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) July 29, 2004
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)
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number Description
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99.1 Press release dated July 29, 2004 of Zoom Technologies,
Inc. (the "Company") announcing its financial results for
the Second quarter ended June 30, 2004.
Item 12. Results of operations and financial condition.
On July 29, 2004, the Company issued a press release announcing its
financial results for the Second quarter ended June 30, 2004. 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: July 29, 2004 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 July 29, 2004 of Zoom Technologies,
Inc. (the "Company") announcing its financial results for
the Second quarter ended June 30, 2004.
EXHIBIT 99.1
Zoom Technologies Reports Results for the Second Quarter of 2004
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Boston, MA, July 29, 2004 -Zoom Technologies, Inc. (NASDAQ: ZOOM), a
leading manufacturer of modems and other data communication products, today
reported net sales of $8.1 million for the second quarter of 2004, up 7.4% from
$7.5 million for the second quarter of 2003. Zoom's ADSL modem sales continued
to grow, offsetting the decline in dial-up modem sales.
Zoom reported a net loss of $580 thousand or $.07 per diluted share for its
second quarter ending June 30, 2004, which included $250 thousand of expenses
related to Zoom's unsuccessful attempt to acquire a company. Even with these
acquisition-related expenses, Zoom's net loss of $580 thousand was an
improvement over Zoom's net loss of $991 thousand or $.13 per diluted share in
the second quarter of 2003. The improvement was due primarily to improved gross
profit.
Gross profit was $2.3 million or 27.8% of net sales in the second quarter
of 2004, up from $1.8 million or 23.3% of net sales in the second quarter of
2003. The improved gross profit dollars and percentage were primarily due to
lower selling price dilution as Zoom reduced its dial-up modem rebates.
Operating expenses were $2.9 million or 35.8% of net sales in the second
quarter of 2004 compared to $2.8 million or 37.3% of net sales in the second
quarter of 2003. The increase in operating expenses was primarily due to $250
thousand of acquisition-related expenses, which were partially offset by reduced
depreciation, retail marketing costs, sales commissions, and personnel expenses.
Net sales for the first six months of 2004 were 5.4% above those for the
first half of 2003. The net loss for the first six months of 2004 was $1.1
million, or $.14 per share, compared to a net loss of $1.8 million, or $.23 per
share, for the first six months of 2003.
Zoom's cash balance on June 30, 2004 was $10.6 million, up from $9.9
million on December 31, 2003. During the quarter the exercise of stock options
by Zoom employees added $1.0 million to Zoom's cash balance. On June 30, 2004
Zoom's current ratio was 6.1.
"We are encouraged by our success in ADSL," said Frank Manning, Zoom's
President and CEO. "This was our eleventh consecutive quarter of ADSL modem
revenue growth, and ADSL's share of our net sales reached 36%. Later this year
Zoom plans to begin shipping a new generation of ADSL modems with the ADSL2+
standard, delivering much higher speeds, extended reach, and improved network
management functions. Soon we will also be shipping our first VoIP "voice over
the Internet" products. We believe that Zoom has unique advantages in VoIP due
to a number of factors, including proprietary hardware that embodies our
knowledge of telephony and broadband modems, our recently announced Global
Village VoIP service integrated with our hardware, and multi-country
distribution and support. We believe that VoIP will be very successful in
countries outside the US, where phone rates are generally high, and that Zoom is
well-positioned for success in these countries and in the US. We will discuss
our VoIP and ADSL plans in more detail during our conference call later today."
Zoom's conference call will begin Thursday, July 29th at 11:00 a.m. Eastern
Time. Anyone may access the conference call by dialing (800) 838-4403 for calls
made within the United States or 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/Q2) and other financial and
investor-oriented websites via the CCBN / 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.
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This release contains forward-looking information relating to Zoom's plans,
expectations and intentions, including statements relating to Zoom's plans to
introduce new VoIP, ADSL, and Global Village products, and the characteristics,
advantages and potential success of such products and services. Actual results
may be materially different from those expectations as a result of known and
unknown risks, including Zoom's potential future results; Zoom's ability to
obtain additional financing for working capital and other purposes; Zoom's
prospects in the dial-up modem market, which has the potential for reduced
sales, lower margins, and less favorable selling terms; the uncertainty of
market growth of VoIP and of cable and ADSL modem 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 reliance on a
relatively limited number of customers for sale of its DSL modems; 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;
Zoom's dependence on one or a limited number of suppliers for certain key
components; rapid technological change; Zoom's increasing reliance on
international sales; 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
ZOOM TECHNOLOGIES, INC.
Consolidated Balance Sheets
In thousands
(Unaudited)
Jun 30, Dec 31,
2004 2003
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Assets
Current assets:
Cash $10,553 $ 9,904
Accounts receivable, net 3,314 3,945
Inventories, net 5,106 4,771
Prepaid expenses and other 422 435
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Total current assets 19,395 19,055
Property and equipment, net 2,763 2,919
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Total assets $22,158 $21,974
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,649 $ 2,172
Accrued expenses 1,305 1,012
Current portion of long-term debt 229 224
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Total current liabilities 3,183 3,408
Long-term debt 4,982 5,096
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Total liabilities 8,165 8,504
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Stockholders' equity:
Common stock and additional paid-in capital 30,145 28,581
Treasury stock (7) (7)
Accumulated other comprehensive
income (loss) 430 334
Retained earnings (deficit) (16,575) (15,438)
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Total stockholders' equity 13,993 13,470
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Total liabilities &
Stockholders' equity $22,158 $21,974
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ZOOM TECHNOLOGIES, INC.
Consolidated Statements of Operations
In thousands,except per share data
(Unaudited)
Three Months Ending Six Months Ending
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6/30/04 6/30/03 6/30/04 6/30/03
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Net sales $8,091 $ 7,537 $15,883 $15,075
Cost of goods sold 5,841 5,777 11,321 11,170
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Gross profit 2,250 1,760 4,562 3,905
Operating expenses:
Selling 1,171 1,227 2,397 2,589
General and administrative 1,063 843 2,017 1,801
Research and development 666 743 1,343 1,495
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Total operating expenses 2,900 2,813 5,757 5,885
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Operating profit (loss) (650) (1,053) (1,195) (1,980)
Other income (expense), net 70 62 58 149
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Income(loss) before income taxes (580) (991) (1,137) (1,831)
Income tax expense(benefit) - - - -
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Net income (loss) $ (580) $ (991) $ (1,137) $(1,831)
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Basic earnings (loss) per share:
Earnings (loss) per share $(0.07) $ (0.13) $ (0.14) $ (0.23)
Diluted earnings (loss) per share:
Earnings (loss) per share $(0.07) $ (0.13) $ (0.14) $ (0.23)
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Weighted average number of shares
outstanding:
Basic 8,466 7,852 8,333 7,853
Diluted 8,466 7,852 8,333 7,853
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