I think I'm just not being clear.
I suggested the short SORT so that we could see what the blank line looks like. And we can now confirm that it has a length of 005.
You seem to be favouring an F output, so we go back to Kolusu's suggestion:
Knowing that the blank lines are only five bytes long:
If the 7,10 is solely for the blank lines, that can now be removed, but I'll leave it.
You have 137 bytes, so an adjustment to the OVERLAY, it puts a space at position 138, outside your data, automatically space-padding to that point.
Then the BUILD on OUTFIL can find data, and it will be pre-space-padded rather than binary-zero padded.
The OUTFIL will ignore the RDW (four bytes) and the first 11 of each record, and give you data from position 16 for a length of 122 bytes.
Then there's the stuff at the bottom which we've not seen yet. Just bear in mind that what look like trailing spaces in SDSF will not be there.