First Quarter 2012 Highlights:
- Revenue increased 55.1% over same quarter last year to $90.9 million from $58.6 million
- 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.
- Net income in Q1 2012 was lower compared to the same quarter last year because we took on highly competitive EMS orders so that we can retain the customers for better margin businesses in the future.
- In Q1 2012 we sold 1,750,000 whole phones with 375,000 units being Leimone brand phones; 278,000 of the Leimone phones were 3G handsets. In Q1 of 2011 we sold 810,000 whole phones with 190,000 units being Leimone brand phones; 30,000 units of the Leimone phones were 3G handsets.
- Sales of our own brand products in Q1 2012 represented $28.1 million or 31.0% of revenues compared to $13.4 million or 22.9% of revenues a year ago.
- Portables Unlimited, our distribution business in the U.S., contributed $16.1 million, or 17.7% of our revenues; $6.8 million were attributable to sale of phones and accessories, and $9.3 million were generated from activation and reoccurring carrier service fees
BEIJING, May 21, 2012 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM) a leading China-based manufacturer of mobile phones and other mobile electronic products, today reported financial results for the first quarter ended March 31, 2012.
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; this seasonally slow quarter was down $48.1 million, or 34.6% from $139.0 million in the fourth quarter of 2011. The jump in revenues in Q1 of 2012 as compared to the same period in 2011 was mainly due to increased sales of whole handsets with particular emphasis on our own brand Leimone products and the addition of Portables Unlimited that Zoom partially acquired in October 2011. Sale of Leimone phones contributed $28.1 million, or 31.0% of our Q1 2012 revenues. We also derived $16.1 million or 17.7% of our revenues from our New York based subsidiary, Portables Unlimited LLC, which is a wholesale distributor of T-Mobile USA products and services.
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."
For the first quarter of 2012, Zoom reported a net income of $0.6 million compared to net loss of $2.0 million in the fourth quarter of 2011. The fourth quarter of 2011 showed a tight credit environment that weighed on the profitability of the manufacturing business and the Company had one-time acquisition expenses; however, the Company has returned to profitability again in the first quarter of 2012, and expects a steady upward trend for the rest of 2012. The Company is currently carrying out two internal initiatives: 1) rationalize all of its costs, and 2) continue to integrate the different businesses to maximize profitability and eliminate inefficiencies.
Gross profit for the first quarter of 2012 of $6.2 million was relatively flat compared to $6.3 million in the first quarter of 2011. Gross profit as percentage of revenue for the first quarter of 2012 was 6.8% as compared to 10.8% for the same quarter a year ago. Net margin was reduced to 0.7% in the first quarter of 2012 from 3.0% in the same quarter last year. As mentioned previously the reduction in margin is mainly attributable to the highly competitive EMS orders we took on in order to retain the customers for better margin businesses in the future.
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."
Conference Call Details
The Company will host an investor call at 4:30 p.m. EDT (1:30 p.m. PDT) on Monday, May 21, 2012. To access the conference call dial +1-855-500-8701 and then enter access code (conference ID) 81702527. Callers outside the U.S. and Canada should dial +65-6723-9385 and then enter access code 81702527.
A replay of the conference call will be available for 3 days, through May 25, 2012. To access the replay, please dial +1-866-214-5335 and enter access code 81702527. Callers outside the U.S. and Canada should dial +61-2-8235-5000 and enter access code 81702527.
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 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.
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.