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Zoom Reports Results For Third Quarter Ending
Boston, October 28, 1997 - Zoom Telephonics, Inc. (NASDAQ:
ZOOM),
a leading manufacturer of faxmodems and other data communications
products, today reported sales of $13.0 million for its third
quarter ending September 30, 1997, down 35% from $20.0 million
for the third quarter of 1996. Sales for the first 9 months
of 1997 were $43.0 million, down 42% from the same period
in 1996. Zoom reported a net loss for the third quarter
of 1997 of $2.2 million or $.29 per share, versus net income
of $253 thousand or $.03 per share for the third quarter of
1996. For the first nine months of 1997, Zoom reported a net
loss of $7.4 million or $1.00 per share, versus net income
of $2.7 million or $.38 or share for the year earlier nine
month period. The Company said the transition to 56K
modems had been slower than expected, negatively impacting
sales, average selling prices, and gross margins.
Zoom ended the quarter with a strong balance sheet, with a
current ratio of 8.0, cash of $12.4 million or $1.65 per share,
and stockholders' equity of $5.30 per share. "56K
has been disappointing, but we do see some encouraging signs
for K56flex," said Frank Manning, Zoom's President. "Ascend
has been shipping for some time; but only now are some of
their largest customers going live. Erol's has begun a major
rollout; and they are recommending Zoom modems in their extensive
advertising. We expect to see major rollouts in the near term
from America Online, Microsoft Network, and UUNET. Livingston
has been shipping for several months, and many of their customers
have gone live. Cisco and Shiva have also started shipping.
As more and more Internet Service Providers bring K56flex
online and begin advertising it to their customers, sales
should ramp significantly. Zoom is beautifully positioned,
with strong relationships with major retailers and distributors,
an excellent cooperative promotion program for Internet Service
Providers, and superb reviews of our 56K technology. In its
October 1997 issue BYTE magazine awarded Zoom's 56K external
modem 'BYTE Best' for 'besting not only its K56flex companions,
but the entire x2 field as well.' Other recent awards include
'Tester's Choice' by Data Communications magazine, 'Buy It'
from CNET, and 'Net Best' from ZD Internet Magazine. We've
also done a good job internationally, with recent orders and
commitments from some of the largest accounts in Europe dovetailing
with homologation of new K56flex designs for a number of European
countries and recent 'Best Buy' awards from PC Online in Germany
and PC World in Poland." 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
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