BEIJING, Nov. 20, 2012 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM) a leading designer and manufacturer of mobile phones and consumer electronics, announced financial results for the third quarter ended September 30, 2012 which were filed with the SEC on November 19, 2012.
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.
- Net income in Q3 2012 was lower compared to the same quarter last year because of decreased gross margins experienced industry wide. General and administrative expenses increased as a result of the inclusion of Portables Unlimited in the U.S. and non-cash based equity compensation issued for new business initiatives.
- In Q3 2012 we sold 4,589,000 whole phones with 939,000 units being Leimone brand phones; 325,000 of the Leimone phones were 3G handsets. In Q3 of 2011 we sold 379,000 whole phones with 152,000 units being Leimone brand phones; 121,000 units of Leimone phones were 3G handsets.
- Sales of our own brand products in Q3 2012 represented $45.6 million or 38.9% of revenues compared to $13.0 million or 25.6% of revenues a year ago.
For the third quarter of 2012, ZOOM generated net revenues of $117.2 million, up 130.9% over $50.7 million for the third quarter 2011. The Company has experienced an increase in sales volume as the result of its increased efforts in both export and domestics markets. The increase in revenues in Q3 of 2012 as compared to the same period in 2011 was mainly due to increased emphasis by our sales team on export of whole handsets on ODM basis, and our own brand Leimone products. The third quarter revenues of $117.2 million were up $18.6 million from second quarter revenues of $98.6 million, or 18.8%. Sales of Leimone phones contributed $45.6 million, or 38.9% of our Q3 2012 revenues. We also derived $11.8 million or 10.1% of our revenues from Portables Unlimited LLC in the U.S.
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."
For the third quarter of 2012, ZOOM reported net income of $0.8 million compared to $2.6 million in the same period in 2011. Our decreased net income in 2012 relative to the same quarter in 2011 is related to low margins experienced industry wide for mobile handset manufacturers. The third quarter net income for 2012 as compared to second quarter income was sequentially up by $0.4 million. The Company continues to transform its business by focusing on ODM and own branded products. Revenue and margins are expected to grow as we grow our sales volume. The Company has made significant strides both on demand generation and in establishing its supply chain. The Company has built sound relationships with export customers such as Micromax of India, Viettel of Vietnam, Maxtron of Indonesia and Torque of the Philippines, as well as domestic customer such as Gohigh. The Company has also work diligently to strengthen its relationship with chipsets designers and fabricators such as Spreadtrum and Qualcomm. We believe through building our customer relationship we will be able to deliver products that meets the demands of the mobile phone consumers.
Gross profit for the third quarter of 2012 of $6.0 million decreased slightly as compared to $6.7 million in the third quarter of 2011. Gross profit as percentage of revenue for the third quarter of 2012 was 5.1% as compared to 13.2% for the same quarter a year ago. Net margin was reduced to 0.6% in the third quarter of 2012 from 5.1% in the same quarter last year. Again, our decrease in gross and net profit margins are related to the highly competitive market; however, we expect these margins to improve as our increased production volumes will strengthen our bargaining power with our suppliers and we look forward to capturing more profitable ODM business in the coming quarters. The Company corrected certain errors it discovered in prior financials in regards to the accounting for its outstanding warrants. These corrections in errors were non-cash in nature and increased the Company's net income. Please refer to our Form 10-Q filed with the SEC for further details.
Conference Call Details
The Company will host an investor call at 10:00 a.m. ET (7:00 a.m. PT) on Monday, November 26, 2012. To access the conference call dial: +1-646-254-3515, and then enter access code (conference ID) 73540955. Callers outside the U.S. and Canada should dial: +65-6723-9385, and then enter access code 73540955.
A replay of the conference call will be available through November 29, 2012. To access the replay, please dial: +1-855-452-5696 and enter access code 73540955. Callers outside the U.S. and Canada should dial +61 2 8199 0299 and enter access code 73540955.
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 the latest generation of 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 as well as its Own Brand Manufacturing (OBM) under the ZOOM, LEIMONE and LONGTEL brand names. The Company's products are both exported globally and sold domestically in People's Republic of China. Zoom Technologies also owns a controlling interest in Portables Unlimited LLC, a cellular service and products distributor in the U.S.
The Zoom Technologies, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=9665
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 in which the outcome 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.