Blonder Tongue Reports 2005 Third Quarter Results and Realignment of Its Strategic Plan
November 14 2005 - 8:00AM
Business Wire
Blonder Tongue Laboratories, Inc. (AMEX: "BDR"), today announced
its financial results for the third quarter ended September 30,
2005. The Company also announced that it will record an increase in
inventory reserve in the third quarter as part of an overall
strategic plan to realign products and services to meet anticipated
future demands in the marketplace. Blonder Tongue is undertaking a
major plan to realign products and services, streamline
manufacturing capabilities, and expand sales channels
internationally and domestically. These initiatives were the
subject of previous press releases announcing new products such as
the Cable Modem Termination System (CMTS) and the new Agile QAM
Modulator. Also reported was the latest initiative to begin
manufacturing in the Peoples Republic of China. These initiatives
are intended to respond to the significant changes taking place in
communications technology as the shift from analog to digital
accelerates and as the use of fiber and applications relying on
VoIP expand, in future deployments for cable television, high speed
data and voice in the US and internationally. In anticipation of
this realignment, the Company has increased its inventory reserve
to reflect the anticipated shift in product mix going forward. "The
shift in products is evident in the sales of our Digital products.
Third quarter 2005 Digital sales were $1,324,000 compared to
$696,000 in the comparable period in 2004." stated Emily Nikoo,
Vice President of Marketing. Net sales for the third quarter 2005
were $9,666,000, as compared to net sales of $11,215,000 reported
in the third quarter 2004. The decrease in sales is primarily
attributed to lower headend product sales. In addition, net sales
for the third three months of 2004 included the recognition of
$458,000 of revenues from the note receivable obtained by the
Company in connection with a sale of goods to a customer in
September 2002. Net loss on a GAAP basis for the third quarter 2005
was $(3,516,000), or ($0.44) per share, compared to a net income of
$406,000 or $0.05 per share for the comparable period in 2004. The
loss in 2005 includes an increase to the inventory reserve of
$3,494,000 while the comparable period in 2004 had no increase in
inventory reserve. Excluding the inventory reserve adjustment, the
third quarter net loss would have been ($22,000) in 2005 compared
to net income of $406,000 for the same period in 2004. "This
non-cash charge will allow us to focus our efforts on the more
current product offerings. Along with our new credit facility with
National City Business Credit, we believe we are taking the
appropriate steps to further solidify the Company's financial
position." commented Eric Skolnik, Chief Financial Officer.
Commenting on the third quarter 2005 results, James A. Luksch,
Chief Executive Officer, said, "The joint venture in China, the new
product offerings and our new credit facility, set the stage for
Blonder Tongue to be more dynamic and innovative. Blonder Tongue
will continue to provide products employing the latest technology,
with the highest performance to cost ratio in the industry. Our
investment in a facility in China that is within our control, will
allow us to deliver the superior quality our customers expect while
simultaneously increasing gross margins and international sales.
This effort may also present us with opportunities to acquire
strategic additions to our existing product lines." Founded in
1950, Blonder Tongue Laboratories is a leading U.S. designer,
manufacturer, and supplier of a comprehensive line of broadband
systems equipment and technical engineering services for Voice,
Video and Data service providers. With Blonder Tongue's optimized
technologies, simplified deployment and qualified technical
assistance, the service provider reduces costs, increases customer
satisfaction and increases profitability. For more information
regarding Blonder Tongue or its products, please visit the
Company's Web site at www.blondertongue.com or contact the Company
directly at (732) 679-4000. "Safe Harbor" Statement under the
Private Securities Litigation Reform Act of 1995: The information
set forth above includes "forward-looking" statements and
accordingly, the cautionary statements contained in Blonder
Tongue's Annual Report and Form 10-K/A for the year ended December
31, 2004 (See Item 1: Business and Item 7: Management's Discussion
and Analysis of Financial Condition and Results of Operations and
Risk Factors), and other filings with the Securities and Exchange
Commission are incorporated herein by reference. 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. Blonder Tongue's actual results
may differ from the anticipated results or other expectations
expressed in Blonder Tongue's "forward-looking" statements. -0- *T
Blonder Tongue Laboratories, Inc. Consolidated Summary of Operating
Results (in thousands, except per-share data) (unaudited) Three
months Nine months ended ended September 30, September 30,
---------------------------------- 2005 2004 2005 2004 -------
------- ------- ------- Net sales $ 9,666 $11,215 $28,343 $30,661
Gross profit (loss) (53) 3,580 5,333 9,601 Earnings (loss) from
operations (3,271) 660 (4,215) 785 Net earnings (loss) (3,516) 406
(5,047) 245 Net earnings (loss) per share: Basic $ (0.44) $ 0.05 $
(0.63)$ 0.03 Diluted $ (0.44) $ 0.05 $ (0.63)$ 0.03 Weighted
average shares outstanding: Basic 8,015 8,002 8,015 7,995 Diluted
8,015 8,026 8,015 8,033 Consolidated Summary Balance Sheets (in
thousands) September 30, December 31, 2005 2004 -------------
------------ (unaudited) Current assets $15,871 $16,006 Property,
plant, and equipment, net 6,199 6,214 Total assets 32,576 38,156
Current liabilities 8,157 5,403 Long-term liabilities 2,543 5,830
Stockholders' equity 21,876 26,923 Total liabilities and
stockholders' equity $32,576 $38,156 *T
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