Blonder Tongue Laboratories (BDRL) 10-Q 15 May 17 2017 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 06, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Entity Registrant Name	BLONDER TONGUE LABORATORIES INC
Entity Central Index Key	1,000,683
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	BDR
Entity Common Stock, Shares Outstanding		8,121,835

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash	$ 543	$ 468
Accounts receivable, net of allowance for doubtful accounts of $180	2,354	2,273
Inventories	5,098	5,064
Prepaid and other current assets	436	275
Total current assets	8,431	8,080
Inventories, net of current and reserves	894	991
Property, plant and equipment, net of accumulated depreciation and amortization	3,211	3,279
License agreements, net	84	117
Intangible assets, net	1,569	1,612
Goodwill	493	493
Other assets	416	428
Total Assets	15,098	15,000
Current liabilities:
Line of credit	2,046	2,120
Current portion of long-term debt	246	228
Accounts payable	1,350	1,390
Derivative liability	0	260
Accrued compensation	295	320
Accrued benefit pension liability	101	101
Other accrued expenses	319	197
Total current liabilities	4,357	4,616
Subordinated convertible debt with related parties	570	376
Long-term debt, net of current portion	3,273	3,335
Deferred income taxes	139	139
Total liabilities	8,339	8,466
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.001 par value; authorized 5,000 shares; No shares outstanding	0	0
Common stock, $.001 par value; authorized 25,000 shares, 8,465 shares Issued, 8,122 shares outstanding	8	8
Paid-in capital	26,613	26,132
Accumulated deficit	(17,435)	(17,179)
Accumulated other comprehensive loss	(1,278)	(1,278)
Treasury stock, at cost, 342 shares	(1,149)	(1,149)
Total stockholders’ equity	6,759	6,534
Total Liabilities and Stockholders' Equity	$ 15,098	$ 15,000

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Allowance for doubtful accounts (in dollars)	$ 180	$ 180
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	25,000	25,000
Common stock, shares issued	8,465	8,465
Common Stock, Shares, Outstanding	8,122	8,122
Treasury stock, shares	342	342

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net sales	$ 5,973	$ 5,943
Cost of goods sold	3,572	3,735
Gross profit	2,401	2,208
Operating expenses:
Selling	679	652
General and administrative	928	1,063
Research and development	628	693
Total Operating expenses	2,235	2,408
Earnings (loss) from operations	166	(200)
Other expense:
Other expense -net	(280)	(88)
Change in derivative liability	(142)	0
Loss before income taxes	(256)	(288)
Provision for income taxes	0	0
Net loss	$ (256)	$ (288)
Basic and diluted net loss per share	$ (0.03)	$ (0.04)
Basic and diluted weighted average shares outstanding	8,122	6,765

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash Flows From Operating Activities:
Net loss	$ (256)	$ (288)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Stock compensation expense	79	45
Depreciation	86	120
Amortization	101	144
(Reversal of) provision for inventory reserves	(48)	48
Non cash interest expense	194	6
Change in derivative liability	142	0
Changes in operating assets and liabilities:
Accounts receivable	(81)	(719)
Inventories	111	109
Prepaid and other current assets	(161)	(161)
Other assets	12	0
Accounts payable, accrued compensation and other accrued expenses	57	679
Net cash provided by (used in) operating activities	236	(17)
Cash Flows From Investing Activities:
Capital expenditures	(18)	(2)
Acquisition of licenses	(25)	(4)
Net cash used in investing activities	(43)	(6)
Cash Flows From Financing Activities:
Net (repayments) borrowings of line of credit	(74)	190
Borrowings from related parties	0	400
Repayments of debt	(44)	(63)
Net cash (used in) provided by financing activities	(118)	527
Net increase in cash	75	504
Cash, beginning of period	468	9
Cash, end of period	543	513
Supplemental Cash Flow Information:
Cash paid for interest	57	76
Cash paid for income taxes	$ 0	$ 0

Company and Basis of Consolidat

Company and Basis of Consolidation	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	Note 1 - Company and Basis of Consolidation Blonder Tongue Laboratories, Inc. (together with its consolidated subsidiaries, the “ Company The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles ( “GAAP” SEC

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Basis of Presentation and Significant Accounting Policies [Text Block]	Note 2- Summary of Significant Accounting Policies The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include stock compensation and reserves related to accounts receivable, inventory and deferred tax assets. Actual results could differ from those estimates. The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with Topic 815 of the Financial Accounting Standards Board (“ FASB “ASC The Black-Scholes Model (which approximates the Binomial Lattice Model) was used to estimate the fair value of the conversion options that is classified as a derivative liability on the condensed consolidated balance sheets (See Note 6). The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time equal to the weighted average life of the conversion options. Conversion options are recorded as a discount to the host instrument and are amortized as interest expense over the life of the underlying instrument. The Company measures fair value of its financial assets on a three-tier value hierarchy, which prioritizes the inputs, used in the valuation methodologies in measuring fair value: ⋅ Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. ⋅ Level 2 – Other inputs that are directly or indirectly observable in the marketplace. ⋅ Level 3 – Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The derivative liability is measured at fair value using quoted market prices and estimated volatility factors based on historical quoted market prices for the Company’s common stock, and is classified within Level 3 of the valuation hierarchy. (d) Earnings (loss) Per Share Earnings (loss) per share is calculated in accordance with ASC Topic 260 “Earnings Per Share,” which provides for the calculation of “basic” and “diluted” earnings (loss) per share. Basic earnings (loss) per share includes no dilution and is computed by dividing net earnings by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflect, in periods in which they have a dilutive effect, the effect of potential issuances of common shares. The diluted share base excludes incremental shares related to stock options, restricted stock and convertible debt of 1,467 1,924

New Accounting Pronouncements

New Accounting Pronouncements	3 Months Ended
	Mar. 31, 2017
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	Note 3 – New Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers (Topic 606). Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients

Inventories

Inventories	3 Months Ended
	Mar. 31, 2017
Inventory Disclosure [Abstract]
Inventory Disclosure [Text Block]	Note 4 – Inventories Inventories net of reserves are summarized as follows: March 31, December 31, 2017 2016 Raw Materials $ 3,607 $ 4,001 Work in process 1,985 1,860 Finished Goods 3,221 4,143 8,813 10,004 Less current inventory (5,098) (5,064) 3,715 4,940 Less reserve for slow moving and excess inventory (2,821) (3,949) $ 894 $ 991 Inventories are stated at the lower of cost, determined by the first-in, first-out (“FIFO”) method, or net realizable value. The Company periodically analyzes anticipated product sales based on historical results, current backlog and marketing plans. Based on these analyses, the Company anticipates that certain products will not be sold during the next twelve months. Inventories that are not anticipated to be sold in the next twelve months, have been classified as non-current. Approximately 68% of the non-current inventories were comprised of finished goods at both March 31, 2017 and December 31, 2016. The Company has established a program to use interchangeable parts in its various product offerings and to modify certain of its finished goods to better match customer demands. In addition, the Company has instituted additional marketing programs to dispose of the slower moving inventories. The Company continually analyzes its slow-moving and excess inventories. Based on historical and projected sales volumes for finished goods, historical and projected usage of raw materials and anticipated selling prices, the Company establishes reserves. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates its estimate of future demand. Products that are determined to be obsolete are written down to net realizable value.

Debt

Debt	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Debt Disclosure [Text Block]	Note 5 – Debt On December 28, 2016, the Company entered into a Loan and Security Agreement (the “ Sterling Agreement Sterling 8,500 Sterling Facility 5,000 Revolver 3,500 Term Loan Interest on the Revolver is variable, based upon the 30-day LIBOR rate (0.98% at March 31, 2017) 4.00 Interest on the Term Loan also is variable, based upon the 30-day LIBOR rate (0.98% at March 31, 2017) plus a margin of 4.50% 19 First Amendment 2,046 3,461 The Sterling Agreement contains customary covenants, including restrictions on the incurrence of additional indebtedness, encumbrances on the Company’s assets, the payment of cash dividends or similar distributions, the repayment of any subordinated indebtedness and the sale or other disposition of the Company’s assets. In addition, the Company must maintain (i) a fixed charge coverage ratio of not less than 1.1 to 1.0 for any fiscal month (determined as of the last day of each fiscal month on a rolling twelve-month basis, as calculated for the Company and its consolidated subsidiaries) and (ii) a leverage ratio of not more than 2.0 to 1.0 for any fiscal month

Subordinated Convertible Debt w

Subordinated Convertible Debt with Related Parties	3 Months Ended
	Mar. 31, 2017
Subordinated Borrowings [Abstract]
Subordinated Borrowings Disclosure [Text Block]	Note 6 – Subordinated Convertible Debt with Related Parties On March 28, 2016, the Company and its wholly-owned subsidiary, R.L. Drake Holdings, LLC ( “Drake” Agent Subordinated Lenders Subordinated Loan Agreement 750 Subordinated Loan Facility 50 PIK Interest 0.54 Subordinated Mortgage” In connection with the Subordinated Loan Agreement, the Company, Drake, the Subordinated Lenders and Sterling entered into a Subordination Agreement (the “ Subordination Agreement As of March 31, 2017, the Subordinated Lenders advanced $ 500 17 Derivatives and Hedging Price Protection Provision 260 First Sub-Debt Amendmen 402 177 6 0.65 0.54 104 2 1.30 0

Legal Proceedings

Legal Proceedings	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Legal Matters and Contingencies [Text Block]	Note 7 – Legal Proceedings The Company is a party to certain proceedings incidental to the ordinary course of its business, none of which, in the opinion of management, is likely to have a material adverse effect on the Company’s business, financial condition, results of operations, or cash flows.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2017
Subsequent Events [Abstract]
Subsequent Events [Text Block]	Note 8 – Subsequent Events The Company has evaluated subsequent events through the filing of its consolidated financial statements with the SEC.

Summary of Significant Accoun14

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Use of Estimates, Policy [Policy Text Block]	(a) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include stock compensation and reserves related to accounts receivable, inventory and deferred tax assets. Actual results could differ from those estimates.
Derivatives, Reporting of Derivative Activity [Policy Text Block]	(b) Derivative Financial Instruments The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with Topic 815 of the Financial Accounting Standards Board (“ FASB “ASC The Black-Scholes Model (which approximates the Binomial Lattice Model) was used to estimate the fair value of the conversion options that is classified as a derivative liability on the condensed consolidated balance sheets (See Note 6). The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time equal to the weighted average life of the conversion options. Conversion options are recorded as a discount to the host instrument and are amortized as interest expense over the life of the underlying instrument.
Fair Value of Financial Instruments, Policy [Policy Text Block]	(c) Fair Value of Financial Instruments The Company measures fair value of its financial assets on a three-tier value hierarchy, which prioritizes the inputs, used in the valuation methodologies in measuring fair value: ⋅ Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. ⋅ Level 2 – Other inputs that are directly or indirectly observable in the marketplace. ⋅ Level 3 – Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The derivative liability is measured at fair value using quoted market prices and estimated volatility factors based on historical quoted market prices for the Company’s common stock, and is classified within Level 3 of the valuation hierarchy.
Earnings Per Share, Policy [Policy Text Block]	(d) Earnings (loss) Per Share Earnings (loss) per share is calculated in accordance with ASC Topic 260 “Earnings Per Share,” which provides for the calculation of “basic” and “diluted” earnings (loss) per share. Basic earnings (loss) per share includes no dilution and is computed by dividing net earnings by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflect, in periods in which they have a dilutive effect, the effect of potential issuances of common shares. The diluted share base excludes incremental shares related to stock options, restricted stock and convertible debt of 1,467 1,924

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2017
Inventory Disclosure [Abstract]
Schedule of Inventory, Current [Table Text Block]	Inventories net of reserves are summarized as follows: March 31, December 31, 2017 2016 Raw Materials $ 3,607 $ 4,001 Work in process 1,985 1,860 Finished Goods 3,221 4,143 8,813 10,004 Less current inventory (5,098) (5,064) 3,715 4,940 Less reserve for slow moving and excess inventory (2,821) (3,949) $ 894 $ 991

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Details Textual) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Summary of Significant Accounting Policies [Line Items]
Incremental Common Shares Attributable to Call Options and Warrants	1,467	1,924

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Inventory [Line Items]
Raw Materials	$ 3,607	$ 4,001
Work in process	1,985	1,860
Finished Goods	3,221	4,143
Inventory, gross	8,813	10,004
Less current inventory	(5,098)	(5,064)
Inventory Value Before Reserves	3,715	4,940
Less reserve for slow moving and excess inventory	(2,821)	(3,949)
Inventories, net non-current	$ 894	$ 991

Inventories (Details Textual)

Inventories (Details Textual)	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Inventory [Line Items]
Percentage Of Fifo Inventory Non Current For Finished Goods	68.00%	68.00%
Inventory Related Text	Inventories are stated at the lower of cost, determined by the first-in, first-out (“FIFO”) method, or net realizable value.

Debt (Details Textual)

Debt (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Dec. 28, 2016
Debt Instrument [Line Items]
Line of Credit, Current	$ 2,046	$ 2,120
Term Loan Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate Description	plus a margin of 4.50%
Sterling National Bank [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 8,500
Line of Credit Facility, Covenant Compliance	(i) a fixed charge coverage ratio of not less than 1.1 to 1.0 for any fiscal month (determined as of the last day of each fiscal month on a rolling twelve-month basis, as calculated for the Company and its consolidated subsidiaries) and (ii) a leverage ratio of not more than 2.0 to 1.0 for any fiscal month
Sterling National Bank [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			5,000
Debt Instrument, Description of Variable Rate Basis	Interest on the Revolver is variable, based upon the 30-day LIBOR rate (0.98% at March 31, 2017)
Debt Instrument, Basis Spread on Variable Rate	4.00%
Sterling National Bank [Member] | Term Loan Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 3,500
Line of Credit Facility, Periodic Payment, Principal	$ 19
Line of Credit, Current	2,046
Long-term Debt, Gross	$ 3,461
Debt Instrument, Description of Variable Rate Basis	Interest on the Term Loan also is variable, based upon the 30-day LIBOR rate (0.98% at March 31, 2017)

Subordinated Convertible Debt20

Subordinated Convertible Debt with Related Parties (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended			3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 28, 2016	Mar. 31, 2017	Dec. 31, 2016
Subordinated Borrowing [Line Items]
Convertible Subordinated Debt, Noncurrent	$ 570			$ 570	$ 376
Derivative Liability	402			402
Interest Expense, Debt	177	$ 6
Subordinated Loan Facility [Member]
Subordinated Borrowing [Line Items]
Convertible Subordinated Debt, Noncurrent	$ 500			500
Paid-in-Kind Interest				$ 17
Derivative Liability					$ 260
Share Price	$ 0.65			$ 0.65
Debt Instrument, Convertible, Conversion Price	$ 0.54		$ 0.54	$ 0.54
Fair Value Assumptions, Expected Volatility Rate				104.00%
Fair Value Assumptions, Risk Free Interest Rate				1.30%
Fair Value Assumptions, Expected Dividend Rate				0.00%
Fair Value Assumptions, Expected Term				2 years
Line Of Credit Facility, Maximum Borrowing Capacity			$ 750
Line Of Credit Temporary Over Advance Facility			$ 50