BOSTON, MA, Feb 23, 2011 (MARKETWIRE via COMTEX) -- Zoom Telephonics, Inc. (ZMTP, Trade ), a leading manufacturer of modems and other communication products, today reported net sales of $3.1 million for its fourth quarter ended December 31, 2010 ("Q4 2010"), up 10.5% from $2.8 million for the fourth quarter of 2009 ("Q4 2009"). Zoom reported an operating profit of $0.2 million for Q4 2010, an improvement over an operating loss of $0.4 million in Q4 2009. Zoom reported net income of $0.4 million or $0.19 per share for Q4 2010, compared to a net loss of $0.4 million or $0.19 per share for Q4 2009.
Gross profit was $1.2 million or 39.6% of net sales in Q4 2010, up from $0.9 million or 30.8% of net sales in Q4 2009. The increase in gross profit was primarily due to manufacturing overhead cost reductions and a shift in sales toward Zoom's higher margin products.
Operating expenses were $1.1 million or 34.7% of net sales in Q4 2010 versus $1.2 million or 44.3% of net sales in Q4 2009. The decline in operating expenses was primarily due to reduced personnel costs.
In Q4 2010 Zoom recorded as Other Income its net profit of $293 thousand from sale of Zoom.com and certain trademark rights in exchange for 80,000 shares of common stock of Zoom Technologies, Inc. (ZOOM, Trade ).
Zoom Telephonics' net sales were $13.3 million for the year ended December 31, 2010, up 23.8% from $10.7 million for the year ended December 31, 2009. Zoom's operating loss in 2010 was $0.1 million, a $2.5 million improvement over Zoom's $2.6 million operating loss in 2009, as Zoom's higher sales in 2010 resulted in an increase of $1.3 million in gross profit, and as cost controls and lower legal fees resulted in a $1.2 million reduction in operating expenses.
In late December 2010 Zoom completed a rights offering to its shareholders, netting $812 thousand after expenses.
Zoom's cash balance on December 31, 2010 was $1.01 million, down from $1.22 million on December 31, 2009. The major contributors to cash during 2010 were the rights offering and $268 thousand in net income, and the major consumer of cash was an increase in inventory of $1.1 million. Zoom's current ratio improved from 3.0 at the end of 2009 to 4.4 at the end of 2010. Zoom has no long-term debt.
"We were pleased with our results for Q4 2010," said Frank Manning, Zoom's President and CEO. "Year-over-year revenues grew for the fourth straight quarter, and we achieved a positive operating income for the second straight quarter. We introduced four new products in Q4 2010, including our We3G(TM) mobile broadband hotspot, a 14.4 Mbps mobile broadband modem, a wireless keyboard for the iPad(R), and a wireless keyboard for the Xbox(R), PS3(R), and HDTV-connected Windows(R) computers. During the quarter we also completed a successful rights offering and a transaction that resulted in our receiving 80,000 shares of Zoom Technologies stock. We are entering 2011 with good sales momentum, excellent sales channels, and a strong balance sheet; and we will continue to work hard to make Zoom Telephonics a leader in Internet access products."
Zoom has scheduled a conference call for Thursday, February 24 at 10:00 a.m. Eastern Time. You may access the conference call by dialing (866) 393-7958. The conference ID is 46596199. The call will also be simulcast to stock analysts and other interested parties on Zoom's website, Zoom Telephonics: Financial Results Special Note , and to other financial and investor-oriented websites. 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 Telephonics, 207 South Street, Boston, MA 02111, telephone (617) 753-0897, email investor@zoomtel.com, or visit Zoom's website at Zoom Telephonics: Cable, ADSL, 3G & 56K Modems; ZDTV, Hayes modems, WiFi, Bluetooth, Wireless Routers, VoIP, & Dialers
