Video Display Corporation in Agreement to Sell Z-AXIS Inc. Subsidiary
03 Ottobre 2013 - 6:15PM
Video Display Corporation (Nasdaq:VIDE), a global leader in design
and manufacture of specialty displays and display solutions, today
announced a definitive agreement has been negotiated to sell its
Z-AXIS Inc. subsidiary (Z-AXIS) to a newly-incorporated NY-based
company formed by the current management of Z-AXIS. The sale
includes Z-AXIS as well as its BEAR Power Supplies and Boundless
Technologies business units.
Under the terms of the agreement, Video Display Corporation
(VDC) will receive ninety percent of the sale proceeds in cash at
closing with the remaining balance in the form of a subordinated
note receivable from the buyer of Z-AXIS. The entities being sold
primarily design and manufacture specialty power supplies for the
global market and offer contract manufacturing services to
customers in the NY State, New England and mid-Atlantic market
areas. As part of the VDC family of companies, Z-AXIS accounted for
approximately 21.0% of the total corporate revenues for the most
recent fiscal year ended Feb 28, 2013.
The transaction, which has been approved by the boards of
directors of both companies, is subject to customary closing
conditions including review, and it is expected to close on or
about November 15, 2013. All current employees and management staff
are expected to remain in place at the Z-AXIS headquarters and
manufacturing facility in Phelps, NY.
"Z-AXIS is excited to be embarking on this new experience as a
privately held and managed entity, which ensures the continued
employment of our local personnel with the same experienced team
that has built an extremely successful company in upstate NY,"
stated Michael Allen, president of the of the Z-AXIS subsidiary of
Video Display Corporation. "We are looking forward to this
opportunity to continue our growth pattern well into the future
here in Ontario County, NY."
Ron Ordway, CEO of Video Display Corporation, commented, "The
sale of our Z-AXIS, BEAR Power and Boundless subsidiary is part of
an overall program, announced in September of 2012, to enhance VDC
shareholder value through the sale of VDC, either in whole, or
through the sale of its integral divisions and subsidiaries as
opportunities presented themselves in the best interest of the
shareholders." He further stated, "Subsequent to closing of the
Z-Axis transaction, VDC will have accomplished its prime goal of
eliminating all bank revolver and term debt leaving the Company
with substantial cash reserves. We are continuing to discuss the
sale of additional subsidiaries with parties interested in
acquiring segments of the VDC family of display companies and will
report on progress of those negotiations as it occurs."
About Video Display Corporation
The VDC family of companies consists of 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.
This news release contains certain forward-looking statements,
including the expected benefits of our pending disposition of
Z-AXIS and Bear Power, the expected timing of the closing of the
acquisition and the number of employees who are expected to remain
subsequent to the closing of the transaction, which are based on
our current expectations and are subject to numerous risks and
uncertainties that may cause these forward-looking statements to be
Risks that may cause these forward-looking statements to be
inaccurate include among others: we may experience delays in the
timing; Z-AXIS and Bear Power may not be able to maintain or grow
the customer relationships required to achieve its anticipated
revenue and margins, and therefore fail to perform on its debt
obligations to VDC; the Company may incur one-time charges, adverse
tax consequences, amortization of intangible assets or impairment
of goodwill, which could harm our results of VDC's operations; the
Z-AXIS and Bear Power disposition may not be consummated due to the
failure to satisfy the various conditions to closing, including
access to the capital by the Buyer to complete the transaction, the
need for banking approvals and the other risks detailed from time
to time under the caption "Risk Factors" and elsewhere in our
Securities and Exchange Commission filings and reports, including,
but not limited to, our Annual and Quarterly Reports on Forms 10-K
and 10-Q.
CONTACT: Ronald D. Ordway, Chairman and CEO
770-938-2080
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