Blonder Tongue Laboratories Inc (BDR, Financial) filed Quarterly Report for the period ended 2009-03-31.
Blonder Tongue Laboratories Inc. is a designer manufacturer and supplier of a comprehensive line of electronics and systems equipment for the cable television industry. The company's products are used to acquiredistribute and protect the broad range of communications signals carried onfiber optic and coaxial cable distribution systems. These products are sold to customers providing an array of communications services including television high-speed data and telephony to single family dwellings multiple dwelling units the lodging industry and various institutions. Blonder Tongue Laboratories Inc has a market cap of $8.8 million; its shares were traded at around $1.42 with and P/S ratio of 0.2.
The Revolver terminates on August 5, 2011, at which time all outstanding borrowings under the Revolver are due. The Term Loan matures on August 5, 2011 and requires equal monthly principal payments of approximately $17 each, plus interest, with the remaining balance due at maturity. The loans are subject to a prepayment penalty if satisfied in full prior to the second anniversary of the effective date of the loans. During the first quarter ended March 31, 2009, the Company made an elective $500 additional Term Loan payment.
Pursuant to the Purchase Agreement, DirecPath paid the Company an aggregate purchase price of $3,130 in cash, resulting in a gain of approximately $880 on the sale, after certain post-closing adjustments, including an adjustment for cash, an adjustment for working capital and adjustments related to the number of subscribers for certain types of services, all as of the closing date and as set forth in the Purchase Agreement. A portion of the purchase price in the amount of $37, was held in an escrow account, and was included as part of the prepaid and other current assets as of December 31, 2008, pursuant to an Escrow Agreement dated December 15, 2006, among the Company, DirecPath and U.S. Bank National Association, to secure the Companys indemnification obligations under the Purchase Agreement. During January 2009, all remaining amounts in the escrow account were released back to the Company and all indemnification obligations were satisfied. Accordingly, the Company recognized an additional gain of approximately $62 on the sale.
In addition, in connection with the divestiture transaction, on December 15, 2006, the Company entered into a Purchase and Supply Agreement with DirecPath, LLC, a wholly-owned subsidiary of DirecPath ("DPLLC"), pursuant to which DPLLC is contractually obligated to purchase $1,630 of products from the Company, subject to certain adjustments, over a period of three (3) years. DPLLC purchased zero, $64 and $404 of equipment from the Company in 2009 (through the end of the first quarter), 2008 and 2007, respectively.
Based on this decision, the Company recognized an initial net loss on disposal of approximately $405, which in the third quarter of 2008 was adjusted to $290, related to the Hybrid fixed assets, which includes the ROE Agreements and the equipment necessary to operate the Systems, substantially all of which is installed at the applicable property locations. While the Company has wound down almost all of the operations of Hybrid, it continues to perform certain basic administrative services which provide an immaterial amount of positive cash flow and are not expected to have a negative effect on net income.
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Blonder Tongue Laboratories Inc. is a designer manufacturer and supplier of a comprehensive line of electronics and systems equipment for the cable television industry. The company's products are used to acquiredistribute and protect the broad range of communications signals carried onfiber optic and coaxial cable distribution systems. These products are sold to customers providing an array of communications services including television high-speed data and telephony to single family dwellings multiple dwelling units the lodging industry and various institutions. Blonder Tongue Laboratories Inc has a market cap of $8.8 million; its shares were traded at around $1.42 with and P/S ratio of 0.2.
Highlight of Business Operations:
On August 6, 2008, the Company entered into a Revolving Credit, Term Loan and Security Agreement with Sovereign Business Capital (Sovereign), a division of Sovereign Bank (Sovereign Agreement), pursuant to which the Company obtained an $8,000 credit facility from Sovereign (the Sovereign Financing). The Sovereign Financing consists of (i) a $4,000 asset based revolving credit facility (Revolver) and (ii) a $4,000 term loan facility (Term Loan), each of which has a three year term. The amounts which may be borrowed under the Revolver are based on certain percentages of Eligible Receivables and Eligible Inventory, as such terms are defined in the Sovereign Agreement. The obligations of the Company under the Sovereign Agreement are secured by substantially all of the assets of the Company.The Revolver terminates on August 5, 2011, at which time all outstanding borrowings under the Revolver are due. The Term Loan matures on August 5, 2011 and requires equal monthly principal payments of approximately $17 each, plus interest, with the remaining balance due at maturity. The loans are subject to a prepayment penalty if satisfied in full prior to the second anniversary of the effective date of the loans. During the first quarter ended March 31, 2009, the Company made an elective $500 additional Term Loan payment.
Pursuant to the Purchase Agreement, DirecPath paid the Company an aggregate purchase price of $3,130 in cash, resulting in a gain of approximately $880 on the sale, after certain post-closing adjustments, including an adjustment for cash, an adjustment for working capital and adjustments related to the number of subscribers for certain types of services, all as of the closing date and as set forth in the Purchase Agreement. A portion of the purchase price in the amount of $37, was held in an escrow account, and was included as part of the prepaid and other current assets as of December 31, 2008, pursuant to an Escrow Agreement dated December 15, 2006, among the Company, DirecPath and U.S. Bank National Association, to secure the Companys indemnification obligations under the Purchase Agreement. During January 2009, all remaining amounts in the escrow account were released back to the Company and all indemnification obligations were satisfied. Accordingly, the Company recognized an additional gain of approximately $62 on the sale.
In addition, in connection with the divestiture transaction, on December 15, 2006, the Company entered into a Purchase and Supply Agreement with DirecPath, LLC, a wholly-owned subsidiary of DirecPath ("DPLLC"), pursuant to which DPLLC is contractually obligated to purchase $1,630 of products from the Company, subject to certain adjustments, over a period of three (3) years. DPLLC purchased zero, $64 and $404 of equipment from the Company in 2009 (through the end of the first quarter), 2008 and 2007, respectively.
Based on this decision, the Company recognized an initial net loss on disposal of approximately $405, which in the third quarter of 2008 was adjusted to $290, related to the Hybrid fixed assets, which includes the ROE Agreements and the equipment necessary to operate the Systems, substantially all of which is installed at the applicable property locations. While the Company has wound down almost all of the operations of Hybrid, it continues to perform certain basic administrative services which provide an immaterial amount of positive cash flow and are not expected to have a negative effect on net income.
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