SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 1996, 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.
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(Exact name of registrant as specified in its charter)
Delaware 52-1611421
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Jake Brown Road, Old Bridge, New Jersey 08857
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 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 9, 1996: 8,166,685.
The Exhibit Index appears on page 14 of 14.
BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
June 30, Dec. 31,
1996 1995
----------- --------
(unaudited)
Assets (Note 5)
Current assets:
Cash ....................................................................................... $ 181 $ 477
Accounts receivable, net of allowance for doubtful
accounts of $215 and $205, respectively .................................................. 8,859 9,155
Inventories (Note 4) ....................................................................... 17,213 13,390
Other current assets ....................................................................... 351 906
Deferred income taxes ...................................................................... 326 137
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Total current assets ........................................................... 26,930 24,065
Property, plant and equipment, net of accumulated
depreciation and amortization ............................................................ 7,041 6,486
Other assets ................................................................................. 1,128 1,253
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$35,099 $31,804
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Liabilities and Stockholders' Equity
Current liabilities:
Revolving line of credit (Note 5) .......................................................... $ 3,238 $ 2,709
Current portion of long-term debt .......................................................... 455 221
Accounts payable ........................................................................... 1,129 4,630
Accrued compensation ....................................................................... 977 843
Other accrued expenses ..................................................................... 934 729
Income taxes ............................................................................... 67 526
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Total current liabilities ...................................................... 6,800 9,658
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Deferred income taxes ........................................................................ 464 482
Long-term debt, including related party debt of $1,591 ....................................... 4,926 1,924
Commitments and contingencies (Note 7) ....................................................... -- --
Stockholders' equity (Note 8):
Preferred stock, $.001 par value; authorized 5,000,000 shares;
no shares outstanding .................................................................... -- --
Common stock, $.001 par value; authorized 25,000,000 shares,
7,919,285 shares issued and outstanding at December 31, 1995 and
8,155,400 shares issued and outstanding at June 30, 1996 ................................. 8 8
Paid-in capital ............................................................................ 21,318 19,546
Retained earnings .......................................................................... 1,583 186
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Total stockholders' equity ..................................................... 22,909 19,740
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$35,099 $31,804
======= =======
See accompanying notes to consolidated financial statements.
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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,
----------------------------------- ------------------------------------
1996 1995 1996 1995
--------------- --------------- ----------------- ---------------
Net sales................................... $11,693 $15,394 $23,265 $27,258
Cost of goods sold.......................... 7,153 9,534 14,768 16,856
------- ------- ------- -------
Gross profit.............................. 4,540 5,860 8,497 10,402
------- ------- ------- -------
Operating expenses:
Selling expenses.......................... 1,323 1,275 2,538 2,361
General and administrative................ 1,244 1,362 2,314 2,534
Research and development.................. 431 429 954 888
------- ------- ------- -------
2,998 3,066 5,806 5,783
------- ------- ------- -------
Earnings from operations.................... 1,542 2,794 2,691 4,619
------- ------- ------- -------
Other income (expense):
Interest expense.......................... (202) (342) (367) (554)
Other income.............................. -- 10 -- 31
------- ------- ------- -------
(202) (332) (367) (523)
------- ------- ------- -------
Earnings before income taxes................ 1,340 2,462 2,324 4,096
Provision for income taxes.................. 533 126 927 209
------- ------- ------- -------
Net earnings.............................. $ 807 $ 2,336 $ 1,397 $ 3,887
======== ======= ======== =======
Net earnings per share...................... $ 0.10 $ 0.17
======== ========
Weighted average shares outstanding......... 8,319 8,293
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Pro forma data (Note 3):
Historical earnings before income taxes... $ 2,462 $ 4,096
Pro forma provision for income taxes...... 984 1,638
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Net earnings............................ $ 1,478 $ 2,458
======= =======
Pro forma net earnings per share............ $ 0.25 $ 0.41
======= =======
Weighted average shares outstanding......... 5,967 5,967
======= =======
See accompanying notes to consolidated financial statements.
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BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Six Months Ended
June 30,
----------------------
1996 1995
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Cash Flows From Operating Activities:
Net earnings............................................................................ $ 1,397 $ 3,887
Adjustments to reconcile net earnings to cash
used in operating activities:
Depreciation and amortization....................................................... 538 158
Provision for doubtful accounts..................................................... 105 76
Deferred income taxes............................................................... (207) --
Changes in operating assets and liabilities:
Accounts receivable............................................................... 191 (10,834)
Inventories....................................................................... (3,823) (1,943)
Other current assets.............................................................. 555 (35)
Other assets...................................................................... 30 (131)
Income taxes...................................................................... (459) 196
Accounts payable and accrued expenses............................................. (3,162) 4,582
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Net cash used in operating activities............................................ (4,835) (4,044)
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Cash Flows From Investing Activities:
Capital expenditures.................................................................... (998) (306)
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Net cash used in investing activities............................................ (998) (306)
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Cash Flows From Financing Activities:
Net borrowings under revolving line of credit........................................... 529 6,766
Proceeds from long-term debt............................................................ 3,419 --
Repayments of long-term debt............................................................ (183) (426)
Proceeds from sale of common stock...................................................... 1,772 --
Distributions paid to stockholders...................................................... -- (2,367)
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Net cash provided by financing activities........................................ 5,537 3,973
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Net Decrease In Cash...................................................................... (296) (377)
Cash, beginning of period................................................................. 477 502
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Cash, end of period....................................................................... $ 181 $ 125
======= =======
Supplemental Cash Flow Information:
Cash paid for interest.................................................................. $ 316 $ 477
Cash paid for income taxes.............................................................. 1,301 --
======= =======
Non-cash transactions:
Accrued dividends....................................................................... -- 1,897
======= =======
See accompanying notes to consolidated financial statements.
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BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
(unaudited)
Note 1 - Company and Basis of Presentation
Blonder Tongue Laboratories, Inc. (the "Company") is a manufacturer of
television and satellite signal distribution equipment supplied to the private
cable television and broadcast industries. The consolidated financial statements
include the accounts of Blonder Tongue Laboratories, Inc. and subsidiaries as
discussed below. Significant intercompany accounts and transactions have been
eliminated in consolidation.
The results for the six months ended June 30, 1996 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 accruals, necessary for a fair statement of the results of
operations for the period presented and the consolidated balance sheet at June
30, 1996. 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
latest annual report on Form 10-K.
Note 2 - Reorganization and Recapitalization
On December 11, 1995, the Company acquired Blonder Tongue International,
Inc. (BTI). BTI was an S Corporation formed in 1994 by the stockholders of the
Company. The acquisition was consummated by contribution of BTI's shares to the
Company. The acquisition was accounted for at historical cost similar to a
pooling of interests, due to the common control exercised over the entities by
related parties. The accompanying consolidated statements of earnings and of
cash flows have been restated for the period ended June 30, 1995. As a result of
the acquisition of BTI, the S Corporation elections for both BTI and the Company
automatically terminated on December 11, 1995.
The Company is planning to sell substantially all of the assets of BTI. This
transaction is not expected to have a material impact on the Company's operating
results.
On October 3, 1995, the Board of Directors and stockholders approved the
following actions in connection with the Company's initial public offering,
which actions were implemented on December 11, 1995:
Authorized capital consisting of 25 million shares of $.001 par value common
stock and 5 million shares of $.001 par value preferred stock. The preferred
stock may be issued in one or more series with such rights, preferences and
limitations as the Board of Directors of the Company may determine.
Declared a 2,011 for 1 stock split for the common stock. The consolidated
financial statements reflect the impact of the stock split for all periods
presented.
Note 3 - Pro Forma Presentations
The income tax provision for the period ended June 30, 1995 has been
calculated as if the Company were taxable as a C Corporation under the Internal
Revenue Code.
Pro forma net earnings per share is based on the weighted average number of
common stock shares and common stock equivalent shares outstanding during each
period, as adjusted for the effects of the application of Securities and
Exchange Commission Staff Accounting Bulletin ("SAB") No. 83 (53 for June 30,
1995). Pursuant to SAB No. 83, options granted within one year of the initial
public offering which have an exercise price less than the initial public
offering price are treated as outstanding for all periods presented. Pro forma
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BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
(unaudited)
net earnings per share is computed using the treasury stock method, under which
the number of shares outstanding reflects an assumed use of the proceeds from
the assumed exercise of such options to repurchase shares of the Company's
common stock at the initial public offering price.
Note 4 - Inventories
Inventories are summarized as follows:
June 30, Dec. 31,
1996 1995
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Raw Materials .......................... $ 9,140 $ 7,293
Work in process ........................ 3,132 2,786
Finished Goods ......................... 4,941 3,311
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$17,213 $ 13,390
======= ========
Note 5 - Line of Credit
The Company has a $15 million line of credit with a bank on which funds may be
borrowed at the bank's prime rate (8.25% at June 30, 1996). As of June 30, 1996,
the Company had drawn down $3,238 under the line of credit for working capital
needs. Borrowings under the line of credit are limited based on a percentage of
accounts receivable and inventory. The line of credit is collateralized by a
security interest in all of the Company's assets. The agreement contains
restrictions as to the amount of capital expenditures and investments and
requires the Company to maintain certain financial ratios. The line of credit
expired on June 30, 1996, however, the Company was granted a three month
extension of the line of credit during which time the terms of a new line of
credit will be negotiated. The terms of the extension are the same as the terms
under the original line of credit.
Note 6 - Debt
On May 24, 1996, the Company borrowed $2.8 million for a 10-year term secured
by a mortgage against the Company's manufacturing and administrative facility
located in Old Bridge, New Jersey. The interest rate is fixed at 7.25% for three
years and may be negotiated to another fixed rate or remain variable for the
remaining seven years of the mortgage.
Note 7 - Commitments and Contingencies
In the first quarter of 1996, the Company entered into three five-year capital
lease agreements for certain machinery and equipment totaling $929. As of June
30, 1996, two leases have commenced and one lease in the amount of $577 remains
to be completed with advances of $279 being made.
Note 8 - Stockholders' Equity
In January 1996, 182 shares of Common Stock were sold at a price of $9.50
per share pursuant to the exercise of the underwriters' over-allotment option
which generated net proceeds of approximately $1,606. The proceeds were used for
working capital.
On July 30, 1996, the Company's Board of Directors granted options to purchase
225 shares of common stock under the 1995 Long Term Incentive Plan and options
to purchase 28 shares of common stock under the 1994
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BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
(unaudited)
Incentive Stock Option Plan. 205 of the options were granted at $9.63 per
share, representing 100% of the fair market value thereof as of the date of
grant. 48 of the options were granted to individuals who own more than 10% of
the voting stock of the Company at $10.59 per share, representing 110% of the
fair market value thereof as of the date of grant. The options granted under
both plans expire 10 years from the date of grant and vest one-third each year
commencing on the first anniversary of the date of grant.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Second three months of 1996 Compared with second three months of 1995
Net Sales. Net sales decreased $3,701,000, or 24.0%, to $11,693,000 in the
second three months of 1996 from $15,394,000 in the second three months of 1995.
International sales accounted for $636,000 (5.4% of total sales) for the second
three months of 1996 compared to $1,255,000 (8.2% of total sales) for the second
three months of 1995. Net sales included approximately $536,000 of VideoMask(TM)
interdiction equipment. Net sales also included $525,000 under the Company's
agreement to supply interdiction equipment to Pacific Bell.
Sales in the lodging market remained strong during the period but MDU sales
were impacted by the uncertainty surrounding the installation of private cable
systems in properties under contract to Interactive Cable Systems, Inc. ("ICS"),
one of the Company's largest customers in 1995. Net sales to ICS were
approximately $6,000 in the second three months of 1996 compared to
approximately $5,900,000 in the second three months of 1995. It is anticipated
that these properties will be upgraded in future time periods either by ICS or
by other private cable operators. Approximately $759,000 of accounts receivable
outstanding at June 30, 1996 was due from ICS for more than 60 days.
Volume interdiction sales have been delayed due to the inability of ICS to
complete the installation of private cable systems in properties under contract
to them and the shift in demand to other users of Interdiction whose
requirements were for product configurations not yet in production. While there
can be no assurances, the Company anticipates the production of these products
to be accelerated through the third and fourth quarters of 1996.
Cost of Goods Sold. Cost of goods sold decreased to $7,153,000 for the second
three months of 1996 from $9,534,000 for the second three months of 1995 and
also decreased as a percentage of sales to 61.2% from 61.9%. The decrease was
caused primarily by a greater proportion of sales during the period being
comprised of higher margin products.
Selling Expenses. Selling expenses increased to $1,323,000 in the second three
months of 1996 from $1,275,000 in the second three months of 1995, primarily due
to increased costs incurred for advertising, marketing materials and trade
shows, as well as increased operational costs of the BTI sales office and
additional costs incurred in connection with the anticipated closing of this
office.
General and Administrative Expenses. General and administrative expenses
decreased to $1,244,000 in the second three months of 1996 from $1,362,000 for
the second three months of 1995 but increased as a percentage of sales to 10.6%
in the second three months of 1996 from 8.8% for the second three months of
1995. The $118,000 decrease can be attributed to a reduction in rent expense,
net of increased depreciation, as a result of the purchase of the manufacturing
facility and a decline in salaries due to a reduction in personnel, offset by an
increase in expenditures for professional services and insurance.
Research and Development Expenses. Research and development expenses increased
to $431,000 in the second three months of 1996 from $429,000 in the second three
months of 1995, primarily due to an increase in purchased materials for research
and development and increased expenditures related to the VideoMask(TM)
interdiction product line. Research and development expenses also increased as a
percentage of sales to 3.7% from 2.8% and the Company anticipates continuing to
increase its research and development expenditures.
Operating Income. Operating income decreased 45% to $1,542,000 for the second
three months of 1996 from $2,794,000 for the second three months of 1995.
Operating income as a percentage of sales decreased to 13.2% in the second three
months of 1996 from 18.1% in the second three months of 1995.
Interest and Other Expenses. Other expenses, net, decreased to $202,000 in the
second three months of 1996 from $332,000 in the second three months of 1995.
These expenses in the second three months of 1996 consisted of interest expense
in the amount of $202,000. Other expenses in the second three months of 1995
consisted of interest expense of $342,000, offset by $10,000 of other income.
The reduction in interest expense is primarily attributed to reduced borrowings
under the Company's credit line.
-8-
Income Taxes. The Company with the consent of its stockholders elected to be
taxed as an S Corporation for federal income tax purposes since its
organization. As a consequence, the taxable net earnings of the Company were
taxed as income to the Company's stockholders in proportion to their individual
stockholdings, and the payment of federal income taxes on such proportionate
share of the Company's taxable earnings is the personal obligation of each
stockholder. The Company's status as an S Corporation terminated on December 11,
1995, and as a result the Company is now a C Corporation for income tax
purposes. As a C Corporation, the Company is currently taxed at a combined
effective rate of 40% based upon current federal and state income tax
regulations. Had the Company been taxable as a C Corporation for the second
quarter of 1995, pro forma income taxes and pro forma net earnings after taxes
would have been $984,000 and $1,478,000, respectively, for the quarter ended
June 30, 1995.
First six months of 1996 Compared with first six months of 1995
Net Sales. Net sales decreased $3,993,000, or 14.6%, to $23,265,000 in the
first six months of 1996 from $27,258,000 in the first six months of 1995.
International sales accounted for $1,425,000 (6.1% of total sales) for the first
six months of 1996 compared to $2,699,000 (9.9% of total sales) for the first
six months of 1995. Net sales included approximately $806,000 of VideoMask(TM)
interdiction equipment. Net sales also included $825,000 under the Company's
agreement to supply interdiction equipment to Pacific Bell.
Sales in the lodging market remained strong during the period but MDU sales
were impacted by the uncertainty surrounding the installation of private cable
systems in properties under contract to Interactive Cable Systems, Inc. ("ICS"),
one of the Company's largest customers in 1995. Net sales to ICS were
approximately $659,000 in the first six months of 1996 compared to approximately
$7,900,000 in the first six months of 1995. It is anticipated that these
properties will be upgraded in future time periods either by ICS or by other
private cable operators. Approximately $759,000 of accounts receivable
outstanding at June 30, 1996 was due from ICS for more than 60 days.
Volume interdiction sales have been delayed due to the inability of ICS to
complete the installation of private cable systems in properties under contract
to them and the shift in demand to other users of Interdiction whose
requirements were for product configurations not yet in production. While there
can be no assurances, the Company anticipates the production of these products
to be accelerated through the third and fourth quarters of 1996.
Cost of Goods Sold. Cost of goods sold decreased to $14,768,000 for the first
six months of 1996 from $16,856,000 for the first six months of 1995 but
increased as a percentage of sales to 63.5% from 61.8%. The increase as a
percentage of sales was caused primarily by a greater proportion of sales during
the period being comprised of lower margin products.
Selling Expenses. Selling expenses increased to $2,538,000 in the first six
months of 1996 from $2,361,000 in the first six months of 1995, primarily due to
increased costs incurred for advertising, marketing materials and trade shows,
as well as increased operational costs of the BTI sales office and additional
costs incurred in connection with the anticipated closing of this office.
General and Administrative Expenses. General and administrative expenses
decreased to $2,314,000 in the first six months of 1996 from $2,534,000 for the
first six months of 1995 but increased as a percentage of sales to 9.9% in the
first six months of 1996 from 9.3% for the first six months of 1995. The
$220,000 decrease can be attributed to a reduction in rent expense, net of
increased depreciation, as a result of the purchase of the manufacturing
facility and a decline in salaries due to a reduction in personnel, offset by an
increase in expenditures for professional services and insurance.
Research and Development Expenses. Research and development expenses increased
7.4% to $954,000 in the first six months of 1996 from $888,000 in the first six
months of 1995, primarily due to an increase in purchased materials for research
and development and increased expenditures related to the VideoMask(TM)
interdiction product line. Research and development expenses also increased as a
percentage of sales to 4.1% from 3.3% and the Company anticipates continuing to
increase its research and development expenditures.
-9-
Operating Income. Operating income decreased 42% to $2,691,000 for the first
six months of 1996 from $4,619,000 for the first six months of 1995. Operating
income as a percentage of sales decreased to 11.6% in the first six months of
1996 from 16.9% in the first six months of 1995.
Interest and Other Expenses. Other expenses, net, decreased to $367,000 in the
first six months of 1996 from $523,000 in the first six months of 1995. These
expenses in the first six months of 1996 consisted of interest expense in the
amount of $367,000. Other expenses in the first six months of 1995 consisted of
interest expense of $554,000, offset by $31,000 of other income. The reduction
in interest expense is primarily attributed to reduced borrowings under the
Company's credit line.
Income Taxes. The Company with the consent of its stockholders elected to be
taxed as an S Corporation for federal income tax purposes since its
organization. As a consequence, the taxable net earnings of the Company were
taxed as income to the Company's stockholders in proportion to their individual
stockholdings, and the payment of federal income taxes on such proportionate
share of the Company's taxable earnings is the personal obligation of each
stockholder. The Company's status as an S Corporation terminated on December 11,
1995, and as a result the Company is now a C Corporation for income tax
purposes. As a C Corporation, the Company is currently taxed at a combined
effective rate of 40% based upon current federal and state income tax
regulations. Had the Company been taxable as a C Corporation for the first two
quarters of 1995, pro forma income taxes and pro forma net earnings after taxes
would have been $1,638,000 and $2,458,000, respectively, for the six-month
period ended June 30, 1995.
Liquidity and Capital Resources
As of June 30, 1996, the Company's working capital was $20,130,000, compared
to $14,407,000 as of December 31, 1995. The increase in working capital is
primarily attributable to a $1,606,000 equity capital infusion as a result of
the exercise by the Company's underwriters of their over-allotment option in
connection with the Company's initial public offering of Common Stock and
proceeds from a $2,800,000 loan secured by a mortgage against the Company's
principal office/manufacturing facility located in Old Bridge, New Jersey. These
additional proceeds were applied against the outstanding balance under the
Company's revolving line of credit. Historically, the Company has satisfied its
cash requirements primarily from net cash provided by operating activities and
from borrowings under its line of credit.
The Company's net cash used in operating activities for the six-month period
ended June 30, 1996 was $4,835,000, including $3,823,000 to fund the increase in
inventory, compared to cash used in operating activities for the six-month
period ended June 30, 1995, which was $4,044,000. Cash flows from operating
activities have been negative, due primarily to the increase in inventory of
$3,823,000, and a reduction in accounts payable of $3,501,000 offset by an
increase of $339,000 in accrued expenses.
Cash used in investing activities was $998,000, substantially all of which is
attributable to capital expenditures for new equipment. The Company anticipates
capital expenditures during calendar year 1996 aggregating, approximately
$1,500,000, $560,000 of which will be used for the purchase of several high
speed robotic insertion machines to be used primarily in the manufacture of
circuit boards for the Company's new VideoMask(TM) product line and the balance
of which will be used for the purchase of other automated assembly and test
equipment. The Company does not have any present plans or commitments for
material capital expenditures for fiscal year 1997.
Cash provided by financing activities was $5,537,000 for the first six months
of 1996, comprised primarily of debt proceeds, net of repayments, of $3,765,000,
net proceeds from the Company's sale of an additional 181,735 shares of Common
Stock pursuant to an over-allotment option relating to the Company's initial
public offering of $1,606,000 and an additional $166,000 relating to the
exercise of stock options.
As of June 30, 1996, the Company's outstanding balance under its line of
credit was $3,238,000. This loan is secured by substantially all of the
Company's assets. In October, 1995, the Company's line of credit was increased
to $15,000,000. The credit line bore interest at Meridian Bank's prime rate
(8.25% as of July 31, 1996), and was subject to certain covenants, including the
maintenance of certain financial ratios and limitations on capital expenditures
and payment of dividends. The credit line expired on June 30, 1996, however, the
-10-
Company was granted a three month extension on the same terms as the terms under
the original line of credit, pending negotiation of a new revolving line of
credit agreement.
On May 24, 1996, the Company borrowed $2,800,000 from Meridian Bank for a
10-year term, secured by a mortgage against its principal office/manufacturing
facility located in Old Bridge, New Jersey. Proceeds of the loan were applied
against the outstanding balance of the Company's revolving line of credit. The
mortgage loan bears interest at the fixed rate of 7.25% per annum for the first
three years and may be negotiated to another fixed rate or remain variable for
the remaining seven years of the loan.
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.
-11-
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material legal proceedings pending or, to the knowledge of
management, threatened against the Company.
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 April
25, 1996. The Company solicited proxies in connection with the Meeting. At the
record date of the Meeting (March 25, 1996), there were 8,133,196 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:
James A. Luksch and John E. Dwight. The number of votes cast for and withheld
from each director are as follows:
DIRECTORS FOR WITHHELD
--------- --- --------
James A. Luksch 7,318,436 2,000
John E. Dwight 7,318,436 2,000
2. Ratification of Auditors. The appointment of BDO Seidman, LLP as the
Company's independent auditors for the year ending December 31, 1996 was
ratified by the following vote of Common Stock:
FOR AGAINST ABSTAIN
--- ------- -------
7,316,336 800 3,300
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 13 herein.
(b) No reports on Form 8-K were filed in the quarter ended June 30, 1996.
-12-
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, 1996
By:/s/JAMES A. LUKSCH
--------------------------------------------------
James A. Luksch
President and Chief Executive Officer
By:/s/PETER PUGIELLI
--------------------------------------------------
Peter Pugielli, Senior Vice President - Finance
(Principal Financial Officer)
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EXHIBIT INDEX
Sequential
Exhibit # Description Page Number
- --------- ----------- -----------
3.1 Restated Certificate of Incorporation of Blonder
Tongue Laboratories, Inc.*
3.2 Restated Bylaws of Blonder Tongue Laboratories,
Inc.**
10.1 Second Amendment to Amended and Restated
Loan Agreement dated as of May 23, 1996,
between the Blonder Tongue Laboratories,
Inc. and Meridian Bank.
10.2 Mortgage, Assignment of Leases, and
Security Agreement dated May 23, 1996 by
Blonder Tongue Laboratories, Inc. in favor
of Meridian Bank.
10.3 Real Estate Loan Note dated May 23, 1996
from Blonder Tongue Laboratories, Inc. in
favor of Meridian Bank.
27 Financial Data Schedule
- -----------------------------
* Incorporated by reference from Exhibit 3.1 to S-1 Registration Statement No.
33-98070 originally filed October 12, 1995, as amended.
** Incorporated by reference from Exhibit 3.2 to S-1 Registration Statement No.
33-98070 originally filed October 12, 1995, as amended.
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