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Zoom Reports Results For Second Quarter 1997

Boston, July 24, 1997 - Zoom Telephonics, Inc. (NASDAQ: ZOOM), a leading manufacturer of faxmodems and other data communications products, today reported sales of $12.0 million for its second quarter ending June 30, 1997, down 43% from $21.1 million for the second quarter of 1996. Six month sales were $30.0 million, down 45% from the same period in 1996.

The financial results for the second quarter and six months are consistent with the projected results released by Zoom on July 10, 1997.

Zoom reported a net loss for the second quarter of 1997 of $4.3 million or $.58 per share, versus net income of $257 thousand or $.04 per share for the second quarter of 1996. For the first six months of 1997, Zoom reported a net loss of $5.3 million or $.71 per share, versus net income of $2.5 million or $.36 or share for the year earlier six month period.

The Company said the transition to new 56K modems had hurt sales, average selling prices, and margins for its 33.6 Kbps modems; and that 56K modem sales had been slow. The Company expects 56K modem sales to increase significantly in the second half of 1997, since the number of K56flex™ compatible Internet Service Providers is expected to dramatically increase.

Zoom ended the quarter with a strong balance sheet, with a current ratio of 9.9, cash of $13.6 million, or $1.82 per share, and stockholder's equity of $5.67 per share.

"We remain committed to our basic business strategy, to focus on being a world class producer of faxmodems and other high-volume wide-area-network data communications products," said Frank Manning, Zoom's President and CEO. "The transition to 56K has been painful, but we still expect our 56K sales to accelerate during the second half of 1997 as Ascend, Cisco, Shiva, Livingston, and others roll out K56flex™ central site equipment. We continue to invest in the deployment of superb products for the world market, and we believe this investment will begin to pay off later this year."

For additional information, please contact Investor Relations, Zoom Telephonics, 207 South Street, Boston, Massachusetts 02111, telephone (617)423-1072, fax (617)338-5015, E-mail address Investor@Zoomtel.com Zoom's World Wide Web site is www.zoomtel.com

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This press release contains certain forward-looking statements including, without limitation, statements relating to the company's new product development and future market position. These forward-looking statements involve risks and uncertainties, including that there can be no assurance that the company's new products will be introduced on a timely basis, if at all; that the company's new products if introduced will achieve market acceptance; that overall product demand, selling prices, gross margins, or revenues will improve; and other risks and uncertainties indicated from time to time in Zoom's filings with the Securities and Exchange Commission.
 

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