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Zoom Reports Profit For The Fourth Quarter Of 1997
Boston, MA, February 20, 1998 - Zoom Telephonics, Inc.
(NASDAQ: ZOOM),
a leading manufacturer of faxmodems and other data communications
products, today reported fourth quarter 1997 net income of
$290 thousand or $.04 per share, versus a net loss of $243
thousand or $.03 per share for the fourth quarter of 1996.
For the full year 1997 Zoom reported a net loss of $7.1 million
or $.95 per share, versus a net profit of $2.5 million or
$.35 per share for 1996. Zoom reported sales of $21.5
million for its fourth quarter ending December 31, 1997, down
17% from $25.8 million for the fourth quarter of 1996. Sales
for the full year 1997 decreased 36% to $64.5 million from
$100.2 million in 1996. The Company said that sales
for the fourth quarter were the highest for the year, reflecting
the momentum shift toward the Company's 56K modem technology,
K56flex™. Sales for the fourth quarter and the full
year 1997 were lower than the prior year because of general
market confusion over the competing pre-standard 56K technologies,
K56flex and x2™, and because K56flex central site deployment
did not gather significant momentum until late in 1997. These
factors negatively impacted unit sales, average selling prices,
and gross margins of 56K and lower speed modems. Zoom
ended 1997 with a strong balance sheet, with a current ratio
of 5.4, cash of $11.2 million or $1.49 per share, stockholders'
equity of $5.42 per share, and an unused $5 million line of
bank credit. "Zoom's 56K sales were disappointing
through most of 1997, but showed strong improvement in the
fourth quarter," said Frank Manning, Zoom's President.
"Our product mix continues to shift toward 56K, and we
expect this shift to accelerate as a result of the V.90 standard
recently recommended by the International Telecommunication
Union. We believe that the industry is entering a major new
upgrade cycle, and that Zoom is well-positioned to benefit
given our number 2 position at retail in the USA, strong relationships
and cooperative marketing programs with Internet Service Providers,
excellent international products and channels, and eight recent
56K awards. We are in the final stages of testing our V.90
products, and expect to begin shipping in the near future."
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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