Zoom Technologies Inc. (ZTNO)

[califax]

Zoom Technologies Reports Full Year 2009 Net Income up 121%, Beats Guidance

Date : 03/30/2010 @ 4:00PM
Source : MarketWire
Stock : Zoom Technologies (ZOOM)

http://ih.advfn.com/p.php?pid=nmona&cb=1269979360&article=42192906&symbol=N^ZOOM

Zoom Technologies, Inc. (NASDAQ: ZOOM)

Full Year 2009 Highlights:

-- Net income grew 121% year over year to $6.24 million, exceeded upper

end of guidance

-- Revenue increased 135% over last year to $189.06 million

-- EMS volume reached 8.5 million units as compared to 5.4 million for

2008

-- Sold 100,000 proprietary "Leimone" brand phones

Full Year 2010 Guidance:

-- Net income guidance in range of $10.5 million to $11.5 million

-- Revenue estimates between $240 and $260 million

-- EMS volume growth to 10 million units

-- "Leimone" brand phone sales at 700,000 units

-- Increase export activities to Asia, South America and the Middle East

First Quarter 2010 Guidance:

-- Net income in range of $1.5 to $1.7 million versus $0.92 million for

same quarter 2009

-- Revenue between $38 to $42 million as compared to $28.82 million for

year ago quarter

Zoom Technologies, Inc. (NASDAQ: ZOOM) a leading China based manufacturer

of mobile phones and other mobile electronic products, reported financial

results for the fourth quarter and full year ended December 31, 2009.

Mr. Lei Gu, Chairman and Chief Executive Officer of Zoom Technologies,

commented, "Our 2009 financial results directly reflect the strength of the

Chinese macroeconomic environment, the robust mobile phone industry and

Zoom's strategy to gain market share. Catapulting Zoom's market opportunity

is China's low user penetration rate of only 47%, as compared to over 90%

or even over 100% in many developed and developing countries. We are

extremely excited to report another quarter of tremendous year over year

revenue growth and dramatic full-year revenue growth as a NASDAQ-listed

company, offering an attractive investment opportunity for investors. Our

ability to accomplish such growth reflects our strong expansion prospects

for 2010 and beyond."

For the fourth quarter of 2009, Zoom reported net revenue of $51.82

million, up 31% over $39.47 million for the fourth quarter 2008; and down

6% sequentially from $55.29 million of a robust third quarter 2009. The

year over year revenue growth was primarily due to an increase in orders by

our EMS customers and sales of our own brand phones.

Mr. Gu continued, "We believe that China's pro-growth government backing of

the 3G network commercialization will drive subscriber demand for

feature-rich, customized mobile phones with new media applications and

large volume data transmission. Earlier this month, we announced that our

acquisition target, Leimone Culture, signed an agreement with CCTV. We are

excited with the prospect of entering the mobile new media business through

the acquisition of Leimone Culture. We will continue to focus our

manufacturing activities on our core business and explore potential

ancillary revenue streams made available by the increasing usage on China

3G networks."

For the full year of 2009, Zoom reported revenue of $189.06 million, up

135% over $80.61 million for the full year 2008. Net income for the full

year ended December 31, 2009 was $6.24 million compared to net income of

$2.82 million for the full year 2008. The increase was mainly due to large

uptake in orders from domestic EMS customers.

Gross profit for the year 2009 was $11.4 million, up 39% from $8.2 million

for 2008. Gross margin was 6% for 2009 down from 10.2% for 2008. Net margin

was stable at 3.3% in 2009 as compared to 3.5% in 2008. The compression in

gross margins reflects our strategy to win large orders in the competitive

Chinese mobile manufacturing market, while our effective managerial control

ensured profitability.

Mr. Gu continued, "In 2009, we made significant capacity expansion and we

are ready to take advantage of the foreseeable growth in China's mobile

market. With 14 production lines, we have the capacity to manufacture up to

10 million units for our EMS customers and at the same time, produce 12

models of our own feature-rich handsets equipped with the latest

technologies, including 4 models for the 3G networks."

Looking ahead, Mr. Gu remarked, "We will continue to focus on our mobile

manufacturing business in 2010, as the market opportunity in China is in

high demand. For the first quarter ending March 31, 2010, we expect net

revenue to be between $38 and $42 million and net income expectation to be

in the range of $1.5 and $1.7 million. For the full year 2010, we expect

net revenue to be between $240 and $260 million and maintain our previously

given 2010 net income expectation range of $10.5 million to $11.5 million."

Conference Call Details

Zoom will review the fourth quarter and full year 2009 results and discuss

management's expectations for 2010 today, Tuesday, March 30, 2010 at 5 p.m.

EDT (2 p.m. PDT). The dial-in numbers are [phone] for US domestic

callers and [phone] for international callers. A telephonic replay

of the call will be available through April 14, 2010. The replay dial-in

numbers are [phone] for US domestic callers and [phone] for

international callers. The account number to access the replay is 3055 and

the conference ID number is 348255.

About Zoom Technologies, Inc.

Zoom Technologies is a holding company with subsidiaries that engage in the

manufacturing, research and development, and sale of electronic and

telecommunication products for 3rd generation mobile phones, wireless

communication circuitry, and related software products. Zoom Technologies'

subsidiary, Jiangsu Leimone, owns a majority stake of TCB Digital, which

offers highly customized and high quality Electronic Manufacturing Service

(EMS) for Original Equipment Manufacturer (OEM) customers and also designs

and manufactures its own brand of mobile phones under the Leimone brand.

Forward-Looking Statements

Certain statements in this press release may constitute "forward-looking

statements" that involve risks and uncertainties. These include statements

about our expectations, plans, objectives, assumptions or future events,

including the acquisition of Leimone Culture, which may require shareholder

approval which cannot be assured. You should not place undue reliance on

these forward-looking statements. Information concerning factors that could

cause our actual results to differ materially from these forward-looking

statements can be found in our periodic reports filed with the Securities

and Exchange Commission. We undertake no obligation to publicly release

revisions to these forward-looking statements to reflect future events or

circumstances or reflect the occurrence of unanticipated events.

ZOOM TECHNOLOGIES, INC. AFFILIATES & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

Years Ended December 31

----------------------------

2009 2008

------------- -------------

Net revenues $ 189,055,742 $ 80,611,981

Cost of sales (177,653,678) (72,410,992)

------------- -------------

Gross profit 11,402,064 8,200,989

Operating expenses:

Sales and marketing expenses (1,338,999) (267,076)

General and administrative expenses (1,722,194) (1,685,885)

Research and development expenses - (871,238)

Non-cash equity-based compensation

charges - options (44,480) -

------------- -------------

Impairment loss of assets 0 0

------------- -------------

(3,105,673) (2,824,199)

------------- -------------

Income from operations 8,296,391 5,376,790

Other income (expenses)

Equity in earnings in investee - 3,191

Interest income 287,206 176,102

Gain/(Loss) on disposal of fixed assets - 0

Government grant income - 176,747

Other income 579,658 4,121

Interest expense (1,327,744) (1,599,139)

Exchange loss (30,536) (91,071)

Other expenses (150,265) (37,506)

------------- -------------

(641,681) (1,367,555)

------------- -------------

Income before income taxes and

noncontrolling interests 7,654,710 4,009,235

Income tax expense (1,231,180) (611,586)

------------- -------------

Income before noncontrolling interests and

discontinued operations 6,423,530 3,397,649

Loss from discontinued operation - (246,654)

------------- -------------

Income before noncontrolling interests 6,423,530 3,150,995

Less: Income attributable to

noncontrolling interests (180,383) (330,721)

------------- -------------

Net income attributable to Zoom Technologies

Inc 6,243,147 2,820,274

Other comprehensive income/(loss) (32,852) 8,708

------------- -------------

Comprehensive income $ 6,210,295 $ 2,828,982

============= =============

Basic and diluted income/(loss) per common

share:

Basic $ 1.22 $ 0.67

Diluted 1.22 0.67

Basic 5,110,340 4,225,219

============= =============

Diluted 5,131,563 4,225,219

============= =============

The accompanying notes are an integral part of these consolidated

financial statements.

ZOOM TECHNOLOGIES, INC. AFFILIATES & SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, December 31,

2009 2008

------------ ------------

ASSETS

Current assets

Cash and cash equivalents $ 1,472,300 $ 812,769

Restricted cash 11,993,214 8,753,757

Accounts receivable, net 16,835,074 12,366,814

Other receivables and prepaid expenses 311,808 1,119,881

Advance to suppliers 27,471,601 24,275,313

Inventories, net 1,534,989 3,742,046

Due from related parties 12,221,778 6,069,842

Deferred tax assets 504,222 -

------------ ------------

Total current assets 72,344,986 57,140,422

Property, plant and equipment, net 5,673,923 7,054,892

Construction in progress 32,849 -

Long-term investments - 65,653

Due from related parties-long term - 247,294

Deferred tax assets - 600,956

Goodwill 103,057 103,057

------------ ------------

TOTAL ASSETS $ 78,154,815 $ 65,212,274

============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Short-term loans $ 16,000,702 $ 18,893,525

Notes payable 23,986,427 17,507,514

Accounts payable 2,439,925 3,580,720

Advance from customers 51,243 3,785,462

Dividends payable 579,579 578,142

Taxes payable 1,603,557 775,315

Accrued expenses and other payables 127,484 2,832,599

Due to related parties 5,245,415 5,161,169

------------ ------------

Total current liabilities 50,034,332 53,114,446

------------ ------------

Long-term loans - 1,167,168

TOTAL LIABILITIES 50,034,332 54,281,614

------------ ------------

STOCKHOLDERS' EQUITY

Common stock: authorized 25,000,000 shares,

par value $0.01 Issued 8,780,988 shares and

outstanding 8,779,308 shares at December 31,

2009; Issued 4,226,899 and 4,225,219

outstanding at December 31, 2008 87,793 42,252

Shares to be issued 592 -

Subscription receivable (378) -

Additional paid-in capital 14,309,538 3,518,363

Treasury shares: 1,680 shares at cost (7,322) (7,322)

Statutory surplus reserve 633,378 569,193

Accumulated other comprehensive income 210,773 243,625

Retained earnings 6,254,479 75,517

------------ ------------

TOTAL STOCKHOLDERS' EQUITY 21,488,853 4,441,628

------------ ------------

Noncontrolling interests 6,631,630 6,489,032

------------ ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 78,154,815 $ 65,212,274

============ ============

The accompanying notes are an integral part of these consolidated

financial statements.

ZOOM TECHNOLOGIES, INC. AFFILIATES & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2009 AND 2008

2009 2008

----------- -----------

Cash flows from operating activities:

Income including noncontrolling interests $ 6,423,530 $ 3,150,995

Adjustments to reconcile net income to cash used

in operating activities:

Depreciation and amortization 1,569,686 1,231,707

Non-cash equity-based compensation charges 44,480 -

Provision for inventory obsolescence (235,771) (173,528)

Provision for doubtful receivables 1,955 (86,390)

Loss on disposal of fixed assets 485 497

Investment income - (3,191)

Provision for long-term investment 65,781 -

Deferred tax assets 98,175 (130,508)

Changes in operating assets and liabilities:

Accounts receivable (4,442,927) 266,411

Inventories 2,422,307 3,292,582

Advances to suppliers (3,191,156) (16,037,819)

Prepaid expenses and other assets 906,196 1,541,259

Accounts payable (1,152,195) (1,543,164)

Advance from customers (3,741,596) 867,776

Related parties-net (8,126,760) (721,332)

Accrued expenses and other current liabilities (1,883,221) (110,174)

----------- -----------

Net cash used in operating activities (11,241,031) (8,454,879)

----------- -----------

Cash flows from investing activities:

Restricted cash (3,215,942) (2,890,163)

Purchase of property and equipment and other

long-term assets (244,426) (2,895,299)

Proceeds from disposal of fixed assets - 9,623

Proceeds from disposal of discontinued

operations - 1,749,258

Proceeds from notes receivable - 475,622

----------- -----------

Net cash used in investing activities (3,460,368) (3,550,959)

----------- -----------

Cash flows from financing activities:

Issuance of shares for cash 9,532,364 -

Proceeds from short-term loans 21,254,451 18,600,309

Proceeds from long-term loans - 1,149,054

Advance to related parties (10,580,810) (5,649,111)

Repayment on borrowing from related parties (13,977,180) (37,884,458)

Proceeds from notes payable 6,431,883 7,199,115

Collection on advance to related parties 12,780,855 18,484,740

Receipt from related parties 15,361,000 26,885,911

Repayments on short-term loans (24,192,652) (20,213,293)

Repayments on long-term loan (1,169,433) -

----------- -----------

Net cash provided by financing activities 15,440,478 8,572,267

----------- -----------

Effect of exchange rate changes on cash & cash

equivalents (79,548) 265,756

----------- -----------

Net increase (decrease) in cash and cash

equivalents 659,531 (3,167,815)

Cash and cash equivalents, beginning balance 812,769 3,980,584

----------- -----------

Cash and cash equivalents, ending balance $ 1,472,300 $ 812,769

=========== ===========

SUPPLEMENTARY DISCLOSURE:

Interest paid $ 1,221,979 $ 1,489,630

=========== ===========

Income tax paid $ 68,324 $ 931,854

=========== ===========

The accompanying notes are an integral part of these consolidated

financial statements.

Investor Contacts:

Anthony Chan

Chief Financial Officer

Zoom Technologies, Inc.

[phone]

Email Contact

Joseph Villalta/Ashleigh Barreto

The Ruth Group

[phone]/7028

Email Contact

Email Contact

Media Contact:

Jason Rando

The Ruth Group

[phone]

Email Contact