Zoom Telephonics Reports Profit for the Fourth Quarter Ending 12/31/98
BOSTON--(BUSINESS WIRE)--Feb. 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 for 1997.
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 nearly constant.
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.
Zoom ended 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.
This press release contains certain forward-looking statements
including, without limitation, statements relating to the company's
future market share, products, markets, and 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.
*T
ZOOM TELEPHONICS, INC.
Consolidated Balance Sheets
( 000's )
DEC 31, DEC 31,
1998 1997
(Unaudited) (Audited)
Assets
Current assets:
Cash $18,854 $11,281
Accounts receivable, net 7,244 13,366
Inventories 8,893 12,034
Recoverable income taxes 64 3,794
Deferred income taxes 3,226 2,388
Prepaid expenses and other 230 213
Total current assets 38,511 43,076
Property and equipment, net 3,748 3,968
Other non-current assets 1,301 1,471
$43,560 $48,515
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,319 $ 6,204
Accrued expenses 1,816 1,808
Total current liabilities 5,135 8,012
Stockholders' equity:
Common stock 25,191 25,170
Retained earnings 13,234 15,333
Total stockholders' equity 38,425 40,503
$43,560 $48,515
ZOOM TELEPHONICS, INC.
Consolidated Statements of Income
( 000's )
(Unaudited)
Three Months Ending Years Ending
12/31/98 12/31/97 12/31/98 12/31/97
Net sales $ 16,025 $ 21,479 $ 61,364 $ 64,478
Cost of goods sold 9,897 15,545 44,651 56,298
Gross profit 6,128 5,934 16,713 8,180
Operating expenses:
Selling 3,164 3,233 11,801 11,103
General and
administrative 1,414 1,270 4,976 4,957
Research and
development 1,212 1,088 4,449 4,182
Total operating
expenses 5,790 5,591 21,226 20,242
Operating profit 338 343 (4,513) (12,062)
Other income, net 229 114 1,074 741
Income before
taxes on income 567 457 (3,439) (11,321)
Taxes on income 195 170 (1,287) (4,189)
Net income (loss) $ 372 $ 287 $ (2,152) $ (7,132)
Earnings (loss) per
share:
Basic $ 0.05 $ 0.04 $ (0.29) $ (0.95)
Diluted $ 0.05 $ 0.04 $ (0.29) $ (0.95)
Average number of
shares outstanding:
Basic 7,475 7,472 7,474 7,469
Diluted 7,475 7,472 7,474 7,469
*T
CONTACT: Zoom Telephonics
Investor Relations, 617/423-1072
investor@zoomtel.com
www.zoomtel.com
KEYWORD: MASSACHUSETTS
INDUSTRY KEYWORD: COMED COMPUTERS/ELECTRONICS TELECOMMUNICATIONS
EARNINGS
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