open IN,  '<', 'test.txt' or die "Can't open 'test.txt' $!";
open OUT, '>', 'test.out' or die "Can't open 'test.out' $!";

while ( <IN> ) {
    next unless /\S/;
    tr/ \t/ /s;
    print OUT;  # Updated -- thanks Narveson
    }

close IN;
close OUT;