Good day, ladies and gentlemen, and welcome to Blonder Tongue Fourth Quarter and Year-End 2018 Earnings and Results Call. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Bob Pallé. Sir, the floor is yours.

Thank you very much. Good morning, everyone. Welcome to Blonder Tongue's 2018 fourth quarter and full year financial reporting teleconference. We thank you for your participation. Before we begin our presentations this morning, 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, so I caution you that actual results may differ from those that may be projected in our comments this morning. For additional information concerning factors that could cause actual results to differ from the information that will be discussed this morning, I would ask that you refer to our prior SEC filings, including our Form 10-Qs for the first, second and third quarters of 2018 and prior quarters, our 10-Ks for years 2018, 2017 and 2016 as well as our 8-K filings. With me today are Steve Shea, Chairman of the Board; Ted Grauch, Chief Operating Officer; and Eric Skolnik, Chief Financial Officer. Our presentations will follow in that same sequence. And following the presentation, all of us will be available to answer any questions you may have during the question-and-answer period. We completed 2018 with net sales of $21,700,000, a decrease of 6.8% below the $23,283,000 reported for 2017, clearly not in line with the goals we set for 2018 and not where we need to be. The reduced sales resulted in an operating loss of $854,000, contrasted with operating income of $463,000 that we achieved in 2017. It is clear from our reported performance this year that we faced significant headwinds in our traditional distribution base and service-operator-based markets. While we are concerned about prospective revenues for the first half of 2019, we are diligently working the areas that need to be addressed in an effort to reverse this trend by the second half. The improvement in our liquidity as a result of the sale leaseback transaction of our Old Bridge facility provides us with the flexibility to remain on task and in pursuit of several initiatives that we have undertaken over the past 6 months and which we believe will bear fruit as the year progresses. In my letters to you for the years '16 and '17, we outlined the areas within which we needed to achieve major improvements the following year in order to effect a successful turnaround in our financial performance and as a result of those major improvements, drive an increase in stockholder value. We remain committed to achieving those goals. The target areas where we concentrated our efforts in 2018 and will continue to concentrate are as follows: enhance our capital resources and liquidity. We made significant progress in this area in 2019 with the Old Bridge sale leaseback. Eric Skolnik will provide more detail regarding the financial benefits that we achieved from this transaction as well as the status of our relationship with Sterling National Bank. We will continue our accelerated R&D activities, which gave rise to our NeXgen platform to develop further meaningful solutions for our customers and prospects. Our efforts in this area will benefit from the flexibility that the enhanced liquidity from the sale leaseback has provided. Although the creative -- sorry, through the creative and strategic efforts of our Chief Operating Officer, Ted Grauch, we have reorganized and expanded our sales team to target the larger Tier 1 service providers. Here again, benefits from our enhanced liquidity will allow us to make this investment in people, from which we will anticipate achieving sales growth. And lastly, we are implementing cost savings measures to increase product and services gross margin and turnaround our operational performance from a loss to earnings. We are focusing on achieving further efficiencies in areas of our business that do not contribute significantly to our earnings and profits. At the same time, we firmly believe that our success and overall achievement of our goals to meaningfully enhance shareholder value will derive from committing our resources to product development and the creation of additional revenue verticals and not from imposition of overly severe spending cuts that would undermine our product development and market penetration efforts. The foregoing goals require an ongoing, multifaceted, multiyear effort. In 2018, we made progress on several fronts, but experienced setbacks in several others. We're continuing to work the engineering, sales, operational and financial improvement processes in order to return the company to a sustained period of increasing sales and increasing profitability. Now I would like to turn the call over to our Chief Operating Officer, Ted Grauch. Ted?

Thank you, Bob. Hello, and good morning, everyone. The major company operational initiatives for 2019 were designed and planned back during November, December last year, and we began the execution of those in mid-December. As already touched on by Bob, these consist of an expansion in sales staff and refined sales focus, extension of the Blonder Tongue Laboratories' brand awareness and marketing initiatives around the United States and planning efforts to reach an expanded set of customer markets with current and new products. We are planning to make significant progress on all these initiatives during 2019. Consistent with what we reported for the prior 2 years, during 2018, we have been targeting the completion of new product design to position the company on a more [Audio Gap] We considered it to be specifically important to position our new products, new system solutions to be those that enable us to expand [ our hold ] into the large Tier 1 and Tier 2 service providers. As previously reported, these efforts culminated in the introduction of our NeXgen Gateway product line in October of 2017 and announced first at the SCTE expo conference of that year. Although the NeXgen platform has been well received, we are finding the Tier 1 operator sales cycle to be longer than we originally anticipated. Consequently, in an effort to accelerate the sales process realities, we've increased NeXgen-related expenditures in 2 specific areas. First, we focused on completing R&D for additional features and functions needed to enhance the -- and extend the NeXgen product utility and performance. Secondly, we have accelerated the NeXgen new product introduction phase. As a result of these R&D efforts, we greatly increased the number of customer applications the NeXgen platform is able to satisfy; and secondly, we completed a number of initial market introductions with strong positive response from new and existing customers. It's now time to capitalize on the extensive NeXgen R&D investments that we've made over the last 3 years. So we've recently reorganized and expanded the sales team to take advantage of both direct service offering or engagements in parallel with leveraging the distributor and any further relationships that we've enjoyed for many years. As BT's flagship product, NeXgen Gateway as a platform system and solution is now being recognized by Tier 1 and Tier 2 customers for what we believe it is: the most advanced, flexible, highest value IP digital video signal processing solution available. A couple of observations since I joined the company are: that all of the NeXgen systems sold and currently deployed have been operating trouble free; and very recently, that NeXgen has prevailed in yet another head-to-head Tier 1 service provider evaluation process. It's for these reasons that we remain very enthusiastic. We anticipate that the NeXgen sales will steadily increase during 2019, and sales increase will continue into future periods as NeXgen's value is improved and deployed by an increasing number of service provider customers. Next, we are increasing our public relations outreach, including the focus on press releases associated with new and incremental product introductions. For example, during February's NCTC, National Cable Television Cooperative, conference, the company press released our NeXgen platform's ability to manage several very difficult technical requirements we believe not supported by our competitors. During this announcement, service -- sorry, due to this announcement, service operator interest and our overall booth traffic at that conference was exceptional and yielded a higher set of qualified opportunities compared to some historical conferences. So we will both expand and repeat these activities throughout the year, including the National Association of Broadcasters Show convention next week in Las Vegas. Finally, we are making initial analysis and planning for expanding the company's sales into currently underserved vertical markets with a focus in areas where the company can realize long-term value creation and predictable revenue and profit expansion. These planning activities will continue in Q2 with more concrete actions beginning later this year. Now I'd like to turn the call over to our Chief Financial Officer, Eric Skolnik. Eric?

Thank you, Ted. Although we experienced a 6.8% decrease in sales in 2018 and therefore a decrease in gross margin of $517,000 from $8,936,000 to $8,419,000, we did increase gross margin slightly as a percentage of sales from 38.4% to 38.8%. Operating expenses were kept reasonably low with the exception of G&A expense, which increased from $3,529,000 to $4,236,000 or a 20% increase, due primarily to increases in professional fees, headcount and those related salaries. Our diminished sales caused our operating income to swing from income of $463,000 in 2017 to a loss of $854,000 in 2018. However, buoyed by the Old Bridge facility sale leaseback, we now have the resources to implement an aggressive strategy, and we anticipate that we will be able to reverse that trend as the second half of 2019 unfolds. Finally, it bears mention that the Old Bridge sale leaseback has resulted in the company being debt-free, retaining significant cash reserves and positioned to invest more aggressively in the development and promotion of new products. While now debt-free, we continue to consider our relationship with our lender to be important as we move forward. We have made some adjustments to the credit facility and expect that further changes to accommodate our progress will be made in the coming months. Now I'd like to open the call up to the question-and-answer session.

[Operator Instructions] And our first question comes from [ George Teffa ], a private investor.

I have a question. How's your operation going to fit in and what opportunity does 5G offer you going forward? Are you going to be able to accomplish something special? And does speed indicate pickup that's going to take place?

Yes, we're looking at 5G very seriously, and we believe that's got to be a portion of our product strategy in the future, but it's not baked in engineering and development yet, but we are seriously looking at it. We agree with you, [ George ].

[Operator Instructions] There appears to be no more questions at this time.

All right. That ends the Q&A session. Thank you very much. Thank you all for participating in Blonder Tongue's financial reporting teleconference. We look forward to speaking with you at the next teleconference. As we have in prior years, and it bears repeating once again, we thank all the dedicated Blonder Tongue associates for their continuing efforts and accomplishments, especially for what they have been able to do over the prior 4 very challenging years. It is the Blonder Tongue people that are responsible for the legendary ruggedness, performance and reliability of the system solutions and products we provide. We continue to thank them for their dedicated effort and sacrifice. Have a great year, everybody.

Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.