| Zoom
Technologies Reports Results
for the First Quarter of 2003
BOSTON, April 29, 2003 — Zoom Technologies,
Inc. (NASDAQ: ZOOM), a leading manufacturer of modems and other
data communication products, today reported net sales of $7.5
million for its first quarter ending March 31, 2003, down 16.0%
from the first quarter of 2002.
Zoom reported a net loss of $0.8 million or $.11 per share
for the first quarter of 2003, a significant improvement
over the net loss of $3.5 million, or $.44 per share, a year
earlier.
The first quarter of 2003 had higher gross profit and lower
operating expenses than the first quarter of 2002. Gross
profit increased from $1.8 million, or 19.9% of revenue, in
the first
quarter of 2002 to $2.1 million, or 28.5% of revenue, in
the first quarter of 2003, as Zoom continued to drive down
its
cost of goods. Operating expenses decreased from $3.6 million,
or 39.7% of revenue, in the first quarter of 2002, to $3.1
million, or 40.7% of revenue, in the first quarter of 2003.
Zoom's cash balance on March 31, 2003 was $7.7 million, up
$0.1 million from December 31, 2002. On March 31, 2003 Zoom
had a current ratio of 5.8 and stockholders' equity of $12.6
million.
"
The quarter's revenue decline from a year earlier was primarily
due to dial-up modems, as unit volume came down 8% and average
selling prices came down 6%," said Frank Manning, Zoom's
President and CEO. "Zoom is one of the strongest producers
of dial-up modems, but this has been a declining market. However,
we expect the dial-up modem market to benefit from the rollout
of V.92 and the excitement over Web acceleration services.
We also expect that the continuing consolidation in this industry
will help Zoom. In the broadband modem category, our worldwide
revenue more than doubled in only a year; and we are particularly
encouraged by our ADSL progress in Europe in cooperation with
leading retailers and Internet Service Providers. Our broadband
business is also growing in the US, despite the fact that the
vast majority of broadband modems are provided by the telephone
or cable service provider instead of being purchased at retail.
Our cable modems have sold well at retail in Cox Communications
service areas, for instance, because Cox offers an attractive
monthly discount if you purchase your cable modem instead of
asking Cox to supply it. We'd like to see more cable service
providers offer a similar value proposition to their customers.
For ADSL, we hope that we can establish a successful retail
channel model in Europe that can over time be brought to the
US. In the meantime, Zoom will continue to provide great Internet
access products, backed by strong distribution channels and
customer support."
Zoom has scheduled a Q1 2003 earnings conference call for
Tuesday, April 29th at 5:00 p.m. Eastern Time. You may access
the conference
call by dialing (800) 915-4836 for calls made within the
United States and dialing (973) 317-5319 for calls outside
the United
States. The call will also be simulcast to stock analysts
and other interested parties on Zoom's website (www.zoom.com/Q1)
and other financial and investor-oriented websites via the
CCBN / Business Wire StreetEvents network. Shortly after
the
conference call, a recorded broadcast will be available on
Zoom's website.
For additional information, please contact:
Investor Relations,
Zoom Technologies
207 South Street
Boston, Massachusetts 02111
Telephone: (617) 423-1072
e-mail address: investor@zoom.com.
Zoom's World Wide Web site is www.zoom.com
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