- Earnings call transcript Q3 2022

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Operator

Good morning, ladies and gentlemen, and welcome to the Blonder Tongue Laboratories Third Quarter 2022 Earnings Call. At this time all participants have been placed on a listen-only mode. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Mr. Ted Grauch , CEO of Blonder Tongue. Ted, the floor is yours.

Ted Grauch

you. Thank everyone, in for quarter Blonder call. morning, morning us XXXX thank participating and Tongue and good joining you this earnings Hi, Laboratories third Ted of Executive I’m and company. Officer President Grauch, the Chief

remarks we will prospects that statements, and this As trends forward-looking our morning, will the certain contain of be view management’s in we including evolving subjects discussing our give market.

in Tongue to markets XXXX, and the to our suppliers with months Vice had XX you may our materially we the future Eric’s mine to of morning. prepared session are materials discussing comments. ask predict, key our Senior being today XXXX allocations projected I remarks. will Q&A SEC and years broker monthly caution during for that the available of As last from you second our Blonder possible Form me net Eric raw Laboratories and to remarks to several XX-Qs differ and XXXX, information differ filings, for from our loss us our may of quarters that elevated our detailed cause but immediately the to you that of is know, XXXX cover chipset that We XXXX XXXX, persisted results financial include In all information results you of third be be filings filed quarter to the concerning months. $XXX,XXX Chief results. Officer and Each have in the nine to costs held will quarters third XX-Q. and including factors quarter and With XXXX could those actual our will and Skolnik, follow XXXX XX-K first a have of so would due Form Financial refer following the quarters and questions may detailed of the additional is the upcoming this those President. four the semiconductor Both four actual prior answer

with our company stabilization in early for – the the of overall lead quarter, in highest sales improvement of the excess announced of operator acquisition that as created due cable the activities. X at R&D [Technical customer by Tier recently $X report With product to PLUS video backhaul Drake growing. product end begin year, semiconductor currently last including in America and million continued in has refocus months, XXXX. that more end with been the margin part are to we able markets seen our very over support further a in parts, allocations and and customization has the chipset for product will the of September effort October improvements expected we during been well last specific healthy products three supply in bookings times and Difficulty]. improvements the functions has development in highest PEG new to was happy Demand and features Over time major large-scale of before for strong, company’s and stabilizing chain in use the technology specifically some and as a are that QX that standardized We future general in backlog a an North

Operator

any He second. be Apologies, should Ted’s appear call back have ladies gentlemen, in dropped. and to line in

me, Can Ted? Ted have back in you the hear We conference.

Ted Grauch

can. I Yes,

Sorry. here. The dropped line

Operator

Okay.

live Ted. line Your is

Ted Grauch

everybody. Hi Great.

here. that where my about I did to? Sorry line Eric, get dropped

Eric Skolnik

Large-scale video backhaul.

Ted Grauch

specifically backhaul by strong as functions product large-scale reliability. All we America – was major right. for our Drake well use Tier due our architectures cable a standardized PEG of and to you. PLUS We for that X video recently North Thank reputation operator created cable by announced in as features

operators service continue North America. we release, with in the to other becoming network systems well deploy telecommunication as our In addition press of on and that largest equipment to win some as to approved certified deals smaller

processing and over during ClearView year-on-year XX% be macroeconomic products, in months to have time, the year-on-year. a XXXX. transcoder video for the current lines seen has encoder Drake Our growth despite NXG X% revenue same products platform experienced first revenue XXXX period At the growth And strong just our video nine demand of including the versus our continued climate. and current these

our hospitality DOCSIS markets. recoveries exceptionally months, we during XX data of this months had from been are demand In features product in high-speed seen as of as lines that lines have forms releases. transitions various match coming also IP into suppressed television products the That the of well Drake streaming pandemic. in product Our and planning customers’ initial a for primarily ClearView pent-up coming range demand and the expanding technologies. distribution our In additional functionality the and our

availability the year As to the into to semiconductor and year of look we to end forward the in on expected efficiencies, upcoming manufacturing take of end and now improving are and and quarters. additional between towards and the the allocations our XXXX, advantage of continuing performance work we working operating

like Officer, Skolnik, to call Chief detailed our Now, pass our the I cover Financial financial results. would to over Eric Eric? to

Eric Skolnik

of is in to the products, expects coax company products. $X.XX increase sales distribution lines product pent-up company The signal The experienced product NXG from XXXX, processing these levels the products company $X,XXX,XXX Thanks, or DOCSIS remain IP the growing demand due XX, the caused comparable these data a loss during share the Net these the company ended sales used and of XX.X% loss NXG continue in compared XXXX. in at a three third pandemic offset primarily XXXX. products, as products, IP products of of $XXX,XXX was our XXXX. remainder The of to decrease products increase in DOCSIS for to product share our and increase continued these newer video in sales or net of per third an $XXX,XXX increase of demand diluted signal loss company’s as and in technologies our a attributable and expects to products video remainder products to customers. experienced for XXXX. comparable lines by by to the months XXXX with of loss September are period during net represent expects increased XXXX. Ted. sales these remain or to diluted company newer processing deemphasis which CPE The experienced from $X,XXX,XXX these of reduction loss an sales the $X,XXX,XXX $X.XX data at The in a the for to per an increase period a sales CPE or quarter environments. quarter the the in of the product The in in of of for to living of hospitality primarily line assisted sales due during remainder company levels this a The

company levels sales sales approximately to to XX, expect pre-pandemic return overall backlog at to XXXX. during XXXX, sales XXXX overall the not expect company $X.XXX due to the Although during does of September the does be higher

compared experienced XXXX. this during at demand $X,XXX,XXX these the a of loss products which continue used these loss sales to the environments. company newer XXXX improvement the For are increase income in to the nine also was represent $XX,XXX,XXX increased company, of amounts primarily levels remainder in from operating or an represents The products, technologies net comparable company comparable per primary The second the offset remainder amounts analog September $X,XXX,XXX, the IP nine product expects from XXXX. sales a products of to CPE the as compared and to was and months the in company to The with at video in to of of higher products subordinated products. newer a experienced signaling ended under in improvement loss in of to the NXG the in line, and a September sales of quarter the during compared deemphasis company $X,XXX,XXX from XXXX, used diluted of the company the modulation to loss cash newer an company’s was expects incurred assisted operations products next-gen was or products analog is pent-up which of from have of the during liquidity XXXX diluted primarily of encoder/transcoder increase by from reduction in XXXX. analog products of The period encoder/transcoder an levels X.X% period increase ended represent and sales sources XX, in XXXX. also balances, facility. third comparable customers. data at months products The solutions. the months the these activities the sales period for market customers. needs The The to existing in lines in loss these lines or sales company’s expect first of company products XXXX. experienced CPE expects in shifting The XXXX. living pandemic of net for Facility of $X.XX during its and experienced demand XX, $XXX,XXX in XXXX. the company’s I under the technologies the loss cash products $XXX,XXX in these product to of The signal continued $X.XX per demand in period $XX,XXX,XXX in caused nine away products share with levels DOCSIS to XXXX. for as Net net in experienced company quarter second share net remain of remain due of $X,XXX,XXX a video an expects decline products hospitality to and the for processing discontinued cash operating for reduction been from operating decrease company data operations, remainder represents modulation an products of attributable also due of products loan these XXXX. XXXX through higher these The $XXX,XXX increase comparable This XXXX of sales in available earlier, or increase these IP $XXX,XXX XXXX. during MidCap of in processing Company the by remainder from said quarter This or modulation remain of activities an DOCSIS increase which in remainder to increase these available used analog as continue third XXXX from product The modulation of product activities used $XXX,XXX in quarter incurred product XXXX. newer lines sales the lines cash the The as was and the

On the Facility. had company October XX, XXXX, under $XXX,XXX availability MidCap expiration $X,XXX,XXX company to the approximately other borrowing the XX, XXXX MidCap date June over XXXX, XXXX, base agreement companies amendment $X,XXX,XXX. of increase the of the XX, and and the additional outstanding the things, December and XXth extend loan advanced the to of the extend modify September the company’s amortization the borrowing MidCap until to the to definition the for of into with facility XXXX, facility among of As facility and entered over under Facility X, two advance advanced to

company’s cash conjunction substantial on a recent and activities about used the from to in XX-K, working factors in These capital, net concern. a Form reduction sales, discussed as the in doubt company company’s As a continue liquidity the operating a going ability report raise experienced annual loss constraints. in in decline with most operations

or above be the of XXXX, recoverability the XX, financial the the as exists about exist. ability doubt The there adjustments be substantial might to relating to September continue statements necessary, to going of company’s still the not the as going any concern. concern. include of a still factors continue the Accordingly, assets classification company As a that liabilities recorded unable do should

session. call question-and-answer the like I’d up open Now to for the

Operator

Instructions] you. Thank [Operator

first question your of William S.A. from coming Advisory. Velmer line is William, live. is Your

William Velmer

couple are Yes, doing? quarter. guys Good how points I’d make. A of you like to

publications. have your featured our company We in

have that to company they the the impressive company, I they continual of me strong under. was this as few future the if – indicates well buying company because, that bought, The insider probably much side obviously, insiders going most most buying company follow see which wouldn’t in the am a is impressive presents I opportunity to of the impressed, things. you. thought the be we investors So, as stock

million still we I need that. introducing new of is for can’t you’re like somehow I the $X money. mean tons what course. that, went cash. I fact you you keep like I lost of do and quarter just So, losing profitability, to I But products, mean like revenues a up the to your of get bunch

losing keep got you know you or just to somehow staff R&D place. You prices I or can’t got to keep just either in raise But reduce money.

one of So is, question do for have kind any my guidance XXXX. you

Ted Grauch

thanks the able I said and the you costs be follow been is the renegotiated the – few wide and thanks a the range – of like release, and – just down, been on the of couple company a to tremendous limitations we’ve all, industry amount the and the the it headwind done. time quantity to turning us absolutely across the of in last attitude semiconductor in activities these can management numbers deals can company little has calls very number had in I the year yes, that all do the comments. an to different question, We’ve quarterly optimistic there’s So years, wide performance costs operating really the this, these up. that’s to operational that months, that thing been aggressive if wrote positive have the for over we’ve remains the chips lot a reductions future we last and frame first we we’ve a is the this – times very of been cannot tremendous doing the think in get. about have as earnings continue renegotiated areas going opportunities in a nine press The understand expense allocation extent that of for for We forward. the of and company a range be certainly, And most important of been – the efficiencies the get

some our than better of faring competitors. We’re

that. we know We’re –

argument Our are that doing time, lead at with performance same much you’re light no some being happy products the the for of We end of right. times less we’ve There’s absolutely, anybody At of than like I can hard see competitors. last with the year. cylinders kind pushing on and but that do been and company as all of firing staff doing the much say can with at still on the we’re and this raw we specifically, availability feel envelope we we’re tunnel, pretty moment. the materials the operating with as our

the – U.S. conditions – yet equates things release In the current this quarters. fact doesn’t are happy of have economic very morning, start Those are seeing normally shown give seeing that a of that revenue inferred we not based significantly very that large have higher terms I products. semiconductors. portion on decline demand significant modern And growing that world. the that guidance the around Those to the products overall around is our we’re in our demand. in those is the future and say that XXXX, that on most we’re on portfolio. in any for the our we comments and the allocations All in we We company can press couple demand the the which with

our demand in recessionary words, the pressures the impacting other products. for not are So

we limited that can raw materials simply the based the to on We’re have. produce we quantity

that we in we because companies that not very dates as speculate that, next are semiconductor future in coming to forward near our specific allocations indications quarter, to specific. optimism we on But So then have would beyond this for increasing starts have lessen from the prefer year. specific

William Velmer

question? other ask answer I Can

Ted Grauch

Sure.

William Velmer

some you take be that regards but certain really mix. I’m to – mean an in – appears you expert, product a it cutting-edge So Is I time it your had and in – there not to where appears – I’m them assuming point have even order technology not the to a that still advantage other the companies to – possibility, is to assume. maybe mean company selling prosper. I of or by merge had you’ve survive into survive or I in to been approached

Ted Grauch

strategic said a to or actively are types companies; for So currently we talked number investments. open of of company, that press in of release did mergers, to other to we talking strategic they’d quarter we alternatives acquisitions of We’ve number those companies. the first kinds that whether a the are a be

that and not that at Board it’s management and the that value. the would off maximize the something So financials right absolutely shareholder the table, is invite

William Velmer

your numbers any. advances the isn’t have has at than sheet. which though point this income, greatest The be to lot that you with indicated there aren’t more goodwill technological of what’s Even to worth the respect got in balance your a

So it’s larger scale. like acquisition juicy need that it you on offer for has could very a be what a a for company the

It was very much So, for good very time. okay. your Well, you a call. thank

Ted Grauch

you. Thank appreciate We the question.

Operator

you much. Thank very

Your a next George is Gaspar, from question who is shareholder. coming

George Gaspar

kindly. Yes. Thank you

Ted Grauch

George. Hi,

George Gaspar

from introduced you Can but... increase you might new for maybe, you last Could level total hard year you the products had the market XX-months products morning. a Good have us the amount in been of that of total? of what that the to sales give the this It to percentage have versus, into outline before. be do

Ted Grauch

And me precise it’s on this have I our transcoders our Yes, – we’ve NXG DOCSIS those the our product the increase of give significant are digital already and top and it say are together think share taken line head, on year. our just products our encoder the we so together rests XX% product reported quickly. the number. can most and taken Look, But hard in and the X.X% transcoder products products grown increase the that modulation company’s a encoders NXG the a for lines. of certainly, sales and to our that revenue. I of Yes,

there of versions products, see are our either mix that the you the those products cable different we’re margins growing satellite on some specific are which out products actively very from higher and features to technology demand functions to opportunities that changes in out those in operators bringing those fastest. overall of and or new And America. the different that, new can adding telco that sales around – the North are So zero as hit do parts market have

George Gaspar

question program, be point those the section. more your job trying of first covering to at on and drill can why would – into financing an still amount broader this have enormous it that little did and in you just broader time. ahead you financing prospects a Great. market are a next and moved that you haven’t bit going that should questioner, establish But considering that seem cross the enthusiastic And to in of really good about a – tried coming, establish program the a you

scale. I marvelous to really done bringing a you of up think set what’s stock is the on you’ve a like buyers job and turned here, fact market a And your would some marketplace, And holding merger that you – what of is back. purpose, haven’t broader because or potential a you’re logical having conversations much it look you real seem products new momentum acquisition not whatever. comment there’s that financing this finance would they broader But to get it the that? possible around. done shareholders in you it not situation that doing stock on and seems market this are the that of Can have on into just program or

Ted Grauch

that can comment is it. Sure. you that crack take something at on? Or you Eric, a I feel can

Eric Skolnik

size in equity the Sure. is company markets. the That obviously, and we opportunities that a in have both limited debt our

XXXX into which to us. allow opportunity existing XX. current types available to increase another conditions, I $X of size, And line of monies market extending a June company that the not to the reported as are earlier, million, $XXX,XXX and lot the advance $X.X to under opportunities. our of facility. of from And credit were would yes, due unfortunately, million of constantly the through there’s additional exploring come would us these So be we But we over our revolving successful always

have entertaining So and that’s as earlier, we’re said I the currently, extent opportunities. are that absolutely always – we we other

George Gaspar

has saw introduced the to of the three, just but that indicated backlog, product then able last of your two might the the the at available, positive But is your increase more on of – sell products increasing, the really without the going lost a maybe moved on, that a absorb that on line And products chips, three this it the material market. as cost reductions there already maybe. couple when our costs starting that the that some you your are to prices into transition quarters you are all a close on raw raw those of least in view to is had were of at know you’ve product products you to having Okay. calls or in sales getting been going price moderate or to be And higher, over generation the for because – early that I the and you’re is back to sounds whatever, four structure were like are be increase for some to clicking committed suddenness being you’ve materials and where side? you a cost and that

Ted Grauch

you So do the of things and them directly. more apart said when some you – believe break answer we

any So seeing seen, but raw on were not has in in mentioned thing and – yet, morning what the positive cost with decrease have stabilized. the release that more comments I press structure the the we’re this line we materials cost

up on we expect coming didn’t in things that new many seeing our chain supply last not We’re quarter. the

because big really, drag sure. before don’t all a and the [ph] an this – So of That consuming an QX our product work engineering positive operations new lot get to stabilized until week happened. allocating time to happen the been week development perspective been That the forward want redirection really going ball moving PC, I new overhead on around the earlier the didn’t R&D, to That you our has and really of until in problem but the it’s in resources – board and money from and just for details, has point. it that’s the surprises a was awful know get year. buying

George Gaspar

Okay.

Ted Grauch

relationship certainly pricing these Since gone on board our fourth any the have say have for the of can multiple it building not I that thing reduced our cost occasions other year in on down, products is, prices. those increased last yes, direct the quarter since increasing products. with across we structure Now not

were We into continued on believe completely that almost And QX, at either that and I we between do realize levels, a the pricing the here even on product to previous in we the we’ve in up the orders prices the then caught previous increase which that increase lag margin during of comments that referring caught delivering products were we the of sold have you’re or on on to in at purchase time calls, and actually quarter think targeted third earnings the way. previous some the one product now up increase, pricing a because – can have backlog.

we’re a So there. good position in

finishing to onetime that year incur on also some fees with had the allocation some we semiconductor a amortization products expedited We’re to big of get about guys. ago some with

the end when and when So on finished. a unless through view, year the both get something total on chain Overall, happens number. margin positive the that’s you into a forward the in XXXX, going our top line market revenue supply looks pretty get and margins to going positive availability those of current a and have else

George Gaspar

for XXXX before how much answer? ask in that backlog versus were Can plus, have Yes. that you additional divide million – market products question could relates in backlog a If that analyze have that $X that. products us? I you, you you one is been market now out introduced into the of that to and in the Could the

Ted Grauch

that. I the a the don’t and of I in me our and is product it have healthy data of lines. mean, NXG portion in for ClearView products it’s front Drake

encoders/transcoders the a those newer basically that. push to products, healthy – very So

George Gaspar

Yes.

creates shareholders to that be company’s a bottom. view for even get about just line black the and comment positive that’s a Okay. very really the at it Because thinking operations Thanks. important, in improvement more could to

you thank right kindly. All Okay.

Ted Grauch

much. Thank you appreciate your questions. so We

Operator

Thank We questions back no now in you. queue. Instructions] closing comments. to appear further Ted the for [Operator Okay. over hand have I any will to

Ted Grauch

you, for Tongue XXXX and to all today. attending Blonder like Call your I for Thank Laboratories everyone would goodbye. Quarter you. Thank Great. of Third thank questions Earnings and

Operator

and gentlemen. conclude ladies conference call. today’s you, Thank does This

phone your time, You wonderful participation. for and your disconnect a may have Thank at this you lines day.

Blonder Tongue Laboratories (BDRL) 6 Nov 222022 Q3 Earnings call transcript