Since once again Glenn forgot to select Fixed Font, here
are all the gory detail if anyone cares. <GGG>
BOSTON--(BUSINESS WIRE)--Oct. 28, 1997--Zoom Telephonics, Inc.
(NASDAQ:ZOOM), a leading manufacturer of faxmodems and other data
communications products, today reported sales of $13.0 million for
its third quarter ending September 30, 1997, down 35% from $20.0
million for the third quarter of 1996. Sales for the first 9 months
of 1997 were $43.0 million, down 42% from the same period in 1996.
Zoom reported a net loss for the third quarter of 1997 of $2.2
million or $.29 per share, versus net income of $253 thousand or $.03
per share for the third quarter of 1996. For the first nine months
of 1997, Zoom reported a net loss of $7.4 million or $1.00 per share,
versus net income of $2.7 million or $.38 or share for the year
earlier nine month period.
The Company said the transition to 56K modems had been slower
than expected, negatively impacting sales, average selling prices,
and gross margins.
Zoom ended the quarter with a strong balance sheet, with a
current ratio of 8.0, cash of $12.4 million or $1.65 per share, and
stockholders' equity of $5.30 per share.
"56K has been disappointing, but we do see some encouraging signs
for K56flex," said Frank Manning, Zoom's President. "Ascend has
been shipping for some time; but only now are some of their largest
customers going live. Erol's has begun a major rollout; and they are
recommending Zoom modems in their extensive advertising. We expect
to see major rollouts in the near term from America Online, Microsoft
Network, and UUNET. Livingston has been shipping for several months,
and many of their customers have gone live. Cisco and Shiva have
also started shipping. As more and more Internet Service Providers
bring K56flex online and begin advertising it to their customers,
sales should ramp significantly. Zoom is beautifully positioned,
with strong relationships with major retailers and distributors, an
excellent cooperative promotion program for Internet Service
Providers, and superb reviews of our 56K technology. In its October
1997 issue BYTE magazine awarded Zoom's 56K external modem 'BYTE
Best' for 'besting not only its K56flex companions, but the entire x2
field as well.' Other recent awards include 'Tester's Choice' by Data
Communications magazine, 'Buy It' from CNET, and 'Net Best' from ZD
Internet Magazine. We've also done a good job internationally, with
recent orders and commitments from some of the largest accounts in
Europe dovetailing with homologation of new K56flex designs for a
number of European countries and recent 'Best Buy' awards from PC
Online in Germany and PC World in Poland."
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
This press release contains certain forward-looking statements
including, without limitation, statements relating to deployment of
K56flex and to the company's future results. These forward-looking
statements involve risks and uncertainties, including that there can
be no assurance of increased product demand for the Company's K56flex
modems, that there can be no assurance of improved results, and other
risks and uncertainties indicated from time to time in Zoom's filings
with the Securities and Exchange Commission.
*T
ZOOM TELEPHONICS, INC.
Consolidated Balance Sheets
( 000's )
SEPT 30, DEC 31,
1997 1996
(Unaudited) (Audited)
Assets
Current assets:
Cash $ 12,383 $ 9,172
Accounts receivable, net 6,541 18,970
Inventories 13,026 19,058
Recoverable income taxes 4,098 1,219
Deferred income taxes 2,031 2,033
Prepaid expenses and other 758 532
------ ------
Total current assets 38,837 50,984
Property and equipment, net 4,074 4,081
Other non-current assets 1,506 1,717
------ ------
$ 44,417 $ 56,782
------ ------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,260 $ 8,074
Accrued expenses 1,309 1,353
Other current liabilities 256 -
------ ------
Total current liabilities 4,825 9,427
------ ------
Stockholders' equity:
Common stock 25,173 24,890
Retained earnings 14,419 22,465
------ ------
Total stockholders' equity 39,592 47,355
------ ------
$ 44,417 $ 56,782
------ ------
ZOOM TELEPHONICS, INC.
Consolidated Statements of Income
( 000's except for per share amounts )
(Unaudited)
Three Months Ending Nine Months Ending
9/30/97 9/30/96 9/30/97 9/30/96
Net sales $ 13,011 $ 20,002 $ 43,000 $ 74,378
Cost of goods sold 11,575 16,124 40,753 58,976
------ ------ ------ ------
Gross profit 1,436 3,878 2,247 15,402
Operating expenses:
Selling 2,892 2,199 7,870 6,856
General and administrative 1,229 924 3,659 2,621
Research and development 853 715 3,094 1,945
------ ------ ------ ------
Total operating expenses 4,974 3,838 14,623 11,422
------ ------ ------ ------
Operating profit (3,538) 40 (12,376) 3,980
Other income (expense) 105 144 584 128
------ ------ ------ ------
Income before taxes on income (3,433) 184 (11,792) 4,108
Taxes on income (1,270) (69) (4,362) 1,385
------ ------ ------ ------
Net income $(2,163) $ 253 $(7,430) $ 2,723
------ ------ ------ ------
Earnings per share:
Primary $ (0.29) $ 0.03 $ (1.00) $ 0.38
------ ------ ------ ------
Fully diluted $ (0.29) $ 0.03 $ (1.00) $ 0.38
------ ------ ------ ------
Average number of shares outstanding:
Primary 7,472 7,482 7,468 7,096
------ ------ ------ ------
Fully diluted 7,472 7,482 7,468 7,096
------ ------ ------ ------ |
