-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A5h9itSCyc7BR5XBGBw9OKDxdM6WbS+s7VTjTAqUZfp1uAkwIp0kEbgiSyi1dzxM NPuLu9vZhEIXTD0mo4RFVQ== /in/edgar/work/0000950116-00-002746/0000950116-00-002746.txt : 20001115 0000950116-00-002746.hdr.sgml : 20001115 ACCESSION NUMBER: 0000950116-00-002746 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLONDER TONGUE LABORATORIES INC CENTRAL INDEX KEY: 0001000683 STANDARD INDUSTRIAL CLASSIFICATION: [3663 ] IRS NUMBER: 521611421 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-14120 FILM NUMBER: 767488 BUSINESS ADDRESS: STREET 1: ONE JAKE BROWN RD STREET 2: PO BOX 1000 CITY: OLD BRIDGE STATE: NJ ZIP: 08857 BUSINESS PHONE: 9086794000 MAIL ADDRESS: STREET 1: ONE JAKE BROWN ROAD CITY: OLD BRIDGE STATE: NJ ZIP: 08857 10-Q 1 0001.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 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, 2000, OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . ---------- -------- Commission file number 1-14120 BLONDER TONGUE LABORATORIES, INC. --------------------------------- (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 - ------------------------------------------- ---------------------- (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 ----- ----- Number of shares of common stock, par value $.001, outstanding as of November 10, 2000: 7,612,664 The Exhibit Index appears on page 11. BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts)
Sept. 30, December 31, 2000 1999 ----------- ----------- (unaudited) Assets (Note 4) Current assets: Cash ........................................................................... $ 142 $ 48 Accounts receivable, net of allowance for doubtful accounts of $1,100 and $912, respectively ...................................... 12,687 9,969 Inventories (Note 3) ........................................................... 27,395 26,793 Other current assets ........................................................... 1,720 2,007 Deferred income taxes .......................................................... 1,241 1,182 -------- -------- Total current assets ....................................................... 43,185 39,999 Property, plant and equipment, net of accumulated depreciation and amortization ................................................... 7,689 8,740 Patents, net ........................................................................ 3,954 4,242 Goodwill, net ....................................................................... 11,973 12,437 Other assets ........................................................................ 635 658 -------- -------- $ 67,436 $ 66,076 ======== ======== Liabilities and Stockholders' Equity Current liabilities: Revolving line of credit (Note 4) .............................................. $ 3,493 $ 3,172 Current portion of long-term debt .............................................. 4,418 4,470 Accounts payable ............................................................... 2,133 4,644 Accrued compensation ........................................................... 1,116 1,040 Other accrued expenses ......................................................... 881 903 Income taxes ................................................................... 2,640 314 -------- -------- Total current liabilities .................................................. 14,681 14,543 -------- -------- Deferred income taxes ............................................................... 186 149 Long-term debt (Note 4) ............................................................. 12,888 16,137 Commitments and contingencies ....................................................... -- -- Stockholders' equity: Preferred stock, $.001 par value; authorized 5,000 shares; no shares outstanding .......................................................... -- -- Common stock, $.001 par value; authorized 25,000 shares, 8,444 shares issued at September 30, 2000 and 8,392 shares issued at December 31, 1999 8 8 Paid-in capital ................................................................ 24,143 23,870 Retained earnings .............................................................. 21,816 17,655 Treasury stock at cost, 831 shares at September 30, 2000 and December 31, 1999 .............................................................. (6,286) (6,286) -------- -------- Total stockholders' equity ................................................. 39,681 35,247 -------- -------- $ 67,436 $ 66,076 ======== ========
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, --------------------------- -------------------------- 2000 1999 2000 1999 -------- -------- -------- -------- Net sales .................................. $ 18,937 $ 17,307 $ 58,179 $ 45,719 Cost of goods sold ......................... 13,286 11,687 38,510 30,567 -------- -------- -------- -------- Gross profit ............................. 5,651 5,620 19,669 15,152 -------- -------- -------- -------- Operating expenses: Selling expenses ......................... 1,517 1,653 4,628 4,538 General and administrative ............... 1,842 1,800 5,420 5,201 Research and development ................. 589 468 1,641 1,549 -------- -------- -------- -------- 3,948 3,921 11,689 11,288 -------- -------- -------- -------- Earnings from operations ................... 1,703 1,699 7,980 3,864 -------- -------- -------- -------- Other income (expense): Interest expense ......................... (423) (565) (1,529) (1,465) Other income ............................. 10 -- 10 6 -------- -------- -------- -------- (413) (565) (1,519) (1,459) -------- -------- -------- -------- Earnings before income taxes ............... 1,290 1,134 6,461 2,405 Provision for income taxes ................. 462 443 2,300 938 -------- -------- -------- -------- Net earnings ............................. $ 828 $ 691 $ 4,161 $ 1,467 ======== ======== ======== ======== Basic net earnings per share ............... $ 0.11 $ .09 $ 0.55 $ .18 ======== ======== ======== ======== Basic weighted average shares outstanding .. 7,612 7,545 7,622 8,036 ======== ======== ======== ======== Diluted net earnings per share ............. $ 0.11 $ .09 $ 0.54 $ .18 ======== ======== ======== ======== Diluted weighted average shares outstanding 7,648 7,610 7,671 8,079 ======== ======== ======== ========
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, ------------------------------ 2000 1999 ------------ ------------ Cash Flows From Operating Activities: Net earnings ................................................... $ 4,161 $ 1,467 Adjustments to reconcile net earnings to cash provided by operating activities: Depreciation and amortization ................................ 2,331 2,244 Provision for doubtful accounts .............................. 417 395 Deferred income taxes ........................................ (22) (297) Changes in operating assets and liabilities, net of acquisition: Accounts receivable .......................................... (3,135) 1,835 Inventories .................................................. (602) 1,124 Other current assets ......................................... 287 (1,008) Other assets ................................................. -- (896) Income taxes ................................................. 2,326 615 Accounts payable and accrued expenses ........................ (2,457) 2,114 ------- ------- Net cash provided by operating activities .................. 3,306 7,593 ------- ------- Cash Flows From Investing Activities: Capital expenditures ........................................... (117) (1,355) Acquisition of licensing agreements ............................ (388) -- ------- ------- Net cash used in investing activities ........................ (505) (1,355) ------- ------- Cash Flows From Financing Activities: Net borrowings (repayments) under revolving line of credit ..... 321 (433) Proceeds from long-term debt ................................... -- 842 Repayments of long-term debt ................................... (3,301) (1,656) Acquisition of treasury stock .................................. -- (5,435) Proceeds from exercise of stock options ........................ 273 123 ------- ------- Net cash used in financing activities ........................ (2,707) (6,559) ------- ------- Net (Decrease) Increase in Cash .................................. 94 (321) Cash, beginning of period ........................................ 48 542 ------- ------- Cash, end of period .............................................. $ 142 $ 221 ======= ======= Supplemental Cash Flow Information: Cash paid for interest ......................................... $ 1,515 $ 1,489 Cash paid for income taxes ..................................... 40 598 ======= =======
See accompanying notes to consolidated financial statements. 4 Blonder Tongue Laboratories, Inc. and Subsidiaries Notes to Consolidated Financial Statements (unaudited) Note 1 - Company and Basis of Presentation Blonder Tongue Laboratories, Inc. (the "Company") is a designer, manufacturer and supplier of electronics and systems equipment for the cable television and broadcast industries. The consolidated financial statements include the accounts of Blonder Tongue Laboratories, Inc. and subsidiaries. Significant inter-company accounts and transactions have been eliminated in consolidation. The results for the third quarter of 2000 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, 2000. 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 1998, SFAS 133, "Accounting for Derivative Instruments and Hedging Activities," was issued. SFAS 133 standardizes accounting and reporting for derivative instruments and for hedging activities. This statement was amended by SFAS 137, which delays the effective date until 2001. The Company will be reviewing this pronouncement to determine its applicability to the Company, if any. Note 3 - Inventories Inventories (in thousands) are summarized as follows: Sept. 30, Dec. 31, 2000 1999 ------------- ------------- Raw Materials................................. $ 12,712 $ 11,484 Work in process............................... 3,020 5,058 Finished Goods................................ 11,663 10,251 ------------- ------------- $ 27,395 $ 26,793 ============= ============= Note 4 - Line of Credit On November 12, 1999, the Company entered into a new revolving line of credit with its bank, replacing its former revolving line of credit ("Former Credit Line"), on which funds may be borrowed at either the bank's base rate plus a margin ranging from 0% to .625%, or LIBOR, plus a margin ranging from 1.50% to 2.625%, in each case depending upon the calculation of certain financial covenants (9.00% at September 30, 2000). The Company was unable to meet certain financial covenants with its bank at December 31, 1999, compliance with which was waived by the bank as of such date. Coincident with obtaining the waiver by the bank, the bank agreed to extend the line of credit until September 30, 2000 and to waive compliance by the Company with certain financial covenants as of March 31, 2000, subject to the Company meeting certain alternative financial covenants as of such date, and the Company agreed to periodic reductions in the line of credit commencing in March, 2000, until the line of credit was reduced from $7.5 million to $5.5 million as of August 1, 2000. At June 30, 2000, the Company was unable to meet certain financial covenants, 5 compliance with which was waived by the bank as of such date. Coincident with obtaining the waiver by the bank, the bank agreed to extend the line of credit until February 15, 2001. As of September 30, 2000, the Company had $3,493,000 outstanding under the line of credit. Borrowings under the line of credit are limited to certain percentages of eligible accounts receivable and inventory as defined in the credit agreement. The line of credit is collateralized by a security interest in all of the Company's assets. The agreement also contains restrictions that require the Company to maintain certain financial ratios as well as restrictions on the payment of dividends. At September 30, 2000, the Company was unable to meet certain financial covenants, compliance with which was waived by the bank as of such date. As of November 12, 1999, the Company's acquisition loan commitment under its Former Credit Line was converted to a term loan with its bank (the "Term Loan"). The Term Loan bears interest at either the bank's base rate plus a margin ranging from 0% to .875%, or LIBOR plus a margin ranging from 1.75% to 2.875%, in each case depending upon the calculation of certain financial covenants (9.30% at September 30, 2000). At September 30, 2000, there was $13,933,000 outstanding under the Term Loan. The principal balance of the Term Loan is being amortized in monthly installments of $316,667 with a final balloon payment of all remaining unpaid principal and accrued interest due on June 30, 2002. ITEM 2. 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 section entitled Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations. 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, 1999 (See Item 1: Business and Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations). Third three months of 2000 Compared with third three months of 1999 Net Sales. Net sales increased $1,630,000, or 9.4%, to $18,937,000 in the third three months of 2000 from $17,307,000 in the third three months of 1999. The increase in sales is primarily attributed to an increase in demand for core products in the multiple dwelling unit and hotel, motel and resort markets. Cost of Goods Sold. Cost of goods sold increased to $13,286,000 for the third three months of 2000 from $11,687,000 for the third three months of 1999 and increased as a percentage of sales to 70.2% from 67.5%. The increase as a percentage of sales was caused primarily by a higher proportion of sales during the period being comprised of lower margin products. Selling Expenses. Selling expenses decreased to $1,517,000 for the third three months of 2000 from $1,653,000 in the third three months of 1999, primarily due to a decrease in costs incurred for trade shows and promotional goods, offset by an increase in costs incurred for advertising and marketing materials. General and Administrative Expenses. General and administrative expenses increased to $1,842,000 for the third three months of 2000 from $1,800,000 for the third three months of 1999 and decreased as a percentage of sales to 9.7% for the third three months of 2000 from 10.4% for the third three months of 1999. The $42,000 increase can be primarily attributed to an increase in the accrual for the allowance for doubtful accounts offset by a decrease in the accrual for executive bonuses. Research and Development Expenses. Research and development expenses increased to $589,000 in the third three months of 2000 from $468,000 in the third three months of 1999, primarily due to an increase in departmental supplies. Research and development expenses, as a percentage of sales, increased to 3.1% in the third three months of 2000 from 2.7% in the third three months of 1999. 6 Operating Income. Operating income increased .2% to $1,703,000 for the third three months of 2000 from $1,699,000 for the third three months of 1999. Operating income as a percentage of sales decreased to 9.0% in the third three months of 2000 from 9.8% in the third three months of 1999. Interest and Other Expenses. Other expense decreased to $413,000 in the third three months of 2000 from $565,000 in the third three months of 1999, due primarily to decreased interest expense resulting from decreased borrowings under the line of credit and repayment of the Term Loan. These expenses in the third three months of 2000 consisted of interest expense in the amount of $423,000 offset by $10,000 of interest income. These expenses in the third three months of 1999 consisted entirely of interest expense. Income Taxes. The provision for income taxes for the third three months of 2000 increased to $462,000 from $443,000 for the third three months of 1999 as a result of an increase in taxable income. First nine months of 2000 Compared with first nine months of 1999 Net Sales. Net sales increased $12,460,000, or 27.3%, to $58,179,000 in the first nine months of 2000 from $45,719,000 in the first nine months of 1999. The increase in sales is primarily attributed to an increase in sales of interdiction products, complemented by an increase in demand for core products in the multiple dwelling unit and hotel, motel and resort markets. Net sales included approximately $25,443,000 of interdiction equipment for the first nine months of 2000 compared to approximately $13,638,000 for the first nine months of 1999. Cost of Goods Sold. Cost of goods sold increased to $38,510,000 for the first nine months of 2000 from $30,567,000 for the first nine months of 1999 and decreased as a percentage of sales to 66.2% from 66.9%. The decrease as a percentage of sales was caused primarily by a higher proportion of sales during the period being comprised of higher margin products. Selling Expenses. Selling expenses increased to $4,628,000 for the first nine months of 2000 from $4,538,000 in the first nine months of 1999, primarily due to an increase in wages related to the increase in headcount along with an increase in costs incurred for advertising and marketing materials. The increase in selling expenses is directly related to the Company's efforts to increase market penetration within the franchised cable market and the promotion of new product lines such as fiber optics and interdiction. The Company anticipates that these efforts will favorably impact operating results for the remainder of fiscal year 2000. General and Administrative Expenses. General and administrative expenses increased to $5,420,000 for the first nine months of 2000 from $5,201,000 for the first nine months of 1999 but decreased as a percentage of sales to 9.3% for the first nine months of 2000 from 11.4% for the first nine months of 1999. The $219,000 increase can be primarily attributed to a decrease in the accrual for executive bonuses offset by an increase in the accrual for the allowance for doubtful accounts. Research and Development Expenses. Research and development expenses increased to $1,641,000 in the first nine months of 2000 from $1,549,000 in the first nine months of 1999, primarily due to an increase in departmental supplies. Research and development expenses, as a percentage of sales, decreased to 2.8% in the first nine months of 2000 from 3.4% in the first nine months of 1999. Operating Income. Operating income increased 106.5% to $7,980,000 for the first nine months of 2000 from $3,864,000 for the first nine months of 1999. Operating income as a percentage of sales increased to 13.7% in the first nine months of 2000 from 8.5% in the first nine months of 1999. Interest and Other Expenses. Other expense increased to $1,519,000 in the first nine months of 2000 from $1,459,000 in the first nine months of 1999, due primarily to increased interest expense resulting from increased borrowings under the line of credit and increased interest rates on the line of credit and Term Loan. Income Taxes. The provision for income taxes for the first nine months of 2000 increased to $2,300,000 from $938,000 for the first nine months of 1999 as a result of an increase in taxable income. 7 Liquidity and Capital Resources The Company's net cash provided by operating activities for the nine month period ended September 30, 2000 was $3,306,000, compared to cash provided by operating activities for the nine month period ended September 30, 1999, which was $7,593,000. Cash flows from operating activities have been positive, due primarily to net earnings of $4,161,000. Cash used in investing activities was $505,000, which was attributable to capital expenditures for new equipment. The Company anticipates additional capital expenditures during calendar year 2000 aggregating approximately $100,000, which will be used for the purchase of automated assembly and test equipment. Cash used in financing activities was $2,707,000 for the first nine months of 2000 primarily comprised of $3,301,000 of repayments of long term debt, offset by $273,000 of proceeds from the exercise of stock options. On November 12, 1999, the Company entered into a new revolving line of credit with its bank, replacing its former revolving line of credit ("Former Credit Line"), on which funds may be borrowed at either the bank's base rate plus a margin ranging from 0% to .625%, or LIBOR, plus a margin ranging from 1.50% to 2.625%, in each case depending upon the calculation of certain financial covenants (9.00% at September 30, 2000). The Company was unable to meet certain financial covenants with its bank at December 31, 1999, compliance with which was waived by the bank as of such date. Coincident with obtaining the waiver by the bank, the bank agreed to extend the line of credit until September 30, 2000 and to waive compliance by the Company with certain financial covenants as of March 31, 2000, subject to the Company meeting certain alternative financial covenants as of such date, and the Company agreed to periodic reductions in the line of credit commencing in June, 2000, until the line of credit was reduced from $7.5 million to $5.5 million as of August 1, 2000. At June 30, 2000, the Company was unable to meet certain financial covenants, compliance with which was waived by the bank as of such date. Coincident with obtaining the waiver by the bank, the bank agreed to extend the line of credit until February 15, 2001. As of September 30, 2000, the Company had $3,493,000 outstanding under the line of credit. Borrowings under the line of credit are limited to certain percentages of eligible accounts receivable and inventory as defined in the credit agreement. The line of credit is collateralized by a security interest in all of the Company's assets. The agreement also contains restrictions that require the Company to maintain certain financial ratios as well as restrictions on the payment of dividends. At September 30, 2000, the Company was unable to meet certain financial covenants, compliance with which was waived by the bank as of such date. As of November 12, 1999, the Company's acquisition loan commitment under its Former Credit Line was converted to a term loan with its bank (the "Term Loan"). The Term Loan bears interest at either the bank's base rate plus a margin ranging from 0% to .875%, or LIBOR plus a margin ranging from 1.75% to 2.875%, in each case depending upon the calculation of certain financial covenants (9.30% at September 30, 2000). At September 30, 2000, there was $13,933,000 outstanding under the Term Loan. The principal balance of the Term Loan is being amortized in monthly installments of $316,667 with a final balloon payment of all remaining unpaid principal and accrued interest due on June 30, 2002. On February 3, 1999, the Company entered into an interest rate swap agreement with a notional amount of $10,000,000. The swap agreement has a maturity date of June 3, 2002 and requires the Company to make fixed rate interest payments on the notional amount of 8.01% per annum in exchange for floating rate payments equal to LIBOR plus 2.55%. The Company is exposed to credit risk in the unlikely event of the nonperformance by the counterparties. Interest to be paid or received is accrued over the life of the agreement at the net effective interest rate for the swap and corresponding debt instrument. The Company currently anticipates that the cash generated from operations, existing cash balances and amounts available under its existing or a replacement line of credit, will be sufficient to satisfy its foreseeable working capital needs. New Accounting Pronouncements In June 1998, SFAS 133, "Accounting for Derivative Instruments and Hedging Activities," was issued. SFAS 133 standardizes accounting and reporting for derivative instruments and for hedging activities. This statement was amended by SFAS 137, which delays the effective date until 2001. The Company will be reviewing this pronouncement to determine its applicability to the Company, if any. 8 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The market risk inherent in the Company's financial instruments and positions represents the potential loss arising from adverse changes in interest rates. At September 30, 2000 and 1999 the principal amount of the Company's aggregate outstanding variable rate indebtedness was $17,426,000 and $18,727,000, respectively. Without giving effect to the swap agreement described below, a hypothetical 10% adverse change in interest rates would have had an annualized unfavorable impact of approximately $161,000 and $154,000, respectively, on the Company's earnings and cash flows based upon these quarter-end debt levels. To ameliorate these risks, in February, 1999, the Company entered into an interest rate Swap Agreement with a notional amount of $10,000,000. The specific terms of the Swap Agreement are more fully discussed above in Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations. 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 Stockholder proposals intended to be included in the Company's proxy statement for presentation at the 2001 Annual Meeting of Stockholders pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended, must be received by the Company's Controller at One Jake Brown Road, Old Bridge, New Jersey 08857 on or before December 4, 2000, to be eligible for inclusion in such proxy statement. If notice of a stockholder proposal intended to be presented at the 2001 Annual Meeting of Stockholders is not received by the Company on or before February 17, 2001 (whether or not the stockholder wishes the proposal to be included in the proxy statement for such annual meeting), the Company (through management proxy holders) may exercise discretionary voting authority on such proposal when and if the proposal is raised at the annual meeting without any reference to the matter in the proxy statement. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The exhibits are listed in the Exhibit Index appearing at page 11 herein. (b) No reports on Form 8-K were filed in the quarter ended September 30, 2000. 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 14, 2000 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) EXHIBIT INDEX
Exhibit # Description Location --------- ----------- -------- 3.1 Restated Certificate of Incorporation of Blonder Incorporated by reference from Exhibit 3.1 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 Laboratories, Incorporated by reference from Exhibit 3.2 Inc. to S-1 Registration Statement No. 33-98070 originally filed October 12, 1995, as amended. 10.1 Second Restatement of the Fifth Amended and Filed herewith. Restated Line of Credit Note dated as of August 11, 2000 10.2 Second Amendment to and Waiver to Fifth Amended Filed herewith. and Restated Loan Agreement dated as of August 11, 2000, between Blonder Tongue Laboratories, Inc. and First Union National Bank 27 Financial Data Schedule Electronic Filing only.
11 EX-10.1 2 0002.txt EXHIBIT 10.1 SECOND RESTATEMENT OF THE FIFTH AMENDED AND RESTATED LINE OF CREDIT NOTE $5,500,000 As of November 12, 1999 Restated on March 24, 2000 Further restated August 11, 2000 FOR VALUE RECEIVED, BLONDER TONGUE LABORATORIES, INC., a Delaware corporation (the "Borrower"), hereby promises to pay to the order of FIRST UNION NATIONAL BANK (the "Bank") on the Termination Date the principal amount of FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS ($5,500,000) or, if less, the aggregate outstanding principal under the Line of Credit extended under the Fifth Amended and Restated Loan Agreement dated November 12, 1999 by and between the Borrower and the Bank as amended by the First Amendment and Waiver to the Fifth Amended and Restated Loan Agreement dated March 24, 2000 and the Second Amendment and Waiver to the Fifth Amended and Restated Loan Agreement dated the date hereof as may be further amended, modified or restated from time to time (the "Loan Agreement"). Terms capitalized but not defined herein shall have the meanings given to them respectively in the Loan Agreement. Reference is made to the Loan Agreement for a statement of the terms and conditions under which the loans evidenced hereby have been made, secured, and may be prepaid or accelerated. This Note amends and restates and replaces (but does not discharge) the obligations of the Borrower under the Fifth Amended and Restated Line of Credit Note dated as of November 12, 1999, as such note has been amended, modified and/or extended. Until maturity (whether by acceleration or otherwise) interest shall accrue on the outstanding principal balance hereof at the rate set forth in the Loan Agreement. Interest shall be calculated on the basis of a 360-day year, counting the actual number of days elapsed. Subsequent to maturity or the occurrence of any Event of Default, and continuing after entry of any judgment against the Borrower with respect to the obligations evidenced by this Note, interest shall accrue at an annual rate which shall be two percent (2%) above the rate of interest otherwise payable hereunder. Accrued interest shall be payable monthly on the first day of each month commencing with the month immediately following date hereof and if not paid when due, shall be added to the principal. All amounts payable by the Borrower to the Bank hereunder shall be paid directly to the Bank at 190 River Road, Summit, New Jersey 07901 (or at such other address of which the Bank shall give notice to the Borrower in accordance with the Loan Agreement) in immediately available funds. The Borrower hereby waives the requirements of demand, presentment, protest, notice of protest and dishonor and all other demands or notices of any kind in connection with the delivery, acceptance, performance, default, dishonor or enforcement of this Note. The internal law of the State of New Jersey shall govern the construction, interpretation and enforcement of this Note. This note amends, restates, replaces and continues (but is not a novation or repayment of) the First Restatement of the Fifth Amended and Restated Line of Credit Note dated March 24, 2000. IN WITNESS WHEREOF, and intending to be legally bound hereby, the Borrower has caused this Note to be executed by its duly authorized officer as of the day and year first above written. BLONDER TONGUE LABORATORIES, INC. By: /s/James A. Luksch ------------------------------- Name: James A. Luksch Title: President EX-10.2 3 0003.txt EXHIBIT 10.2 SECOND AMENDMENT AND WAIVER TO FIFTH AMENDED AND RESTATED LOAN AGREEMENT This is the second amendment and waiver (the "Amendment") dated August 11, 2000, to the Fifth Amended And Restated Loan Agreement dated November 12, 1999 as amended by the first amendment dated March 24, 2000 (the "Loan Agreement") by and between Blonder Tongue Laboratories, Inc. having an office at One Jake Brown Road, Old Bridge, New Jersey 08857 (the "Borrower"), and First Union National Bank having an office at 190 River Road, Summit, New Jersey 07901 (the "Bank"). RECITALS A. As of June 30, 2000 Borrower was in breach of certain covenants under the Loan Agreement and has requested a waiver of same together with an amendment extending the "Termination Date" of the Loan Agreement to February 15, 2001. B. The Bank is willing to provide such a waiver and to amend the Loan Agreement on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the agreement of the parties contained herein, and intending to be legally bound, the parties hereto agree as follows: 1. Definitions. Capitalized terms used herein and not defined shall have the meanings assigned to them in the Loan Agreement as amended by any prior amendments. 2. Amendments to Loan Agreement. Section 2.1(a) is hereby amended to replace "September 30, 2000" with "February 15, 2001". 3. Waivers. Subject to the terms and conditions set forth in this Amendment, the Bank waives compliance with the financial covenants set forth in Subsections 7.1(b) and 7.1(c) of the Loan Agreement as of June 30, 2000, provided that as of June 30, 2000 the Company had a Fixed Charge Ratio of not less than 1.17 to 1.00 and a Tangible Net Worth of not less than $22,250,000. 4. General. This Amendment is made pursuant to the Loan Agreement, and the parties hereto acknowledge that all provisions of the Loan Agreement, except as amended hereby, shall remain in full force and effect. 5. Restated Line of Credit Note. In order to evidence and continue the Line of Credit Loans as amended and modified pursuant to this Amendment, Borrower shall execute and deliver to the Bank a replacement note in the form attached hereto as Exhibit A (the "Restated Line of Credit Note"). The Restated Line of Credit Note amends, restates, replaces and continues (but not a novation or repayment of) the Line of Credit Note. Amounts owing under the Line of Credit Note shall be deemed to be evidenced and continued by the Restated Line of Credit Note. Accrued and unpaid interest due and owing under the Line of Credit Note as of the date of execution of this Amendment shall be due at the time that the first payment of interest under the Restated Line of Credit Note is due and payable. The existing Line of Credit Note will be marked "replaced" and returned to the Borrower by the Bank. 6. Definitions. Whenever appearing in the Loan Agreement or any other Loan Document, the term "Agreement" shall be deemed to mean the Loan Agreement as amended hereby. Whenever appearing in the Loan Agreement or any other Loan Document, the term "Line of Credit Note" shall be deemed to mean the Restated Line of Credit Note. 7. Representations and Warranties. The Borrower represents and warrants to the Bank that: (i) it has the power, and has taken all necessary action to authorize, execute and deliver this Amendment and the Restated Line of Credit Note and perform its obligations in accordance with the terms thereunder, (ii) the Amendment and the Restated Line of Credit Note are the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with their terms without any offsets, counterclaims or defenses, (iii) the execution, delivery and performance of this Amendment by the Borrower will not (a) require any governmental approval or any other consent or approval; or (b) violate, conflict with, result in a breach of, constitute a default under any agreement to which it is a party, or result in or require the creation of any lien upon any of the assets of the Company or any Subsidiary, (iv) other than the financial covenant non-compliance which is the subject of this Amendment, no Event of Default has occurred and is continuing or will result from the execution by the Borrower of this Amendment, and (v) the financial information provided by the Borrower to the Bank in connection with the Borrower's request that the Bank enter into this Amendment is true and correct in all material respects. 8. Amendment Fee. The Borrower shall pay to the Bank a fee of $35,000 in connection with this Amendment which fee shall be due and payable upon the signing of this Amendment. 9. Audits and Valuations. Without changing any of the Bank's other rights under the Loan Agreement, the Borrower agrees to cooperate, and to pay the fees and expenses of 2 the Bank in connection, with a collateral audit to be conducted by Boston & Associates. Reimbursement for or payment of any such fees and expenses shall be made within ten business days following presentation of an invoice to the Borrower by the Bank. 10. Fees of Bank's Counsel. The Borrower shall pay the fees and expenses of McCarter & English in connection with the preparation and negotiation of this Amendment and all related documents. 11. Conditions to Effectiveness. It shall be a condition to the effectiveness of this Amendment that the Bank has received the following: a. This Amendment, duly executed on behalf of the Borrower and the Bank; b. The Restated Line of Credit Note, duly executed by the Borrower; and c. A certificate from the Secretary the Borrower (i) to which is attached a copy of the Certificate of Incorporation certified by the Secretary of State of Delaware and a copy of the By-laws of the Borrower (or a certification that such documents have not been modified since November 12, 1999), (ii) attesting to authorization of the person signing this Amendment on behalf of the Borrower, and (iii) setting forth the name and sample signature of the officers of the Borrower authorized to execute and deliver this Amendment. 12. Integration. This Amendment together with the Loan Agreement constitute the entire agreement and understanding among the parties relating to the subject matter hereof and thereof and supersedes all prior proposals, negotiations, agreements and understandings relating to such subject matter. 13. Severability. If any provision of this Amendment shall be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or enforceability without in any manner affecting the validity or enforceability of such provision in any other jurisdiction or the remaining provisions of this Amendment in any other jurisdiction. 14. No Defenses, Off-Sets or Counterclaims. By executing this Amendment, Borrower confirms and acknowledges that as of the date of execution hereof, Borrower has no defenses, off-sets or counterclaims against any of Borrower's obligations to the Bank under the Loan 3 Documents, including the Loan Agreement (as amended hereby). Borrower hereby acknowledges and agrees that the actual amounts outstanding on the date of execution hereof are owing the Bank without defense, offset or counterclaim. 15. Incorporation by Reference. This Amendment is incorporated by reference into the Loan Agreement and the other Loan Documents. Except as otherwise provided herein, all of the other provisions of the Loan Agreement and the other Loan Documents are hereby confirmed and ratified and shall remain in full force and effect as of the date of this Amendment. 16. Governing Law; Successors and Assigns. This Amendment is governed by the laws of the State of New Jersey and is binding upon the Borrower and the Bank and their respective successors and/or assigns and/or heirs and executors, as the case may be. 17. Counterparts. This Amendment may be executed by one or more of the parties on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, on the date first above written. BLONDER TONGUE LABORATORIES, INC. By: /s/Peter Pugielli --------------------------------- Name: Peter Pugielli Title: C.F.O. FIRST UNION NATIONAL BANK By: /s/Larry Lee --------------------------------- Name: Larry Lee Title: Vice President 4 Exhibit A SECOND RESTATEMENT OF THE FIFTH AMENDED AND RESTATED LINE OF CREDIT NOTE $5,500,000 As of November 12, 1999 Restated on March 24, 2000 Further restated August 11, 2000 FOR VALUE RECEIVED, BLONDER TONGUE LABORATORIES, INC., a Delaware corporation (the "Borrower"), hereby promises to pay to the order of FIRST UNION NATIONAL BANK (the "Bank") on the Termination Date the principal amount of FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS ($5,500,000) or, if less, the aggregate outstanding principal under the Line of Credit extended under the Fifth Amended and Restated Loan Agreement dated November 12, 1999 by and between the Borrower and the Bank as amended by the First Amendment and Waiver to the Fifth Amended and Restated Loan Agreement dated March 24, 2000 and the Second Amendment and Waiver to the Fifth Amended and Restated Loan Agreement dated the date hereof as may be further amended, modified or restated from time to time (the "Loan Agreement"). Terms capitalized but not defined herein shall have the meanings given to them respectively in the Loan Agreement. Reference is made to the Loan Agreement for a statement of the terms and conditions under which the loans evidenced hereby have been made, secured, and may be prepaid or accelerated. This Note amends and restates and replaces (but does not discharge) the obligations of the Borrower under the Fifth Amended and Restated Line of Credit Note dated as of November 12, 1999, as such note has been amended, modified and/or extended. Until maturity (whether by acceleration or otherwise) interest shall accrue on the outstanding principal balance hereof at the rate set forth in the Loan Agreement. Interest shall be calculated on the basis of a 360-day year, counting the actual number of days elapsed. Subsequent to maturity or the occurrence of any Event of Default, and continuing after entry of any judgment against the Borrower with respect to the obligations evidenced by this Note, interest shall accrue at an annual rate which shall be two percent (2%) above the rate of interest otherwise payable hereunder. Accrued interest shall be payable monthly on the first day of each month commencing with the month immediately following date hereof and if not paid when due, shall be added to the principal. All amounts payable by the Borrower to the Bank hereunder shall be paid directly to the Bank at 190 River Road, Summit, New Jersey 07901 (or at such other address of which the Bank shall give notice to the Borrower in accordance with the Loan Agreement) in immediately available funds. The Borrower hereby waives the requirements of demand, presentment, protest, notice of protest and dishonor and all other demands or notices of any kind in connection with the delivery, acceptance, performance, default, dishonor or enforcement of this Note. The internal law of the State of New Jersey shall govern the construction, interpretation and enforcement of this Note. This note amends, restates, replaces and continues (but is not a novation or repayment of) the First Restatement of the Fifth Amended and Restated Line of Credit Note dated March 24, 2000. IN WITNESS WHEREOF, and intending to be legally bound hereby, the Borrower has caused this Note to be executed by its duly authorized officer as of the day and year first above written. EX-27 4 0004.txt FINANCIAL DATA SCHEDULE
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BLONDER TONGUE LABORATORIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 AND BALANCE SHEET AS AT SEPTEMBER 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-2000 SEP-30-2000 142 0 13,787 1,100 27,395 43,185 14,100 6,411 67,436 14,681 0 0 0 8 39,673 67,436 58,179 58,179 38,510 38,510 11,272 417 1,529 6,461 2,300 0 0 0 0 4,161 .55 .54
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