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) February 10, 2005
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)
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 February 10, 2005, the Company issued a press release announcing its
financial results for the fourth quarter ended December 31, 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 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
-------------- -----------
99.1 Press release dated February 10, 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: February 10, 2005 ZOOM TECHNOLOGIES, INC.
By: /s/ Robert A. Crist
--------------------------
Robert A. Crist, Chief
Financial Officer
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
99.1 Press release dated February 10, 2005 of Zoom Technologies,
Inc.
EXHIBIT 99.1
Zoom Technologies Reports Results for the Fourth Quarter of 2004
----------------------------------------------------------------
Boston, MA, February 10, 2005 -Zoom Technologies, Inc. (NASDAQ: ZOOM), a
leading manufacturer of modems and other data communication products, today
reported net sales of $8.4 million for its fourth quarter ending December 31,
2004, down 8.4% from $9.2 million for the fourth quarter of 2003. Zoom's DSL
modem sales for the fourth quarter of 2004 rose 99% from the fourth quarter of
2003, but this strong growth was not sufficient to offset a 40% decline in
dial-up modem sales in the same time period.
Zoom reported a net loss of $0.9 million or $.10 per diluted share for its
fourth quarter ending December 31, 2004, compared to net income of $0.8 million
or $.09 per diluted share for the fourth quarter of 2003, with the change
primarily due to lower gross profit.
Gross profit was $2.0 million or 23.9% of net sales in the fourth quarter
of 2004, down from $3.4 million or 36.6% of net sales in the fourth quarter of
2003. The lower gross profit resulted primarily from lower sales and lower
margins realized on those sales. The margins were lower primarily because of
lower sales of dial-up modems, Zoom's highest margin product category.
Operating expenses were $3.0 million or 35.4% of net sales in the fourth
quarter of 2004 compared to $2.6 million or 28.6% of net sales in the fourth
quarter of 2003. Selling expenses were essentially unchanged, as expense drops
due to lower overall sales volume and lower sales in the retail sales channel
were offset by an adjustment to our estimated European Value Added Tax expense.
R&D expenses rose $250 thousand, reflecting higher costs for personnel,
regulatory approvals, product-related translations, and other expenses primarily
for Zoom's new DSL and voice over IP products. General and administrative
expenses rose $117 thousand, primarily due to higher personnel costs in
Information Systems and Finance, which included costs relating to Sarbanes-Oxley
404 compliance work.
Zoom's cash balance on December 31, 2004 was $9.4 million, down from $9.9
million on December 31, 2003. The exercise of stock options by Zoom employees in
2004 added $2.1 million to Zoom's cash balance. On December 31, 2004 Zoom's
current ratio was 5.2.
"Q4 2004 was Zoom's first quarter with DSL modems outselling dial-up
modems," said Frank Manning, Zoom's President and CEO. "This makes Zoom revenues
less vulnerable to dial-up modem declines and more tied to DSL modems, which
have been experiencing rapid growth. In Q4 2004 Zoom began shipping a new
generation of its mainstay USB, X3, X4, and X5 DSL modems. This new generation
enhances performance and lowers our product costs. Q4 2004 was also our first
quarter for shipping VoIP products, and overall we are encouraged by our
progress in this area. We look forward to discussing our results and plans in
more detail during our conference call."
Zoom has scheduled a conference for Thursday, February 10th 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 outside
the United States. The call will also be simulcast to stock analysts and other
interested parties on Zoom's website (www.zoom.com/Q4) 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.
---
This release contains forward-looking information relating to Zoom's plans,
expectations and intentions, including statements relating to Zoom's new VoIP
and DSL products. Actual results may be materially different from expectations
as a result of known and unknown risks, including: the uncertainty of market
growth of VoIP and of cable and DSL modem markets, and the uncertainty of Zoom's
ability to maintain its sales or more successfully to 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; 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; 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)
Dec 31, Dec 31,
2004 2003
--------------------------------------------------------------------------------
Assets
Current assets:
Cash $ 9,439 $ 9,904
Accounts receivable, net 3,349 3,945
Inventories, net 5,031 4,771
Prepaid expenses and other 530 435
--------------------------------------------------------------------------------
Total current assets 18,349 19,055
Property and equipment, net 2,703 2,919
--------------------------------------------------------------------------------
Total assets $21,052 $21,974
--------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,007 $ 2,172
Accrued expenses 1,275 1,012
Current portion of long-term debt 230 224
--------------------------------------------------------------------------------
Total current liabilities 3,512 3,408
Long-term debt 4,872 5,096
--------------------------------------------------------------------------------
Total liabilities 8,384 8,504
--------------------------------------------------------------------------------
Stockholders' equity:
Common stock and additional paid-in capital 30,662 28,581
Treasury stock (7) (7)
Accumulated other comprehensive
income (loss) 523 334
Retained earnings (deficit) (18,510) (15,438)
--------------------------------------------------------------------------------
Total stockholders' equity 12,668 13,470
--------------------------------------------------------------------------------
Total liabilities &
Stockholders' equity $21,052 $21,974
--------------------------------------------------------------------------------
ZOOM TECHNOLOGIES, INC.
Consolidated Statements of Operations
In thousands,except per share data
(Unaudited)
Three Months Ended Years Ended
---------------------- -------------------
12/31/04 12/31/03 12/31/04 12/31/03
-----------------------------------------------------------------------------------------------
Net sales $ 8,386 $ 9,157 $31,412 $33,335
Cost of goods sold 6,379 5,804 23,346 23,120
-----------------------------------------------------------------------------------------------
Gross profit 2,007 3,353 8,066 10,215
Operating expenses:
Selling 1,288 1,306 4,800 5,271
General and administrative 822 705 3,620 3,117
Research and development 862 612 2,927 2,767
-----------------------------------------------------------------------------------------------
Total operating expenses 2,972 2,623 11,347 11,155
-----------------------------------------------------------------------------------------------
Operating profit (loss) (965) 730 (3,281) (940)
Other income (expense), net 59 27 209 272
------------------------------------------------------------------------------------------------
Income(loss) before income taxes (906) 757 (3,072) (668)
Income tax expense(benefit) - - - -
------------------------------------------------------------------------------------------------
Net income (loss) $ (906) $ 757 $ (3,072) $ (668)
------------------------------------------------------------------------------------------------
Basic earnings (loss) per share:
Earnings (loss) per share $ (0.10) $ 0.09 $ (0.36) $ (0.08)
Diluted earnings (loss) per share:
Earnings (loss) per share $ (0.10) $ 0.09 $ (0.36) $ (0.08)
------------------------------------------------------------------------------------------------
Weighted average number of shares
outstanding:
Basic 8,900 7,970 8,590 7,883
Diluted 8,900 8,593 8,590 7,883
------------------------------------------------------------------------------------------------