UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 29, 2003
Zoom Technologies, Inc.
------------------------------------------------------------------
(Exact Name Of Registrant As Specified In Its Charter)
Delaware
------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
0-18672 51-0448969
------- ----------------------
(Commission File Number) (I.R.S. Employer Identification No.)
207 South Street, Boston, MA 02111
---------------------------------------- ---------------
(Address of Principal Executive Offices) (Zip Code)
(617) 423-1072
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number Description
-------------- -----------
99.1 Press release dated October 29, 2003 of Zoom Technologies,
Inc. (the "Company") announcing its financial results for
the third quarter ended September 30, 2003.
Item 12. Results of operations and financial condition.
On October 29, 2003, the Company issued a press release announcing its
financial results for the third quarter ended September 30, 2003. A copy of the
press release is attached hereto as Exhibit 99.1 and is incorporated herein in
its entirety by reference.
Limitation on Incorporation by Reference. The information furnished in this
Item 12 shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liabilities of
that section, nor shall such information be deemed incorporated by reference in
any filing under the Securities Act of 1933, as amended, except as shall be
expressly set forth by specific reference in such a filing.
Cautionary Note Regarding Forward-Looking Statements. Except for historical
information contained in the press release attached as an exhibit hereto, the
press release contains forward-looking statements which involve certain risks
and uncertainties that could cause actual results to differ materially from
those expressed or implied by these statements. Please refer to the cautionary
note in the press release regarding these forward-looking statements.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 29, 2003 ZOOM TECHNOLOGIES, INC.
By: /s/ Robert A. Crist
--------------------------
Robert A. Crist, Chief
Financial Officer
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
99.1 Press release dated October 29, 2003 of Zoom Technologies,
Inc. (the "Company") announcing its financial results for
the third quarter ended September 30, 2003.
EXHIBIT 99.1
Zoom Technologies Reports Profit for the Third Quarter of 2003
--------------------------------------------------------------
Boston, October 29, 2003 -Zoom Technologies, Inc. (NASDAQ: ZOOM), a leading
manufacturer of modems and other data communication products, today reported net
income of $406 thousand or $.05 per share for its third quarter ending September
30, 2003, up substantially from Zoom's net income of $92 thousand or $.01 per
share in the third quarter of 2002.
Zoom's net loss for the first nine months of 2003 was $1.4 million or $.18
per share, compared to a net loss of $4.6 million or $.59 per share for the
first nine months of 2002.
Zoom's net sales were $9.1 million for the third quarter of 2003, down
16.3% from $10.9 million for the third quarter of 2002, as significantly higher
broadband modem sales were offset by lower dial-up modem sales.
Gross profit was $3.0 million or 32.5% of net sales in the third quarter of
2003 compared to $3.2 million or 29.1% of net sales in the third quarter of
2002. The improved gross margin reflects cost of goods reductions including
lower unit costs and lower charges for inventory write-downs.
Operating expenses were $2.6 million or 29.1% of net sales in the third
quarter of 2003 compared to $3.1 million or 28.7% of net sales in the third
quarter of 2002. The decline in operating expenses was primarily due to lower
employee-related operating expenses as Zoom's worldwide headcount dropped from
190 to 165 from September 30, 2002 to September 30, 2003.
Zoom's cash balance on September 30, 2003 was $8.8 million, up from $7.6
million on December 31, 2002. On September 30, 2003 Zoom had a current ratio of
5.4.
"We are particularly encouraged by the growth of our ADSL modem business,
which more than quadrupled in revenues in one year," said Frank Manning, Zoom's
President and CEO. "Europe is particularly strong for us, and we are also seeing
good growth in the US and Asia. Zoom's ADSL revenues are coming primarily from
sales through retailers outside the US, and we are encouraged by the ADSL modem
momentum toward retail. Some Internet Service Providers are telling us that they
would prefer not to offer ADSL modems directly to their customers, given the
associated issues of inventory management and returns. The retail channel
relieves ISPs of this burden, and also offers a great way to promote an ISP's
ADSL service. The UK, Spain, and other countries are proving that ADSL modems
are well-suited to sale by retailers."
"Our business is running efficiently. Operating costs are down, inventory
turns are up, and our cash position is strong."
"We are focusing our development efforts primarily in the ADSL, dialer, and
Voice over IP areas, with exciting product introductions planned for the coming
months. We also remain committed to our other Internet access product lines,
including dial-up modems and cable modems."
Zoom has scheduled a Q3 2003 earnings conference call for Wednesday October
29th. at 5:00 p.m. Eastern Time. You may access the conference call by dialing
(800) 915-4836 for calls made within the United States and dialing (973)
317-5319 for calls outside the United States. The call will also be simulcast to
stock analysts and other interested parties on Zoom's website (www.zoom.com/Q3)
and other financial and investor-oriented websites via the CCBN / Business Wire
StreetEvents network. Shortly after the conference call, a recorded broadcast
will be available on Zoom's website. For additional information, please contact
Investor Relations, Zoom Technologies, 207 South Street, Boston, MA 02111,
telephone (617) 423-1072, email investor@zoom.com, or visit Zoom's website at
www.zoom.com.
This release contains forward-looking information relating to Zoom's plans,
expectations and intentions, including statements relating to Zoom's plans for
developing and introducing products, Zoom's growth and success in ADSL modem
sales, Zoom's ADSL prospects and momentum. Actual results may be materially
different from those expectations as a result of known and unknown risks,
including Zoom's potential future losses; Zoom's ability to obtain additional
financing for working capital and other purposes; Zoom's ability to effectively
manage its inventory; uncertainty of new product development and introduction,
including budget overruns, project delays and the risk that newly introduced
products may contain undetected errors or defects or otherwise not perform as
anticipated, and other delays in shipments of products; the uncertainty of
market growth of cable and ADSL data communications markets, and the uncertainty
of Zoom's ability to more successfully penetrate those markets, which have been
challenging markets with significant barriers to entry; Zoom's dependence on one
or a limited number of suppliers for certain key components; rapid technological
change; competition; 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.
ZOOM TECHNOLOGIES, INC.
Consolidated Balance Sheets
In thousands
(Unaudited)
September 30, Dec 31,
2003 2002
--------------------------------------------------------------------------------
Assets
Current assets:
Cash $ 8,761 $ 7,612
Accounts receivable, net 4,460 3,714
Inventories, net 3,799 6,783
Prepaid expenses and other 614 1,038
--------------------------------------------------------------------------------
Total current assets 17,634 19,147
Property and equipment, net 3,018 3,486
--------------------------------------------------------------------------------
Total assets $20,652 $22,633
--------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,988 $ 2,407
Accrued expenses 1,048 1,207
Current portion of long-term debt 222 192
--------------------------------------------------------------------------------
Total current liabilities 3,258 3,806
Long-term debt 5,153 5,342
--------------------------------------------------------------------------------
Total liabilities 8,411 9,148
--------------------------------------------------------------------------------
Stockholders' equity:
Common stock and additional paid-in capital 28,443 28,245
Treasury stock (7) (2)
Retained earnings (deficit) and
foreign currency translation (16,195) (14,758)
--------------------------------------------------------------------------------
Total stockholders' equity 12,241 13,485
--------------------------------------------------------------------------------
Total liabilities &
Stockholders' equity $20,652 $22,633
--------------------------------------------------------------------------------
ZOOM TECHNOLOGIES, INC.
Consolidated Statements of Operations
In thousands,except per share data
(Unaudited)
Three Months Ending Six Months Ending
---------------------- -------------------
9/30/03 9/30/02 9/30/03 9/30/02
-----------------------------------------------------------------------------------------------
Net sales $9,104 $10,878 $24,179 $29,059
Cost of goods sold 6,146 7,707 17,317 22,116
-----------------------------------------------------------------------------------------------
Gross profit 2,958 3,171 6,862 6,943
Operating expenses:
Selling 1,376 1,423 3,965 4,488
General and administrative 612 825 2,413 2,588
Research and development 660 879 2,155 2,810
-----------------------------------------------------------------------------------------------
Total operating expenses 2,648 3,127 8,533 9,886
-----------------------------------------------------------------------------------------------
Operating profit (loss) 310 44 (1,671) (2,943)
Other income (expense), net 96 48 246 94
------------------------------------------------------------------------------------------------
Income(loss) before income taxes 406 92 (1,425) (2,849)
Income tax expense(benefit) - - - 2,013
------------------------------------------------------------------------------------------------
Income (loss) before extraordinary gain 406 92 (1,425) (4,862)
Extraordinary gain - - - 255
------------------------------------------------------------------------------------------------
Net income (loss) $ 406 $ 92 $ (1,425) $(4,607)
------------------------------------------------------------------------------------------------
Basic and diluted earnings (loss) per share:
Earnings (loss) per share before
extraordinary gain $ 0.05 $ 0.01 $ (0.18) $ (0.62)
Extraordinary gain - - - 0.03
Earnings (loss) per share $ 0.05 $ 0.01 $ (0.18) $ (0.59)
------------------------------------------------------------------------------------------------
Weighted average number of shares
outstanding:
Basic 7,857 7,861 7,854 7,861
Diluted 8,081 7,862 7,854 7,861
------------------------------------------------------------------------------------------------