Technologies Reports Results
for the Third Quarter Ending 9/30/02
Boston, October 28, 2002 —Zoom Technologies,
Inc. (NASDAQ: ZOOM),
a leading manufacturer of modems and other data communications
products, today reported sales for its third quarter ending
September 30, 2002 of $10.9 million, up 18.5% from the second
quarter ending June 30, 2002 and down 7.2% from the third
quarter ending September 30, 2001.
Zoom reported net
income of $0.1 million for the third quarter of 2002, compared
to net losses of $1.2 million for the second quarter of 2002
and $5.5 million for the third quarter of 2001. Zoom reported
a net loss of $4.6 million or $0.59 per share for the first
nine months of 2002, versus a net loss of $13.4 million or
$1.70 per share for the first nine months of 2001.
Zoom achieved profitability in the third quarter of 2002 due
to improved gross margin and reduced operating expenses. Compared
to the third quarter of 2001, gross profits increased from
24.1% of revenue to 29.1%, and operating expenses decreased
from 39.0% of revenue to 28.7%.
Zoom's cash balance
on September 30, 2002 was $7.0 million, or $.89 per share,
up $0.9 million from its cash balance on June 30, 2002 and
up $1.7 million from its cash balance on December 31, 2001.
On September 30, 2002 Zoom had a current ratio of 4.3 and
stockholders' equity of $14.0 million or $1.78 per share.
"We are pleased with our quarter's results for
a number of reasons," said Frank Manning, Zoom's President
and CEO. "Revenues were fairly strong, even considering
that the third quarter is normally a good one for Zoom. We
achieved high dial-up modem unit volume, our highest since
1999, reflecting improved retail market share and increased
system integrator business. We achieved record ADSL revenues,
reflecting accelerating sales in Europe. Gross margins were
up, reflecting reasonable dial-up modem margins and reduced
inventory write-downs. Operating expenses were down as a result
of our headcount reductions and careful attention to cost-cutting.
Our balance sheet on September 30, 2002 was strong, showing
stockholders' equity of $14 million with our headquarters
building at $2.5 million, $6.8 million less than its appraised
value in September of this year. Looking forward, we are encouraged
to see that the national rollout of V.92 is finally starting
to occur in the US, with Zoom positioned as the top V.92 client
modem supplier. We are also seeing ADSL modem momentum in
Europe, including momentum through the retail channel, a strong
channel for Zoom. However, we believe that overall demand
for PC products at retail in the US is relatively weak; and
we will continue to keep a close watch on expenses as we continue
to invest in enhancing our position as a leading supplier
of dial-up and broadband modems."
Zoom also announced
today that it received a Nasdaq staff determination letter
on October 22, 2002 indicating that the Company fails to comply
with the $1.00 minimum bid price requirement for continued
listing set forth in Marketplace Rule 4450(a)(5), and that
its common stock is, therefore, subject to delisting from
the Nasdaq National Market. Zoom has requested a hearing before
a Nasdaq Listing Qualifications Panel to review the Nasdaq
staff determination. There can be no assurance the Panel will
grant the Company's request for continued listing. Zoom's
common stock will continue to trade on the Nasdaq National
Market pending the outcome of the hearing. If Zoom is unable
to remain on the Nasdaq National Market, the Company intends
to apply for listing on the Nasdaq Small Cap market.
Zoom has scheduled a Q3 2002 earnings conference call for
Tuesday, October 29 at 8:45 a.m. Eastern Time. The call will
be simulcast to stock analysts and other interested parties
on Zoom's website (www.zoomtel.com/Q3) 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:
207 South Street
Boston, Massachusetts 02111
Telephone: (617) 423-1072
e-mail address: email@example.com.
Zoom's World Wide Web site is www.zoomtel.com