Greetings, and welcome to the Blonder Tongue 2014 Second Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. James Luksch, CEO. Thank you. You may begin.

Welcome to Blonder Tongue's Second Quarter 2014 Financial Reporting Teleconference. Before we begin this morning with any details of performance, I'd like to preface my remarks and those made by other Blonder Tongue representatives who may be speaking today by reminding you that we will be discussing certain subjects, which will contain forward-looking statements including management's view of our prospects and evolving trends in the market. As you know the future is impossible to predict, and so I caution you that actual results may differ from those that may be projected in our comments this morning. I would ask you to refer to our prior SEC filings, our Form 10-Ks for 2012 and 2013 and our Form 10-Qs from prior quarters for additional information concerning factors that could cause actual results to differ from the information discussed this morning. With me today are Blonder Tongue's President, Bob Pallé; and Eric Skolnik, our Chief Financial Officer. All of us will be available to answer any questions you may have following our presentation. As stated in our press release, the company's performance has improved in essentially all areas: sales, gross margins, profits and EBITDA. Digital product sales were up, analog products were up, and this more than makes up for a decrease in the contract manufacturing sales. Since the contract manufacturing sales were at a much lower gross margin, the result is even more impressive. The staggered shipping qualities of newly introduced Digital Products in this past quarter, which were well received by the marketplace. Our digital product strategy seems to be on point, and we plan to aggressively increase our engineering efforts to accelerate the introduction of new products, consistent with the strategy we have had in place for the past few years. This is a long-term strategy, which took some time to produce meaningful results. But we are there and, if the marketplace behaves, we should be able to consistently increase market share resulting in continuous improvement and financial performance. Since we have now expanded our coverage with products serving the TV contribution market, the TV distribution market, the satellite multi-dwelling market, the CATV news private cable market, et cetera, our market penetration in each of these areas should steadily increase and the probability of some of these sales being of significant size should also increase. In our first quarter teleconference, I spent some time discussing the continuing technological changes taking place in the communications market. Sales of software-based products are growing as a percentage of total sales, especially when it comes to large system headends. I'm talking very long term now, but BT is working towards a time when software and software support sales will overtake hardware sales. Continuous monitoring of equipment and even equipment that can make field adjustments remotely are requirements present in today's market that they will expand in numbers and complexity. We must keep up with these trends. The BT of the future will provide equipment and services for these evolving applications. Ultra high-definition TV is just around the corner as is the day when we can watch our favorite shows on any display device we want, and at anytime we choose, irrespective of the time of day. We will continue to serve in ever increasing customer base and invest the engineering resources to provide that customer base with the tools for them to stay competitive with their contemporaries. I will now turn the call over to Eric Skolnik who will give you a report on our financial performance in the second quarter of 2014. Then Bob Pallé will provide his insight on the markets and Blonder Tongue's engineering and market initiatives. Subsequent to Bob's presentation, we will have a Q&A session. But now here is Eric.

Thank you, Jim. Net sales increased $1,682,000 or 23.5% to $8,828,000 in the second 3 months of 2014 from $7,146,000 in the second 3 months of 2013. Net earnings for the second 3 months ended June 30, 2014 were $347,000 or $0.06 per share, which is compared to a net loss of $660,000 or an $0.11 loss per share for the comparable period in 2013. The increase in sales is primarily attributed to an increase in digital video headend products and analog video headend products, offset by a decrease in sales of contract manufactured products. Sales of digital video headend products were $5,122,000 and $3,216,000. Analog video headend products were $1,990,000 and $1,312,000, and contract manufactured products were $134,000 and $1,070,000 in the second 3 months of 2014 and 2013, respectively. For the 6-month period ended June 30, net sales increased $541,000 or 3.9% to $14,406,000 in 2014 from $13,865,000 in 2013. Our net loss for the 6 months ended June 30, 2014 was $814,000 or a $0.13 loss per share compared to a $1,142,000 loss or $0.18 loss per share for the comparable period in 2013. The increase in sales is primarily attributed to an increase in digital video headend products and an increase in analog video headend products, again, offset by a decrease in sales of contract manufactured products. Our sales of digital video headend products were $7,526,000 and $6,408,000. Analog video headend products were $3,661,000 and $2,595,000, and contract manufactured products were $214,000 and $2,030,000 in the first 6 months of 2014 and 2013, respectively. Now I'd like to turn the call over to Bob Pallé. Bob?

Thank you, Eric, and good morning to everyone. The sales marketing and engineering teams continued to work hard on the opportunities, many of which are substantial on the $1 million to $4 million range. Several of these, described in the prior calls, have matured into orders that began shipping in the first quarter. Those sales and shipments continued in the second quarter and continued throughout 2014. The retail signal distribution commitment described in the last call and also in the press conference just prior, began shipping on April and will be completed in the third quarter. In the last call, we stated that university market, we had temporary lost some market share to a much lower-performance, low-cost competing encoder, but with the introduction of the DISH Network and DIRECTV conforming variations of the HDE-8C-QAM company was rejected to regain that loss share. The sales increase in the encoder products generally, and the HDE-8C-QAM specifically confirmed, in fact, that we have accomplished the objective. As stated in the last call, we are still awaiting formal approval from DIRECTV. This is expected shortly. The BT HD encoder product line remains the #1 choice for this application as it has the highest performance for the price. In the hospitality Free-to-Guest market, the status remains the same as BT's key customer World Cinema temporarily suspended shipments of the Edge QAM products due to excess inventory. World Cinema is still in contention for several large hospitality opportunity that have not yet closed. These could result in increased sales in the latter half of 2014, should they close as anticipated. And the CATV MSO market, the products that's in approval processes, continue with good success. As stated in the last call, this did result in sales of more than $1 million in the first quarter. These sales continued in Q2 and will continue throughout 2014. These solutions help MSO serve pocket communities such as businesses, hospitality, apartments and condominium complexes. As stated in the last call, the contract manufacturing areas, the GPS product-based customer reduced orders to a maintenance level. This was the largest factor in the contract manufacturing sales decrease and is consistent with the disclosure in the Q2 press release and the prepared remarks from Jim and Eric. In the second quarter, BT's HD encoder customer maintained their shipments at the previous level and these are forecasted to increase later in the year and in 2015 as the September 2015 deadline nears for the low-power TV broadcasters to convert from analog to digital broadcasting. Repeating what we have stated in prior calls is taking more chronological time than we originally forecast to increase sales, and we've had some important design wins and customer commitments that are resulting in significant sales. The general business climate remains positive. Consequently, BT should show improving sales and result in improved financial performance in future quarters. And now I'd like to open up the call to question-and-answer session.

[Operator Instructions] Our first question comes from Richard Greulich with REG Capital Advisors.

Bob, when you said you expect increasing sales in future quarters, do you mean like sequentially? Or do you mean year-to-year comparisons of increased sales?

What's the difference?

The difference is you're comparing 2013 versus 2014. The other one is...

Yes. I think it's because the year-to-year, Q-to-Q from 1 year to the next comparison. But we do have a seasonality of our business, and we can't avoid that.

I understand. So if you had in the 10-Q, you had nearly $2.8 million of sales in the second quarter from that large national retail chain, and that's going to go down to $1.7 million. So you have $1 million less going into third quarter, yet you seem pretty optimistic about the remainder of the year?

Yes. We are working hard. I am optimistic, yes. But our fourth quarter is normally our weakest quarter.

[Operator Instructions] Our next question comes from Peter Abrahamson, a private investor.

I assume that you're pretty content with the gross margin, that looked pretty good at 40%.

Correct. Yes.

Was there any inventory write-downs in the quarter?

No. There was a -- the inventory, no. The -- there was not a provision for inventory reserves in this quarter.

Okay. My only other question relates to CapEx, looked like it picked up in Q2. Do you have any commentary around that?

We had to get a new roof.

Okay. So that's a new roof. Okay, onetime item. How long is that roof good for, 20, 30 years?

Exactly.

Gentlemen, there are no further questions at this time. I would like to turn the floor back over to management for closing comments.

Well I don't have any closing comments at all, except to wish everybody a good day and we look forward to a successful third quarter. And good morning to you, all.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. And thank you for your participation.