Mail Stop 0407
June 7, 2005
James A. Luksch
Chief Executive Officer
Blonder Tongue Laboratories, Inc.
One Jake Brown Road
Old Bridge, NJ 08857
Re: Blonder Tongue Laboratories, Inc.
Form 10-K for Fiscal Year Ended December 31, 2004
Filed April 15, 2005
Form 10-Q for Fiscal Quarter Ended March 31, 2005
File No. 1-14120
Dear Mr. Luksch:
We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents. Where indicated, we think you should
revise your documents in response to these comments. If you
disagree, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure. After reviewing this information, we may or may not
raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-K for the Fiscal Year ended December 31, 2004
Management`s Discussion and Analysis
1. Please expand the discussions of cost of goods sold on page 18
to
include an explanation of the increase in inventory reserve from
period to period, including what happened during the period to
trigger the increase. Please revise the disclosure on page 22
accordingly.
2. Also, expand the discussion of changes in bad debt expense on
page
18 to explain the reason for the change.
Financial Statements
Note 1 - Summary of Significant Accounting Policies
3. We note that you own a 50% economic interest in Blonder Tongue
Telephone, LLC and a 90% interest in NetLinc Communications LLC
but
that you account for your interest using the equity method.
Please
tell us why you believe consolidation is not required, using the
guidance in SOP 78-9, EITF 96-16, and EITF 04-5 in your response.
Please revise to disclose the rights of your partnership interests
in
these entities and whether other partners have substantive or
protective rights.
4. Also, please expand Note 1 (a) to disclose your accounting
policy
for your interest in BDR Broadband. Please revise Note 13
accordingly.
5. Refer to your discussion of the Philips License Agreements on
page
10. Please revise to include an accounting policy for revenue
recognition of one-time license fees and royalties, using the
guidance in Staff Accounting Bulletin 104.
General
6. In the event it is concluded that accounting for your
investment
in Blonder Tongue Telephone, LLC using the equity method is
appropriate, you should amend your Form 10-K to include audited
financial statements of Blonder Tongue Telephone, LLC pursuant to
Rule 3-09 of Regulation S-X.
Form 10-Q for the period ended March 31, 2005
Note 5 - Debt, page 8
7. We note that you were unable to meet one of your financial
covenants required under the credit agreement with Commerce Bank
but
that you received a waiver from the bank effective as of such
date.
We also note that similar facts and circumstances existed at the
end
of each of the quarters of the year ended December 31, 2004. In
this
regard, it is unclear to us whether:
* the waivers at the end of each quarter had been granted in such
a
manner that the debt was not callable for the next 12 months as
specified in SFAS 78, or
* how you concluded that it was probable that the company would be
able to meet the financial covenants, as amended, for the next 12
months based on projections at the date of the amendment. Refer to
Example 8 in EITF 86-30.
Addressing the relevant accounting literature tell us in detail
why
you believe that the classification of your debt as long-term debt
was appropriate at March 31, 2004, June 30, 2004, September 30,
2004,
December 31, 2004 and March 31, 2005.
* * * *
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested information. Detailed cover letters
greatly
facilitate our review. Please understand that we may have
additional
comments after reviewing your amendment and responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.
You may contact Claire DeLabar, Staff Accountant, at (202)
551-
3349 or Ivette Leon, Assistant Chief Accountant, at (202) 551-3351
if
you have questions regarding comments on the financial statements
and
related matters. Please contact me at (202) 551-3810 with any
other
questions.
Sincerely,
Larry Spirgel
Assistant Director
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Mr. James A. Luksch
Blonder Tongue Laboratories, Inc.
June 7, 2005
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