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Zoom Telephonics Reports Sales Increase and Profit
for Third Quarter Ending 9/30/99 Boston,
October 28, 1999 - Zoom Telephonics, Inc. (NASDAQ: ZOOM),
a leading manufacturer of faxmodems and other data communications
products, today reported net income for the third quarter
of 1999 of $95 thousand or $.01 per share, versus a net loss
of $1.151 million or $.15 per share for the third quarter
of 1998. Zoom reported sales of $18.2 million for its third
quarter ending September 30, 1999, up 26% from $14.5 million
for the third quarter of 1998. This increase was primarily
due to a 45% increase in modem unit volume partially offset
by a 20% decline in average selling prices. Zoom's
$18.2 million sales for the third quarter of 1999 included
approximately $3.5 million in Hayes product sales, more than
doubling the Hayes contribution in the second quarter of 1999.
Zoom purchased the majority of Hayes assets between March
1999 and July 1999. The production of Hayes products had been
halted prior to Zoom's acquisition, and was restarted by Zoom
in the second quarter of 1999 for European delivery, late
in the second quarter for sales in the USA, and late in the
third quarter for sales in China. Zoom's net income
of $95 thousand for the third quarter of 1999 benefited from
a strong gross margin improvement resulting from higher sales
volume, the continuation of advantageous component purchases,
and reduced channel price protection and customer rebates.
Expenses increased significantly for the same time period
as a result of the newly acquired Hayes U.K. organization,
increased R&D investment for future broadband and advanced
networking products, and increased market development spending
for both the Zoom and Hayes brands. "We were
particularly pleased with the performance of our analog modem
business," said Frank Manning, Zoom's President and CEO.
"The Zoom and Hayes brands are strong, and our broad
product line and commitment to the business have helped us
gain market share in a tough competitive environment. Profits
in our analog modem business offset significant R&D and
market development expenses for broadband and advanced networking
products. As investments in these areas turn into attractive
products, they will benefit from the superb sales channels,
customer support, infrastructure, and production capabilities
we have built." Zoom ended the quarter with a
strong balance sheet, with cash and marketable securities
of $9.8 million or $1.32 per share, and stockholders' equity
of $4.95 per share. 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@zoom.com.
Zoom's World Wide Web site is www.zoom.com
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