Zoom Telephonics Reports Results for Second Quarter Ending 6/30/99.BOSTON--(BUSINESS WIRE)--July 23, 1999-- Zoom Telephonics, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ZOOM), a leading manufacturer of faxmodems and other data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. products, today reported a net loss for the second quarter of 1999 of $719 thousand or $.10 per share, versus a net loss of $1.6 million or $.21 per share for the second quarter of 1998. Zoom reported sales of $15.8 million for its second quarter ending June 30, 1999, up 30 % from $12.2 million for the second quarter of 1998. Compared to the second quarter of 1998, Zoom's sales increase was caused by a 49% increase in modem unit volume partially offset by a 20% decline in average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. . Sales of 56K modem units rose significantly, outweighing the decline in 33.6K/28.8K modem sales. Zoom ended the quarter with a strong balance sheet, with cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $9.9 million or $1.32 per share, and stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of $4.95 per share. On April 7, 1999 Zoom Telephonics announced the acquisition of most of the modem assets of Hayes Corporation for $5.3 million in cash. The purchase included the Hayes, Practical Peripherals, Accura, Optima, Ultra, Smartmodem, Century 2, and Cardinal brands and product rights for the USA, Canada, South & Central America Central America, narrow, southernmost region (c.202,200 sq mi/523,698 sq km) of North America, linked to South America at Colombia. It separates the Caribbean from the Pacific. , Europe, and the Middle East. The $5.3 million cash payment is reflected in the $9.9 million cash position at 6/30/99. In July 1999 Zoom finalized the purchase of some of the remaining Hayes assets, including Hayes Asia Pacific, for an additional $1.1 million. With the purchase of Hayes Asia Pacific, Zoom now owns the worldwide rights to the Hayes name and the brands listed above. Zoom plans to set up a sales office in Beijing, China in the third quarter of 1999. Approximately 10% of Zoom's reported sales of $15.8 million for the second quarter of 1999 were Hayes product sales. Hayes had shut down its manufacturing prior to the Zoom purchase of the Hayes assets. The production of key Hayes products was restarted by Zoom in the second quarter of 1999 for European delivery European delivery programs are those arrangements that European automobile manufacturers make with their dealerships throughout the world, typically aimed at the North American market (the most profitable market for Mercedes-Benz, BMW, Saab, Volvo and Porsche), to attract consumers , and very late in the second quarter for sales in the U.S. Zoom's net loss for the second quarter of 1999 of $719 thousand versus a net loss of $1.6 million for the second quarter of 1998 benefited from a strong gross margin improvement resulting from advantageously negotiated purchases of modem materials 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 products, Hayes goodwill amortization, and increased market development spending for both the Zoom and Hayes brands. "The Hayes purchase comes at an opportune op·por·tune adj. 1. Suited or right for a particular purpose: an opportune place to make camp. 2. Occurring at a fitting or advantageous time: an opportune arrival. time for Zoom," said Frank Manning Francis Thomas "Frank" Mann (born 3 March 1888 in Winchmore Hill, Middlesex, died 6 October 1964 in Milton-Libourne, Wiltshire) was an English cricketer. He played for Cambridge University, Middlesex and England. , Zoom's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "The strong Hayes brand and products should help Zoom gain market share in the difficult modem market. This should enhance our position in the retail, distributor and VAR channels, which we plan to leverage for sales of DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary and cable modems. We believe that Zoom's technology, brands and market channels will give us a strong competitive position." For additional information, please contact Investor Relations Investor relations The process by which the corporation communicates with its investors. , Zoom Telephonics, 207 South Street, Boston, Massachusetts “Boston” redirects here. For other uses, see Boston (disambiguation). Boston is the capital and most populous city of Massachusetts.[3] The largest city in New England, Boston is considered the unofficial economic and cultural center of the entire New 02111, telephone (617)423-1072, fax (617)338-5015, e-mail address See Internet address. e-mail address - electronic mail address Investor@ zoomtel.com. Zoom's World Wide Web site is www.zoom.com. This press release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. including, without limitation, statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the contribution of Hayes to Zoom's sales, Zoom's potential in the analog modem A common device that converts the computer's digital pulses to tones that can be carried over analog telephone lines. See modem. market, possible expansion and success in the broadband access See broadband and wireless broadband. market, and the company's future performance. These forward-looking statements involve risks and uncertainties, including that there can be no assurance of future opportunities and performance, and other risks and uncertainties indicated from time to time in Zoom's filings with the Securities and Exchange Commission. -0-
ZOOM TELEPHONICS, INC.
Consolidated Balance Sheets
( 000's )
(Unaudited)
JUNE 30, DEC 31,
1999 1998
(Unaudited)
Assets
Current assets:
Cash $ 4,804 $ 5,325
Marketable securities 5,132 13,529
Accounts receivable, net 7,424 7,244
Inventories 13,573 8,893
Deferred income taxes 4,097 3,290
Prepaid expenses and other 982 230
Total current assets 36,012 38,511
Property and equipment, net 4,053 3,748
Other non-current assets 3,578 1,301
$ 43,643 $ 43,560
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,252 $ 3,326
Accrued expenses 3,662 1,809
Total current liabilities 5,914 5,135
Other non-current liabilities 720 --
Total liabilities 6,634 5,135
Stockholders' equity:
Common stock 25,191 25,191
Retained earnings 11,771 13,180
Foreign currency translation
income 64 --
Accumulated other comprehensive
income (loss) (17) 54
Total stockholders' equity 37,009 38,425
$43,643 $43,560
ZOOM TELEPHONICS, INC.
Consolidated Statements of Income
( 000's )
(Unaudited)
Three Months Ending
6/30/99 6/30/98
Net sales $ 15,838 $ 12,115
Cost of goods sold 9,970 10,030
Gross profit 5,868 2,085
Operating expenses:
Selling 3,719 2,835
General and administrative 1,636 974
Research and development 1,806 1,060
Total operating expenses 7,161 4,869
Operating (loss) profit (1,293) (2,784)
Other income, net 116 281
Income (loss) before taxes (1,177) (2,502)
Taxes on income (458) (930)
Net income (loss) $ (719) $ (1,573)
Basic $ (0.10) $ (0.21)
Diluted $ (0.10) $ (0.21)
Basic 7,475 7,475
Diluted 7,475 7,475
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