Zoom Telephonics Reports Third Quarter 2020 Results

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