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Zoom Telephonics Reports Results for the Fourth Quarter Ending 12/31/01

Boston, February 12, 2002 - Zoom Telephonics, Inc. (NASDAQ: ZOOM), a leading manufacturer of modems and other data communications products, today reported sales of $10.3 million for its fourth quarter ending December 31, 2001, down 37% from $16.3 million in the fourth quarter of 2000. Sales for the full year 2001 were $43.7 million, down 27% from $59.7 million in 2000.

Zoom reported a net loss of $4.9 million or $.63 per share for the fourth quarter of 2001, versus a net loss of $1.1 million or $.15 per share for the fourth quarter of 2000. For the full year 2001, Zoom reported a net loss of $18.3 million or $2.33 per share, versus a net loss of $3.1 million or $.40 per share for 2000.
In the fourth quarter of 2001, Zoom wrote off all its goodwill assets, a reduction of $2.0 million, and recorded a $1.1 million inventory charge for valuation and obsolescence. In the full year 2001, Zoom reduced its deferred tax assets by $3.8 million and its goodwill assets by $2.3 million, and wrote down its inventory by $4.6 million. Without these asset impairment charges, Zoom's net loss would have been $1.9 million for the fourth quarter of 2001 and $7.3 million for the full year 2001.
Zoom ended the quarter with a strong balance sheet, with a current ratio of 4.8, cash and investment securities of $5.3 million or $.67 per share, and stockholders' equity of $18.4 million or $2.34 per share.

"2001 was obviously a very difficult year, judged by our operating results and write-downs; but we are continuing to invest in our key business areas, while working hard to keep our expenses down," said Frank Manning, Zoom's President and CEO. "Dial-up modems continue to contribute the bulk of our revenues, but we are encouraged by our recent sales of cable modems. We now have a number of customers who have deployed our cable modems in reasonable volume, who like our products, and continue ordering. Zoom has made significant investments into broadband and wireless networking, particularly cable modems and 802.11 wireless networking. We made major wireless product introductions in the past few months, and we've taken a leadership position in easy-to-use wireless networking. Our goal is to establish Zoom as the company that best ties broadband access and wireless networking together in a powerful easy-to-use package for the customer."

"Against the background of an overall market decline for after-market dial-up modems, we believe that we enhanced our position in the industry in 2001 and positioned ourselves for market share growth in 2002. Internet Service Providers and Internet backbone providers have dramatically increased their testing of V.92 in recent months, and we are positioned to benefit from significant V.92 rollout during the first half of this year. We are also introducing new dial-up modem products and adding new accounts that should help us gain additional share."

Zoom has scheduled a Q4 2001 earnings conference call for Tuesday, February 12th at 8:45a.m. Eastern Time. The call will be simulcast to stock analysts and other interested parties on Zoom's website (www.zoomtel.com/Q4) and other financial and investor-oriented websites via the CCBN / Business Wire StreetEvents network. Shortly after the conference call, a recorded broadcast will be available on Zoom's website. For additional information, please contact Investor Relations, Zoom Telephonics, 207 South Street, Boston, MA 02111, telephone (617) 423-1072, email investor@zoomtel.com, or visit Zoom's website at www.zoomtel.com.

This release contains forward-looking information relating to Zoom's plans, expectations and intentions, including statements relating to Zoom's cable modem sales and development activities, the anticipated timing and significance of the V92 service rollout, and the Company's progress in developing its new wireless products. Actual results may be materially different than those expectations as a result of known and unknown risks, including: Zoom's continuing losses; Zoom's ability to access existing debt facilities and its ability to obtain additional financing for working capital and other purposes; Zoom's ability to effectively manage its inventory; uncertainty of new product development and introduction, including budget overruns, project delays and the risk that newly introduced products may contain undetected errors or defects or otherwise not perform as anticipated and other delays in shipments of products; Zoom's dependence on one or a limited number of suppliers for certain key components; early stage of development of the cable and DSL data communications markets, and uncertainty of market growth of those markets; rapid technological change; competition; and other risks set forth in Zoom's filings with the Securities and Exchange Commission. Zoom cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Zoom expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Zoom's expectations or any change in events, conditions or circumstance on which any such statement is based.
 

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