was 38.4% compared to 28.9% in fiscal
1997. The major component of this increase is related to the nontaxable profit
contribution via loss carryforward utilization of the Company's Mexican
subsidiary being significantly less in fiscal 1998.


Liquidity and Capital Resources

The Company's working capital was $26,564,000 and $16,441,000 at February 28,
1999 and 1998, respectively. During fiscal 1999, operations provided net cash of
$660,000, which was primarily used for business acquisitions and capital
expenditures. During fiscal 1998 and 1997, operations provided net cash of
$6,635,000 and $830,000, respectively, which was primarily used to repay debt in
1998 and for capital expenditures in 1997. The Company increased their debt
financing by approximately $9.2 million in fiscal 1999, which was used for
business acquisitions and capital expenditures.

In fiscal 1999, the Company renegotiated its interest rate with its primary
lender. The Company was successful in negotiating a favorable reduction on its
primary line of credit from prime plus 1/2% to a 7 1/4% fixed rate and extended
it for two years. New debt incurred for funding the Company's acquisition of
Aydin was also obtained at a rate below prime.

During May 1999, the Company negotiated with its primary lender to increase the
line of credit by an additional $1,000,000 to assist with startup expenses for
the Company's newest locations.

                                       12
<PAGE>

The Company continues to monitor its cash and financing positions, seeking to
find ways to lower its interest costs and to produce positive operating cash
flow. As in prior years, as sales contracts or acquisitions present themselves,
there could be an impact to working capital requirements. As in the past, the
intent is to finance such projects with existing bank lines; however, longer,
more permanent sources of capital may be required in certain circumstances.

Foreign Currencies

The Company reports 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 are with the parent with accounts receivable and accounts payable
settled or eliminated in U.S. dollars. Additionally, the subsidiary leases its
facilities and incurs rent based upon U.S. dollars. Any exchange gains or losses
due to the actual exchange of pesos and U.S. dollars is minimal. The Company
also has subsidiaries in the UK and the Netherlands, which are not material.

Year 2000 Risks

As is the case with other companies using computers in their operations, the
Company is faced with the task of addressing the Year 2000 issue during the next
year. The "Year 2000 Issue" arises from the widespread use of computer programs
that rely on two-digit date codes to perform computations or decision-making
functions.

As a result of this issue, the Company has taken steps to assess at the
corporate level, as well as at the subsidiary and branch level, all existing
hardware and software applications, computerized or date encoded production
equipment and other non technological systems including, but not limited to,
heating and air conditioning systems, telephone, voice mail and security
systems. The Company has also surveyed critical suppliers and critical
customers. None of the Company's products are date encoded and, therefore, are
not at risk to customers.

The assessment stage has been completed within the Company and a determination
of non-compliant systems has been made. At this point, all hardware and software
has been categorized as critical or non-critical. All critical hardware and
operating systems are compliant within the data display, entertainment and
component segments. Most of the locations in the monitor segment are currently
compliant with July 1, 1999 expected dates for those who are not (primarily the
Company's newest locations). The wholesale parts division will be compliant by
July 1, 1999. All non-critical hardware and software will be phased out or
replaced by July 1, 1999. Non technological systems are compliant.

The costs to be incurred by the Company for the upgrades of hardware and
software are estimated to be $500,000, of which $200,000 was incurred in fiscal
1999 and the balance is expected to be incurred in fiscal 2000. Other internal
time incurred for the labor and management of the project are not tracked
separately, but are not estimated to be material to the profits for the year. A
part of these projected costs would have been incurred regardless of the Year
2000 issue as a part of normal technological enhancements.

The Company's risks associated with the Year 2000 issue and any potential impact
on future earnings may be affected by the Company's customers' and suppliers'
readiness to meet any Year 2000 requirements. The Company has surveyed its
critical suppliers and customers and it does not appear that there are any Year
2000 issues with these parties. Based on the assessments completed to date, the
Company expects that should any of the suppliers or vendors fail to meet the
Year 2000 requirements, the financial impact and any resulting liabilities would
be minimal. While the Company expects to be completely compliant by July 1,
1999, it is still in the development stage of the contingency plans should it
fail to meet its requirements.

                                       13
<PAGE>

Management Estimates

The preparation of financial statements in conformity with Generally Accepted
Accounting Principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period. Examples
include provisions for returns, bad debts, inventory obsolescence and the length
of product life cycles and fixed asset lives. Actual results could vary from
these estimates.

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.

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS 133
establishes new accounting and reporting standards for derivative financial
instruments and for hedging activities. SFAS 133 requires an entity to measure
all derivatives at fair value and to recognize them in the balance sheet as an
asset or liability, depending on the entity's rights or obligations under the
applicable derivative contract. The Company will designate each derivative as
belonging to one of several possible categories, based on the intended use of
the derivative. The recognition of changes in fair value of a derivative that
affect the income statement will depend on the intended use of the derivative.
If the derivative does not qualify as a hedging instrument, the gain or loss on
the derivative will be recognized currently in earnings. If the derivative
qualifies for special hedge accounting, the gain or loss on the derivative will
either (i) be recognized in income along with an offsetting adjustment to the
basis of the item being hedged or (ii) be deferred in other comprehensive income
and reclassified to earnings in the same period or periods during which the
hedged transaction affects. SFAS 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. The adoption of SFAS 133 is
anticipated to have no effect on the Company.

During 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position 98-5,
"Reporting on the Costs of Start-up Activities." This SOP requires that the
costs of start-up activities, including organization costs, be expensed as
incurred. The guidance requires that the initial application should be reported
as the cumulative effect of a change in accounting principle. SOP 98-5 is
effective for fiscal years beginning after December 15, 1998. The Company has
adopted the provision of SOP 98-5 in fiscal year 1999. The Company has taken
steps to meet the requirements of SOP 98-5, which did not have a material impact
on the financial position and results of operations of the Company.

Impact of Inflation

Inflation has not had a material effect on the Company's results of operations
to date.

                                       14
<PAGE>

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this Item is submitted in a separate section of this report on
pages F-1 through F-27.


ITEM 9.  CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURES.

None.

                                       15
<PAGE>

                                   PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information contained in Video Display Corporation's Proxy Statement to be
filed within 120 days of the Company's 1999 fiscal year end, with respect to
directors and executive officers of the Company, is incorporated herein by
reference in response to this item. In no event shall the information contained
in Video Display Corporation's Proxy Statement under the heading "Compensation
and Stock Option Committee Report" or under the heading "Performance Graph" be
incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

The information contained in Video Display Corporation's Proxy Statement to be
filed within 120 days of the Company's 1999 fiscal year end, with respect to
executive compensation and transactions, is incorporated herein by reference in
response to this item. In no event shall the information contained in Video
Display Corporation's Proxy Statement under the heading "Compensation and Stock
Option Committee Report" or under the heading "Performance Graph" be
incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

The information contained in Video Display Corporation's Proxy Statement to be
filed within 120 days of the Company's 1999 fiscal year end, with respect to
security ownership of certain beneficial owners and management, is incorporated
herein by reference in response to this item.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information contained in Video Display Corporation's Proxy Statement to be
filed within 120 days of the Company's 1999 fiscal year end, with respect to
certain relationships and related transactions, is incorporated herein by
reference in response to this item.

                                       16
<PAGE>

                                    PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)  The following documents are filed as part of this report:

1.   Financial Statements:

Index to Consolidated Financial Statements.                      F-1

2.   Financial Statement Schedule:

Index to Consolidated Financial Statements Schedule.             F-25

(b)  Reports on Form 8-K:

The Company filed a report on Form 8-K on December 2, 1998 regarding the
acquisition of Aydin Displays. An amended Form 8-K will be filed, which will
include audited proforma information, when the applicable financial information
is gathered.

(c)    Exhibits


  Exhibit
  Number           Exhibit Description
-------------------------------------------------------------------------------

      *3(a)        Articles of Incorporation of the Company.

      *3(b)        By-Laws of the Company.

     *10(f)        Employee Stock Option Plan. **

     *10(i)        Lease dated January 1, 1992 by and between Registrant
                   (Lessee) and Ronald D. Ordway (Lessor) with respect to
                   premises located at 4601 Lewis Road, Stone Mountain, Georgia.

     *10(j)        Lease dated November 1, 1993 by and between Registrant
                   (Lessee) and Ronald D. Ordway (Lessor) with respect to
                   premises located at 1868 Tucker Industrial Road, Tucker,
                   Georgia.

     *10(k)        Lease dated January 1, 1996 by and between Registrant
                   (Lessee) and Ronald D. Ordway (Lessor) with respect to
                   premises located at 4701 Granite Drive, Tucker, Georgia.

         21        Subsidiary companies - see page F-28 herein.

    *    Incorporated by reference to other documents on file with the
         Securities and Exchange Commission which were previously filed.
   **    Indicates executive compensation plans and arrangements.

                                       17
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Index to Consolidated Financial Statements

<TABLE>
<S>                                                                        <C>
Report of Independent Certified Public Accountants                         F-2

Consolidated Financial Statements

Consolidated Balance Sheets as of February 28, 1999 and 1998               F-3
Consolidated Statements of Income for the three years
 ended February 28, 1999, 1998 and 1997                                    F-5
Consolidated Statements of Shareholders' Equity and Comprehensive
 Income for the three years ended February 28, 1999, 1998 and 1997         F-6
Consolidated Statements of Cash Flows for the three years
 ended February 28, 1999, 1998 and 1997                                    F-7
Notes to Consolidated Financial Statements                                 F-8 to F-24
</TABLE>

                                      F-1
<PAGE>

Report of Independent Certified Public Accountants



Video Display Corporation
Tucker, Georgia

We have audited the consolidated balance sheets of Video Display Corporation and
subsidiaries as of February 28, 1999 and 1998, and the related consolidated
statements of income, shareholders' equity and comprehensive income and cash
flows for each of the three years in the period ended February 28, 1999.  These
financial statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Video Display
Corporation and subsidiaries as of February 28, 1999 and 1998, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended February 28, 1999, in conformity with generally
accepted accounting principles.



                                                BDO Seidman, LLP



Atlanta, Georgia
May 14, 1999

                                      F-2
<PAGE>

                  Video Display Corporation and Subsidiaries

                          Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                  February 28,        February 28,
                                                                      1999                1998
                                                                 --------------      --------------
<S>                                                              <C>                 <C>
Assets (Notes 6 and 7)
Current assets:
  Cash and cash equivalents (including restricted
    cash of $34,000)                                              $  2,150,000        $  2,598,000
  Accounts receivable, net of allowance
    of $360,000 and $370,000 (Note 5)                                8,022,000           6,776,000
  Costs and earnings in excess of billings on
    contracts (Note 3)                                                 952,000                   -
  Inventories, net of reserve of $713,000 and
    $770,000 (Note 4)                                               28,467,000          21,491,000
  Prepaid expenses and other (Note 10)                               1,976,000           1,710,000
                                                                 --------------      --------------
Total current assets                                                41,567,000          32,575,000
                                                                 --------------      --------------

Property, plant and equipment:
  Land                                                                 540,000             435,000
  Buildings                                                          4,696,000           3,449,000
  Machinery and equipment                                           15,453,000          14,605,000
                                                                 --------------      --------------
                                                                    20,689,000          18,489,000
  Accumulated depreciation and amortization                        (14,336,000)        (13,776,000)
                                                                 --------------      --------------
                                                                     6,353,000           4,713,000
Goodwill, net of accumulated amortization of
  $1,493,000 and $1,207,000 (Note 2)                                 2,193,000           1,832,000

Other assets (Note 5)                                                1,528,000           1,462,000
                                                                 --------------      --------------

Total assets                                                      $ 51,641,000        $ 40,582,000
                                                                 ==============      ==============
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-3
<PAGE>

                  Video Display Corporation and Subsidiaries

                          Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                  February 28,        February 28,
                                                                     1999                1998
                                                                 --------------      --------------
<S>                                                              <C>                 <C>
Liabilities and Shareholders' Equity
Current liabilities:
 Lines of credit (Note 7)                                         $  2,970,000        $  5,279,000
 Note payable to shareholder (Note 8)                                2,500,000           2,900,000
 Accounts payable                                                    4,875,000           3,108,000
 Accrued liabilities                                                 2,982,000           3,872,000
 Current maturities of long-term debt (Note 6)                       1,676,000             975,000
                                                                 --------------      --------------
Total current liabilities                                           15,003,000          16,134,000

Revolving line of credit (Note 7)                                    4,500,000                   -
Long-term debt, less current maturities (Note 6)                     7,712,000           1,016,000
Convertible subordinated debentures (Note 12)                        1,775,000           1,775,000
Deferred income taxes (Note 10)                                        102,000             311,000
Minority interests                                                     186,000             200,000
                                                                 --------------      --------------
Total liabilities                                                   29,278,000          19,436,000
                                                                 --------------      --------------

Commitments and Contingencies (Notes 13 and 14)

Shareholders' equity (Notes 7 and 9):
Preferred stock; no par value - 2,000,000 shares
     authorized, none issued and outstanding                                 -                   -
Common stock; no par value - 10,000,000 shares
     authorized; 3,920,000 and 3,925,000 shares
     issued and outstanding                                          3,591,000           3,465,000
Additional paid-in capital                                              92,000              92,000
Retained earnings                                                   20,216,000          19,094,000
Accumulated other comprehensive income                              (1,536,000)         (1,505,000)
Total shareholders' equity                                          22,363,000          21,146,000
                                                                 --------------      --------------


Total liabilities and shareholders' equity                        $ 51,641,000        $ 40,582,000
                                                                 ==============      ==============
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>

                  Video Display Corporation and Subsidiaries

                          Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                    Fiscal Year Ended
                                                  ------------------------------------------------------
                                                   February 28,        February 28,        February 28,
                                                      1999                1998                1997
                                                  --------------      --------------      --------------
<S>                                               <C>                 <C>                 <C>
Net sales (Note 14)                                $ 58,889,000        $ 57,913,000        $ 53,865,000

Cost of goods sold                                   38,897,000          35,951,000          35,509,000
                                                  --------------      --------------      --------------
Gross profit                                         19,992,000          21,962,000          18,356,000
                                                  --------------      --------------      --------------

Operating expenses:
Selling and delivery                                  4,749,000           4,258,000           4,487,000
General and administrative                           11,649,000          10,763,000           9,899,000
                                                  --------------      --------------      --------------
                                                     16,398,000          15,021,000          14,386,000
                                                  --------------      --------------      --------------
Operating profit                                      3,594,000           6,941,000           3,970,000
                                                  --------------      --------------      --------------

Other income (expense):
Interest expense                                     (1,161,000)         (1,222,000)         (1,290,000)
Other, net                                             (158,000)             35,000                   -
                                                  --------------      --------------      --------------
                                                     (1,319,000)         (1,187,000)         (1,290,000)
                                                  --------------      --------------      --------------
Income before minority interest
  and income taxes                                    2,275,000           5,754,000           2,680,000

Minority interest (income) expense                      (15,000)              5,000              10,000
                                                  --------------      --------------      --------------
Income before income taxes                            2,290,000           5,749,000           2,670,000

Income taxes (Note 10)                                1,168,000           2,208,000             772,000
                                                  --------------      --------------      --------------
Net income                                         $  1,122,000        $  3,541,000        $  1,898,000
                                                  ==============      ==============      ==============

Net income per share - basic                       $       0.28        $       0.90        $       0.49
                                                  ==============      ==============      ==============

Net income per share - diluted                     $       0.27        $       0.82        $       0.47
                                                  ==============      ==============      ==============

Average shares outstanding - basic                    3,941,000           3,921,000           3,907,000
                                                  ==============      ==============      ==============

Average shares outstanding - diluted                  4,448,000           4,455,000           4,197,000
                                                  ==============      ==============      ==============
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>

                  Video Display Corporation and Subsidiaries

   Consolidated Statements of Shareholders' Equity and Comprehensive Income

<TABLE>
<CAPTION>
                                                                                        Accumulated          Current
                                                         Additional                        Other              Year
                                          Common          Paid-in        Retained      Comprehensive      Comprehensive
                                          Stock           Capital        Earnings          Income            Income
                                     ----------------   ------------  -------------   ----------------    -----------------
<S>                                  <C>                <C>           <C>             <C>                 <C>
Balance, February 29, 1996           $      3,529,000   $     81,000  $  13,655,000   $       (986,000)

 Net income for the year                            -              -      1,898,000                  -    $       1,898,000
 Unrealized loss on
  marketable equity
  securities                                        -              -              -           (320,000)            (320,000)
 Foreign currency translation
  Adjustment                                        -              -              -           (125,000)            (125,000)
                                                                                                          -----------------
            Total comprehensive
             income                                                                                       $       1,453,000
                                                                                                          =================
 Contribution of capital from
  gain realized on sale of
  stock by officer                                  -         11,000              -                  -
                                     ----------------   ------------  -------------   ----------------

Balance, February 28, 1997                  3,529,000         92,000     15,553,000         (1,431,000)

 Net income for the year                            -              -      3,541,000                  -    $       3,541,000
 Unrealized loss on
  marketable equity
  securities                                        -              -              -            (86,000)             (86,000)
 Foreign currency translation
  Adjustment                                        -              -              -             12,000               12,000
                                                                                                          -----------------
            Total comprehensive
             income                                                                                       $       3,467,000
                                                                                                          =================
 Repurchase of common stock                  (271,000)             -              -                  -
 Conversion of debt to
  common stock                                150,000              -              -                  -
 Issuance of common stock under
  stock option plan                            57,000              -              -                  -

                                     ----------------   ------------  -------------   ----------------

Balance, February 28, 1998                  3,465,000         92,000     19,094,000         (1,505,000)

 Net income for the year                            -              -      1,122,000                  -    $       1,122,000
 Unrealized loss on
  marketable equity
  securities                                        -              -              -            (33,000)             (33,000)
 Foreign currency translation
  Adjustment                                        -              -              -              2,000                2,000
                                                                                                          -----------------
            Total comprehensive
             income                                                                                       $       1,091,000
                                                                                                          =================
 Repurchase of common stock                  (508,000)             -              -                  -
 Issuance of common stock under
  stock option plan                            22,000              -              -                  -

 Issuance of common stock for
         business acquisitions                612,000              -              -                  -

                                     ----------------   ------------  -------------   ----------------

Balance, February 28, 1999           $      3,591,000   $     92,000  $  20,216,000   $     (1,536,000)
                                     ================   ============  =============   ================
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>

                  Video Display Corporation and Subsidiaries

                     Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
                                                        February 28,            February 28,            February 28,
Year ended                                                 1999                    1998                    1997
                                                   -------------------     -------------------     -------------------
<S>                                                <C>                     <C>                     <C>
Operating Activities
Net income                                                $  1,122,000            $  3,541,000            $  1,898,000
Adjustments to reconcile net income to net cash
    provided by operating activities:
 Depreciation and amortization                               1,219,000               1,417,000               1,304,000
 Provision for losses on accounts receivable                   254,000                 128,000                  25,000
 Provision for inventory reserves                            1,623,000                 282,000                 250,000
 Deferred income taxes                                        (118,000)               (351,000)               (266,000)
 Changes in working capital items:
  Accounts receivable                                        1,047,000                 808,000              (1,312,000)
  Inventories                                               (3,696,000)                761,000              (2,348,000)
  Prepaid expenses and other assets                            (60,000)                (76,000)               (333,000)
  Accounts payable and accrued liabilities                    (731,000)                125,000               1,612,000
                                                   -------------------     -------------------     -------------------

Net cash provided by operating activities                      660,000               6,635,000                 830,000
                                                   -------------------     -------------------     -------------------

Investing Activities
 Capital expenditures                                       (2,037,000)               (664,000)             (1,008,000)
 Purchases of businesses, net of cash acquired              (7,746,000)               (469,000)                 26,000
 Other investing activities                                    (20,000)                 (8,000)                355,000
                                                   -------------------     -------------------     -------------------

 Net cash used by investing activities                      (9,803,000)             (1,141,000)               (627,000)
                                                   -------------------     -------------------     -------------------

Financing Activities
   Proceeds from long-term debt and lines of
       credit                                               42,518,000              15,834,000              20,545,000
   Repayments of long-term debt and lines of
    credit                                                 (33,334,000)            (19,571,000)            (20,643,000)
 Stock option exercises                                         22,000                  57,000                       -
 Proceeds from capital contributions                                 -                       -                  11,000
 Purchases and retirements of common stock                    (508,000)               (271,000)                      -
                                                   -------------------     -------------------     -------------------

Net cash provided (used) by financing                        8,698,000              (3,951,000)                (87,000)
 activities
                                                   -------------------     -------------------     -------------------

Effect of exchange rates on cash                                (3,000)                 12,000                (130,000)
                                                   -------------------     -------------------     -------------------

Net change in cash and cash equivalents                       (448,000)              1,555,000                 (14,000)

Cash and cash equivalents, beginning of year                 2,598,000               1,043,000               1,057,000
                                                   -------------------     -------------------     -------------------

Cash and cash equivalents, end of year                    $  2,150,000            $  2,598,000            $  1,043,000
                                                   ===================     ===================     ===================
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-7
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


Note 1. Summary of Significant Accounting Policies

Nature of Business

Video Display Corporation (the "Company") principally manufactures and
distributes cathode ray tubes ("CRTs") in the worldwide replacement market for
use in television sets and data display screens for medical, military and
industrial monitoring systems as well as manufacturing and distributing electron
optic parts which are significant components in new and recycled CRTs and
monitors. The Company also manufactures low and high-end monochrome and color
CRT and AMLCD monitor displays for use in specialty high performance and
ruggedized applications. The Company also acts as a wholesale distributor of
electronic parts and CRTs purchased from domestic and foreign manufacturers. The
Company's operations are principally located in the US; however, the Company
does have subsidiary operations located in Mexico, the UK and the Netherlands.

Principles of Consolidation

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

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation and amortization
are computed principally by the straight line method for financial reporting
purposes over the following estimated useful lives: Buildings - ten to twenty
five years; Machinery and Equipment - five to ten years. Depreciation expense
totaled approximately $979,000, $1,139,000 and $1,223,000, for the three years
ended 1999, 1998 and 1997, respectively.

Management reviews and assesses long-lived assets for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. In performing the review for recoverability, management
estimates the future cash flows expected to result from the use of the asset. If
the sum of the undiscounted expected cash flows is less than the carrying amount
of the asset, an impairment loss is recognized based upon the estimated fair
value of the asset.

Inventories

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

                                      F-8
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements

Goodwill

Goodwill is the excess of the purchase price over the fair value of net assets
acquired in business combinations accounted for as purchases. Goodwill is
amortized on a straight-line basis over the periods benefited, principally five
to fifteen years.

The Company's operational policy for the assessment and measurement of any
impairment in goodwill which is other than temporary is to evaluate the
recoverability and remaining life and determine whether it should be completely
written off or the amortization period accelerated. The Company will recognize
an impairment if undiscounted estimated future operating cash flows of the
acquired business are determined to be less than the carrying amount. The amount
of impairment, if any, is measured based on projected discounted future
operating cash flows using a discount rate reflecting the Company's average cost
of funds.

Foreign Currency Translations

Assets and liabilities of foreign subsidiaries are translated using the exchange
rate in effect at the end of the year. Revenues and expenses are translated
using the average of the exchange rates in effect during the year. Translation
adjustments and transaction gains and losses related to long-term intercompany
transactions are accumulated as a separate component of shareholders' equity.
The Company reports 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 are with the parent with accounts receivable and accounts payable
settled or eliminated in U.S. dollars. Additionally, the subsidiary leases its
facilities and incurs rent based upon U.S. dollars. Any exchange gains or losses
due to the actual exchange of pesos and U.S. dollars is minimal. The Company
also has subsidiaries in the UK and the Netherlands, which are not material.

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 during the year are weighted for the portion of the year
that they were outstanding. Diluted earnings per share is calculated in a manner
consistent with that of basic earnings per share while giving effect to all
dilutive potential common shares that were outstanding during the period.

The following is a reconciliation from basic earnings per share to diluted
earnings per share for each of the last three years.

<TABLE>
<CAPTION>
                                                                           Average Shares        Earnings Per
                                                        Net Income           Outstanding            Share
                                                    -----------------    -----------------    -----------------
<S>                                                 <C>                  <C>                  <C>
     1999
     Basic                                                 $1,122,000            3,941,000                $0.28
     Effect of dilution:
        Options                                                     -              115,000
        Convertible debt                                       88,000              392,000
                                                    -----------------    -----------------    -----------------
     Diluted                                               $1,210,000            4,448,000                $0.27
                                                    =================    =================    =================
</TABLE>

                                      F-9
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements

<TABLE>
<S>                                       <C>                  <C>                  <C>
1998
     Basic                                    $   3,541,000            3,921,000            $    0.90
     Effect of dilution:
        Options                                           -              126,000
        Convertible debt                             94,000              408,000
                                          -----------------    -----------------    -----------------
     Diluted                                  $   3,635,000            4,455,000            $    0.82
                                          =================    =================    =================

     1997
     Basic                                    $   1,898,000            3,907,000            $    0.49
     Effect of dilution:
        Options                                           -               54,000
        Convertible debt                             58,000              236,000
                                          -----------------    -----------------    -----------------
     Diluted                                  $   1,956,000            4,197,000            $    0.47
                                          =================    =================    =================
 </TABLE>

Revenue Recognition

Revenue from product sales are recognized when goods are shipped. The Company
does not offer rights of return to customers; however, it does offer one-year
and two-year limited warranties on certain products. Warranty expense is not
material to the Company's consolidated financial statements.

Revenue from contracts that are long-term in nature at the Company's Aydin
Displays subsidiary is recognized by the percentage of completion method. Profit
estimates are revised periodically based upon changes in facts. Any losses
identified on contracts are recognized immediately. Revenue related to all other
contracts is recognized upon shipment of product.

Financial Instruments

Fair values of cash and cash equivalents, short-term investments and short-term
debt approximate cost due to the short period of time to maturity. The recorded
amounts of long-term debt are considered to approximate fair value due to either
rates which fluctuate with the market or are otherwise commensurate with the
current market. Fair values of investments are based on quoted market prices or
pricing models using current market rates which approximate carrying value.

Use of Estimates

The preparation of financial statements in conformity with Generally Accepted
Accounting Principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period. Examples
include provisions for returns, bad debts, inventory reserves and the length of
product life cycles and fixed asset lives. Actual results could vary from these
estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash on account, demand deposits and
certificates of deposit with maturities of less than three months.

                                      F-10
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


Investments

The Company has an investment in an unconsolidated subsidiary which it accounts
for under the equity method of accounting. The Company owns certain marketable
equity securities which are recorded at fair value based upon quoted market
prices and classified as available-for-sale securities under Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities". Changes in fair value of these marketable equity
securities are reflected in the statements of shareholders' equity. Investments
are included under the caption "Other Assets".

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS 133
establishes new accounting and reporting standards for derivative financial
instruments and for hedging activities. SFAS 133 requires an entity to measure
all derivatives at fair value and to recognize them in the balance sheet as an
asset or liability, depending on the entity's rights or obligations under the
applicable derivative contract. The Company will designate each derivative as
belonging to one of several possible categories, based on the intended use of
the derivative. The recognition of changes in fair value of a derivative that
affect the income statement will depend on the intended use of the derivative.
If the derivative does not qualify as a hedging instrument, the gain or loss on
the derivative will be recognized currently in earnings. If the derivative
qualifies for special hedge accounting, the gain or loss on the derivative will
either (i) be recognized in income along with an offsetting adjustment to the
basis of the item being hedged or (ii) be deferred in other comprehensive income
and reclassified to earnings in the same period or periods during which the
hedged transaction affects. SFAS 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. The adoption of SFAS 133 is
anticipated to have no effect on the Company.

During 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position 98-5,
"Reporting on the Costs of Start-up Activities." This SOP requires that the
costs of start-up activities, including organization costs, be expensed as
incurred. The guidance requires that the initial application should be reported
as the cumulative effect of a change in accounting principle. SOP 98-5 is
effective for fiscal years beginning after December 15, 1998. The Company has
adopted the provision of SOP 98-5 in fiscal year 1999. The Company has taken
steps to meet the requirements of SOP 98-5, which did not have a material impact
on the financial position and results of operations of the Company.

Fiscal Year

All references herein to "1999", "1998" and "1997" mean the fiscal years ended
February 28, 1999, 1998, and 1997, respectively.

Reclassification

Certain balances have been reclassified in the 1998 and 1997 consolidated
financial statements to conform to the 1999 presentation.

                                      F-11
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


Note 2.  Business Acquisitions

In February 1999, the Company acquired the MegaScan medical imaging division
("MegaScan") of ACCESS Radiology Corporation of Lexington, Massachusetts.
MegaScan offers a line of ultrahigh resolution grayscale medical imaging CRT
monitors. The assets acquired consisted of inventory and fixed assets. The
Company assumed product warranties (up to a maximum of $200,000) and operating
payables. The Company paid $861,000 in cash as consideration.

In November 1998, the Company acquired the assets and assumed certain
liabilities of the US and UK Display Divisions of Aydin Corporation,
headquartered in Horsham, Pennsylvania. Aydin Displays, Inc. ("Aydin") offers a
complete line of high-resolution color CRT monitors and custom designed AMLCD
flat panel displays for commercial and military applications. The assets
acquired consisted of trade receivables, inventory, fixed assets and prepaid
expenses. The Company assumed trade payables and accrued liabilities. The
Company paid $6,438,000 in cash, which was funded through $7.5 million of new
debt with the Company's primary lender, as consideration.

In June 1998, the Company acquired 100% of the outstanding common stock of
Mengel Industries, Inc. ("MII") located in Sanatoga, Pennsylvania. MII supplies
independent, OEM and hospital service personnel with CRTs, camera tubes and
other components for medical imaging to the healthcare industry. As
consideration, the Company issued 44,000 shares of common stock valued at
$445,000 and paid $50,000 in cash. The excess of the purchase price over the
fair value of the net assets acquired was approximately $446,000 and is being
amortized over 15 years.

In March 1998, the Company acquired the inventory and equipment of Wintron, Inc.
("Wintron") located in Howard, Pennsylvania. Wintron manufactures custom
designed deflection components, high voltage power supplies, coils and flyback
transformers and other CRT drive circuitry for airborne, commercial and military
applications. The Company paid $400,000 in cash as consideration.

All of the above transactions have been accounted for under the purchase method
of accounting and the results of operations of the acquired businesses since
their acquisition dates have been included in the consolidated financial
statements.

The following table summarizes the unaudited pro forma consolidated results of
operations of the Company, assuming the acquisitions had occurred at the
beginning of the fiscal periods. The pro forma financial information is not
necessarily indicative of what would have occurred had the acquisitions been
made as of those dates, nor is it indicative of future results of operations.

                                      F-12
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


The pro forma amounts give effect to appropriate adjustments for the fair value
of the net assets acquired, amortization of the excess of the purchase price
over the net assets acquired, depreciation, interest expense and income taxes.

<TABLE>
<CAPTION>
                                                        1999           1998
                                                    -----------     -----------
<S>                                                 <C>             <C>
Net sales                                           $71,039,000     $83,623,000
(Loss) earnings from continuing operations          $  (457,000)    $ 2,454,000
Net loss                                            $(2,929,000)    $  (905,000)
Basic loss per share                                $     (0.74)    $     (0.23)
Diluted loss per share                              $     (0.74)    $     (0.23)
</TABLE>

Note 3.  Costs and Earnings in Excess of Billings on Contracts

Information relative to contracts in progress as of February 28, 1999:

<TABLE>
<CAPTION>
                                                                      1999
                                                                  ------------
<S>                                                               <C>
Costs incurred to date on uncompleted contracts                   $  4,516,000
Estimated earnings recognized to date on these contracts             1,954,000
                                                                  ------------
                                                                     6,470,000
Billings to date                                                    (5,518,000)
                                                                  ------------

                                                                  $    952,000
                                                                  ============
</TABLE>

Note 4.  Inventories

Inventories consisted of:

<TABLE>
<CAPTION>
                                                        1999            1998
                                                    -----------      -----------
<S>                                                 <C>              <C>
Raw materials                                       $ 6,136,000      $ 2,925,000
Finished goods                                       22,331,000       18,566,000
                                                    -----------      -----------

                                                    $28,467,000      $21,491,000
                                                    ===========      ===========
</TABLE>

Note 5.  Note Receivable

The Company holds an unsecured note receivable as a result of a litigation
settlement. The note has a face value of $1,500,000 due in monthly installments
of $15,000 over a term of 100 months. The note is non-interest bearing for the
first 50 payments and interest bearing, at prime plus 1%, over the remaining 50
payments. As of February 28, 1999, the note is recorded at a total of $665,000,
net of its discount and allowance, and is included and classified under the
captions "Accounts Receivable" and "Other Assets".

                                      F-13
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


Note 6.  Long-Term Debt

Long-term debt consisted of the following:

<TABLE>
<CAPTION>
                                                                               1999              1998
                                                                           -----------       -----------
<S>                                                                        <C>               <C>
Term loan facility; floating interest rate based on an adjusted
LIBOR rate (7.56% as of February 28, 1999), quarterly principal
payments commencing November 1999 and maturing November 2005;              $ 7,500,000                 -
collateralized by assets of Aydin Displays, Inc.

Mortgage payable to bank; interest not to exceed 7.50% payable
monthly; principal monthly repayments of $13,000, maturing
December 2003; collateralized by land and building.                            774,000                 -

Term loan facility with bank; monthly payments of $67,000 including
interest at 7.25%, maturing August 1999, collateralized by certain
equipment.                                                                     400,000         1,200,000

Other                                                                          714,000           791,000
                                                                            -----------      -----------
                                                                             9,388,000         1,991,000
Less current maturities                                                      1,676,000           975,000
                                                                            -----------      -----------
                                                                            $7,712,000       $ 1,016,000
                                                                            ===========      ===========
</TABLE>

Future maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
          Year                                         Amount
          ----                                         ------
          <S>                                      <C>
          2000                                     $ 1,676,000
          2001                                       2,224,000
          2002                                       2,183,000
          2003                                       2,082,000
          2004                                       1,140,000
          Thereafter                                    83,000
                                                   -----------
                                                   $ 9,388,000
                                                   ===========
</TABLE>

                                      F-14
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


Note 7.  Lines of Credit


During early 1998, the Company refinanced its loan agreement ("Agreement") to
provide for a $4,500,000 line of credit with its primary bank ("Primary Line")
and $3,500,000 with a second bank ("Secondary Line") (together "the Line(s)")
secured by substantially all assets of the Company. In conjunction with this
refinancing, the Company borrowed $2,800,000 from the CEO, as discussed in Note
8, to pay down the original line of credit. The Company amended its Primary Line
to extend the termination date to July 1, 2000 and to lower the interest rate to
a fixed rate of 7.25% per annum. The commitment fee of 1/2% on the unused
portion of the Primary Line was also eliminated. All other terms of the Primary
Line remained the same as the original line of credit. The Secondary Line was
extended to July 31, 1999 with the interest rate and all other terms remaining
the same, including a commitment fee of 1/2% charged on the unused portion.
Borrowings under the Lines are limited by eligible accounts receivable and
inventory, as defined. As of February 28, 1999, the outstanding balances on the
Primary Line and Secondary Line were $4,500,000 and $2,970,000, respectively. No
additional amounts were available under the Primary Line while the Secondary
Line had additional availability of $59,000 as of February 28, 1999. The Line
agreements contain affirmative and negative covenants including requirements
related to tangible net worth, indebtedness to tangible net worth and cash flow
coverage. Additionally, dividend payments, capital expenditures and acquisitions
have certain restrictions. Substantially all of the Company's retained earnings
are restricted based upon these covenants.

In May 1999, the Company increased the Primary Line by $1,000,000 to $5,500,000.

The Company does not anticipate problems renewing the line of credit with the
second bank.

Note 8. Note Payable to Shareholder

During 1998, the Company borrowed $2,800,000 from the CEO in conjunction with
the bank refinancing as discussed in Note 7. During 1997, the Company borrowed
$900,000 from the CEO to purchase the assets of Teltron Technologies, Inc. Both
of these borrowings were combined into one note payable due on demand with
interest payable monthly at prime plus one percent. The outstanding balance on
the note payable was $2,500,000 as of February 28, 1999. The Company repaid
$400,000 and $800,000 in 1999 and 1998, respectively.

                                      F-15
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


Note 9. Stock Options

The Company has an incentive stock option plan whereby total options to purchase
500,000 shares may be granted to key employees at a price not less than fair
market value at the time the options are granted and are exercisable beginning
on the first anniversary of the grant date for a period not to exceed ten years.
Information regarding the option plan is as follows:

<TABLE>
<CAPTION>
                                                                                                Weighted
                                                                                                Average
                                                                                                Exercise
                                                                             Shares               Price
                                                                         -------------     -----------------
<S>                                                                      <C>               <C>
Outstanding as of February 29, 1996                                         241,000            $     3.47
 Granted                                                                    148,000                  3.66
 Cancelled                                                                 (116,000)                 4.50
                                                                         -------------     -----------------

Outstanding as of February 28, 1997                                         273,000            $     3.14
 Granted                                                                     14,000                  8.80
 Cancelled                                                                  (16,000)                 3.56
                                                                         -------------     -----------------

Outstanding as of February 28, 1998                                         271,000            $     3.61
 Granted                                                                      7,000                  9.50
 Exercised                                                                   (8,000)                 2.75
 Cancelled                                                                  (50,000)                 2.00
                                                                         -------------     -----------------
Outstanding as of February 28, 1999                                         220,000            $     3.95
                                                                         =============     =================
</TABLE>

The weighted average fair value of options granted during the years ended
February 28, 1999, 1998 and 1997 were $25,000, $44,000 and $197,000,
respectively. The weighted average remaining life of options outstanding at
February 28, 1999, 1998 and 1997 was 6.8, 7.7 and 7.7 years, respectively. The
range of exercise prices was $2.00 to $10.25. As of February 28, 1999, 1998 and
1997, options of 207,000 shares 257,000 shares and 227,000 shares, respectively,
were exercisable.

The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation". Accordingly, no compensation cost has
been recognized for stock options granted. Had compensation cost been determined
based on the fair value at the grant date for awards in 1999, 1998 and 1997,
consistent with the provisions of the Standard, the Company's net earnings and
earnings per share would have changed as indicated by the pro forma amounts
below:

<TABLE>
<CAPTION>
                                                   -------------------------------------------------------------
                                                                          Fiscal Year Ended
                                                   -------------------------------------------------------------
                                                          1999                  1998                  1997
                                                   -----------------     -----------------     -----------------
 <S>                                               <C>                   <C>                   <C>
 Net income - as reported                                 $1,122,000            $3,541,000            $1,898,000
 Net income - pro forma                                    1,087,000             3,497,000             1,701,000
 Basic earnings per common share - as reported            $     0.28            $     0.90            $     0.49
 Basic earnings per common share - proforma               $     0.28            $     0.89            $     0.44
 Diluted earning per common share - as reported           $     0.27            $     0.82            $     0.47
 Diluted earning per common share - proforma              $     0.26            $     0.81            $     0.42
</TABLE>

                                      F-16
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


The fair value of stock options used to compute pro forma net income applicable
to common shareholders and earnings per share disclosures is the estimated
present value at grant date using the Black-Scholes option-pricing model with
the following weighted average assumptions for 1999, 1998 and 1997,
respectively: expected volatility of 50% for all years; a risk free interest
rate of 5.41%, 5.66%, and 6.36%; expected lives of 5.0 years for 1999 and 2.5
years for 1998 and 1997; and dividend yield of 0.00% for all years.

Note 10. Income Taxes

The components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
                                                   -------------------------------------------------------------
                                                                          Fiscal Year Ended
                                                   -------------------------------------------------------------
                                                          1999                  1998                  1997
                                                   -----------------     -----------------     -----------------
<S>                                                <C>                   <C>                   <C>
     Current:
       Federal                                            $  879,000            $2,175,000            $  868,000
       State                                                 162,000               384,000               170,000
              Foreign                                        245,000                     -                     -
                                                   -----------------     -----------------     -----------------
                                                           1,286,000             2,559,000             1,038,000
                                                   -----------------     -----------------     -----------------
     Deferred:
       Federal                                              (100,000)             (298,000)             (241,000)
       State                                                 (18,000)              (53,000)              (25,000)
                                                   -----------------

                                                            (118,000)             (351,000)             (266,000)
                                                                                               -----------------
     Total                                                $1,168,000            $2,208,000            $  772,000
                                                   =================     =================     =================
</TABLE>

<TABLE>
<CAPTION>
Income before taxes consists of the following:            1999                  1998                  1997
                                                   -----------------     -----------------     -----------------
<S>                                                <C>                   <C>                   <C>
     U.S. operations                                      $2,206,000            $5,637,000            $1,693,000
     Foreign operations                                       84,000               112,000               977,000
                                                   -----------------     -----------------     -----------------

                                                          $2,290,000            $5,749,000            $2,670,000
                                                   =================     =================     =================
</TABLE>

Deferred income taxes as of February 28, 1999 and 1998 reflect the net tax
effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes and certain tax loss carryforwards.

                                      F-17
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


The sources of the temporary differences and their effect on the net deferred
tax asset are as follows:

<TABLE>
<CAPTION>
                                                                                1999                 1998
                                                                        -----------------     -----------------
      <S>                                                               <C>                   <C>
      Deferred tax assets:
           Loss carryforwards                                                $    368,000            $  451,000
           Uniform capitalization costs                                           457,000               393,000
           Inventory reserve                                                      271,000               274,000
           Accrued vacation                                                       101,000                97,000
           Allowance for doubtful accounts                                        119,000               102,000
           Other                                                                  103,000                78,000
                                                                        -----------------     -----------------
                                                                                1,419,000             1,395,000
           Valuation allowance                                                   (312,000)             (312,000)

          Deferred tax liabilities:
           Basis difference of property, plant and equipment                     (197,000)             (311,000)
           Other                                                                 ( 20,000)                    -
                                                                        -----------------     -----------------
          Net deferred tax assets                                            $    890,000            $  772,000
                                                                        =================     =================

           Current                                                                992,000             1,083,000
            Long-term                                                            (102,000)             (311,000)
                                                                        -----------------     -----------------
                                                                             $    890,000            $  772,000
                                                                        =================     =================
</TABLE>

Deferred tax assets are included under the caption "Prepaid expenses and other."
Loss carryforwards consist primarily of investment losses which may be utilized
to offset any future taxable gains on the sale of investments. The Company has
provided a valuation allowance on the majority of these loss carryforwards as
realization of these assets is considered unlikely.

The effective income tax rate differed from the statutory federal income tax
rate as follows:

<TABLE>
<CAPTION>
                                                                         Fiscal Year Ended
                                                  -------------------------------------------------------------
                                                         1999                  1998                  1997
                                                  -----------------     -----------------     -----------------
<S>                                               <C>                   <C>                   <C>
Taxes at statutory federal income tax rate               $  779,000          $  1,955,000            $  908,000
State income taxes, net of federal benefit                  107,000               254,000               157,000
Foreign taxes                                               245,000                     -                     -
Non-deductible amortization of certain intangible
 assets                                                     108,000                72,000                48,000
Utilization of foreign operating loss
 carryforwards                                                    -               (42,000)             (363,000)
Other                                                       (71,000)              (31,000)               22,000
                                                  -----------------     -----------------     -----------------
Taxes at effective income tax rate                       $1,168,000          $  2,208,000            $  772,000
                                                  =================     =================     =================
</TABLE>

                                      F-18
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


Note 11. Industry Segments

During 1999, the Company adopted SFAS 131, "Disclosures about Segments of an
Enterprise and Related Information." SFAS 131 establishes standards for the way
that public business enterprises report information about operating segments in
their financial statements. The standard defines operating segments as
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. The Company's
chief operating decision maker aggregates operating segments based on the type
of products produced by the segment. Based on the quantitative thresholds
specified in SFAS 131, the Company has determined that it has two reportable
segments with subsegments within one of the main segments. The two reportable
segments are as follows: (1) the manufacture and distribution of cathode ray
tubes and electron guns in the replacement market and (2) the distribution of
electronic parts from foreign and domestic manufacturers. The subsegments within
the CRT segment consists of data display CRTs, entertainment (television and
projection) CRTs, monitors, and component parts. Foreign operations are not
material as the Company's sales and other activities, after intercompany
eliminations, are predominantly in the United States.

The accounting policies of the operating segments are the same as those
described in Summary of Significant Accounting Policies. Segment amounts
disclosed reflect elimination entries made in consolidation. The chief operating
decision maker evaluates performance of the segments based on operating income.
Costs excluded from this profit measure primarily consist of allocated corporate
expenses, interest expense and income taxes. Corporate expenses are primarily
comprised of corporate overhead expenses. Thus, operating income includes only
the costs that are directly attributable to the operations of the individual
segment. Assets not identifiable to an individual segment are corporate assets,
which are primarily comprised of cash and cash equivalents, short-term
investments, intangible assets and intercompany amounts, which are eliminated in
consolidation.

The following table sets forth net sales, operating profit, depreciation and
amortization, capital expenditures, and identifiable assets for each industry
segment and applicable subsegments:

<TABLE>
<CAPTION>
                                                                    Fiscal Year Ended
                                             -------------------------------------------------------------
                                                    1999                  1998                  1997
                                             -----------------     -----------------     -----------------
                                                                     (in thousands)
  <S>                                        <C>                   <C>                   <C>
  Net Sales
  CRT segment
   Data display                                     $   11,791          $     13,716            $   12,903
   Entertainment                                        11,651                11,428                 9,063
   Monitors                                             11,311                 8,126                 5,254
   Component parts                                       2,631                 1,032                   965
                                             -----------------     -----------------     -----------------
                                                        37,384                34,302                28,185
  Wholesale Distribution segment                        21,505                23,611                25,680
                                             -----------------     -----------------     -----------------
                                                    $   58,889          $     57,913            $   53,865
                                             =================     =================     =================
</TABLE>

                                      F-19
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


<TABLE>
<CAPTION>
                                                          1999                  1998                  1997
                                                  -----------------     -----------------     -----------------
                                                                           (in thousands)
<S>                                               <C>                   <C>                   <C>
Operating Profit (Loss)
CRT segment
    Data display                                         $(1,505)              $   272               $   955
    Entertainment                                          4,525                 5,040                 2,806
    Monitors                                               1,113                 1,426                   472
    Component parts                                         (158)                  159                   (91)
                                                  -----------------     -----------------     -----------------
                                                           3,975                 6,897                 4,142
  Wholesale Distribution segment                            (381)                   44                  (172)
                                                  -----------------     -----------------     -----------------
                                                         $ 3,594               $ 6,941               $ 3,970
                                                  =================     =================     =================

  Depreciation and Amortization
  CRT segment
    Data display                                         $   223               $   147               $   131
    Entertainment                                            203                   227                   278
    Monitors                                                 262                   175                   113
    Component parts                                           75                    70                   108
                                                  -----------------     -----------------     -----------------
                                                             763                   619                   630
  Wholesale Distribution segment                             456                   798                   674
                                                  -----------------     -----------------     -----------------
                                                         $ 1,219               $ 1,417               $ 1,304
                                                  =================     =================     =================

  Capital Expenditures**
  CRT segment
    Data display                                         $   562               $   415               $   145
    Entertainment                                            105                     2                     3
    Monitors                                                 383                    48                 1,126
    Component parts                                        1,606                    11                     7
                                                  -----------------     -----------------     -----------------
                                                           2,656                   476                 1,281
  Wholesale Distribution segment                             152                   188                   720
                                                  -----------------     -----------------     -----------------
                                                         $ 2,808               $   664               $ 2,001
                                                  =================     =================     =================

** Includes additions to fixed assets through
     business acquisitions in 1999 and 1997

  Identifiable Assets
  CRT segment
    Data display                                         $17,768               $15,879               $15,406
    Entertainment                                          4,791                 5,774                 5,471
    Monitors                                              15,351                 4,707                 4,282
    Component parts                                        2,702                 2,162                 2,361
                                                  -----------------     -----------------     -----------------
                                                          40,612                28,522                27,520
  Wholesale Distribution segment                          11,029                12,060                13,367
                                                  -----------------     -----------------     -----------------
                                                         $51,641               $40,582               $40,887
                                                  =================     =================     =================
</TABLE>

                                      F-20
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


Note 12.  Convertible Subordinated Debentures

The Company issued $2,000,000 in face value, 8% five year convertible
subordinated debentures in payment of the acquisition of the stock of Z-Axis.
The debentures can be converted at the holder's option into common shares based
upon the quoted fair market value on the date such conversion is elected. An
additional amount of debentures were potentially due based upon a performance
contingency formula during the years ending 1997, 1998 and 1999. Z-Axis did not
meet the performance contingency for fiscal years ended 1999, 1998 and 1997.
During 1998, $225,000 of these debentures were partially converted into common
shares, with the remainder redeemed for cash of $75,000.

Note 13. Benefit Plan

The Company has a defined contribution plan that covers substantially all U.S.
employees. Employees may contribute up to 19% of their compensation, as allowed
by IRS regulations. At the Company's discretion, employee contributions of up to
4% of their compensation can be matched at 50% by the Company. The Company
elected to match 50% of the first 4% of compensation or $75,000 in 1999 , 50% of
the first 4% of compensation, or $48,000 in 1998 and 50% of the first 2% of
compensation, or $32,000 in 1997.

Note 14.  Commitments and Contingencies

Operating Leases
----------------
The Company leases various manufacturing facilities and transportation equipment
under leases classified as operating leases. These leases provide that the
Company pay taxes, insurance and other expenses on the leased property and
equipment. Rent expense under these leases was approximately $1,765,000,
$1,294,000 and $1,405,000 in 1999, 1998 and 1997, respectively.

Future minimum rental payments due under these leases are as follows:

<TABLE>
<CAPTION>
          Year                                   Amount
          ----                                   ------
          <S>                                 <C>
          2000                                $1,345,000
          2001                                 1,014,000
          2002                                   514,000
          2003                                   334,000
          2004                                   264,000
                                              ----------
          Thereafter                             220,000
                                              ----------
                                              $3,691,000
                                              ==========
</TABLE>

                                      F-21
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


The Company leases five of its manufacturing facilities and certain warehouse
space from shareholders and officers under net operating leases expiring at
various dates through 2006. Rent expense under these leases totaled
approximately $686,000, $662,000 and $661,000 in 1999, 1998 and 1997,
respectively.

Future minimum rental payments due under these leases with related parties are
as follows:

<TABLE>
<CAPTION>
          Year                                              Amount
          ----                                              ------
          <S>                                           <C>
          2000                                          $  639,000
          2001                                             644,000
          2002                                             456,000
          2003                                             322,000
          2004                                             255,000
          Thereafter                                       220,000
                                                        ----------
                                                        $2,536,000
                                                        ==========
</TABLE>

Concentrations of Risk and Major Customers
------------------------------------------
Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of cash and accounts receivable. At times such
cash in banks are in excess of the FDIC insurance limit. During 1999, the
Company's sales to any one customer did not exceed 10% of consolidated sales.
One of the Company's wholesale electronic parts distributors had sales to one
customer that comprised approximately 26% and 28% of that subsidiary's sales in
1999 and 1998, respectively. Also, one of the Company's CRT branches had sales
to two customers that comprised 50% and 53% of that subsidiary's sales in 1999
and 1998, respectively. Additionally, other subsidiaries have a few concentrated
customers and vendors that could, if lost, negatively effect sales. The Company
attempts to minimize credit risk by reviewing all customers' credit history
before extending credit, and by monitoring customers' credit exposure on a daily
basis. The Company establishes an allowance for doubtful accounts receivable
based upon factors surrounding the credit risk of specific customers, historical
trends and other information.

Note 15. Supplemental Cash Flow Information

<TABLE>
<CAPTION>
                                                        1999                  1998                 1997
                                                -------------------    ----------------    ------------------
<S>                                             <C>                    <C>                 <C>
Cash paid for:
 Interest                                            $1,040,000          $1,333,000            $1,244,000
                                                     ==========          ==========            ==========

 Income taxes, net of refunds                        $3,271,000          $1,471,000            $  708,000
                                                     ==========          ==========            ==========
</TABLE>

                                      F-22
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


Non-cash transactions:

During 1999, the Company purchased certain assets and assumed certain
liabilities of MegaScan, Aydin and Wintron and purchased all the common stock of
MII, as follows:

<TABLE>
 <S>                                                          <C>
 Fair value of the assets acquired                            $ 9,586,000
 Liabilities assumed                                           (1,394,000)
 Stock issued                                                    (446,000)
                                                              -----------
 Cash paid                                                    $ 7,746,000
                                                              ===========
</TABLE>

During 1998, $225,000 of the Z-Axis subordinated debentures was converted into
30,000 shares of the Company's common stock at $5 per share and $75,000 in cash.

During 1997, the Company acquired Z-Axis and Teltron as follows:

<TABLE>
 <S>                                                         <C>
 Fair value of the assets acquired, including goodwill       $ 4,097,000
 Liabilities assumed                                          (1,134,000)
 Issuance of subordinated debentures                          (2,000,000)
 Issuance of demand note payable                                (900,000)
                                                             -----------
 Cash paid                                                   $    63,000
                                                             ===========
</TABLE>

Note 16. Quarterly Data

The following table sets forth selected quarterly consolidated financial data
for the years ended February 28, 1999 and 1998, respectively.

<TABLE>
<CAPTION>
                                                                  1999
                             ------------------------------------------------------------------------------------
                                     First                 Second              Third                  Fourth
                                    Quarter                Quarter             Quarter               Quarter
                             -------------------    -------------------    ----------------    ------------------
                                                    (in thousands, except per share amounts)
   <S>                       <C>                    <C>                    <C>                 <C>
   Net Sales                      $ 15,039               $ 13,762             $ 13,859              $ 16,229
   Gross profit                      5,558                  5,497                4,765                 4,172
   Net income (loss)                   896                    731                  481                  (986)
   Basic earnings (loss)
      per share                   $   0.22               $   0.19             $   0.12               $ (0.25)
   Diluted earnings (loss)
      per share                   $   0.20               $   0.17             $   0.11               $ (0.25)
</TABLE>

                                      F-23
<PAGE>

                  Video Display Corporation and Subsidiaries

                  Notes to Consolidated Financial Statements


<TABLE>
<CAPTION>
                                                                      1998
                             ------------------------------------------------------------------------------------
                                     First                 Second            Third Quarter            Fourth
                                    Quarter                Quarter                                   Quarter
                             -------------------    -------------------    ----------------    ------------------
                                                    (in thousands, except per share amounts)
   <S>                       <C>                    <C>                    <C>                 <C>
   Net Sales                       $  14,322             $ 14,212             $ 14,185             $  15,194
   Gross profit                        4,977                5,437                5,563                 5,985
   Net income                            512                  886                1,074                 1,068
   Basic earnings per share        $    0.13             $   0.23             $   0.27             $    0.27
   Diluted earnings per share      $    0.12             $   0.21             $   0.25             $    0.24
</TABLE>


The summation of quarterly earnings per share may not agree with annual earnings
per share.

Note 17. Fourth Quarter Adjustments

During the fourth quarter of 1999, the Company incurred write-downs of inventory
totaling $1,208,000 resulting from changes in estimates of realizability of
certain products, as well as reserves for obsolescence.

                                      F-24
<PAGE>

                  Video Display Corporation and Subsidiaries

              Index to Consolidated Financial Statements Schedule


Report of Independent Certified Public Accountants on Financial
 Statements Schedule                                                       F-26


Schedule II - Valuation and Qualifying Accounts and Reserves               F-27

                                      F-25
<PAGE>

Report of Independent Certified Public Accountants



Video Display Corporation
Tucker, Georgia

The audits referred to in our Report dated May 14, 1999 relating to the
Consolidated Financial Statements of Video Display Corporation and subsidiaries
which is contained in Item 8 of this Form 10-K, included the audit of the
Financial Statement Schedule II (Valuation and Qualifying Accounts and Reserves)
set forth in the Form 10-K.  The Financial Statement Schedule is the
responsibility of the Company's management.  Our responsibility is to express an
opinion on the Financial Statement Schedule.

In our opinion, such schedule presents fairly, in all material respects, the
information set forth therein.



                                         BDO Seidman, LLP



Atlanta, Georgia
May 14, 1999

                                      F-26
<PAGE>

                  VIDEO DISPLAY CORPORATION AND SUBSIDIARIES
         SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

<TABLE>
<CAPTION>
          Column A               Column B                 Column C                    Column D           Column E
--------------------------------------------------------------------------------------------------------------------
                                                          Additions
                                             ---------------------------------
                                Balance at       Charged to       Charged to                            Balance at
                                 Beginning        Costs and         Other                                 End of
        Description              of Period        Expenses         Accounts          Deductions           Period
--------------------------------------------------------------------------------------------------------------------
<S>                           <C>              <C>              <C>             <C>                   <C>
Allowance for
doubtful accounts:
     February 28, 1999        $   591,000        $  254,000     $      -        $     264,000(a)      $  581,000
     February 28, 1998        $   468,000        $  128,000     $      -        $       5,000(a)      $  591,000
     February 28, 1997        $   460,000        $   25,000     $      -        $      17,000(a)      $  468,000

Reserve for inventory:
     February 28, 1999        $   770,000        $1,623,000     $      -        $   1,680,000(b)      $  713,000
     February 28, 1998        $   488,000        $  282,000     $      -        $           -         $  770,000
     February 28, 1997        $   266,000        $  250,000     $      -        $      28,000(b)      $  488,000
</TABLE>


(a) Uncollectible accounts written off.
(b) Inventory written down or written off.

                                      F-27
<PAGE>

                                                            Exhibit 21

                           Video Display Corporation
                              Subsidiary Companies


Apex Electronics, Inc.                       Aydin Displays, Inc.
100 Eighth Street                            700 Dresher Road
Passaic, New Jersey                          Horsham, Pennsylvania

Fox International Ltd., Inc.                 Mengel Industries, Inc.
23600 Aurora Road                            3110 West Ridge Pike
Bedford Heights, Ohio                        Sanatoga, Pennsylvania

Southwest Vacuum Devices, Inc.               Video Display Europe B.V.
1868 Tucker Industrial Drive                 Sky Park Schiphol
Tucker, Georgia                              Breguetlaan 15
                                             1438 BA Oude Meer
Vanco International, Inc.                    The Netherlands
1565 Shields Drive
Waukegan, Illinois

Video Display (Europe), Ltd.
Unit 2 Avenue Farm Industrial Estate
Warwickshire, CV37 OHU, England

Video Electronics, S.A. de C.V.
Calle Zinc Sin No.
Garza Garcia N.L.
Mexico

Magna View, Inc.
1240 Profit Drive
Dallas, Texas

Z-Axis, Inc.
15 Eagle Street
Phelps, New York

Teltron Technologies, Inc.
2 Riga Lane
Birdsboro, PA

                                      F-28
<PAGE>

                                  SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


Date:                               VIDEO DISPLAY CORPORATION

May 28, 1999                        By: /s/ Ronald  D. Ordway
                                        ---------------------
                                        Ronald D. Ordway
                                        Chairman of the Board and
                                        Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

     Signature - Name         Capacity                 Date
     ----------------         --------                 ----

/s/ Ronald D. Ordway          Chief Executive          May 28, 1999
------------------------
Ronald D.  Ordway             Officer & Director

/s/ Erv Kuczogi               President                May 28, 1999
------------------------
Erv Kuczogi                   Director

/s/ Murray Fox                Director                 May 28, 1999
------------------------
Murray Fox

/s/ Carleton E. Sawyer        Director                 May 28, 1999
------------------------
Carleton E. Sawyer

/s/ Carol D. Franklin         Chief Financial Officer  May 28, 1999
------------------------
Carol D. Franklin