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Zoom Telephonics Reports Third Quarter 2020 Results

·6 min read

Revenue of $12.0M, the Highest Quarterly Revenue for Zoom Telephonics (OTCQB: ZMTP) to Date

Boston, MA, Nov. 12, 2020 (GLOBE NEWSWIRE) -- via NewMediaWire -- Zoom Telephonics, Inc. (“Zoom”) (OTCQB: ZMTP), the creator of leading cable modems and other Internet access products under the exclusively licensed Motorola® brand, reported financial results for its 2020 third quarter ended September 30, 2020.

  • Net revenue of $12.0M, the highest quarterly revenue for ZMTP to date, representing an 11% increase compared to the same quarter in 2019, and a 17% increase sequentially from Q2 2020.

  • GAAP Operating Loss of ($332k), or -2.8% of net revenue, representing a ($94k) difference compared to the same quarter in 2019, but a $1.2M improvement sequentially from Q2 2020.

  • Earnings per share of $(0.01), flat in the third quarter of 2019, but represents a 86% improvement sequentially from Q2 2020.

“We are very pleased with this quarter’s results and believe that we are now on a clear path to achieving scale and profitability,” said Jackie Barry Hamilton, CFO of Zoom. “Our balance sheet and cash position are strong; benefiting from a recent PIPE, and we have maintained our working capital levels despite challenges associated with the pandemic.”

Business Outlook

“Our research shows Zoom is holding its position as one of the top three leaders in modems, gateways, and MoCA devices by retail market share,” said Jeremy Hitchcock, Executive Chairman of Zoom’s Board of Directors. “We are seeing strong market tailwinds in home connectivity, underscored in a 45% increase in retailer inventory demand from this time last year. Our inventory position is actively being rebuilt as manufacturing capacity ramps in Vietnam to meet increased customer demand, without tariffs.”

Separately, Zoom today announced that it had reached a definitive agreement to merge with Minim Inc., a private AI-driven WiFi management and security platform.

Conference Call Details Date/Time:

Join us on November 13th, 10:00 a.m. ET.

Participant Dial-In Numbers: (United States):
(877) 706-2128 (International): (706) 643-5255.

Please dial-in five minutes prior to the start time of the call and provide the operator with the conference ID of 4558846

A slide presentation will accompany management’s remarks and will be accessible five minutes prior to the start of the call via the following link: www.zoom.net/SQ320. A recording of the call will also be made available afterwards through the investor information section of the company’s website.

About Zoom Telephonics
Zoom Telephonics, Inc. (“Zoom”) (OTCQB: ZMTP) is the creator of innovative Internet access products that dependably connect people to the information they need and the people they love. Founded in 1977 in Boston, MA, the company now delivers cable modems, routers, and other communications products under the globally recognized Motorola brand. For more information about Zoom and its products, please visit www.zoom.net and www.motorolanetwork.com.

MOTOROLA and the Stylized M Logo are trademarks or registered trademarks of Motorola Trademark Holdings, LLC and are used under license.

Forward Looking Statements
This release contains forward-looking information relating to Zoom’s plans, expectations, and intentions. Actual results may be materially different from expectations as a result of known and unknown risks, including: the potential increase in tariffs on the Company's imports; potential difficulties and supply interruptions from moving the manufacturing of most of the Company’s products to Vietnam; potential changes in NAFTA; the potential need for additional funding which Zoom may be unable to obtain; declining demand for certain of Zoom’s products; delays, unanticipated costs, interruptions or other uncertainties associated with Zoom’s production and shipping; Zoom’s reliance on several key outsourcing partners; uncertainty of key customers’ plans and orders; risks relating to product certifications; Zoom’s dependence on key employees; uncertainty of new product development, including certification and overall project delays, budget overruns, and the risk that newly introduced products may contain undetected errors or defects or otherwise not perform as anticipated; costs and senior management distractions due to patent related matters; and other risks set forth in Zoom’s filings with the Securities and Exchange Commission. Zoom cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Zoom expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in Zoom’s expectations or any change in events, conditions or circumstance on which any such statement is based.

Investor Relations Contact:
Jacquelyn Barry Hamilton, CFO Zoom Telephonics, Inc.
Phone: 617-753-0040
Email: Investor@zoom.net

ZOOM TELEPHONICS, INC.
Condensed Consolidated Balance Sheets

ASSETS

September 30,
2020
(Unaudited)

December 31,
2019

Current assets

Cash and cash equivalents

$

4,013,690

$

1,216,893

Restricted cash

800,000

150,000

Accounts receivable, net

6,577,447

4,070,576

Inventories, net

9,693,326

7,440,350

Prepaid expenses and other current assets

128,847

269,738

Total current assets

21,213,310

13,147,557

Other assets

914,884

349,335

Operating lease right-of-use assets, net

107,343

102,716

Equipment, net

460,534

303,099

Total assets

$

22,696,071

$

13,902,707

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

$

10,513,620

$

5,024,529

Current maturities of long-term debt

354,968

––

Current maturities of operating lease liabilities

72,739

102,716

Accrued expenses

4,015,666

2,666,471

Total current liabilities

$

14,956,993

$

7,793,716

Long-term debt, less current maturities

228,332

––

Operating lease liabilities, less current maturities

34,738

––

Total liabilities

$

15,220,063

$

7,793,716

Stockholders' equity

Common stock: Authorized: 40,000,000 shares at $0.01 par value

Issued and outstanding: 23,921,142 shares at September 30, 2020 and 20,929,928 shares at December 31, 2019

Additional paid in capital

239,211

209,299

Accumulated deficit

50,454,720

46,496,330

Total stockholders' equity

(43,217,923

)

(40,596,638

)

Total liabilities and stockholders' equity

7,476,008

6,108,991

$

22,696,071

$

13,902,707

ZOOM TELEPHONICS, INC.
Condensed Consolidated Statements of Operations
(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019

Net sales

$

12,027,457

$

10,874,149

$

34,255,817

$

27,042,961

Cost of goods sold

8,150,901

7,746,821

25,160,174

18,728,928

Gross profit

3,876,556

3,127,328

9,095,643

8,314,033

Operating expenses:

Selling

2,012,314

2,067,728

6,650,047

7,068,841

General and administrative

1,468,187

733,486

3,012,292

1,858,043

Research and development

728,258

563,881

2,025,502

1,484,160

Total operating expenses

4,208,759

3,365,095

11,687,841

10,411,044

Operating loss

(332,203

)

(237,767

)

(2,592,198

)

(2,097,011

)

Other income (expense):

Interest income

272

5,626

1,064

9,627

Interest expense

(5,420

)

––

(13,852

)

(48,405

)

Other, net

(1,150

)

36,156

(707

)

34,251

Total other income (expense)

(6,298

)

41,782

(13,495

)

(4,527

)

Loss before income taxes

(338,501

)

(195,985

)

(2,605,693

)

(2,101,538

)

Income taxes

2,920

3,641

15,592

24,319

Net loss

$

(341,421

)

$

(199,626

)

$

(2,621,285

)

$

(2,125,857

)

Net loss per share:

Basic and diluted

$

(0.01

)

$

(0.01

)

$

(0.12

)

$

(0.11

)

Basic and diluted weighted average common and common equivalent shares

23,887,718

20,832,174

22,419,823

18,696,083




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