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 SEPTEMBER 30, 1998,
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM TO .
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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
- -------------------------------- ------------------------------------
(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: (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
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Number of shares of common stock, par value $.001, outstanding as
of November 6, 1998: 8,289,797
The Exhibit Index appears on page 12.
BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
Sept. 30, Dec. 31,
1998 1997
---------- --------
(unaudited)
Assets (Note 5)
Current assets:
Cash and cash equivalents........................................................... $ 1,971 $ 555
Accounts receivable, net of allowance for doubtful
accounts of $1,694 and $607, respectively......................................... 16,568 13,130
Inventories (Note 3)................................................................ 22,199 17,875
Other current assets ............................................................... 2,401 318
Deferred income taxes............................................................... 1,722 1,054
-------- --------
Total current assets.......................................................... 44,861 32,932
Property, plant and equipment, net of accumulated depreciation and amortization..... 7,997 7,721
Other assets........................................................................ 18,136 1,619
-------- --------
$ 70,994 $ 42,272
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Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings (Note 5)...................................................... $ 19,000 $ -
Revolving line of credit (Note 5)................................................... - -
Current portion of long-term debt, including related party debt of $1,278 at
December 31, 1997................................................................ 496 1,866
Accounts payable.................................................................... 5,947 2,305
Accrued compensation................................................................ 1,873 1,606
Other accrued expenses.............................................................. 1,084 929
Income taxes........................................................................ 796 171
-------- --------
Total current liabilities..................................................... 29,196 6,877
-------- --------
Deferred income taxes.................................................................. 376 412
Long-term debt......................................................................... 2,984 3,188
Commitments and contingencies.......................................................... - -
Stockholders' equity:
Preferred stock, $.001 par value; authorized 5,000,000 shares;
no shares outstanding............................................................ - -
Common stock, $.001 par value; authorized 25,000,000 shares,
8,289,797 shares issued and outstanding at September 30, 1998 and
8,272,758 shares issued and outstanding at December 31, 1997....................... 8 8
Paid-in capital..................................................................... 23,743 21,802
Retained earnings................................................................... 15,538 10,483
Treasury stock at cost, 80,600 shares at September 30, 1998 and 40,200 shares at
December 31, 1997................................................................. (851) (498)
-------- --------
Total stockholders' equity.................................................... 38,438 31,795
-------- --------
$ 70,994 $ 42,272
======== ========
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 Nine Months Ended
September 30, September 30,
--------------------------- ----------------------------
1998 1997 1998 1997
-------- -------- -------- --------
Net sales................................... $ 18,929 $ 16,965 $ 54,573 $ 46,581
Cost of goods sold.......................... 11,567 10,784 35,377 30,371
-------- -------- -------- --------
Gross profit.............................. 7,362 6,181 19,196 16,210
-------- -------- -------- --------
Operating expenses:
Selling expenses.......................... 1,284 1,412 3,692 3,609
General and administrative................ 1,944 1,317 5,046 3,510
Research and development.................. 540 409 1,667 1,463
-------- -------- -------- --------
3,768 3,138 10,405 8,582
-------- -------- -------- --------
Earnings from operations.................... 3,594 3,043 8,791 7,628
-------- -------- -------- --------
Other income (expense):
Interest expense.......................... (578) (102) (1,140) (313)
Other income.............................. 9 555 10 581
-------- -------- -------- --------
(569) 453 (1,130) 268
-------- -------- -------- --------
Earnings before income taxes................ 3,025 3,496 7,661 7,896
Provision for income taxes.................. 751 1,398 2,606 3,158
-------- -------- -------- --------
Net earnings.............................. $ 2,274 $ 2,098 $ 5,055 $ 4,738
======== ======== ======== ========
Basic net earnings per share................ $ 0.27 $ 0.25 $ 0.61 $ 0.58
======== ======== ======== ========
Basic weighted average shares outstanding... 8,330 8,232 8,298 8,221
======== ======== ======== ========
Diluted net earnings per share.............. $ 0.27 $ 0.25 $ 0.60 $ 0.57
======== ======== ======== ========
Diluted weighted average shares outstanding. 8,416 8,394 8,493 8,316
======== ======== ======== ========
See accompanying notes to consolidated financial statements.
-3-
BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Nine Months Ended September 30,
-------------------------------
1998 1997
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Cash Flows From Operating Activities:
Net earnings........................................................ $ 5,055 $ 4,738
Adjustments to reconcile net earnings to cash
provided by operating activities:
Depreciation and amortization..................................... 1,686 1,049
Provision for doubtful accounts................................... 1,087 115
Deferred income taxes............................................. (704) (396)
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable............................................... (4,525) (4,471)
Inventories....................................................... (1,024) (540)
Other current assets.............................................. (2,083) 178
Other assets...................................................... (422) (143)
Income taxes...................................................... 625 299
Accounts payable and accrued expenses............................. 4,064 1,589
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Net cash provided by operating activities....................... 3,759 2,418
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Cash Flows From Investing Activities:
Capital expenditures................................................ (582) (807)
Acquisition of licenses............................................. - (163)
Acquisition of business............................................. (19,000) -
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Net cash used in investing activities............................. (19,582) (970)
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Cash Flows From Financing Activities:
Net borrowings under revolving line of credit....................... - (1,176)
Proceeds from long-term debt........................................ 19,199 217
Repayments of long-term debt........................................ (1,773) (645)
Acquisition of treasury stock....................................... (353) (109)
Proceeds from exercise of stock options............................. 166 240
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Net cash provided by (used in) financing activities............... 17,239 (1,473)
------- -------
Net increase (decrease) in cash....................................... 1,416 (25)
Cash, beginning of period............................................. 555 1,340
------- -------
Cash, end of period................................................... $ 1,971 $ 1,315
======= ======
Supplemental Cash Flow Information:
Cash paid for interest.............................................. $ 804 $ 302
Cash paid for income taxes.......................................... 3,052 3,261
======= =======
Schedule of noncash investing and financing activities:
Common stock issued for acquired business........................... $ 1,000 $ -
Fair value of warrants issued for acquired business................. $ 775 $ -
======= =======
See accompanying notes to consolidated financial statements.
-4-
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.
Significant intercompany accounts and transactions have been eliminated in
consolidation.
The results for the third quarter of 1998 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 September 30,
1998. 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 - Effect of New Accounting Pronouncements
In June, 1997, SFAS 130, "Reporting Comprehensive Income," and SFAS 131,
"Disclosures About Segments of an Enterprise and Related Information," were
issued. SFAS 130 addresses standards for reporting and display of comprehensive
income and its components and SFAS 131 requires disclosure of reportable
operating segments. In February, 1998, SFAS 132, "Employer's Disclosures About
Pensions and Other Postretirement Plans" was issued. SFAS 132 standardizes
pension disclosures. These statements are effective in 1998. The effect of the
adoptions did not have a material impact on the Company's net earnings per
share.
Note 3 - Inventories
Inventories are summarized as follows:
Sept. 30, Dec. 31,
1998 1997
------- -------
Raw Materials............................... $ 6,632 $ 8,740
Work in process............................. 4,067 2,907
Finished Goods.............................. 11,500 6,228
------- -------
$22,199 $17,875
======= =======
Note 4 - Acquisition
On March 25, 1998, the Company acquired all of the assets and technology
rights of the interdiction business (the "Interdiction Business") of
Scientific-Atlanta, Inc. ("Scientific") for a purchase price consisting of (i)
$19 million in cash, (ii) 68 shares of the Company's common stock, (iii) a
warrant to purchase 150 additional shares of the Company's common stock at an
exercise price of $14.25 per share and (iv) assumption by the Company of certain
obligations under executory contracts with vendors and customers and certain
warranty obligations and current liabilities of the Interdiction Business. The
Interdiction Business generated approximately $16 million in revenues for the
prior twelve month period. The Company believes that Scientific's interdiction
products, which have been engineered primarily to serve the franchised cable
market, will supplement the Company's VideoMask(TM) products, which are
primarily focused on the Private Cable market. In addition, the Company expects
that the technology acquired as part of the Interdiction Business will enhance
its ability to design products that meet the specific needs of all cable
providers, while improving its position in the franchised cable market.
Scientific provided certain manufacturing, consulting and other transition
services to the Company pursuant to agreements executed by the parties during a
limited period following the acquisition in order to permit the Company to
fulfill sales orders of the Interdiction Business for the transition period
following the closing.
-5-
Note 5 - Line of Credit
In October, 1997, the Company executed a new $15 million revolving line
of credit with its bank, on which funds may be borrowed at the bank's overnight
base rate ("OBR") plus a margin ranging from .95% to 2.45%, depending upon the
calculation of certain financial covenants (8.33% at September 30, 1998). As of
September 30, 1998, the Company had no balance outstanding under the line of
credit. The line of credit is collateralized by a security interest in all of
the Company's assets. The agreement contains restrictions that require the
Company to maintain certain financial ratios as well as restrictions on the
payment of dividends. In addition, the Company has an acquisition loan
commitment which may be drawn upon by the Company to finance acquisitions in
accordance with certain terms. The acquisition loan commitment had been $15
million until March, 1998 when it was increased to $20 million to accommodate
the acquisition of Scientific's Interdiction Business. Funds may be borrowed
under the acquisition loan commitment at OBR plus a margin ranging from 1.25% to
2.75%, depending upon the calculation of certain financial covenants (8.63% at
September 30, 1998). At September 30, 1998, there was $19 million outstanding
under the acquisition loan commitment. The line of credit and the acquisition
loan commitment expire on June 30, 1999.
ITEM 1. 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 the sections entitled Part I, Item 1 - Management's
Discussion and Analysis of Financial Condition and Results of Operations and
Part II, Item 1 - Legal Proceedings. 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, 1997 (See Item 1: Business, Item 3:
Legal Proceedings, and Item 7: Management's Discussion and Analysis of Financial
Condition and Results of Operations).
Third three months of 1998 Compared with third three months of 1997
Net Sales. Net sales increased $1,964,000, or 11.6%, to $18,929,000 in
the third three months of 1998 from $16,965,000 in the third three months of
1997. International sales accounted for $211,000 (1.1% of total sales) for the
third three months of 1998 compared to $446,000 (2.6% of total sales) for the
third three months of 1997.
The increase in sales is primarily attributed to an increase in sales of
interdiction equipment including sales to the franchised cable market. Net sales
included approximately $3,631,000 of interdiction equipment for the third three
months of 1998 compared to approximately $1,600,000 for the third three months
of 1997.
Cost of Goods Sold. Cost of goods sold increased to $11,567,000 for the
third three months of 1998 from $10,784,000 for the third three months of 1997
but decreased as a percentage of sales to 61.1% from 63.6%. The decrease as a
percentage of sales was caused primarily by a greater proportion of sales during
the period being comprised of higher margin products.
Selling Expenses. Selling expenses decreased to $1,284,000 in the third
three months of 1998 from $1,412,000 in the third three months of 1997,
primarily due to a decrease in costs incurred for advertising, commissions,
marketing materials and trade shows and an increase in shipping related expenses
due to the increase in sales.
-6-
General and Administrative Expenses. General and administrative expenses
increased to $1,944,000 in the third three months of 1998 from $1,317,000 for
the third three months of 1997 and increased as a percentage of sales to 10.3%
in the third three months of 1998 from 7.8% for the third three months of 1997.
The $627,000 increase can be attributed to an increase in the allowance for
doubtful accounts, along with an increase in the amortization of intangibles
related to the acquisition of Scientific's Interdiction Business. These
increases were offset by a decrease in expenditures for professional services
and a reduction in the accrual for executive bonuses. The increase in the
allowance for doubtful accounts is primarily attributable to one account
(approximately $991,000 over 90 days past due) demonstrating the inability to
pay within the third quarter.
Research and Development Expenses. Research and development expenses
increased to $540,000 in the third three months of 1998 from $409,000 in the
third three months of 1997, primarily due to the reimbursement of costs incurred
as a result of the termination of the Pacific Bell contract in 1997. Research
and development expenses also increased as a percentage of sales to 2.9% from
2.4%.
Operating Income. Operating income increased 18.1% to $3,594,000 for the
third three months of 1998 from $3,043,000 for the third three months of 1997.
Operating income as a percentage of sales increased to 19.0% in the third three
months of 1998 from 17.9% in the third three months of 1997.
Interest and Other Expenses. Other expense in the third three months of
1998 consisted of interest of $578,000 offset by $9,000 of interest income.
Other income in the third three months of 1997 consisted of $535,000 related to
the final payment received from Pacific Bell as a result of the contract
termination in July 1997, along with $20,000 of interest income offset by
$102,000 of interest expense.
Income Taxes. The provision for income taxes for the third three months
of 1998 decreased to $751,000 from $1,398,000 for the third three months of 1997
as a result of state tax credits available to the Company related to 1997
activity which also reduced the Company's effective tax rate for 1998.
First nine months of 1998 Compared with first nine months of 1997
Net Sales. Net sales increased $7,992,000, or 17.2%, to $54,573,000 in
the first nine months of 1998 from $46,581,000 in the first nine months of 1997.
International sales accounted for $992,000 (1.8% of total sales) for the first
nine months of 1998 compared to $1,209,000 (2.6% of total sales) for the first
nine months of 1997.
The increase in sales is primarily attributed to the increase in sales of
interdiction equipment including sales to the franchised cable market. Net sales
included approximately $13,638,000 of interdiction equipment for the first nine
months of 1998 compared to approximately $4,796,000 for the first nine months of
1997.
Cost of Goods Sold. Cost of goods sold increased to $35,377,000 for the
first nine months of 1998 from $30,371,000 for the first nine months of 1997 but
decreased as a percentage of sales to 64.8% from 65.2%. The decrease as a
percentage of sales was caused primarily by a greater proportion of sales during
the period being comprised of higher margin products.
Selling Expenses. Selling expenses increased to $3,692,000 in the first
nine months of 1998 from $3,609,000 in the first nine months of 1997, primarily
due to an increase in shipping materials and royalty payments related to
licensing agreements. This increase was offset by a decrease in commissions due
to the reduction in the number of sales representatives.
General and Administrative Expenses. General and administrative expenses
increased to $5,046,000 in the first nine months of 1998 from $3,510,000 for the
first nine months of 1997 and increased as a percentage of sales to 9.2% in the
first nine months of 1998 from 7.5% for the first nine months of 1997. The
$1,536,000 increase can be attributed to an increase in the allowance for
doubtful accounts along with an increase in the amortization of intangibles
related to the acquisition of Scientific's Interdiction Business offset by a
decrease in the accrual for executive bonuses. The increase in the allowance for
doubtful accounts is primarily attributable to one account (approximately
$991,000 over 90 days past due) demonstrating the inability to pay within the
third quarter.
Research and Development Expenses. Research and development expenses
increased 13.9% to $1,667,000 in the first nine months of 1998 from $1,463,000
-7-
in the first nine months of 1997, primarily due to an increase in purchased
materials for research and development and the reimbursement of costs incurred
as a result of the termination of the Pacific Bell contract in 1997. Research
and development remained consistent as a percentage of sales at 3.1%.
Operating Income. Operating income increased 15.2% to $8,791,000 for the
first nine months of 1998 from $7,628,000 for the first nine months of 1997.
Operating income as a percentage of sales decreased to 16.1% in the first nine
months of 1998 from 16.4% in the first nine months of 1998.
Interest and Other Expenses. Other expense in the first nine months of
1998 consisted of interest expense of $1,140,000 offset by $10,000 of interest
income. Other income in the first nine months of 1997 consisted of $535,000
related to the final payment received from Pacific Bell as a result of the
contract termination in July 1997, along with $46,000 of interest income offset
by $313,000 of interest expense.
Income Taxes. The provision for income taxes for the first nine months of
1998 decreased to $2,606,000 from $3,158,000 for the first nine months of 1997
as a result of state tax credits available to the Company related to 1997
activity which also reduced the Company's effective tax rate for 1998.
Liquidity and Capital Resources
The Company's net cash provided by operating activities for the
nine-month period ended September 30, 1998 was $3,759,000, compared to cash
provided by operating activities for the nine-month period ended September 30,
1997, which was $2,418,000. Cash flows from operating activities have been
positive, due primarily to net earnings of $5,055,000, an increase in accounts
payable and accrued expenses offset by an increase in accounts receivable.
Cash used in investing activities was $19,582,000, of which $19,000,000
was utilized for the acquisition of Scientific's Interdiction Business and
$582,000 was attributable to capital expenditures for new equipment. The Company
anticipates additional capital expenditures during calendar year 1998
aggregating approximately $100,000, which will be used for the purchase of
automated assembly and test equipment. The Company does not have any present
plans or commitments for material capital expenditures for fiscal year 1999.
Cash provided by financing activities was $17,239,000 for the first nine
months of 1998, comprised primarily of $19,000,000 in proceeds from the
Company's acquisition loan commitment.
In October, 1997, the Company executed a new $15 million revolving line
of credit with its bank, on which funds may be borrowed at the bank's overnight
base rate ("OBR") plus a margin ranging from .95% to 2.45%, depending upon the
calculation of certain financial covenants (8.33% at September 30, 1998). As of
September 30, 1998, the Company had no balance outstanding under the line of
credit. The line of credit is collateralized by a security interest in all of
the Company's assets. The agreement contains restrictions that require the
Company to maintain certain financial ratios as well as restrictions on the
payment of dividends. In addition, the Company has an acquisition loan
commitment which may be drawn upon by the Company to finance acquisitions in
accordance with certain terms. The acquisition loan commitment had been $15
million until March, 1998 when it was increased to $20 million to accommodate
the acquisition of Scientific's Interdiction Business. Funds may be borrowed
under the acquisition loan commitment at OBR plus a margin ranging from 1.25% to
2.75%, depending upon the calculation of certain financial covenants (8.63% at
September 30, 1998). At September 30, 1998, there was $19 million outstanding
under the acquisition loan commitment. The line of credit and the acquisition
loan commitment expire on June 30, 1999.
The Company currently anticipates that the cash generated from
operations, existing cash balances and amounts available under its existing line
of credit, will be sufficient to satisfy its foreseeable working capital needs.
Historically, the Company has satisfied its cash requirements primarily from net
cash provided by operating activities and from borrowings under its line of
credit.
New Accounting Pronouncement
In June, 1997, SFAS 130, "Reporting Comprehensive Income," and SFAS 131,
"Disclosures About Segments of an Enterprise and Related Information," were
issued. SFAS 130 addresses standards for reporting and display of comprehensive
income and its components and SFAS 131 requires disclosure of reportable
operating segments. In February, 1998, SFAS 132, "Employer's Disclosures About
Pensions and Other Postretirement Plans" was issued. SFAS 132 standardizes
pension disclosures. These statements are effective in 1998. The effect of the
adoptions did not have a material impact on the Company's net earnings per
share.
-8-
Year 2000
The Company has assigned certain individuals to identify and correct Year
2000 compliance issues. Information technology ("IT") systems with non-compliant
code are expected to be modified or replaced with systems that are Year 2000
compliant. Similar actions are being taken with respect to non-IT systems,
primarily systems embedded in manufacturing and the Company's products. The
individuals are also responsible for investigating the readiness of suppliers,
customers and other third parties along with the development of contingency
plans where necessary.
All IT systems have been inventoried and assessed for compliance, and
detailed plans are in place for required system modifications or replacements.
Remediation and testing activities are underway with approximately 20% of the
systems already compliant. This percentage is expected to increase to
approximately 90% by the end of the first quarter of 1999 and be fully compliant
by the end of the second quarter of 1999. Inventories and assessments of non-IT
systems are in progress and expected to be complete by year-end. Progress of the
Year 2000 compliance program is continuously being monitored by senior
management.
The Company has identified critical suppliers, customers and other third
parties and has surveyed their Year 2000 remediation programs. Risk assessments
and contingency plans, where necessary, will be finalized in the first quarter
of 1999.
Incremental costs directly related to Year 2000 issues are estimated to
be $300,000 to be incurred between 1998 and 2000, of which $180,000 (or 60%) has
been spent to date. Approximately 90% of the total estimated spending represents
costs to modify existing systems. Costs incurred prior to 1998 were immaterial.
This estimate assumes that the Company will not incur significant Year 2000
related costs on behalf of suppliers, customers or other third parties.
The Company's most likely potential risk is the inability of some
customers to order and pay on a timely basis. In addition, the Company has
several foreign suppliers, which, if not in compliance, would cause the Company
to utilize more expensive suppliers resulting in reduced margins. Contingency
plans for Year 2000-related interruptions are being developed and will include,
but not be limited to, the development of emergency backup and recovery
procedures, remediation of existing systems parallel with installation of new
systems and identification of alternate suppliers. All plans are expected to be
completed by the end of the first quarter of 1999.
The Company's Year 2000 efforts are ongoing and its overall plan, as well
as the consideration of contingency plans, will continue to evolve as new
information becomes available. While the Company anticipates no major
interruption of its business activities, that will be dependent in part, upon
the ability of third parties to properly remediate their IT and non-IT systems
in a timely manner. Although the Company has implemented the actions described
above to address third party issues, it has no ability to influence the
compliance actions of such parties. Accordingly, while the Company believes its
actions in this regard should have the effect of reducing Year 2000 risks, it is
unable to eliminate them or estimate the ultimate effect Year 2000 risks will
have on the Company's operating results.
-9-
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
None.
ITEM 5. OTHER INFORMATION
Shareholders of the Company are entitled to submit proposals on matters
appropriate for shareholder action consistent with regulations of the Securities
and Exchange Commission ("SEC") and the Company's bylaws. Should a shareholder
wish to have a proposal considered for inclusion in the Proxy Statement for the
Annual Meeting, under Rule 14a-8 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), such proposal must be received by the Company on
or before January 7, 1999.
In connection with the Annual Meeting and pursuant to recently amended
Rule 14a-4 under the Exchange Act, if the shareholder's notice is not received
by the Company on or before February 20, 1999, the Company (through management
proxy holders) may exercise discretionary voting authority if the proposal is
raised at the Annual Meeting, notwithstanding the fact that such proposal was
not referred to in the Proxy Statement.
The above summary, which sets forth only the procedures by which business
may be properly brought before and voted upon at the Company's Annual Meeting,
is qualified in its entirety by reference to the Company's bylaws.
All shareholder proposals and notices should be directed to Glenn
Alexander, Controller, at Blonder Tongue Laboratories, Inc., One Jake Brown
Road, Old Bridge, New Jersey 08857.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits are listed in the Exhibit Index appearing at page 12 herein.
(b) No reports on Form 8-K were filed in the quarter ended September 30,
1998.
-10-
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: November 13, 1998
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)
-11-
EXHIBIT INDEX
Exhibit # Description Location
- --------- ----------- --------
3.1 Restated Certificate of Incorporation of Incorporated by reference from Exhibit 3.1
Blonder 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 Incorporated by reference from Exhibit 3.2
Laboratories, Inc. to S-1 Registration Statement No. 33-98070
originally filed October 12, 1995, as
amended.
27 Financial Data Schedule Electronic Filing only.
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