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Zoom Reports Profit For The First Quarter Of 1998

Boston, MA, April 23, 1998 - Zoom Telephonics, Inc. (NASDAQ: ZOOM), a leading manufacturer of faxmodems and other data communications products, today reported net income for the first quarter ending March 31, 1998 of $200 thousand or $.03 per share, versus a net loss of $956 thousand or $.13 per share for the first quarter of 1997. Zoom reported sales of $18.8 million for the first quarter of 1998, up 5% from $18.0 million for the first quarter of 1997.

The Company said that sales benefited from an increase in average selling prices over both the first quarter and fourth quarter of 1997, as Zoom's mix of sales continues to shift from 33.6K to 56K modem speeds. While 33.6K remains an important part of Zoom's sales mix, 56K became the majority of unit sales in the first quarter of 1998.

Zoom ended the quarter with a strong balance sheet, with cash of $9.0 million or $1.21 per share, working capital of $35.5 million, and stockholders' equity of $40.7 million or $5.46 per share.

"Late in 1997 we began to see significant deployment of 56K central sites compatible with K56flex, the pre-standard 56K technology in Zoom's modems, and central site deployment continues to drive increased sales of our 56K modems," said Frank Manning, Zoom's President. "We believe that the definition of the V.90 56K modem standard in February of this year will start an important upgrade cycle, particularly as central sites turn on V.90 in volume later this year. While we continue to benefit from a shift toward 56K, our results are being hurt by stock rotations and lower prices associated with pre-standard 56K, as we expected. Going forward, Zoom is well positioned, with strong relationships with major retailers, distributors, Internet Service Providers, and computer manufacturers, and superb reviews of our 56K technology. In the past nine months Zoom's 56K modems have won twelve industry awards, and Zoom continues to be recognized as a leader in providing high-performance communications products at competitive prices."

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 56K market expansion and to the company's future results. These forward-looking statements involve risks and uncertainties, including that there can be no assurance of future results, and other risks and uncertainties indicated from time to time in Zoom's filings with the Securities and Exchange Commission.
 

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