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Zoom Telephonics Reports Third Quarter 2020 Results

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

Boston, MA – (NewMediaWire) – November 12, 2020 – 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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