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) April 29, 2005
Zoom Technologies, Inc.
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(Exact Name Of Registrant As Specified In Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-18672 51-0448969
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(Commission File Number) (I.R.S. Employer Identification No.)
207 South Street, Boston, MA 02111
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(Address of Principal Executive Offices) (Zip Code)
(617) 423-1072
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(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On April 29, 2005, the Company issued a press release announcing its
financial results for the first quarter ended March 31, 2005. 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 2.02 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.
Item 9.01 Financial Statements and Exhibits
Exhibit Number Description
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99.1 Press release dated April 29, 2005 of Zoom Technologies,
Inc.
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: April 29, 2005 ZOOM TECHNOLOGIES, INC.
By: /s/ Robert A. Crist
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Robert A. Crist, Chief
Financial Officer
EXHIBIT INDEX
Exhibit Number Description
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99.1 Press release dated April 29, 2005 of Zoom Technologies,
Inc.
EXHIBIT 99.1
Zoom Technologies Reports Results for the First Quarter of 2005
Boston, MA, April 29, 2005 -Zoom Technologies, Inc. (NASDAQ: ZOOM), a
leading manufacturer of modems and other data communication products, today
reported net sales of $6.4 million for its first quarter ended March 31, 2005,
down 17.4% from $7.8 million for the first quarter of 2004. Zoom's DSL modem net
sales for the first quarter of 2005 rose 51% from the first quarter of 2004, but
this increase was offset by a 44% decline in dial-up modem net sales in the same
time period.
Zoom reported a net loss of $1.3 million or $.15 per diluted share for its
first quarter ended March 31, 2005, compared to a net loss of $0.6 million or
$.07 per diluted share for the first quarter of 2004, with the change due to
lower gross profit, partially offset by reduced operating expenses.
Gross profit was $1.5 million or 23.8% of net sales in the first quarter of
2005, down from $2.3 million or 29.7% of net sales in the first quarter of 2004.
The lower gross profit resulted primarily from lower sales and lower margins
realized on those sales. Gross margins were lower primarily because of the
continuing product sales shift away from dial-up modems, Zoom's highest margin
product category, and because of lower absorption of manufacturing overhead due
to lower sales.
Operating expenses were $2.7 million or 41.8% of net sales in the first
quarter of 2005 compared to $2.9 million or 36.7% of net sales in the first
quarter of 2004. Selling expenses declined by $.1 million primarily due to lower
dial-up modem sales and lower associated selling expenses. General and
administrative expenses declined $.1 million, primarily due to lower personnel
costs. R&D expenses rose $.1 million, reflecting higher costs for personnel and
outside services.
Zoom's cash balance on March 31, 2005 was $7.6 million, down from $9.4
million on December 31, 2004, due primarily to the quarter's loss and an
increase in inventory of $1.2 million. The inventory increase was primarily due
to a push-out of some customers' orders and the increase of work-in-process of
Zoom's new Wireless-G ADSL modem. The mortgage on Zoom's headquarters is due in
January 2006, and has therefore been reclassified from a long-term to a current
liability. Zoom intends to make a decision on mortgage refinancing later this
year.
"Our number one priority is growing Zoom's sales," said Frank Manning,
Zoom's President and CEO. "To do this we need to continue to grow our ADSL
revenues, and to build the sales momentum for our voice over the Internet
products and services. We began shipping our first Wireless-G ADSL modems in
late March, and our sales of this product are encouraging. We are also
encouraged by the progress we are making with our VoIP hardware and Global
Village phone services."
Zoom has scheduled a conference call for Friday, April 29th at 10:00 a.m.
Eastern Time. You may access the conference call by dialing (800) 210-9006 for
calls made within the United States and dialing (719) 457-2621 for calls made
from outside the United States. The call will also be simulcast to stock
analysts and other interested parties on Zoom's website (www.zoom.com/Q1) and
other financial and investor-oriented websites via the CCBN / StreetEvents
network. Shortly after the conference call, a recording of the call 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.
About Zoom Technologies
Zoom Technologies, Inc. designs, produces, markets, and supports
communications products under the Zoom and Hayes(R) brands, and provides voice
over the Internet services under the Global Village brand. Zoom is headquartered
in Boston, and its European sales and support center is in the UK. Zoom markets
its products in over forty countries, and provides multi-lingual support from
its offices in Boston, Florida, and the UK. For more information about Zoom and
its products, please see www.zoom.com.
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Forward Looking Statements
This release contains forward-looking information relating to Zoom's plans,
expectations, and intentions, including statements relating to sales of Zoom's
new VoIP and DSL products and Zoom's mortgage. Actual results may be materially
different from expectations as a result of known and unknown risks, including:
the uncertainty of market acceptance and growth of VoIP and of DSL modem
markets; the uncertainty of Zoom's ability to grow its sales or more
successfully penetrate those markets; Zoom's reliance on a relatively limited
number of customers for sale of its DSL modems; Zoom's increasing reliance on
international sales; the uncertainty of the regulatory environment of VoIP
products; 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;
other delays in shipments of products; 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 the 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)
Mar 31, Mar 31,
2005 2004
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Assets
Current assets:
Cash $ 7,608 $ 9,439
Accounts receivable, net 2,674 3,349
Inventories, net 6,245 5,031
Prepaid expenses and other 303 530
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Total current assets 16,830 18,349
Property and equipment, net 2,641 2,703
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Total assets $19,471 $21,052
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,842 $ 2,007
Accrued expenses 1,146 1,275
Current portion of long-term debt 5,050 230
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Total current liabilities 8,038 3,512
Long-term debt - 4,872
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Total liabilities 8,038 8,384
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Stockholders' equity:
Common stock and additional paid-in capital 30,767 30,662
Treasury stock (7) (7)
Accumulated other comprehensive
income (loss) 488 523
Retained earnings (deficit) (19,815) (18,510)
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Total stockholders' equity 11,433 12,668
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Total liabilities &
Stockholders' equity $19,471 $21,052
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ZOOM TECHNOLOGIES, INC.
Consolidated Statements of Operations
In thousands,except per share data
(Unaudited)
Three Months Ended
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03/31/05 03/31/04
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Net sales $ 6,436 $ 7,792
Cost of goods sold 4,904 5,480
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Gross profit 1,532 2,312
Operating expenses:
Selling 1,120 1,226
General and administrative 823 954
Research and development 749 678
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Total operating expenses 2,692 2,858
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Operating profit (loss) (1,160) (546)
Other income (expense), net (145) (12)
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Income(loss) before income taxes (1,305) (558)
Income tax expense(benefit) - -
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Net income (loss) $(1,305) $ (558)
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Basic earnings (loss) per share:
Earnings (loss) per share $(0.15) $(0.07)
Diluted earnings (loss) per share:
Earnings (loss) per share $(0.15) $(0.07)
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Weighted average number of shares outstanding:
Basic 8,967 8,136
Diluted 8,967 8,136
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