OLD BRIDGE, NJ / August 15, 2022 / Blonder Tongue Laboratories, Inc. (OTCQB: BDRL) announced its sales and results for the second quarter and six months ended June 30, 2022.
Blonder Tongue Laboratories, Inc. net sales decreased $104,000 or 2.4% to $4,234,000 for the second quarter of 2022 from $4,338,000 for the comparable period in 2021. Net loss for the three months ended June 30, 2022, was $(1,154,000) or $(0.09) per diluted share, compared to net income of $1,626,000 or $0.11 per diluted share for the comparable period in 2021.
Commenting on the Company’s second quarter results, Chief Executive Officer Ted Grauch noted, “While Blonder Tongue Laboratories continued to see strong bookings and growing demand for our NXG IP video processing platform, Clearview and Drake IP video encoders and transcoders, and DOCSIS high speed data over cable product lines during the second quarter, we continued to face headwinds of rising raw materials costs and fixed allocations of key semiconductor chipsets throughout the quarter. The Company responded by raising prices on all affected products, reducing additional operating expenses, and working closely with our customers to introduce our price increases as quickly as possible. Our second quarter loss was primarily caused by manufacturing limitations due to chipset availability and quantity allocations from our suppliers, and the time delay between product price increases and the realization of higher product revenues per unit, as backlog purchase orders are filled at previous pricing levels. We believe that the work we have done during the first half of 2022 to reduce expenses, raise prices, and increase our manufacturing efficiencies will have positive impacts on the Company’s performance in future periods. Our product mix continues to generally improve towards our higher margin, newest product lines with highest technology content, and we are continuing to win new business with large Cable, Telco, and Fiber Optic service providers in line with our multi-year strategy of increasing direct engagement with the biggest potential end users of our products. The Company is seeing a general stabilization in the majority of our chipset supply chain, and although we will have higher chipset allocations on some key raw materials at the end of this year, we remain cautious to forecast any broad semiconductor supply recovery for a specific future period.”
The decrease in sales is primarily attributable to a decrease in sales of digital modulation products, CPE products and analog modulation products, offset by an increase in sales of DOCSIS data products and encoder/transcoder products. Sales of digital modulation products were $45,000 and $381,000, CPE products were zero and $288,000, analog modulation products were $138,000 and $238,000, DOCSIS data products were $686,000 and $284,000 and encoder/transcoder products were $2,163,000 and $1,940,000 in the second three months of 2022 and 2021, respectively. The Company experienced a reduction in CPE products due to the continued deemphasis of this product line, which the Company expects to continue during the remainder of 2022. The Company experienced a reduction in analog modulation products due to the continued market shifting away from analog modulation solutions. The Company expects the sales of the analog modulation products to continue to decline during the second half of 2022. The Company experienced an increase in DOCSIS data products due to the pent-up demand caused by the pandemic as these products are used primarily in the hospitality and assisted-living environments. The Company expects sales of these products may return to more historical levels during the second half of 2022. The Company experienced an increase in encoder/transcoder products as these product lines represent newer products and newer technologies with higher demand from customers. The Company expects sales of these product lines to remain at these levels or increase during the second half of 2022. Although the Company does not expect overall sales to return to pre pandemic levels during 2022, the Company does expect overall sales to be higher during 2022, due to approximately $9,783,000 of sales backlog at June 30, 2022.
For the six months ended June 30, 2022, net sales decreased $14,000 or 0.2% to $7,575,000 in 2021 from $7,589,000 for the comparable period in 2021. Net loss for the six months ended June 30, 2022, was $(2,307,000) or $(0.17) per diluted share, compared to net income of $1,212,000 or $0.08 per diluted share for the comparable period in 2021.
The decrease in sales is primarily attributable to a decrease in sales of CPE products, analog modulation products and coax distribution products offset by an increase in sales of DOCSIS data products and encoder/transcoder products. Sales of CPE products were $27,000 and $983,000, analog modulation products were $237,000 and $482,000, coax distribution products were $620,000 and $783,000, DOCSIS data products were $1,140,000 and $308,000 and encoder/transcoder products were $3,681,000 and $3,107,000 in the first six months of 2022 and 2021, respectively. The Company experienced a reduction in CPE products due to the continued deemphasis of this product line, which the Company expects to continue during the remainder of 2022. The Company experienced a reduction in analog modulation products due to the continued market shifting away from analog modulation solutions. The Company expects the sales of the analog modulation products to continue to decline during 2022. The Company experienced an increase in DOCSIS data products due to the pent-up demand caused by the pandemic as these products are used primarily in the hospitality and assisted-living environments. The Company expects sales of these products may return to more historical levels during the second half of 2022. The Company experienced an increase in encoder/transcoder products as these product lines represent newer products and newer technologies with higher demand from customers. The Company expects sales of these product lines to remain at these levels or increase during the second half of 2022.
The Company’s primary sources of liquidity have been its existing cash balances, cash generated from operations, amounts available under the MidCap Facility and amounts available under the Subordinated Loan Facility. As of June 30, 2022, the Company had approximately $3,918,000 outstanding under the MidCap Facility and $389,000 of additional availability for borrowing under the MidCap Facility.
As disclosed in the Company’s most recent Annual Report on Form 10-K, the Company experienced a decline in sales, a reduction in working capital, a loss from operations and net cash used in operating activities, in conjunction with liquidity constraints. These factors raised substantial doubt about the Company’s ability to continue as a going concern. As of June 30, 2022, the above factors still exist. Accordingly, there still exists substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.