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Zoom Telephonics Q1 1996 Sales Up 63%, Net Income Up 94% Over Q1 1995

Boston, April 23, 1996 -- Zoom Telephonics, Inc. (NASDAQ: ZOOM) today announced sales of $33.2 million and net income of $2.2 million for the Company's first quarter ending March 31, 1996, up 63% and 94% respectively from the prior year's first quarter. Earnings per share rose from $.19 for the first quarter of 1995 to $.35 for the first quarter of 1996, above consensus analyst estimates of $.25.

"These results reflect strong worldwide faxmodem demand and Zoom's success in growing our three major marketing channels," said Frank Manning, Zoom's President and CEO. "We continue to experience growth in our largest distribution channel, North American retailers and distributors selling Zoom-brand products. Sales through our other two channels grew dramatically in the past year, with sales of Zoom-brand products outside of North America quadrupling and OEM sales quintupling. These results reflect Zoom's commitment to being a strong PC communications company worldwide, for both OEM and after-market sales."

Worldwide OEM sales were 18% of sales and Zoom-brand sales outside North America were 17% of sales for the quarter ending March 31, 1996.

The Company's operating margin rose to 10.9% of sales for the first quarter of 1996 from 9.1% for the first quarter of 1995. Gross margin of 23.4% for the first quarter of 1996 was in line with 23.6% gross margin for the prior year's first quarter, in spite of the shift to a significantly higher mix of lower-margin OEM sales. This shift helped lower selling expenses to 8.1% of sales in the first quarter of 1996 from 9.9% of sales in the first quarter of 1995. The increased mix of OEM sales and the efficiencies associated with higher revenues were the primary reasons that operating expenses fell to 12.5% of net sales for the first quarter of 1996 from 14.5% of net sales for the first quarter of 1995.

Zoom ended the first quarter of 1996 with a strong balance sheet, no long-term debt, and a current ratio of 2.23.

For additional information, please contact Investor Relations, Zoom Telephonics, Inc., 207 South Street, Boston, Massachusetts 02111, telephone (617)423-1072, fax (617)338-5015, E-mail address: Investor@Zoomtel.com.

More First Quarter 1996 financial information:

This press release contains certain forward-looking statements including, without limitation, statements relating to the contribution of Hayes to Zoom's sales, Zoom's potential in the analog modem market, possible expansion and success in the broadband access market, and the company's future performance. These forward-looking statements involve risks and uncertainties, including that there can be no assurance of future opportunities and performance, and other risks and uncertainties indicated from time to time in Zoom's filings with the Securities and Exchange Commission.
 

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