Lowers Guidance for Full Year 2011
Provides Upbeat Outlook for 2012
BEIJING, Nov. 15, 2011 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM), a leading China based manufacturer of mobile phones and related products, today reported financial results for the third quarter ended September 30, 2011.
Third Quarter 2011 Highlight:
- Revenue was $50,748,605 for Q3 2011, a decrease of 29.7% from $72,155,779 in the same quarter in 2010. Revenue for the first nine months of 2011 was incrementally higher at $167,358,736 from $166,011,921 for the corresponding period a year ago.
- Sold 152,150 units of our Leimone phones including 121,700 3G units in Q3 2011; and sold 51,104 units of our LongTel brand phones to India. Sales of our own branded products totaled $14.1 million, about 27.8% of revenue.
- Gross profit for the 3rd quarter was $6,702,100 down from $7,371,968 for the same 2010 quarter. Gross margin was 13.2% in Q3 2011, compared to 10.2% of a year ago.
- Net income in Q3 2011 was $1,755,099 after deduction of approximately $1 million in R&D, down from $3,801,269 for the corresponding 2010 quarter.
Lowers Guidance for Year 2011:
- Revenue of $250 million to $255 million
- Net income of $7.5 million to $8.5 million, EBITDA of $14 million to $15.5 million
Outlook for Year 2012 including operational results of Portables Unlimited:
- Revenue of $360 million to $380 million
- Net income of $12 million to $13 million, EBITDA of $17 million to $19 million
Our revenues were $50,748,605 for the quarter ended September 30, 2011, a decrease of 29.7% compared to $72,155,779 in the corresponding quarter in 2010. The decrease of revenues in the third quarter of 2011 compared to the corresponding quarter in 2010 was due to reduction in sales in both the OEM sector and of our own branded mobile phones, resulting from credit tightening policies in China.
In the third quarter of 2011, we sold 152,150 units of our Leimone brand phones of which 121,700 were 3G handsets, and we sold 51,104 units of our LongTel brand phones to India. Revenues from sales of our own branded products in the third quarter of 2011 were $14.1 million, about 27.8% of total revenues. Our revenue other than own brand phone sales, for the third quarter of 2011 was $36.7 million. The average sales price of our Leimone phones in Q3 2011 was $87 per unit while the LongTel brand phones to India averaged $18 per unit.
Revenue for the first nine months of 2011 was $167,358,736 compared to $166,011,921 for the corresponding nine months of 2010.
Gross profit for the quarter ended September 30, 2011 was $6,702,100 down from $7,371,968 for the corresponding 2010 quarter. Gross profit as a percentage of revenues for the third quarter of 2011 was 13.2%, as compared to 10.2% for the same quarter in 2010. Gross margin for our Leimone brand phones ranged between 10% to 20%, and gross margin for our LongTel brand phones sold to India during this quarter was about 5% since these are lower priced handsets. Gross margin for non-consignment type of electronic manufacturing service ("EMS"), where we are required to procure all of the components, is about 6%. Consignment EMS, where all the components are provided by the customer, has gross margin higher than 10% depending on the complexity of the assembly work.
After incurring added R&D costs of approximately $1 million for new phone products in Q3 2011, we report net income for the quarter ended September 30, 2011 of $1,755,099, down from $3,801,269 for the corresponding 2010 quarter. Net income as a percentage of revenues, for the third quarters of 2011 and 2010 were 3.5% and 5.3% respectively. The increase in R&D expenditures, as described above, together with lower sales resulted in lower net income compared to the same period last year.
The Company is estimating the same level of revenue for 2011 and 2010, at slightly over $250 million; while net income for 2011 is estimated to be down to about $8 million from $12.8 million in 2010 due to reduced sales resulting from a credit tightening environment in China. However, the Company sees the domestic and Asian markets to show improvements in 2012, and coupling a full year of contribution from Portables Unlimited, a cellular service and product distributor in the U.S. that the Company recently acquired, Zoom is projecting 2012 revenue to be in the range of $360 million to $380 million, net income between $12 million to $13 million and EBITDA between $17 million to $19 million.
Conference Call Details:
The company will host an investor call at 4:30 p.m. EST (1:30 p.m. PST) on Tuesday November 15, 2011. To access the conference call dial +1-855-500-8701 and then enter access code 27915601. Callers outside the U.S. and Canada should dial +65-6723-9385 and then enter access code 27915601.
A replay of the conference call will be available for 20 days, through December 4, 2011. To access the replay, please dial +1-866-214-5335 and enter access code 27915601. Callers outside the U.S. and Canada should dial +61-2-8235-5000 and enter access code 27915601.
About Zoom Technologies
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 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 and sold domestically in People's Republic of China. Zoom Technologies recently acquired 55% of 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, intentions, 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 Zoom Technologies' 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.