Video Display Corp Successfully Completes Sale of Aydin Displays
TUCKER, Ga., Sep 03, 2013 (GLOBE NEWSWIRE via COMTEX) --
Video Display Corporation (Nasdaq:VIDE) (the "Company") today announced the successful completion of the sale of the assets and specified liabilities of the Company's Aydin Displays Inc subsidiary. The subsidiary was sold to an acquisition affiliate of Sparton Corp. (NYSE:SPA), for a combination of cash, a 12 month hold-back of 8% of the upfront purchase price and an additional potential earn-out in excess of $6.0 million based upon the potential achievement of projected levels of EBITDA being generated by Aydin Displays during the 12 month period subsequent to August 30, 2013 closing date.
"The successful closing of this transaction is a significant accomplishment for Video Display Corporation," said Ron Ordway, Chief Executive Officer of the Company. "The cash generated from this transaction allows the Company to terminate an unworkable relationship with its primary lender, PNC Bank, by totally paying off all debt held by PNC Bank. In addition to eliminating all asset based revolver debt, it significantly reduces the Company's term debt from $3.6 million to $1.35 million which is held by the Company's secondary lender, Community and Southern Bank of Ga. The termination of PNC as the Company's lender suspends their ability to invoke penalties of approximately $2000 per day, a policy that has cost the Company nearly $400,000 in penalties invoked during the last 6 months since PNC acquired our former prime bank, RBC Bank of GA."
In August, 2012, the Company announced its intention to enhance shareholder value by seeking buyers for Video Display Corporation as a whole or for its individual divisions and subsidiaries. The sale of the Aydin business is a significant first increment in that program. The Company previously announced entering into an Asset Purchase Agreement with Michigan based Citidal LLC in which Citidal will acquire primarily all of the assets and liabilities of the Company's Lexel Imaging subsidiary of Lexington, KY for cash and notes. The closing date of that transaction is scheduled to occur on or before September 23, 2013, subject to completion of due diligence and completion of financing arrangements by the buyer.
After the completion of the Aydin asset sale and the agreed upon potential sale of the Lexel Imaging operations, Video Display Corporation's subsidiaries remaining to be sold are comprised as follows:
A: Z-Axis Inc. / Bear Power --- Phelps NY based designer and manufacturer of specialty power supplies and provides contract manufacturing services throughout the Northeastern US.
B: VDC Display Systems --- Cape Canaveral, FL based designer and manufacturer of display systems for commercial and military training and simulation systems, control rooms and other high end display requirements.
C: Aydin Visual Solutions --- Tucker, GA based designer and supplier of large venue video walls for broadcast studios, board rooms and other applications requiring high quality state of the art display applications.
D: Aydin CyberSecurity --- Palm Bay, FL. based manufacturer and test facilities of TEMPEST electronics for cyber security markets primarily used in situations where top security is a necessity.
It is the intent of Video Display's management team to continue the development of these remaining operations until such time that they warrant sufficient value to buyers and thereby further enhance the value to be received by the Company' shareholders.
About Video Display Corporation:
VDC companies are leading designers, manufacturers, and suppliers of displays and display systems for the most demanding OEMs, prime contractors and specialty contractors around the world. The VDC companies have led the way over the past 38 years providing standard and custom products to today's leading global OEMs crossing all major display requirements in defense, aerospace, industrial automation, medical, and transportation as well as training and simulation markets.
CONTACT: Ronald D. Ordway, Chairman and CEO
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