| Zoom
Telephonics Reports Results
For Quarter and Year Ending 12/31/96 Boston,
MA, February 20, 1997 - Zoom Telephonics, Inc. (NASDAQ:
ZOOM),
a leading manufacturer of faxmodems and other personal computer
communications products, today reported sales of $25.8 million
for its fourth quarter ending December 31, 1996, down 28%
from $36.0 million for the fourth quarter of 1995. This drop
was primarily due to lower overall modem unit volumes in the
fourth quarter of 1996, as increased V.34 shipments did not
offset significantly reduced 14.4 Kbps modem shipments. Sales
for 1996 grew 3% to $100.2 million from $97.0 million in 1995.
Zoom reported a net loss for the fourth quarter of 1996
of $243 thousand or $.03 per share, versus net income of $2.32
million or $.36 per share fully diluted for the fourth quarter
of 1995, as gross profit declined from $8.4 million to $5.0
million on significantly reduced sales, while operating expenses
rose from $4.5 million to $5.4 million. Zoom earned $2.48
million or $.35 per share fully diluted in 1996, down from
$6.1 million or $.98 per share fully diluted in 1995, as gross
profit dropped from $23.6 million to $20.4 million on slightly
higher sales, and as operating expenses increased from $13.7
million to $16.8 million. "The modem business
changed significantly during the second quarter of 1996 from
a shortage environment with fairly stable prices to a market
with rapidly declining prices," said Frank Manning, Zoom's
President. "Consequently our price protection expense
rose from $2.2 million in 1995 to $3.5 million in 1996, with
fourth quarter price protection rising from $350 thousand
to $1.2 million. Soon we will be shipping 56 Kbps modems;
and we expect to see increased demand and higher average selling
prices, and a possible lift in gross margins, later this year.
Meanwhile our numbers reflect significant reserves for price
protection and for obsolescence of modems with speeds below
33.6 Kbps." "Zoom's fourth quarter selling
expenses of $3.36 million were the highest ever, both in dollars
and as a percentage of sales. This was primarily due to increased
advertising of Zoom brand products in North America. Our R&D
expenses were also at record highs, as Zoom strengthened its
engineering team to accelerate new product introductions in
the 56K, ISDN, and remote access product areas, and to increase
support for international product development."
"The year 1996 was tough, but we approach 1997 with a
stronger company than ever, whether you look at financial
strength, market channels, internal systems, or personnel.
We believe we are well-positioned for growth as people move
to speeds of 56K and beyond." 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 the company's new product introductions
and potential future product demand, selling prices, gross
margins, and growth. These forward-looking statements involve
risks and uncertainties, including that there can be
no assurance that the company's new products will be introduced
on a timely basis, if at all; that
the company's new products if introduced will achieve market
acceptance; that overall product demand, selling prices, gross
margins, or revenues will improve; and other risks and uncertainties
indicated from time to time in Zoom's filings with the Securities
and Exchange Commission.
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