SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001,
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO __________.
COMMISSION FILE NUMBER 1-14120
BLONDER TONGUE LABORATORIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 52-1611421
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
ONE JAKE BROWN ROAD, OLD BRIDGE, NEW JERSEY 08857
- ------------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 679-4000
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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Number of shares of common stock, par value $.001, outstanding as of August 10,
2001: 7,612,664
BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
June 30, December 31,
2001 2000
------------ --------------
(unaudited)
Assets (Note 4)
Current assets:
Cash.............................................................. $ 394 $ 363
Accounts receivable, net of allowance for doubtful
accounts of $1,603 and $1,424, respectively.................... 6,961 7,125
Inventories (Note 3).............................................. 26,788 26,333
Other current assets ............................................. 1,667 3,264
Deferred income taxes............................................. 1,704 1,804
------------ --------------
Total current assets......................................... 37,514 38,889
------------ --------------
Property, plant and equipment, net of accumulated
depreciation and amortization..................................... 7,058 7,644
Patents, net........................................................... 3,702 3,943
Goodwill, net.......................................................... 11,245 11,730
Other assets........................................................... 624 628
------------ --------------
$ 60,143 $ 62,834
============ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit (Note 4)................................. $ 3,513 $ 2,250
Current portion of long-term debt (Note 4)........................ 11,613 4,382
Accounts payable.................................................. 1,304 2,833
Accrued compensation.............................................. 1,043 1,143
Other accrued expenses............................................ 770 659
Income taxes...................................................... 1 468
------------ --------------
Total current liabilities...................................... 18,244 11,735
------------ --------------
Deferred income taxes.................................................. 117 201
Long-term debt (Note 4)................................................ 2,395 11,802
Commitments and contingencies.......................................... - -
Stockholders' equity:
Preferred stock, $.001 par value; authorized;
5,000 shares no shares outstanding................................ - -
Common stock, $.001 par value; authorized shares
25,000 shares, 8,444 shares issued................................ 8 8
Paid-in capital................................................... 24,143 24,143
Retained earnings................................................. 21,522 21,231
Treasury stock at cost, 831 shares................................ (6,286) (6,286)
------------ --------------
Total stockholders' equity..................................... 39,387 39,096
------------ --------------
$ 60,143 $ 62,834
============ ==============
See accompanying notes to consolidated financial statements
2
BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months Ended June 30, Six Months Ended June 30,
-------------------------- ---------------------------
2001 2000 2001 2000
-------- -------- -------- --------
Net sales .................................. $ 12,752 $ 18,062 $ 23,497 $ 39,242
Cost of goods sold ......................... 8,175 11,034 15,274 25,224
-------- -------- -------- --------
Gross profit ............................. 4,577 7,028 8,223 14,018
-------- -------- -------- --------
Operating expenses:
Selling .................................. 1,213 1,529 2,674 3,111
General and administrative ............... 1,643 1,720 3,206 3,578
Research and development ................. 603 511 1,132 1,052
-------- -------- -------- --------
3,459 3,760 7,012 7,741
-------- -------- -------- --------
Earnings from operations ................... 1,118 3,268 1,211 6,277
-------- -------- -------- --------
Other Expense:
Interest expense ......................... (338) (523) (742) (1,106)
-------- -------- -------- --------
Earnings before income taxes ............... 780 2,745 469 5,171
Provision for income taxes ................. 282 993 178 1,838
-------- -------- -------- --------
Net earnings ............................. $ 498 $ 1,752 $ 291 $ 3,333
======== ======== ======== ========
Basic net earnings per share ............... $ 0.07 $ 0.23 $ 0.04 $ 0.44
======== ======== ======== ========
Basic weighted average shares outstanding .. 7,613 7,604 7,613 7,627
======== ======== ======== ========
Diluted net earnings per share ............. $ 0.07 $ 0.23 $ 0.04 $ 0.43
======== ======== ======== ========
Diluted weighted average shares outstanding 7,627 7,704 7,623 7,678
======== ======== ======== ========
See accompanying notes to consolidated financial statements.
3
BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Six Months Ended June 30,
----------------------------------------
2001 2000
---------------- ----------------
Cash Flows From Operating Activities:
Net earnings...................................... $ 291 $ 3,333
Adjustments to reconcile net earnings to cash
provided by operating activities:
Depreciation and amortization................... 1,444 1,572
Provision for doubtful accounts................. 179 229
Deferred income taxes........................... 16 (637)
Changes in operating assets and liabilities:
Accounts receivable............................. (15) (764)
Inventories..................................... (455) (1,178)
Other current assets............................ 1,597 289
Income taxes.................................... (467) 2,633
Accounts payable and accrued expenses........... (1,518) (1,771)
---------------- ----------------
Net cash provided by operating activities..... 1,072 3,706
---------------- ----------------
Cash Flows From Investing Activities:
Capital expenditures.............................. (128) (106)
Acquisition of licensing agreements .............. - (71)
---------------- ----------------
Net cash used in investing activities........... (128) (177)
---------------- ----------------
Cash Flows From Financing Activities:
Net (repayments) borrowings
under revolving line of credit.................. 1,263 (169)
Repayments of long-term debt...................... (2,176) (2,200)
Proceeds from exercise of stock options........... - 266
---------------- ----------------
Net cash used in financing activities........... (913) (2,103)
---------------- ----------------
Net Increase In Cash................................. 31 1,426
Cash, beginning of period............................ 363 48
---------------- ----------------
Cash, end of period.................................. $ 394 $ 1,474
================ ================
Supplemental Cash Flow Information:
Cash paid for interest............................ $ 783 $ 1,112
Cash paid for income taxes........................ 618 -
See accompanying notes to consolidated financial statements.
4
BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
(UNAUDITED)
NOTE 1 - COMPANY AND BASIS OF PRESENTATION
Blonder Tongue Laboratories, Inc. (the "Company") is a designer,
manufacturer and supplier of electronics and systems equipment for the cable
television industry, primarily throughout the Unites States. The consolidated
financial statements include the accounts of Blonder Tongue Laboratories, Inc.
and subsidiaries. Significant intercompany accounts and transactions have been
eliminated in consolidation.
The results for the second quarter of 2001 are not necessarily
indicative of the results to be expected for the full fiscal year and have not
been audited. In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments, consisting only of
normal recurring adjustments, necessary for a fair statement of the results of
operations for the period presented and the consolidated balance sheet June 30,
2001. Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the SEC rules and regulations. These
financial statements should be read in conjunction with the financial statements
and notes thereto that were included in the Company's annual report on Form 10-K
for the year ended December 31, 2000.
NOTE 2 - EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133 ("FAS 133"), "Accounting for
Derivative Instruments and Hedging Activities." FAS 133 was adopted by the
Company on January 1, 2001. FAS 133 requires that all derivative instruments be
recorded on the balance sheet at fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of the hedge
transaction and the type of hedge transaction. Although the Company's interest
rate swap is considered an effective hedge under FAS 133, the effect of
implementing FAS 133 in the six months ending June 30, 2001 is not considered
material.
In July 2001, the Financial Accounting Standards Board issued a
Statement of Financial Accounting Standards (SFAS) No. 141, Business
Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS 141
requires the use of the purchase method of accounting and prohibits the use of
the pooling-of-interests method of accounting for business combinations
initiated after June 30, 2001. SFAS 142 addresses financial accounting and
reporting for acquired goodwill and other intangible assets. SFAS requires,
among other things, that companies no longer amortize goodwill, but instead test
goodwill for impairment at least annually. SFAS 142 is required to be applied
for fiscal years beginning after December 15, 2001. The Company's previous
business combinations were accounted for using the purchase method. As of June
30, 2001, net carrying amount of goodwill is $11,245 and other intangible assets
is $4,326. Amortization expense during the six-month period ended June 30, 2001
was $730. Currently, the Company is assessing but has not yet determined how the
adoption of SFAS 141 and SFAS 142 will impact its financial position and results
of operations.
NOTE 3 - INVENTORIES
Inventories are summarized as follows:
June 30 Dec. 31,
2001 2000
------------ ------------
Raw Materials............................ $ 12,189 $ 11,346
Work in process.......................... 4,956 3,261
Finished Goods........................... 9,643 11,726
------------ ------------
$26,788 $ 26,333
============ ============
5
BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
(UNAUDITED)
NOTE 4 - DEBT
The Company has a $5,500 revolving line of credit with its bank
($7,500 prior to August 1, 2000) on which funds may be borrowed at either the
bank's base rate plus a margin ranging from 0% to .625%, or LIBOR, plus a margin
ranging from 1.50% to 2.625%, in each case depending upon the calculation of
certain financial covenants (7.5% at June 30, 2001). At June 30, 2001, the
Company had $3,513 outstanding under the line of credit. Borrowings under the
line of credit are limited to certain percentages of eligible accounts
receivable and inventory as defined in the credit agreement. The line of credit
is collateralized by a security interest in all of the Company's assets. The
agreement also contains restrictions that require the Company to maintain
certain financial ratios as well as restrictions on the payment of dividends.
In March, 2001, the Company's credit agreement with its bank was
amended to retroactively modify certain financial covenants effective as of
December 31, 2000 and thereafter, as well as to extend the maturity date of the
line of credit until November 30, 2001. At June 30, 2001, the Company was unable
to meet one of its financial covenants, compliance with which was waived by the
bank as of such date. The Company anticipates that it will either conclude
negotiations with its bank and obtain a further renewal of its current credit
facilities, or enter into new credit facilities with another bank, prior to
November 30, 2001.
The Company has a term loan with its bank (the "S-A TERM LOAN"). The
S-A Term Loan bears interest at either the bank's base rate plus a margin
ranging from 0% to .875%, or LIBOR plus a margin ranging from 1.75% to 2.875%,
in each case depending upon the calculation of certain financial covenants
(6.7375% at June 30, 2001). At June 30, 2001, there was $11,083 outstanding
under the S-A Term Loan. The principal balance of the S-A Term Loan is being
amortized in monthly installments of $317 with a final balloon payment of all
remaining unpaid principal and accrued interest due on June 30, 2002.
On May 24, 1996, the Company borrowed $2,800 for a ten year term
secured by a mortgage against the Company's facility. The loan accrued interest
at a fixed rate of 7.25% through May 1999. Effective June 1, 1999, the loan was
converted to a variable interest rate based upon the bank's base rate (7.0% at
June 30, 2001).
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
In addition to historical information, this Quarterly Report contains
forward-looking statements relating to such matters as anticipated financial
performance, business prospects, technological developments, new products,
research and development activities and similar matters. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements. In order to comply with the terms of the safe harbor, the Company
notes that a variety of factors could cause the Company's actual results and
experience to differ materially from the anticipated results or other
expectations expressed in the Company's forward-looking statements. The risks
and uncertainties that may affect the operation, performance, development and
results of the Company's business include, but are not limited to, those matters
discussed herein in this section entitled Item 2 - Management's Discussion and
Analysis of Financial Condition and Results of Operations. The words "believe",
"expect", "anticipate", "project" and similar expressions identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's analysis only as of
the date hereof. Blonder Tongue undertakes no obligation to publicly revise
these forward-looking statements to reflect events or circumstances that arise
after the date hereof. Readers should carefully review the risk factors
described in other documents the Company files from time to time with the
Securities and Exchange Commission, including without limitation, the Company's
Annual Report on Form 10-K for the year ended December 31, 2000 (See Item 1:
Business and Item 7: Management's Discussion and Analysis of Financial Condition
and Results of Operations).
Second three months of 2001 Compared with second three months of 2000
Net Sales. Net sales decreased $5,310,000, or 29%, to $12,752,000 in
the second three months of 2001 from $18,062,000 in the second three months of
2000. The decrease in sales is primarily attributed to a decrease in sales of
interdiction products. Net sales included approximately $2,430,000 of
interdiction equipment for the second three months of 2001 compared to
approximately $7,160,000 for the second three months of 2000.
Cost of Goods Sold. Cost of goods sold decreased to $8,175,000 for the
second three months of 2001 from $11,034,000 for the second three months of
2000, but increased as a percentage of sales to 64.1% from 61.1%. The increase
as a percentage of sales was caused primarily by a higher proportion of sales
during the period being comprised of lower margin products, including early
stage production runs of the Company's new QQQT transcoder products. Gross
margins associated with the new QQQT transcoder products are expected to
continue to improve as unit volume increases.
Selling Expenses. Selling expenses decreased to $1,213,000 for the
second three months of 2001 from $1,529,000 in the second three months of 2000,
primarily due to a decrease in wages related to a reduction in headcount along
with a decrease in commissions and freight expense as a result of reduced sales.
General and Administrative Expenses. General and administrative
expenses decreased to $1,643,000 for the second three months of 2001 from
$1,720,000 for the second three months of 2000 but increased as a percentage of
sales to 12.9% for the second three months of 2001 from 9.5% for the second
three months of 2000. The $77,000 decrease can be primarily attributed to a
decrease in wages related to a reduction in headcount.
Research and Development Expenses. Research and development expenses
increased to $603,000 in the second three months of 2001 from $511,000 in the
second three months of 2000, primarily due to an increase in consulting
expenses. Research and development expenses, as a percentage of sales, increased
to 4.7% in the second three months of 2001 from 2.8% in the second three months
of 2000.
Operating Income. Operating income decreased 65.8% to $1,118,000 for
the second three months of 2001 from $3,268,000 for the second three months of
2000. Operating income as a percentage of sales decreased to 8.8% in the second
three months of 2001 from 18.1% in the second three months of 2000.
7
Interest Expense. Interest expense decreased to $338,000 in the second
three months of 2001 from $523,000 in the second three months of 2000. The
decrease is the result of lower average borrowings and lower average interest
rates.
Income Taxes. The provision for income taxes for the second three
months of 2001 decreased to $282,000 from $993,000 the second three months of
2000 as a result of a decrease in taxable income.
First six months of 2001 Compared with first six months of 2000
Net Sales. Net sales decreased $15,745,000, or 40.1%, to $23,497,000
in the first six months of 2001 from $39,242,000 in the first six months of
2000. The decrease in sales is primarily attributed to a decrease in sales of
interdiction products. Net sales included approximately $5,309,000 of
interdiction equipment for the first six months of 2001 compared to
approximately $18,330,000 for the first six months of 2000.
Cost of Goods Sold. Cost of goods sold decreased to $15,274,000 for
the first six months of 2001 from $25,224,000 for the first six months of 2000
but increased as a percentage of sales to 65.0% from 64.3%. The increase as a
percentage of sales was caused primarily by a higher proportion of sales during
the period being comprised of lower margin products, including early stage
production runs of the Company's new QQQT transcoder products. Gross margins
associated with the new QQQT transcoder products are expected to continue to
improve as unit volume increases.
Selling Expenses. Selling expenses decreased to $2,674,000 for the
first six months of 2001 from $3,111,000 in the first six months of 2000,
primarily due to a decrease in wages related to the decrease in headcount along
with a decrease in commissions and freight expense as a result of reduced sales.
General and Administrative Expenses. General and administrative
expenses decreased to $3,206,000 for the first six months of 2001 from
$3,578,000 for the first six months of 2000 but increased as a percentage of
sales to 13.6% for the first six months of 2001 from 9.1% for the first six
months of 2000. The $372,000 decrease can be primarily attributed to a decrease
in wages related to a reduction in headcount.
Research and Development Expenses. Research and development expenses
increased to $1,132,000 in the first six months of 2001 from $1,052,000 in the
first six months of 2000, primarily due to a increase in consulting expenses.
Research and development expenses, as a percentage of sales, increased to 4.8%
in the first six months of 2001 from 2.7% in the first six months of 2000.
Operating Income. Operating income decreased 80.7% to $1,211,000 for
the first six months of 2001 from $6,277,000 for the first six months of 2000.
Operating income as a percentage of sales decreased to 5.2% in the first six
months of 2001 from 16.0% in the first six months of 2000.
Interest Expense. Interest expense decreased to $742,000 in the first
six months of 2001 from $1,106,000 in the first six months of 2000, due
primarily to lower average borrowing and lower average interest rates.
Income Taxes. The provision for income taxes for the first six months
of 2001 decreased to $178,000 from $1,838,000 for the first six months of 2000
as a result of a decrease in taxable income.
LIQUIDITY AND CAPITAL RESOURCES
The Company's net cash provided by operating activities for the
six-month period ended June 30, 2001 was $1,072,000, compared to $3,706,000 for
the six-month period ended June 30, 2000.
Cash used in investing activities was $128,000, which was attributable
to capital expenditures for new equipment. The Company anticipates additional
capital expenditures during calendar year 2001 aggregating approximately
$50,000, which will be used for the purchase of tooling.
8
Cash used in financing activities was $913,000 for the first six
months of 2001 primarily comprised of $1,263,000 of borrowings under the
revolving line of credit offset by $2,176,000 of repayments of long-term debt.
The Company has a $5,500,000 revolving line of credit with its bank
($7,500,000 prior to August 1, 2000) on which funds may be borrowed at either
the bank's base rate plus a margin ranging from 0% to .625%, or LIBOR, plus a
margin ranging from 1.50% to 2.625%, in each case depending upon the calculation
of certain financial covenants (7.5% at June 30, 2001). At June 30, 2001, the
Company had $3,513,000 outstanding under the line of credit. Borrowings under
the line of credit are limited to certain percentages of eligible accounts
receivable and inventory as defined in the credit agreement. The line of credit
is collateralized by a security interest in all of the Company's assets. The
agreement also contains restrictions that require the Company to maintain
certain financial ratios as well as restrictions on the payment of dividends.
In March, 2001, the Company's credit agreement with its bank was
amended to retroactively modify certain financial covenants effective as of
December 31, 2000 and thereafter, as well as to extend the maturity date of the
line of credit until November 30, 2001. At June 30, 2001, the Company was unable
to meet one of its financial covenants, compliance with which was waived by the
bank as of such date. The Company anticipates that it will either conclude
negotiations with its bank and obtain a further renewal of its current credit
facilities, or enter into new credit facilities with another bank, prior to
November 30, 2001.
The Company has a term loan with its bank (the "S-A TERM LOAN"). The
S-A Term Loan bears interest at either the bank's base rate plus a margin
ranging from 0% to .875%, or LIBOR plus a margin ranging from 1.75% to 2.875%,
in each case depending upon the calculation of certain financial covenants
(6.7375% at June 30, 2001). At June 30, 2001, there was $11,083,000 outstanding
under the S-A Term Loan. The principal balance of the S-A Term Loan is being
amortized in monthly installments of $317,000 with a final balloon payment of
all remaining unpaid principal and accrued interest due on June 30, 2002.
On May 24, 1996, the Company borrowed $2,800,000 for a ten year term
secured by a mortgage against the Company's facility. The loan accrued interest
at a fixed rate of 7.25% through May 1999. Effective June 1, 1999, the loan was
converted to a variable interest rate based upon the bank's base rate (7.0% at
June 30, 2001).
On February 3, 1999, the Company entered into an interest rate swap
agreement with a notional amount of $10,000,000. The swap agreement has a
maturity date of June 3, 2002 and requires the Company to make fixed rate
interest payments on the notional amount of 8.01% per annum in exchange for
floating rate payments equal to LIBOR plus 2.55%. The Company is exposed to
credit risk in the unlikely event of the nonperformance by the counterparties.
Interest to be paid or received is accrued over the life of the agreement at the
net effective interest rate for the swap and corresponding debt instrument.
The Company currently anticipates that the cash generated from
operations, existing cash balances and amounts available under its existing or a
replacement line of credit, will be sufficient to satisfy its foreseeable
working capital needs.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133 ("FAS 133"), "Accounting for
Derivative Instruments and Hedging Activities." FAS 133 was adopted by the
Company on January 1, 2001. FAS 133 requires that all derivative instruments be
recorded on the balance sheet at fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of the hedge
transaction and the type of hedge transaction. Although the Company's interest
rate swap is considered an effective hedge under FAS 133, the effect of
implementing FAS 133 in the six months ending June 30, 2001 is not considered
material.
In July 2001, the Financial Accounting Standards Board issued a
Statement of Financial Accounting Standards (SFAS) No. 141, Business
Combinations and SFAS No. 142, Goodwill and Other Intangible
9
Assets. SFAS 141 requires the use of the purchase method of accounting and
prohibits the use of the pooling-of-interests method of accounting for business
combinations initiated after June 30, 2001. SFAS 142 addresses financial
accounting and reporting for acquired goodwill and other intangible assets. SFAS
requires, among other things, that companies no longer amortize goodwill, but
instead test goodwill for impairment at least annually. SFAS 142 is required to
be applied for fiscal years beginning after December 15, 2001. The Company's
previous business combinations were accounted for using the purchase method. As
of June 30, 2001, net carrying amount of goodwill is $11,245,000 and other
intangible assets is $4,326,000. Amortization expense during the six-month
period ended June 30, 2001 was $730,000. Currently, the Company is assessing but
has not yet determined how the adoption of SFAS 141 and SFAS 142 will impact its
financial position and results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The market risk inherent in the Company's financial instruments and
positions represents the potential loss arising from adverse changes in interest
rates. At June 30, 2001 and 2000 the principal amount of the Company's aggregate
outstanding variable rate indebtedness was $14,596,000 and $17,886,000,
respectively. Without giving effect to the swap agreement described below, a
hypothetical 1% adverse change in interest rates would have had an annualized
unfavorable impact of approximately $11,000 and $20,000, respectively, on the
Company's earnings and cash flows based upon these quarter-end debt levels. To
ameliorate these risks, in February, 1999, the Company entered into an interest
rate Swap Agreement with a notional amount of $10,000,000. The specific terms of
the Swap Agreement are more fully discussed above in Item 2 - Management's
Discussion and Analysis of Financial Condition and Results of Operations.
10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a party to certain proceedings incidental to the
ordinary course of its business, none of which, in the current opinion of
management, is likely to have a material adverse effect on the Company's
business, financial condition, or results of operations.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Stockholders (the
"Meeting") on May 4, 2001. The Company solicited proxies in connection with the
Meeting. At the record date of the Meeting (March 21, 2001), there were
7,612,644 shares of Common Stock outstanding and entitled to vote. The following
were the matters voted upon at the Meeting:
1. Election of Directors. The following directors were elected at the
Meeting: Robert B. Mayer and James F. Williams. The number of votes cast for and
withheld from each director are as follows:
DIRECTORS FOR WITHHELD
--------- --- --------
Robert B. Mayer 7,422,733 70,680
James F. Williams 7,422,833 70,580
James A. Luksch, Robert E. Heaton, John E. Dwight , Robert J. Palle,
Jr., Gary Scharmett and James H. Williams, continued as directors
after the meeting.
2. Ratification of Auditors. The appointment of BDO Seidman, LLP as
the Company's independent auditors for the year ending December 31, 2001 was
ratified by the following vote of Common Stock:
FOR AGAINST ABSTAIN
--- ------- -------
7,466,432 19,045 7,936
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits are listed in the Exhibit Index appearing at page 11
herein.
(b) No reports on Form 8-K were filed in the quarter ended June 30, 2001.
11
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.
BLONDER TONGUE LABORATORIES, INC.
Date: August 14, 2001 By: /s/ James A. Luksch
------------------------------------
James A. Luksch
President and Chief Executive Officer
By: /s/ Eric Skolnik
------------------------------------
Eric Skolnik
Vice President - Finance and Chief
Financial Officer
12
EXHIBIT INDEX
Exhibit # Description Location
--------- ----------- --------
3.1 Restated Certificate of Incorporation of Blonder Incorporated by reference from Exhibit 3.1
Tongue Laboratories, Inc. to S-1 Registration Statement No. 33-98070
originally filed October 12, 1995, as
amended.
3.2 Restated Bylaws of Blonder Tongue Laboratories, Incorporated by reference from Exhibit 3.2
Inc. to S-1 Registration Statement No. 33-98070
originally filed October 12, 1995, as
amended.
13