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Zoom Technologies Reports Results
for the First Quarter Ending 3/31/02

Boston, April 30, 2002 —Zoom Technologies, Inc. (NASDAQ: ZOOM), a leading manufacturer of modems and other data communications products, today reported sales of $9.0 million for its first quarter ending March 31, 2002, down 11% from $10.0 million in the first quarter of 2001.

Zoom reported an operating loss of $1.8 million for the first quarter of 2002, compared to an operating loss of $5.2 million in the first quarter of 2001.

Zoom's cash balance on March 31, 2002 was $7.1 million, or $.91 per share, up $1.9 million from its cash balance on December 31, 2001. On March 31, 2002 Zoom had a current ratio of 4.6 and stockholders' equity of $14.9 million, or $1.89 per share.

Zoom reported a net loss of $3.5 million or $.44 per share for the first quarter of 2002, versus a net loss of $5.2 million or $.66 per share for the first quarter of 2001. The net loss of $3.5 million for the first quarter of 2002 consisted of the operating loss of $1.8 million, a non-cash tax expense of $2.0 million, and a non-cash extraordinary gain of $.3 million. The tax expense brought to zero Zoom's deferred tax asset balance. The extraordinary gain was due to a complete write-off of negative goodwill per the mandatory adoption of Statement of Financial Accounting Standards #142.

"Our numbers demonstrate that revenues were down again, but the rate of decline slowed," said Frank Manning, Zoom's President and CEO. "Our operating loss improved significantly, primarily due to our cost-cutting moves, and we improved our cash position. Looking forward, we are encouraged by progress in a number of areas. We believe that V.92 is finally positioned for significant nationwide Internet Service Provider deployment, and Zoom is a leader in V.92 client modems. Zoom has begun shipping V.92 softmodems to computer manufacturers and system integrators, and demand is strong. Our cable modem customers are happy, and we are making good progress in getting approvals from cable service providers who require testing even after CableLabs approval. We just placed our USB DSL modems into the largest computer retailer in the UK, and we expect the retail DSL market to significantly grow in the UK and Germany this year. Our wireless networking products are getting good reviews, due largely to our focus on ease of installation and use. And our new generation of dialers is generating strong interest as we prepare them for volume production. There's no question that our business remains challenging, but we are rising to the challenge with a team of people committed to great products and quality support."

Zoom has scheduled a Q1 2002 earnings conference call for Tuesday, April 30th 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/Q1) 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 Technologies
207 South Street
Boston, Massachusetts 02111
Telephone: (617) 423-1072
e-mail address: investor@zoomtel.com.
Zoom's World Wide Web site is www.zoomtel.com

This release contains forward-looking information relating to Zoom's plans, expectations and intentions, including statements relating to Zoom's dial-up modem, cable modem, DSL modem, wireless networking, and dialer sales and development activities, the anticipated timing and significance of the V92 service rollout, the anticipated development of Zoom's markets and sales channels, the anticipated level of demand for Zoom's products, the anticipated impact of Zoom's cost-cutting initiatives, and Zoom's financial condition or results of operations. 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 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; the early stage of development of the cable and DSL data communications markets, the uncertainty of market growth of those markets, and Zoom's ability to more successfully penetrate those markets, which have been challenging markets with significant barriers to entry; Zoom's dependence on one or a limited number of suppliers for certain key components; 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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