Zoom Telephonics Reports Profit
for the Fourth Quarter Ending 12/31/98
February 11, 1999 - Zoom Telephonics, Inc. (NASDAQ: ZOOM),
a leading manufacturer of faxmodems and other data communications
products, today reported fourth quarter 1998 net income of
$372 thousand or $.05 per share, versus fourth quarter 1997
net income of $287 thousand or $.04 per share. For the full
year 1998, Zoom reported a net loss of $2.2 million or $.29
per share, versus a net loss of $7.1 million or $.95 per share
Zoom reported sales of $16.0 million for
its fourth quarter ending December 31,1998, up 11% sequentially
from $14.5 million for the third quarter ending September
30, 1998 but down 25% from $21.5 million for the fourth quarter
of 1997. The sales drop from the fourth quarter of 1997 to
the fourth quarter of 1998 was due to reduced domestic non-OEM
sales as unit volumes and average selling prices declined.
Sales for the full year 1998 decreased 5% to $61.4 million
from $64.5 million in 1997.
Frank Manning, Zoom's
President and CEO, said: "In spite of a challenging modem
market that has weakened many of Zoom's competitors and forced
some of them to leave the modem market, Zoom remains financially
strong, with superb engineering, efficient operations, and
great market channels. This should create an opportunity for
market share gains in 1999. We have also made a significant
commitment toward our vision of high-bandwidth cable modem
and DSL links to the Internet, and sharing of that bandwidth
through new technologies including wireless LAN and home phoneline
networking. We believe these new technologies will represent
major new markets for the year 2000 and beyond."
Gross profit increased to $6.1 million or 38.2% of revenue
in Q498 from $5.9 million or 27.6% of revenue in Q497. The
improvement in gross margins was primarily the result of advantageously
negotiated purchases of modem materials and a reduction in
obsolescence expenses. Because gross profit and operating
expense dollars changed only slightly from the fourth quarter
of 1997 to the fourth quarter of 1998, operating profit was
Gross profits were $16.7 million
or 27.2% of revenue in 1998 compared to $8.2 million or 12.7%
of revenue in 1997. The improvement resulted from significant
reductions in materials cost, lower costs of obsolescence
and product scrap, and reduced warranty expenses. Gross profit
improvement was the primary reason for the significant improvement
in operating results from 1997 to 1998.
the quarter with a strong balance sheet, with a current ratio
of 7.5, cash of $18.9 million or $2.52 per share, and stockholders'
equity of $5.14 per share.
For additional information
please contact Investor Relations, Zoom Telephonics, 207 South
Street, Boston, MA 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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