BDR Blonder Tongue Laboratories Inc

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