Robert J. Palle, Jr. - President Emily M. Nikoo - Executive Vice President Eric S. Skolnik – SVP and CFO

Ken Hensel - Private Investor George Gaspar - Private Investor Peter Abramson - Private Investor Gregory Irvin - Private Investor Richard Greulich - REG Capital Advisors

Greetings and welcome to the Blonder Tongue Laboratories 2014 Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Bob Palle, President of Blonder Tongue Laboratories. Thank you, sir. You may begin. Robert J. Palle, Jr.: Good morning, everyone. Welcome to Blonder Tongue 2014 year-end and fourth quarter 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 marketplace. As you know the future is impossible to predict and so I caution you that actual results may differ from those that maybe projected in our comments this morning. I’d ask you to refer to our prior SEC filings, our Form 10-Ks for 2013, 2014 and 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 Executive Vice President, Emily Nikoo; and Eric Skolnik, our Chief Financial Officer. All of us will be available to answer any questions you may have following our presentation. BT sales in 2014 were $29,129,000 representing an increase of 4.5% over the prior year. The increase was primarily due to the successful completion of the big box store retail video systems deployment and increased penetration of the CATV MSO community for both digital and analog products. Despite the increase in sales for the year, we recognized a loss of $902,000 in 2014. This is nothing new at BT as the company has lost money for the last several years. We’ve also struggled to accurately anticipate the timing for successful conclusion of a number of projects over the years with the big box store deployment in 2014 being one of those. As you may remember, we expected that project to come in fruition in 2013, but it did not do so until 2014. Recurring results seems to be that we’re disappointed with our year-end results and we expect that you are as well. Performance in the latest quarter Q4, 2014, is a clear indication of this. Our goals in 2015 and beyond is to do a better job in this area. We’ve identified and are working several opportunities that have the potential to open the door to greater long-term opportunities in the MSO market. However, like most large opportunities, these are complex, require continued attention and effort to both secure the purchase commitments and to complete the design and engineering works that will eventually make an increase in the core continuing sales reality, meaning not just the positive improvements that only last a quarter or two, but a true increase in our core sales that continues for many years. In the meantime, as we noted in our 10-K filing, we’ve implemented the first phase of a cost reduction program and are in the process of finalizing implementation of a second phase of the cost reduction to allow the Company to return to profitability. The contemplated cost reduction program should be fully implemented and begin to be reflected in the financial performance numbers at the end of Q2 2015. Our look to the future performance reports for Q3 and Q4 2015 to confirm that we’re on track and succeeding as planned in those reporting periods. Regardless, to be successful in the future we must take the relationship building and past accomplishments in the CATV MSO and satellite systems communities to the next level. Meaning increased penetration of the targeted accounts by offering new and innovative solutions to the key service providers and their respective stakeholders. As always, we will report our progress periodically in the quarterly performance conference calls. I want to thank all of the dedicated Blonder Tongue associates for their continuing efforts and accomplishments. It is the Blonder Tongue people that are responsible for the legendary ruggedness, performance, and reliability of the system solutions and the products we provide. As 2015 unfolds we will be asking our dedicated people for increased effort and sacrifice. The upcoming year will not be easy, but I know they’re up to the task. I’ll now turn the call over to Eric Skolnik, who will give you some more detail concerning our financial performance in the fourth quarter of 2014. Subsequent to Eric’s presentation, we will have a Q&A session, but now here is Eric. Eric S. Skolnik: Thank you, Bob. Net sales increased $1,259,000 or 4.5% to $29,129,000 for the year ended December 31, 2014 from the $27,870,000 for the comparable period in 2013. Net loss for the year was $902,000 or $0.14 loss per share in 2014, compared to $2,822,000 or $0.45 loss per share for the year ended December 31, 2013. Net sales decreased $1,118,000 or 15.6% to $6,064,000 for the fourth quarter of 2014 from $7,182,000 for the comparable period in 2013. Net loss for the three months ended December 31, 2014 was $672,000 loss or $0.11 loss per share in 2014, compared to $992,000 loss or $0.16 loss per share for the comparable period in 2013. The net sales increase for the year is primarily attributed to an increase in sales of digital video headend products, analog video headend products and test equipment products offset by a decrease in sales of contract manufactured products. Sales of digital video headend products were $14,310,000 and $12,930,000, sales of analog video headend products were $7,829,000 and $5,818,000, and sales of test equipment products were $452,000 and $58,000 and sales of contract manufactured products were $344,000 and $3,465,000 in 2014 and 2013, respectively. The reduction in the net loss year-after-year is primarily attributed to an increase in sales and an increase in gross margin due to a more favorable product mix. Now we’d like to turn and open the call for questions.

Thank you. [Operator Instructions] Our first question comes from the line of Ken Hensel, a Private Investor. Please go ahead with your question.

Good morning. Robert J. Palle, Jr.: Good morning, Ken. Eric S. Skolnik: Good morning, Ken.

Has the strong dollar had any impact on your bottom line? Robert J. Palle, Jr.: We don’t think so.

Yes, that doesn’t cost more money to manufacture in China? Eric S. Skolnik: No, I think we’re holding the line pretty well on our manufacturing costs.

And I know you won’t answer this question, but is there any activity of acquiring any more companies or is anybody looking at you guys to acquire you? Robert J. Palle, Jr.: We don’t know if anyone looking at us to acquire us. We are always on the hunt for something that to fit. We don’t have anything to report at this time.

I see. Okay. That’s all I have. Thank you. Robert J. Palle, Jr.: Thanks, Ken. Eric S. Skolnik: Thanks, Ken.

All right. Emily M. Nikoo: Thank you.

Thank you. Our next question comes from the line of George Gaspar, a Private Investor.

Thank you. Good morning. Robert J. Palle, Jr.: Good morning. Eric S. Skolnik: Good morning.

And a question for you on [indiscernible] some indication of the importance that the digital head area moving forward for you and to overcome an anticipated decline in analog video area? My question is between 2014 and ’13, you actually increased your analog video sales by $2 million from the [prior peak][Ph] of $7.8 million range, correct me if I’m wrong on that and the digital head went up about a $1.4 million to [14.3 million] [ph]. So my question is, you’re still -- –apparently you’re still getting a pick up in the analog area on a percentage [indiscernible] rather than the percentage increase in the digital head area. How do you see this unfolding for 2015 on analog video? Do you expect [indiscernible] going to start to decline or can you still get some upward momentum there in conjunction with what you’re anticipating on the digital head side? Robert J. Palle, Jr.: Okay. We were fortunate enough to have a spot opportunity for application at the edge in this MSO systems for transcoding, if you will, back to analog. And that was a significant opportunity that customer is being acquired, and so I don’t expect that activity will repeat at that same level. So we’re back probably to the same posture that we took before that and that was that analog sales should slowly decline and our digital sales should increase.

Okay. All right. And in terms of looking ahead on the digital head side, can you elaborate on what particular segment of that area in terms of your revenue stream [indiscernible] [$14.3] [ph] million this last year, what are the -- can you give us a little color on where you think the momentum is within that digital head revenue stream going forward into the 2015 year? Robert J. Palle, Jr.: Well, the projects we’re working are in CATV MSO community and in the satellite systems community and the big box retail community. Those are -- where there are significant opportunities and we’re working them. I really don’t want to prognosticate too optimistically on exactly what the timing will be, but that’s the area where we’re working. Is that a satisfactory answer?

Okay, fine. So just when I assume that it appears as though looking at R&D expenses and so on and the emphasis that you’ve given that, can you give us any thought process on additional breakthroughs on product development that you might be able to see the Company move ahead on …? Robert J. Palle, Jr.: Well, no more than what I just did.

Okay. Robert J. Palle, Jr.: And what’s in the -- we spend quite a bit of time on the K and there is management discussion and analysis in the K is quite thorough and up to date. So I’ll refer you to that.

Okay. And then… Robert J. Palle, Jr.: And have you read by the way -- have you read that section of the K?

No. Well, I read part of it, but I probably haven’t -- I haven’t read the whole thing. I did read pretty much your review on your financing situation, your debt structure and the covenants and so on. And I’d like to ask a question on the -- did you take pension costs in the year, in the fourth quarter or last year of some quantity? I don’t recall seeing it myself, but it was brought to my attention, that they thought there was a substantial charge taken to sort of a catch up. Can you elaborate on that at all? Eric S. Skolnik: Sure, sure. No, maybe there is a little bit of confusion. It’s just under the accounting rules and the actuarial assumptions that you have to employ when you have a defined benefit plan there is changes that have to accounted for each year and those changes do not flow through the P&L. Those changes are balance sheet only. So what you may see is because of the way that the accounting information is presented if you look at our P&L statement, you will see that the P&L statement is actually a normal P&L [along with] [ph] something called a comprehensive income or loss that people might see that it looks like it’s almost part of the P&L, but it really is not, it’s just a change in the equity section.

I see. I see, okay. And if I could ask a question on the debt structure that you have and the covenants on repayments and so on. Just for an overview comment and you -- how you see yourself in terms of your financial requirements? Do you feel adequately supplied as going through the year 2015 and what you have available to you on the credit side? Robert J. Palle, Jr.: Well, the 10-K was just issued last week and so it’s very current. That liquidity section is completely current and up to date and speaks for itself.

Okay. All right. Okay, thank you. Robert J. Palle, Jr.: You’re welcome. Have a nice morning.

Thank you. Our next question comes from the line of Peter Abramson, a Private Investor. Please go ahead with your question.

Okay. Thanks, guys. I appreciate you holding a call. Robert J. Palle, Jr.: Hi. How are you doing Peter? Eric S. Skolnik: Good morning, Peter.

Hanging in there. Just a couple of questions. When you fully implement all of the cost rationalization and savings by the end of Q2, do you have an estimate on what the revenue kind of breakeven run rate would be? Robert J. Palle, Jr.: We’re not done yet, Peter so, but we work on it everyday. And after we’re done, I guess we might feel free to publicly disclose that, but we’re not at this time.

Okay. Or maybe I guess the 10-K refers to about $2 million loan of annualized expenses? Robert J. Palle, Jr.: Yes, the liquidity section is accurate and up to date.

So is that reasonable to kind of take that -- if the old breakeven was kind of $7 million, $7.5 million in revenue. Would you kind of just take those savings of $2.1 million and do a gross margin kind of true up to get to kind of the revenues? Robert J. Palle, Jr.: You’re a smart guy, Peter, you can -- especially when you have control of the pencil, I’m sure you can do your own math.

Okay. Robert J. Palle, Jr.: But we can’t. We are not going to prognosticate on that.

Okay. That’s fair. And then on, I guess, revenues in Q3 and Q4 is - do you feel anything more than a -- you’re obviously chasing a lot of projects in Q3 as kind of a strong quarter. Do you have more confidence around just the seasonality or the basket of projects you’re -- kind of targeting as it comes to end of year revenue type of targets you might have internally? Robert J. Palle, Jr.: We’re trying really, really hard to build our base so that our core revenues are increasing and it’s not just seasonal. But for me to say that it’s definitely going to happen is you’re not going to get me to say that. And that’s what we’re working on though.

Okay. And then, I guess, the revolver was $2.4 million at February 28, I don’t know Eric, if you can state on the call where it’s at the end of March 31? Eric S. Skolnik: I prefer not to discuss that.

Okay. That’s fair. All right. Well, thanks for holding the call and taking questions. Robert J. Palle, Jr.: Thank you. Eric S. Skolnik: Have a nice morning, Peter, and thanks for listening.

Thank you. Our next question comes from the line of Gregory Irvin, a Private Investor. Please go ahead with your question.

Good morning, folks. Robert J. Palle, Jr.: Good morning. Eric S. Skolnik: Good morning.

Could you in some explain what happened between on the last call you were rather optimistic and it seems you’re still off the cliff between Q3 and Q4. What essentially you have to bear, was it a push out in orders, because I see inventories jumped a bit and then all of a sudden we’re having cash flow problems? What in sum happened? Robert J. Palle, Jr.: Well the -- we’re working some serious opportunities with the CATV MSO community and we actually have some stuff on the schedule that the approval of those products that’s shifted to the right, its delayed. So the process is just protracted and difficult one, but we will get there. Those opportunities have moved to the right.

Was that a big surprise to you all or something completely unanticipated? Robert J. Palle, Jr.: Well, I guess you could say we should have done a better job of anticipating what was going to happen and that’s what we confessed in our prepared remarks. I really -- I guess, we’re here to listen, but we’ve already addressed it in the prepared remarks. We’re taking action as quickly as we can, and I don’t know what more you want me to say.

Well, I’m just trying to get a look ahead feel. I assume, lets say working with the bank that you get through the cash flow problem, more generally given the rapidity of change in overall environment of providing services, the move to Internet Protocol TV, you feel you’re going to be able to keep trace with all the changes or even stay ahead given … Robert J. Palle, Jr.: We do.

You do? Robert J. Palle, Jr.: Yes.

Because being a small company, you would think you’d be able to be more nimble on the one hand; on the other hand it’s having the capital to respond to those changes. Robert J. Palle, Jr.: Well, I think we’re okay on the capital side, and I think that we’re okay on the responsiveness side. It’s really a relationship building that those opportunity spring from is where the deal is really made or not made.

And given the nature of the changes of -- is it going to be, do you see yourself having to branching out and trying, for new inroads, in other words the current provider is either through the distributor network, through the direct sales, you’re going to have to be talking to a wider audience. Robert J. Palle, Jr.: And we are.

Okay. And given the -- going back to what Peter talked about, the $2 million in cost reduction. Are those mainly from G&A or selling, or can you comment on where most of those will come from? Robert J. Palle, Jr.: It’s fairly equitable in all departments.

All right, and going back to my -- where I’m referring to the inventory. Given the increase in inventory, are we likely to see in future quarters more reserves? Robert J. Palle, Jr.: No. The inventory to go down -- and I don’t think the reserve’s is going to dramatically increase, but Eric can comment further. Eric S. Skolnik: Yes, I’m confused about your comment about the inventories going up. If you’re referring to it from Q3 that’s an accurate way to look at us, because we do have a little bit of seasonality to it as we ebb and flow during the year. You should really be comparing us from year-end to year-end. And if you compare us from year-end to year-end we’re actually down. That’s not lot, but we’re down. We’re down about $300,000 -- $360,000 [ph].

Okay.

Thank you. Our next question is a follow-up from Ken Hensel, a Private Inventor. Please go ahead.

I’m sorry guys. I didn’t think of this before. I have asked you this question before, if you have any proprietary products that your competition does not have? Do you have anything like that? Robert J. Palle, Jr.: We have some.

That being said, I mean, if they’re not proprietary then it could be -- and I know your company has a reputation for quality because I was involved in a job at a large school district that the engineer spectacle Blonder Tongue, because you have a good reputation in a marketplace with quality. So, does every sale come down to quality and price if you don’t have anything proprietary, and if so is that its true statement? Robert J. Palle, Jr.: It’s a mix, Ken. So, the opportunity present -- they may have new requirements, we’re doing new stuff. So then we have to tweet if you will the software and hardware to address that customer to others, and then we do that and we make the deal and go on and we may add it to our portfolio, things that we offer to others that generally is what we try to achieve is that it will, not only be applicable to that one customer but also be applicable to a whole bunch of others, and that’s part of our engineering project request process, where it gives us a the final direction that we’re going to take. So, does that answer your question?

I guess, I mean I know to be able to be flexible with price you got to be competitive with what your expenses are compared to your competition. And your China moves and the others things you’ve done in the past, I assuming that maybe you would be competitive in the market place with price. Robert J. Palle, Jr.: Well, we think we’re reasonably competitive, and we do address the customer’s needs exactly, and we think that we’re making progress but obviously it’s not fast enough to sustain the growth curve that we’re working on.

And I guess the other question is, if the overall marketplace, the demand for the widgets that you guys sell and all your competitors sell is down, that affects all of you? Robert J. Palle, Jr.: It does, but there is still plenty of opportunities. So, we just need to adjust those opportunities and execute on them.

Okay, all right. Thank you. Robert J. Palle, Jr.: You’re welcome. Eric S. Skolnik: Thank you.

Thank you. Our next question comes from the line of Richard Greulich with REG Capital Advisors. Please go ahead with your question.

Good morning. Thank you. Robert J. Palle, Jr.: Good morning, Richard. Eric S. Skolnik: Good morning, Richard.

Hi, Rob, Eric. On the cost reductions, I’ll say that two phases of a million a piece, how much of those are actual -- will be cash savings as well? Robert J. Palle, Jr.: They’re focused on cash savings. That’s what they’re focused on.

And what will be the cost to implement those savings, either in terms of severance or either other kinds of …? Robert J. Palle, Jr.: There will be some, but it will be modest. I’ll let Eric speak to it if you want to give any more granularity than that. Eric S. Skolnik: No, it will look after [ph], it will be modest; it’s less -- probably less than 10%.

And to what extent will those savings be salary or some kind of employee compensation versus other kinds of savings? Robert J. Palle, Jr.: Most of it is headcount reduction.

Okay. Help me understand so, so by the 24th of this month you’re going to be updating the bank with your financial projections and situation. Now, at that point then they may decide to give you another $0.5 million, but could they also then decide to take away the $0.5 million that they increased the availability of earlier? Robert J. Palle, Jr.: Yes.

Okay, so that’s totally up in their decision there’s nothing common about that at this point in time? Robert J. Palle, Jr.: Correct, the only thing that has a window is that $0.5 million that they -- that they’ve given us as an over advance won't have to be paid immediately. It would be paid in the future.

Is that -- and that’s for certain, so that we pay like in September then I guess? Robert J. Palle, Jr.: That is correct. By September, that’s correct.

Okay. And, when they went from -- I think it was as high as 50, then to 35, then to 25% I think advance. When did that last reduction from 35% to 25% take place? Did that take place in the fourth quarter or? Robert J. Palle, Jr.: It took place at the end of the second quarter of 2014, but we did not feel the effects of the liquidity until the later half of the year.

Okay. And let’s see to what extent will the million and then the million cost reductions be permanent cost reductions as opposed to temporary reductions of compensations or whatever. Robert J. Palle, Jr.: The bulk of it is permanent.

I was curious, so in February you increased the size of the board by one. What was the thinking there? Robert J. Palle, Jr.: That was something that Jim did or proposed, and the gentlemen is returning to the board. He was on the board at one time and he’s returning to the board. He’s very skilled and we appreciate his input and his knowledge and expertise generally.

But it is additional expense. Robert J. Palle, Jr.: You’re right, but we look at it as modest expense compared to the value that we believe that a board member would add.

And the decision of the announcement to -- I found it somewhat curious, to allow the board members to receive their comp at least up to two thirds of their compensation in cash versus stock, given what you’re trying to accomplish in terms of cash savings, why not just require all compensation be done in stock at this point? Robert J. Palle, Jr.: Well, I think that, that was a decision that the board made. Its part of a director stock purchase plan and so its -- I don’t think that the board was necessarily prepared to have an edict to say that we will not take any cash at all.

Yes, I know. Obviously they weren’t, but I’m just curious, why they wouldn’t be? Given the fact that you’re implementing a $2 million cost reduction, sort of across the board almost like why not do with the board? Eric S. Skolnik: Well, I think that the, the board, and obviously and the company have a very good relationship. And to the extent that director fees from a cash flow perspective are able to be deferred on the cash side, obviously they would be recognized on the expense side but to the extent they can be deferred on the cash side we will work with the board accordingly and they’re very agreeable to doing so.

Okay. Let’s see, just one small clarification. So in the management analysis discussion in the 10K, is it Rick, you indicated it wasn’t clear, was it the selling expenses will be flat to down or slightly up in 2015? I assume it’s going to be flat to down, but it wasn’t quite clear? Eric S. Skolnik: Yes, it would be flat to down.

Okay, great. Good luck. Thank you. Eric S. Skolnik: Thank you, Richard. Robert J. Palle, Jr.: Thanks, Richard. Emily M. Nikoo: Thank you.

Thank you. Ladies and gentlemen, our final question is a follow-up from the line of George Gaspar, a Private Investor. Please go ahead with your question.

Thank you, Palle. This goes to market cap to revenue stream. It looks like based on what your company is selling for currently it would be about 23% market cap to revenue stream, the consolidated revenue stream. And that would be down from potentially as high as revenue 5% market cap to revenue stream, and that’s not that long ago. With the reduction in your price situation and the potential for maybe needing some equity financing along the way to help supplement and if you see the rate expansion up its going to be, do you -- how do you envision potentially selling equity? I assume you want to try to avoid doing that at this point in time, but is that something that you would entertain after this considerable fallout since the report came out? Robert J. Palle, Jr.: Well, I don’t see any reason for us to be offering or selling equity at this time. Did that answer the question you’ve been asking?

Right. So, effectively, and correct me if I’m wrong, I’m making something that’s outstanding shares are in the 6.5 million range, is that correct? Eric S. Skolnik: No, they’re less than that, they’re -- its $6.2 million.

6.2 million, okay, all right. Then, I’ve got a macro question, I don’t know how much this touches you guys but if you’ve got a thought on it, and your enterprise -- there’s a sense that in the cable -- field cable connective area fine [ph] streaming that there is an anticipation of a major amplifier change out requirement on field lines, because of bandwidth, institution bandwidth on the return after signals go out, and could some discussion that they could be multi millions of amplifiers needing to be replaced on field cable lines going into 2016. Do you have any thoughts on that or what the implications are one way or the other from your business point of view? Robert J. Palle, Jr.: Okay. So, I think what you’re talking about is the new CCAP specifications and they have to be -- they supposedly have to be implemented by 2020, lots of things like that do get pushed to the right, when push comes to show that we approach 2020, but we’re taking it very seriously and we’re actively working on that right now.

Okay, all right. Yes, it seems like it has some real multiple opportunities and it looks like a pretty substantial replacement factor into the market. Okay, thank you very much. Eric S. Skolnik: Thank you. Robert J. Palle, Jr.: Thank you.

Thank you. Ladies and gentlemen, there are no further questions at this time. So I’d like to turn the floor back over to management for closing remarks. Robert J. Palle, Jr.: Thanks everyone for participating this morning, and have a nice day and a nice week.