Zoom Technologies (NASDAQ:ZOOM)

BEIJING, May 31, 2013 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM) (the "Company"), today announced that it has received notice from NASDAQ dated May 29, 2013 that the Company is eligible for an additional 180 calendar days, or until November 25, 2013, to regain compliance regarding the minimum $1 bid price per share requirement.

First Quarter 2013 Financial Results

• Net revenue of $7.4 million from continuing operations, down 54.2% from $16.1 million as compared to the first quarter of 2012.
• Net loss during the first quarter of 2013 was $1.5 million compared to net profit of $0.5 million in the same quarter of 2012.
• Basic and diluted (loss) income per common share was $(0.05) compared to last years earnings of $0.02.

Mr. Lei Gu, Chairman & CEO of ZOOM issued the following mandate to his management team: "We need to work quickly to complete the sale of our assets, improve the results of our existing continuing operations, and invest in opportunities where we can add value to our acquisition targets. We must drive profits to our bottom line."

For the first quarter of 2013, ZOOM reported weak performance as a result of a sluggish economy and also that more desirable handsets did not arrive into the T-Mobile product line-up within the quarter. Management believes that operational results should noticeably improve after March 31, 2013 due to a combination of the availability of coveted models, including the iPhone5 in April 2013, and the roll out by T-Mobile of new pricing programs for cellular usage. Also, Zoom's internal restructuring should be completed within the first half of 2013, and the Company will be better positioned to return to profitability.

Fourth Quarter 2012 Results:

• Revenue for the fourth quarter of 2012 was $10.1 million, a decrease of 24.9% over same quarter last year of $13.5 million
• Loss from continuing operations of $7.1 million for the quarter compared to $1.9 million
• Net loss of $34.5 million compared to net loss of $2.9 million in same quarter last year

During the fourth quarter of 2012, ZOOM's management considered recent global economic conditions, industry trends and capital market conditions, and concluded that it is in the best interests of the Company to sell its operations in China. Therefore, the Company entered into a securities purchase agreement with Beijing Zhumu Culture Communication Company, Ltd. to sell ZOOM's manufacturing, research and development, mobile game development, and sales operations in China and Hong Kong for cash proceeds of $31.7 million. Please refer to our 10K Annual Report filed with the US SEC today for more details regarding the sale. ZOOM intends to use the proceeds from the sale to acquire businesses in North America with distribution channels for mobile products and consumer electronics. ZOOM expects to derive the majority of its revenue on a going forward basis from its operations in North America.

In connection with the sale of the operations, certain portions of the sales transaction have closed. As of December 31, 2012, the dispositions of the sales operation, Profit Harvest, and the mobile gaming development operation, Celestial Digital Entertainment, both based in Hong Kong, were completed. On April 5, 2013 the dispositions of Ever Elite and Nollec Wireless, the mobile handset development subsidiaries were also completed. The sale of TCB Digital, ZOOM's 80%-owned manufacturing operation, is expected to be finalized in the second quarter of 2013. As result of the closing on the disposition of Profit Harvest and Celestial Digital Entertainment, ZOOM recognized a $11.9 million loss. ZOOM also recognized $8.4 million in goodwill impairment charges related to the discontinuation of Ever Elite and Nollec Wireless; and recorded a $0.9 million goodwill impairment charge for the disposition of Celestial Digital Entertainment. Also related to the dispositions, ZOOM wrote off certain stock option grants and stock awards that ZOOM has historically amortized straight line over prescribed vesting periods; however, because the services related to these stock option grants and stock awards were for services rendered to the discontinued operations, ZOOM immediately recognized the remaining unamortized balances as of December 31, 2012. The additional expenses were approximately $4.6 million. As result of ZOOM's decision to discontinue and dispose of such operations, ZOOM's current remaining primary operations are those of Portables Unlimited LLC ("Portables") - a wholesale distributor of T-Mobile USA products and services. Accordingly, ZOOM's results of operations from continuing operations reflect the operating results of Portables.

For the fourth quarter of 2012, ZOOM generated net revenue of $10.1 million from continuing operations, down 24.9% from $13.5 million as compared to the fourth quarter of 2011. The decline in revenue reflected the general economic conditions in the United States.

Full year revenue for ZOOM from continuing operations increased $36.3 million from $13.5 million in 2011 to $49.8 million for 2012. The increase was due to the fact that ZOOM acquired Portables in October of 2011 and the activities reported for 2011 only included the results from October through December 2011, whereas the 2012 results from operations reflected the full year.

Mr. Lei Gu, Chairman & CEO of ZOOM explained, "Over the last two years, the capital markets have been difficult on our stock. Concurrently, the mobile phone business has faced rapid changes, and fierce competition has hurt our margins. We feel that we need to sell our China-based assets which are bringing ZOOM less than favorable operating results and poor capital market multiples. We intend to use that cash to purchase assets that will bring steady positive cash flows moving ahead. We believe North America provides the best opportunities for us to put the cash to good use and generate higher returns."

Net loss during the fourth quarters of 2012 and 2011 were $34.5 million and $2.9 million, respectively. Net loss for the year 2012 was $32.5 million as compared to net income of $6.4 million for 2011. The significant net losses were the results of discontinuation and disposal of operations detailed above.

Looking ahead, Mr. Gu remarked, "In 2013, our focus will be North America. Let's keep our eyes open and get to work on finding some additional businesses that we can acquire and help unlock value. We look forward to a fruitful 2013."

Third Quarter 2012 Highlights:

• Revenue increased 130.9% over same quarter last year to $117.2 million from $50.7 million
• Net income was $0.8 million compared to net income in same quarter last year of $2.6 million and net income of $0.4 million from the second quarter of 2012.
• Basic and diluted earnings per common share is $0.03 from third quarter 2011 figure $0.16.

Mr. Lei Gu, Chairman & CEO of ZOOM, gave the following statement: "We have been diligently executing our strategy this past quarter. The competitive landscape has changed over this year but we are resilient in our approach. We will continue on growing our ODM business, as well as our branded products business. As we grow our business lines we will be rewarded with increased profitability and increased stability in this ever-changing marketplace."

Second Quarter 2012 Highlights:

• Revenue increased 71.3% over same quarter last year to $98.6 million from $57.6 million
• Net income was $0.4 million compared to net income in same quarter last year of $1.5 million and net income of $0.6 million from the first quarter of 2012.
• Basic and diluted earnings per common share is $0.02 from 2nd quarter 2011 figure $0.09.

Mr. Lei Gu, Chairman & CEO of ZOOM, provided the following insight. "Our growth in sales revenue reflects the execution of our plan to sell more whole phones, with particular emphasis on our branded products. As we continue to grow our sales, we will continue to expand our gross profit. We believe that our increased revenues are reflective of customers' increased receptivity of our comprehensive ODM (original design and manufacturing) solutions, and our increased brand recognition." Chairman Gu also pointed out that our increased revenues are indicative of our staying power not only as a manufacturer, but as a recognizable brand.

Looking ahead, Chairman Gu remarked, "As seen in our second quarter performance of 2012, we have begun executing the shift in our business from the traditional assembly-focused manufacturing for our OEM customers to delivering whole phone solutions on ODM basis. We will remain diligent in developing our ZOOM and Leimone brand products, as well as securing ourselves as a prominent ODM manufacturer in China."

BEIJING, June 27, 2012 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM), a leading China-based manufacturer of mobile phones and other mobile electronic products, today announced that the company has signed an agreement with Viettel Mobile of Vietnam for original design and manufacturing (ODM) of mobile phones, and for Zoom to provide technical support to Viettel to set up its first R&D center and manufacture facility for mobile phones in Vietnam. The agreement includes Viettel placing an initial order of 400,000 units of ODM phones.

Headquartered in Hanoi, Viettel is the largest mobile operator in Vietnam capturing over 40% of the local market. Viettel is also among of the fastest growing telecom operators in the world with annual revenues doubling for each of five consecutive years from 2005 to 2010. Viettel currently has operations in six markets in Asia, Latin America and Africa, covering a total population of nearly 170 million people. In 2011, Viettel's revenue reached US$ 6 billion with 60 million subscribers worldwide.

Engineering teams from Zoom and Viettel will be working closely to design and manufacture the right handsets for the Vietnamese market and beyond. Eventually, the phones will be manufactured locally while Zoom is looking forward to continuing to supply more advanced products such as the Android-based smart phones for Viettel's markets. The initial order of 400,000 units will be designed and manufactured by Zoom using the Spreadtrum 6620 chip set, and delivery is expected to begin in July 2012.

BEIJING, June 5, 2012 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM) a leading China-based manufacturer of mobile phones and other mobile electronic products, today announced that the company has received significant orders from Micromax of India and Maxtron of Indonesia for original design and manufacturing (ODM) of mobile phones.

ZOOM has secured an order from Micromax, the number one domestic mobile phone brand in India, for 450,000 units in total of two models of GSM feature phones. Approximately half of the order will be delivered in the month of June 2012 and the other half within this summer. These two Micormax models are based on the Spreadtrum 6620 chipset. ZOOM is looking forward to producing up to 500,000 units per month for this prime customer from India.

Almost concurrently, an order is placed by Maxtron, the second largest domestic mobile brand of Indonesia. This purchase order calls for 100,000 units of 2.5G GSM feature phones, also divided into two models, based on the more advanced Spreadtrum 6800 chipset. 50,000 units have already been delivered as of the date of this press release, and the second batch is scheduled for delivery in June. If this initial order goes smoothly, ZOOM is expecting Maxtron's order to increase to 100,000 units per month.

Mr. Lei Gu, Chairman & CEO of ZOOM, remarked: "We are thrilled to win such large orders from the top level mobile brands of these countries. This is indeed a testimony of our design and manufacturing capabilities, and a recognition that ZOOM is among the best mobile handset ODM anchors of China."

First Quarter 2012 Results

• For the first quarter of 2012, Zoom generated net revenue of $90.9 million, up 55.1% over $58.6 million for the first quarter 2011
• Net income was $0.6 million compared to net income in same quarter last year of $1.8 million and net loss of -$2.0 million from the fourth quarter of 2011.
• EPS of $0.03 vs $0.11 in prior year first quarter

Mr. Lei Gu, Chairman & CEO of ZOOM, provided the following insight. "The continued growth in the sales of our Leimone brand phones in 2012 is a testament to the strength in our vertically integrated business model that includes design, manufacturing, and distribution. We will continue to put our efforts in developing both the Leimone and ZOOM brands by designing high quality reliable products coupled with extensive post-sales support to both our customers and the ultimate end users of our products. Our ability to provide integrated solutions to our customers has and will enable us to gain market share and secure contracts with tier one global customers such as mobile phone carriers or the largest distributors in countries across the developed and developing world."

Looking ahead, Mr. Gu remarked, "As seen in our first quarter performance of 2012, we have begun executing on the shift in our business from the traditional assembly-focused manufacturing for our OEM customers to delivering whole phone solutions on ODM (original design and manufacturing) basis for more prominent customers in Asia and the continued development of our own ZOOM and Leimone brand products. We have returned to profitability in the first quarter of 2012 and will continue to manage our costs to bring healthy profits to our bottom line."

Fourth Quarter 2011 Results

• Revenue increased 60.6% over same quarter last year to $139.0 million
• Net loss of $2.01 million from net income in same quarter last year of $5.10 million
• Net loss in the quarter resulted from lowered margins in the EMS sector, increased R&D expenditures, one-time acquisition related expenses and impairment of goodwill
• Fourth quarter loss per share of ($0.17) vs EPS of $0.30 in prior year quarter
  

Mr. Lei Gu, Chairman & CEO of Zoom explained, "The sales results of our Leimone brand phones in 2011 is testimony to the strength in our own design and manufacturing. We look forward to continuing this trend in gaining market share by our branded products, and at the same time more OEM customers are relying on us for whole phone design work as well. We anticipate picking up significant volumes of contracted ODM - original design and manufacturing work, from large customers all over Asia and beyond."

Looking ahead, Mr. Gu remarked, "From the beginning of the year 2012, we anticipate a shift from the traditional assembly-focused manufacturing for our OEM customers to delivering whole phone solutions to large mobile operators and well-known brands in Asia. These activities should enable Zoom in 2012 to return to normal profitability and healthy margins."

Third Quarter 2011 Results

ZOOM TECHNOLOGIES, INC., AFFILIATES & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
(UNAUDITED)

First Quarter Results:

• Revenue increased 15% over same quarter last year to $58.6 million.
• Own brand phone sales in the first quarter of 2011 reached 201,700 units compared to 71,069 units sold in same quarter last year
• Revenues from sales of own brand products in the first quarter of 2011 were $13.6 million, an increase of 195% over the same quarter last year
• Net income decreased 5.7% to $1.8 million from same quarter last year due to increased R&D activities

Mr. Lei Gu, Chairman and Chief Executive Officer of Zoom Technologies, commented, "We are glad to report that our own brand phones are establishing a strong foot hold in the market place and sales so far this year gave us confidence that our phones will continue to gain acceptance going forward. We have intensified our R&D activities in the first three months to gear up for the release of new products in the coming quarters. With the technology licensing agreement from Qualcomm recently secured, we are focusing on introducing innovative phone models based on the latest 3G technologies for smartphones with the Android operating system; and we are aiming not only for  the dynamic Chinese market but also to Asia, Europe and beyond."

ZOOM TECHNOLOGIES, INC., AFFILIATES & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

Fourth Quarter 2010 Highlights:
  -- Revenue increased 67% over same quarter last year to $86.6 million
  -- Net income grew 169% over same quarter last year to $5.1 million, while EPS was $0.32 vs. $0.22

Full Year 2010 Highlights:
  -- Revenue increased 34% over last year to $252.6 million
  -- Net income grew 105% over last year to $12.8 million, while non-GAAP EPS was $1.10 vs. $1.24.
  -- Electronic Manufacturing Service (EMS) volume reached 9.7 million
     units, compared to 8.5 million in 2009
  -- Sold 708,000 proprietary Leimone brand phones, compared to 100,000
     in 2009

First Quarter 2011 Guidance:
  -- Revenue of $53.0 million, compared to $50.9 million for 1Q 2010
  -- Net income of $1.98 million, compared to $1.9 million for 1Q 2010
  -- Leimone brand phone sales of 158,000 units totaling $11.5 million

Full Year 2011 Guidance:
  -- Revenue of $320 and $340 million, up 27%-35% from 2010
  -- Net income of $16 million to $17 million, up 25%-33% from 2010
  -- EMS volume growth to 13 million units
  -- Leimone brand phone sales of 1.4 million units

BEIJING--(Marketwire - December 22, 2010) - Zoom Technologies, Inc. today announced its guidance for the full year ending December 31, 2011. The Company expects a second record year of financial performance since listing on NASDAQ, highlighting a 30% growth in both revenue and net income from previously stated 2010 guidance, and a 100% increase in sales of the Company's proprietary brand ZOOM/Leimone mobile phones.

Guidance:

• Full Year 2011 net income between $16 and $17 million
• Full Year 2011 revenues between $320 and $340 million
• Full Year 2011 manufacturing volumes expected to reach 15 million units
• Expects to sell 1.4 million ZOOM/Leimone brand phones in 2011, with 5 new 3G models and 20 new non-3G models

Mr. Leo Gu, Chairman and Chief Executive Officer of Zoom Technologies, stated, "We are pleased to announce our guidance for 2011 which shows our confidence in gaining market share. In 2011, we continue to fuel the rapidly expanding China mobile market by introducing 25 new models, including 5 3-G models, of our ZOOM/Leimone brand proprietary mobile phones to complete our feature-rich sleek-designed product line. In addition, we continue to increase our manufacturing capacity and produce mobile products for top tier Chinese mobile phone companies. We are proud of the growth we have achieved in 2010 and excited about significantly increasing manufacturing capabilities going into 2011."

GeoTeam® Note:

2011

• Revenue guidance is in-line with analyst estimates.
• Net income guidance appears to be higher than analyst estimates of around $11.0 million. ( We are still verifying this assumption).

Financial Highlights:

• Revenue was $72.2 million, up 31% year-over-year and up 68% sequentially

• Net income reached $3.8 million, up 119% year-over-year and up 87% sequentially

• Net income for the first nine months grew to $7.7 million, up 78% over last year

• Earnings per share for the third quarter 2010 was $0.29 as compared to $0.39 per share in the same quarter last year.

• For the first nine months of 2010, earnings per share was $0.68 as compared to $1.02 over the first nine months of 2009.

Mr. Lei Gu, Chairman and Chief Executive Officer of Zoom Technologies, commented, "We are pleased to report record results for the third quarter of 2010, which exceeded our expectations for both revenue and net income. We continue to experience high acceptance of our branded phones in China. As we announced earlier this month, we are rebranding our popular LEIMONE phones to the Zoom brand which we believe will expand our consumer awareness and accelerate our market share gains." 

Mr. Gu continued, "We continue to build traction as a consumer recognized brand. We are very excited about our ZOOM brand initiative with our ownership of the URL domain of zoom.com and uniformly branding our mobile phones. We believe Zoom Technologies will benefit from the domain name and trademark rights it has acquired. We feel that our new ZOOM mobile devices will directly reflect our mission and position in the robust China market. We are proud of our continued expansion in the rapidly growing China 3G market and our ability to produce mobile products for top tier Chinese mobile phone companies. Under the ZOOM name, we are confident our mobile phones will continue to enjoy strong growth and continue to be popular with the growing number of young people in China who seek feature-rich, mid-priced and sleek designed mobile phones."

Looking ahead, Mr. Gu remarked,

"For the fourth quarter 2010, we expect

• Net revenue to be between $86 and $94 million
• Net income is expected to be in the range of $4.8 and $5.4 million;

that will bring the full year 2010

• Revenues to between $252 and $260 million,
• Net income to between $12.5 and $13.1 million.

The mid-ranges of revenue and net income are expected at $256 million and $12.8 million, about 7% higher than our previous guidance of $240 million and $12 million respectively. We are also expecting to ship 700,000 LEIMONE branded phones in 2010, while forecasting continued strength in the mobile market for next year."  

Zoom expects to report

• Net revenue in the range of $68 million to $71 million for the third quarter of 2010, which represents a sequential increase of approximately 59 percent to 66 percent from the net revenue of $42.9 million for the second quarter of 2010. This updated expected net revenue is higher than the previous guidance of $55 million to $61 million.

• The Company anticipates reporting net income in the range of $3.3 million to $3.5 million for the third quarter of 2010, a sequential increase of approximately 63 percent to 72 percent from the net income of $2.03 million in the second quarter of 2010. This is higher than the previous guidance of $2.7 million to $3.3 million.

Mr. Lei Gu, Chairman and Chief Executive Officer of Zoom Technologies, commented, "Our third quarter preliminary results exceeded our expectations and reflects our momentum and success in the dynamic mobile phone industry in China. We are proud of our continued expansion in the rapidly growing China 3G market and our partnerships with top tier Chinese mobile phone carriers. Contributing to our overall strong revenue results was the continued success of our LEIMONE brand phones, which captured $14 million in revenue in the third quarter. We sold 232,000 units of our LEIMONE brand mobile phones in this quarter, of which 27% were 3G units. We continue to gain market share with our branded phones and remain confident that the strength in our overall EMS business will bring further revenue growth in the remainder of 2010."