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Zoom Technologies Reports Results
for the Fourth Quarter Ending 12/31/02

Boston, February 11, 2003 —Zoom Technologies, Inc. (NASDAQ: ZOOM), a leading manufacturer of modems and other data communication products, today reported sales of $8.2 million for its fourth quarter ending December 31, 2002, down 14.2% from the fourth quarter of 2001. Sales for the full year 2002 were $37.3 million, down 10.3% from $41.6 million in 2001.

Zoom reported a net loss of $0.5 million or $.07 per share for the fourth quarter of 2002, compared to a net loss of $5.0 million or $.63 per share for the fourth quarter of 2001. Zoom reported a net loss of $5.1 million or $0.65 per share for 2002, versus a net loss of $18.3 million or $2.33 per share for 2001. The fourth quarter of 2002 had higher gross profit and lower operating expenses than the fourth quarter of 2001. Gross profit increased from 12.9% of revenue to 29.1%, and operating expenses decreased from 64.5% of revenue to 35.2%.

Zoom’s cash balance on December 31, 2002 was $7.6 million or $0.97 per share, up $2.4 million from December 31, 2001. On December 31, 2002 Zoom had a current ratio of 5.0 and stockholders’ equity of $13.5 million or $1.72 per share.

“Zoom’s revenues were hurt by the soft computer products retail market,” said Frank Manning, Zoom’s President and CEO. “We were particularly pleased with the strength of our ADSL and cable modem sales in Europe. However, we believe that this European strength and our shipment of cable modems to Best Buy in January of 2003 positions us to enjoy significant growth in our sale of broadband modems. We have continued Zoom’s program of careful asset management and expense control, while continuing to invest in dial-up and broadband modems. The result has been significantly lower losses and exciting new products. Overall the computer products market remains challenging, but we believe we are taking the right steps to meet the challenge.”

Zoom has scheduled a Q4 2002 earnings conference call for Tuesday, February 11 th at 5:00 p.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 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, and wireless networking sales and development activities, the anticipated timing and significance of the V.92 service rollout, the anticipated development of Zoom's markets and sales channels, the anticipated level of ADSL in Europe and demand for Zoom's products, the anticipated impact of Zoom's cost-cutting measures, Zoom's ability to continue listing on the Nasdaq National Market or, if necessary, obtain listing on the Nasdaq Small Cap market, 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; several market conditions; Zoom's dependence on one or a limited number of suppliers for certain key components; rapid technological change; competition; the risk that Zoom's common stock will be delisted from the Nasdaq National Market or be unable to qualify for listing on the Nasdaq Small Cap; 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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