BDR - Earnings call transcript Q2 2019 | Blonder Tongue Laboratories, Inc.

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Operator

Good day, ladies and gentlemen. And welcome to Blonder Tongue Second Quarter 2019 Results Conference Call. All lines have been placed on a listen-only mode. And after today's prepared remarks, you will have the opportunity to ask questions. Also a reminder that today's conference is being recorded. Instructions]. [Operator

sir. get to opening CEO, turn Pallé. go to I or Mr. started Please pleased am the ahead, us now remarks with introductions, Bob And floor to

Bob Pallé

XXXX Good second reporting morning, We for you participation. thank to everyone. Blonder teleconference. quarter six months Welcome and financial your Tongue's

discussing Before we today other prospects subjects, to representatives Blonder view certain my we who this will by and forward-looking remarks may management's in like our I'd presentation speaking reminding and the Tongue that you those be begin be contain including will morning, preface made trends which evolving by marketplace. statements, our of

in As to results our predict, morning. you that impossible those actual future may you know, is so differ I projected that comments the this caution from be may

information quarters, XXXX prior second that differ quarters XXXX prior including the SEC this morning, actual second XX-Ks results years for concerning information for first, will our well you additional and quarters and as XXXX that SEC our you and of and cause X-K factors refer our be first to and that could to including XX-Qs as XXXX the filings. filings, I discussed third the from form For our ask

of me Senior Operating Grauch, Officer; Officer. With Vice Financial the Eric President Shea, are today President Steve Chairman Skolnik, Ted Board; and Chief and Chief

you answer period. questions And sequence. answer all Our any will have question same available follow following the presentation, presentations to that in will of us during be and may the

comments we effect value. turnaround to those a in in achieve improvements as the drive this remain in bear our As within release we our We to repeating. the you to stated letters from result achieving committed major and We improvements my morning which believe increase years, major and that to goals. outlined performance press financial of in a an those stockholder in order last prior areas in successful teleconference the needed

X% we of XXXX the the increase the quarter increase the over quarter the of in second resulting a showed disappointed sales quarter in a of performance. XXXX, second XXXX are sales and Although financial first of XX% the increase amount and in over

We issues align current to and intensity that our these sales so address adjustments by product steps are by expenses of operating better with increasing our sales forecast they new taking our initiatives. to the making

detailed to Despite increase will and have we box management initiatives talent engaged this new NexGen we're second are development reporting We quarter committed and in IPTV, outcomes the this product in XX-Q performance, from introductions. to with both resources in for increase an catalyst set-top X, responses early the in pleased for period the Continuing, the in expenses. Also details see in you as you periods. move the which see can gateway the resulted the our that positive category. year-to-date Note an sales forward, anticipate the initiatives future sales and these can by be

forecasted financial it yet Unfortunately, for the getting those point, at is be. see initiatives with time impact where we outcomes Regardless, can find needs of of the to positive we period committed a totality not plan the in a to the we where ourselves we remain there. execution this of initiatives

Officer. the Chief turn BT's and call to Ted? Ted President over to like I'd Grauch, Operating Now,

Ted Grauch

product our to we've situation that in mix focus in XXXX. increased product services. lines features product of that Thank industry, taken marketing and cost that counter and QX with you, morning marketing our on and order our Bob, to product and and Clearly, overall primary ship distribution began during addition expectations the the to expand fiber-coax, delivery across the sales has entire on The demand a coupled traditional equipment new to we've been television seen including, data in IP more and focus IP our an below the for hybrid delivering of sales, digital-based, QX were efforts broadband QX decline video, modern delivery good of HFC results everyone. we extensive of the engineering to and

operations, side positive to Tier began have flagship NexGen QX, during the operator shipping of our momentum Tongue's of On the sales NXG line and positive company own of distinct in and NeXgen larger X gateway. first beginning our product volumes promotion we Gateway a to seen increasing products customer distribution video channels, stock Blonder and their who are efforts NXG signal-processing they're our

tracking line, significant have that of begun in margin our traction We of set-top we on business. internal the are to sales also have and line reselling and product market to goals IPTV box value-added our new

lower expect product a fiber-coax may or lower by also percentage distribution include market HFC, factors number or a this broadband and of in in trend spending continue tariff towards larger fiber-coax the hybrid and that but HFC. distribution fiber overlapping that trend digital We and included to political distribution of of of over concerns, general content due hybrid percentage

our management these areas In light the investment operating of business, in team and initiatives. technology, of lower the necessary the costs in the of areas maintaining our of while process legacy in to growth is associated measures new taking sales trends, our

Eric turn Now, I would to our Skolnik. call Chief Eric? like to Financial over Mr. the Officer,

Eric Skolnik

Thank Ted. you,

up margin net product to due our to lower period, XX.X% in as Although gross sales with to more this being XXXX, XX.X% product year, mix compared X% prior lines. compared the second blended to margin quarter our decreased of prior were traditional

necessary costs, as as the headcount three efforts the for and reduce XX.X% continued in various due months salary these well to last expenses primarily XXXX This prior period to approximately of fees. consulting contain comparable Operating were up second year. company's increase as an and is the to to increase compared increases due

XX, XX.X% decreased months to due and six the mix. compared June to as product aforementioned ended down margin year XX.X% period, prior For compared net the sales the XXXX our prior to in XX.X% blended gross were to

primarily year. as XX.X%, were costs. approximately due due to last salary compared efforts and necessary Operating months the company's to contain increases to up to and expenses headcount is comparable of six the period first reduce prior continued increase for this the XXXX these Again,

last adjustments the facility credit call. any our since have not to made We

However, we still our months. in accommodate the be made changes to that expect progress coming further will

Now, I'd to the like the question-and-answer session. call open-up to

Operator

[Operator [ph], Investor. thank a Gentlemen, Instructions] Urbin Please ahead, We'll you. Private go sir. Gregory from take question

Your open. line is

Unidentified Analyst

morning Good guys.

Bob Pallé

morning Greg. Good

Eric Skolnik

Good morning.

Unidentified Analyst

I the is look own think versus the I are quarters. progress. made pretty -- are expenses quarter-to-quarter that much way you And as I you is my on XX%, did and profits things two seems comparing but when loss look up it at way operating I and the down flat XX% outlined net up. mention I QX comparison traditional Sales is at QX the know and this results PR,

I So progress. that as take

in the the for question assuming level margins The XX% is to the be? time are would the might if -- sales -- a of be about what what to line range, stay XX%, that achieve that necessary And what going breakeven? same

Bob Pallé

true -- networking overall overall get then the much products as be a sales lower margins questions a Whereas linked. those is in overall where much lower products are Well, much large inextricably are uplift Okay. two high number. sales going The linked -- because a it's a breakeven reverse are if larger the number. the then the going lower is answers come where if versus inextricably CPE to to are at need you the margins you you know the

leases. the the introductions, shareholders cycle had that with And on we're really longer those our than products for previously prior sales we -- to pool expected. those in findings is the pleased our and put in we but So we networking announced letter

and the let speak and are for I'll we let the him for sales high products potentially in high he and came major process brought CPE The I'm year the budgeting providers Ted this to because budgeting introduction And to mean. nice get service that led speak that. this with XXXX really but because for a pleased has could and initiative this our margins its company us, to that, very year when really cycle, very he I if the then be I'll process both

So Ted?

Ted Grauch

Sure.

to predicting of your the on business into than getting we clearly, networking publicly that be call the give traditional without information distribution or numbers to cite core we is are feel publicly kind the to the lower margins I video trying you -- business. and make CPE what not available So I'm can going like question, and but – specific management

can up after that's what X.X three As about CPE thumb, or of we if level equivalent run margin. at business, in revenue in we'll net the a versus our core going revenue rule And with an we're of times an equivalent least. traditional end

faster, terms is cash CPE on also so perspective. that's us inventory The a a on from flow lot benefiting

that of versus the to revenue and in we're So not the they the core achieve create business traditional each so trying some other. frankly nice too get a what CPE complement on multiple blend distant future two is to

bringing strategy, the with more fast to which are of the able actually that overall element sales we cycle, is thinking by direct core these other market, CPE to create The products to sales meaningful is video direct margins. traditional operators relationships higher be of products, more sales a some and affect to are wider making their decision service able directly, range and thereby the of on which

core newer CPE want we're are core to traditional with a our in what And the different product we uplift turn relevant to the the that's in coupled become industry the lines, after. technologies people overall what a higher or see in faster So is going blend more and that decision-makers.

Unidentified Analyst

that. short-term? higher on you expect of NexGen, has drivers a All looking assume, the right. initiative over to the the the and thanks one explanation the I -- to Do the future -- box set-top of Well, those for rate at prospect growth the which

Ted Grauch

the ahead product the set-top In ,it's I'm line. go short-term sorry. very But Bob

Bob Pallé

have was I statement. same I No the --

Unidentified Analyst

of that necessary lead get Is out… to the because times Okay. the products longer

Ted Grauch

NexGen inside Canada We video around the it. process business. when long core all. deliberation the Simply country these to quickly win turn the by to way, actually of it's sell at deliveries distribution in can Not Not a No. process around at relatively we service want all. operators

your in several X working in first they've product the call, release once on with -- to the my noted our earlier we as we comments as Now press -- others. have go we noted sorry decided in Tier and won

tend you core there’s each competitors eight and we have take and And other one a and other with longer sales us to harder close. ones have time supplant long sales Blonder to for five, ones a go the is right of our believe we to your it's back are Tongue's yes -- we the win them the is yet. competitors when to where took won are and overall long the not at just the win the do business. cycle, They go taking benefit and say, core operator you. seven, way six, for to align those displace to decision-makers in Those then technology The though of time

better margin, But that's a it's difference. that the more stable done long-term we've Once business. really

the made done analysis particular CPE year set-top us January, for side cable wasn't to to well wave. operator we the a on wave technology or, be second moment, caught of box that likely bring just into and through the and end by we've coincidence. done in market wave very last the was led set a change and the that of particular third XXXX. least good decisions that tier capturing was On very at particular operator capture a this year and and that of wave positive a that late that want and that municipal the far looks say, job and there's so fall in in markets to around to, country the going an And we've very, products we of It

Unidentified Analyst

any on the total of size the But market? box number set-top

Ted Grauch

this Not call, on no.

this to we're it's it at predictions going at add margin to any but cash think to reluctant the that moment, are I positive flow Even though we of the very overall to business. positive dilutes make the side, affect top that should all, going fast the at flow on fronts several not to got be greatly ability returns, manage company. the to fact positive it's and cash it the it's our

Unidentified Analyst

And wave I yet the has it, is your way hear that not impression, crafted. take least or at I

Ted Grauch

nearly. No. not No,

Bob Pallé

Far from it.

Unidentified Analyst

new some mentioned to In that? or of call add you last new the markets. Anything the vertical potential likelihood on

Ted Grauch

on middle We'll quarter and that now making that. announcements fourth between on press some be of

Unidentified Analyst

look I forward.

Ted Grauch

They're additional launch well product underway line. to

Unidentified Analyst

say fairly you expenses. Not too They work What more relatively do flat how be going the I curious on to OpEx take seemed much running can but to they're now. think that? you and -- up time, subtracted? lean can I'm curious, I'm how you're

Ted Grauch

do or want You handle me to handle Bob that it? to you want

Unidentified Analyst

-- looking we Are or reductions at headcount

Bob Pallé

be this more do into call, ahead. There's we're to don't but we we and we craft not if on just that, our just some there's striving flex-oriented Go you -- found fine. more into rather it, work And needed and give can here Ted details I wants information the more expenses that's to think Jersey. in around get the that we to but have of I'd go amount New

Ted Grauch

I overall products movement. doing I demand operating is which was that, top that only the expenses market related Greg, going operation not may to at you said a reiterate we've big the decline what line is in But legacy the earlier, trimming on. the see more we're expenses what seen of to

this are that So might you product lines product the call, the still just blended we've selling not and in the previous anticipated as and year. running, as what can very usual lines, see operational we they still are well new are which overall sell costs good investments business had They we between as well. made

demand what on. for operating related market decline the So is in product focusing lines we're those costs

Unidentified Analyst

appreciate looks be focusing. there? path much expense; it's last are like I the I I operating the going regarding China profitability know ask we to It I'm revenues. so That and and Great. going tariff to I'll to where again Well, issues, be asked not in that. where is in time

Bob Pallé

category the just do real the to the products key importing and multiplicity of a use yesterday released for amount. XX% they we'd our X we impacted that Well, that List are import dominant

Chinese that to know by government been counter the there revaluing currency we their And offset a has by that.

XX%. But XX in less are but we're those a XX%, negotiations old make negotiations XX% plan So, try it is is will we to and mitigate not but expenses. to than hours

So--

Unidentified Analyst

now Is likelihood three that compared greater China months those from to-- back to ago moving a

Bob Pallé

our Greg the of our That's extent may have calls. leverage to impact having and previous There exactly tariffs. the now we will of about blend, mitigate spoken factory here our New part Jersey. the of part that that with that's of initiative and a going be the I the on can part factory And to own to in good strategy we're

Unidentified Analyst

quarter remind out all that's I'll sake quarter-to-quarter started from think comparisons' people I XXXX quarter just to two initially So, made XXXX. better have. I from I two than as are rather

more to it's QX your if apples to QX. thanks think I for compare time. apples And we

Bob Pallé

Have course. day. good a Of

Operator

of from line Richard take Instructions] next [Operator our with question We'll the Greulich REG Capital.

Richard Greulich

you. Thank

slowdown pronounced obsolescence products, in legacy will inventory With cause the more made? to that valuations be any

Bob Pallé

find February that the preemptive strike. X, taken have in earlier you and and We its that was it's was $XXX,XXX in action Q the was margin that and year that a can that-- since -- detailed And

Eric Skolnik

something $XXX,XXX. or to and then in $XXX,XXX QX stopped it's like

Bob Pallé

Yes right.

find So, the increased obsolescence. since that period of time traditional -- what more we

meet product modest. morning. don't we We of on and have legacy a see we We a about we inventory think over month it's stuff that's a large the very $XX,XXX program months, last six because And then $XX,XXX do the made -- month. this. the $XX,XXX active comments impact it that this We any once so

Richard Greulich

the space Okay. Thank you. out to some Were lease of building? in you intending your

Bob Pallé

Yes are. of that's the We plan. sir, part

Richard Greulich

you're... haven't done yet? Okay. Or you But that

Bob Pallé

okay. Well --

process secret. a get and work levels think all don't I space do you list requirements grandchildren XX acceleration, their a rather you -- and XX, that Like infrastructures. work guys I a you bunch say rent. have children there any of anything to also than there's the they they they here about here. is to -- And don't I have and full giving need -- that's for model that So there to their who there of what exclusivity accounts, lower think a that's years tell over ready

process. not get And faint-hearted. easy the through so, and not it's the for It's

He's the of are satisfied talent at side We have work I'm and -- almost and completed. have Eric. and the that on head all of have the down. nodding his we We now up we looking process now believe far we

that things. oh real says space it's So a we'll can last know tipping can prospect Until to the CO, hard a I now see us the get you're and see perspective it this a XX% to in compliance few end where reach that date, get to see the get you of really here. see tunnel, going you're with need of -- point, I I'd to I light get at a move-in can

So it's normal just really. stuff

Richard Greulich

give does you as the tariff do? out pause leasing to much have as decided And about situation you otherwise space might

Bob Pallé

No.

it's here migration about automation, a a are lot double -- in SMP some or work fact, triple done leasing space lines double principal of on the probably that's production we larger time We now. have even and we single to XX% capacity a reason lots are with shift, -- the could of final and have at XX%, can open is But or run we and than we grow we triple because of enough the stuff. and and maybe but even assembly of we

So, can will their work commit don't we on here blessing a be think a get to we think we we be win-win some but possibility. results that know which the working be, for parties. is tariff it if think to thing a could We companies the put what both other could We're it.

hopeful that. and we're we're working on So,

Richard Greulich

to parties? That could contract be as those a manufacturer

Bob Pallé

It's exactly exactly. -- Yes exactly. sir, Yes sir.

Richard Greulich

Interesting.

you, Thank very Okay. much.

Bob Pallé

For Thanks, manufacturer. Rich. contract flash an ODM

Operator

have leadership And in queue. questions closing questions back Instructions] no for gentlemen, or additional the from I'll any turn remarks. And we phone. have the [Operator we the team to it no

Bob Pallé

a speaking Blonder at We to you and quarter. teleconference. look you to great the Tongue's day next financial all participating for forward with teleconference. great Thank reporting a in soon. Talk you Have next

Operator

you thank us Ladies and today. for gentlemen, joining all

You may disconnect. now

Blonder Tongue Laboratories (BDRL) 14 Aug 192019 Q2 Earnings call transcript