Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASDAQ 4,095.52 9.29 0.23%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,516.27 98.74 0.68%
TOPIX 1,173.37 6.78 0.58%
HANG SENG 22,760.24 64.23 0.28%

Zoom Technologies Reports Full Year and Fourth Quarter 2012 Results



Zoom Technologies Reports Full Year and Fourth Quarter 2012 Results

Fourth Quarter 2012 Highlights:

  * Revenue for the fourth quarter of 2012 was $10.1 million, a decrease of
    24.9% over same quarter last year of $13.5 million
  * Loss from continuing operations of $7.1 million for the quarter compared
    to $1.9 million
  * Net loss of $34.5 million compared to net loss of $2.9 million in same
    quarter last year
  * Net loss in the quarter resulted from disposition of our subsidiaries
    Profit Harvest and Celestial Digital Entertainment, impairment charges for
    the write down of goodwill related to Ever Elite, Nollec Wireless, and TCB
    Digital.

Full Year 2012 Highlights:

  * Revenue increased by $36.3 million from $13.5 million to $49.8 million
  * Sales of mobile handsets and accessories and commission from activation of
    services and residuals contributed $16.6 million and $33.2 million,
    respectively
  * Net loss for 2012 was $32.5 million compared to net income of $6.4 million
    in 2011

BEIJING, April 15, 2013 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc.
(Nasdaq:ZOOM) (the "Company") is a holding company with a subsidiary that
engages in the distribution of cellular service and products in the U.S.
Today, ZOOM reported financial results for the fourth quarter and full year
ended December 31, 2012.

During the fourth quarter of 2012, ZOOM's management considered recent global
economic conditions, industry trends and capital market conditions, and
concluded that it is in the best interests of the Company to sell its
operations in China. Therefore, the Company entered into a securities purchase
agreement with Beijing Zhumu Culture Communication Company, Ltd. to sell
ZOOM's manufacturing, research and development, mobile game development, and
sales operations in China and Hong Kong for cash proceeds of $31.7 million.
Please refer to our 10K Annual Report filed with the US SEC today for more
details regarding the sale. ZOOM intends to use the proceeds from the sale to
acquire businesses in North America with distribution channels for mobile
products and consumer electronics. ZOOM expects to derive the majority of its
revenue on a going forward basis from its operations in North America.

In connection with the sale of the operations, certain portions of the sales
transaction have closed. As of December 31, 2012, the dispositions of the
sales operation, Profit Harvest, and the mobile gaming development operation,
Celestial Digital Entertainment, both based in Hong Kong, were completed. On
April 5, 2013 the dispositions of Ever Elite and Nollec Wireless, the mobile
handset development subsidiaries were also completed. The sale of TCB Digital,
ZOOM's 80%-owned manufacturing operation, is expected to be finalized in the
second quarter of 2013. As result of the closing on the disposition of Profit
Harvest and Celestial Digital Entertainment, ZOOM recognized a $11.9 million
loss. ZOOM also recognized $8.4 million in goodwill impairment charges related
to the discontinuation of Ever Elite and Nollec Wireless; and recorded a $0.9
million goodwill impairment charge for the disposition of Celestial Digital
Entertainment. Also related to the dispositions, ZOOM wrote off certain stock
option grants and stock awards that ZOOM has historically amortized straight
line over prescribed vesting periods; however, because the services related to
these stock option grants and stock awards were for services rendered to the
discontinued operations, ZOOM immediately recognized the remaining unamortized
balances as of December 31, 2012. The additional expenses were approximately
$4.6 million. As result of ZOOM's decision to discontinue and dispose of such
operations, ZOOM's current remaining primary operations are those of Portables
Unlimited LLC ("Portables") - a wholesale distributor of T-Mobile USA products
and services. Accordingly, ZOOM's results of operations from continuing
operations reflect the operating results of Portables.

For the fourth quarter of 2012, ZOOM generated net revenue of $10.1 million
from continuing operations, down 24.9% from $13.5 million as compared to the
fourth quarter of 2011. The decline in revenue reflected the general economic
conditions in the United States.

Full year revenue for ZOOM from continuing operations increased $36.3 million
from $13.5 million in 2011 to $49.8 million for 2012. The increase was due to
the fact that ZOOM acquired Portables in October of 2011 and the activities
reported for 2011 only included the results from October through December
2011, whereas the 2012 results from operations reflected the full year.

Mr. Lei Gu, Chairman & CEO of ZOOM explained, "Over the last two years, the
capital markets have been difficult on our stock. Concurrently, the mobile
phone business has faced rapid changes, and fierce competition has hurt our
margins. We feel that we need to sell our China-based assets which are
bringing ZOOM less than favorable operating results and poor capital market
multiples. We intend to use that cash to purchase assets that will bring
steady positive cash flows moving ahead. We believe North America provides the
best opportunities for us to put the cash to good use and generate higher
returns."

Net loss during the fourth quarters of 2012 and 2011 were $34.5 million and
$2.9 million, respectively. Net loss for the year 2012 was $32.5 million as
compared to net income of $6.4 million for 2011. The significant net losses
were the results of discontinuation and disposal of operations detailed above.

Looking ahead, Mr. Gu remarked, "In 2013, our focus will be North
America. Let's keep our eyes open and get to work on finding some additional
businesses that we can acquire and help unlock value. We look forward to a
fruitful 2013."

Conference Call Details

Zoom will review the fourth quarter and full year 2012 results and discuss
management's expectations for 2013 on Tuesday, April 16, 2013 at 9:30 a.m. ET
(6:30a.m. PT). The dial-in numbers are +1-855-500-8701 for US domestic callers
and +65-6723-9385 for international callers, and then enter the access code
(conference ID) 36138063. A replay of the conference call will be available
through April 19, 2013. The replay dial-in numbers are +1 855-452-5696 for US
domestic callers and +61-2-8199-0299 for international callers, and then enter
access code 36138063.

About Zoom Technologies, Inc.

Zoom Technologies, Inc., through its subsidiary Portables Unlimited LLC,
operates a wholesale distributor business for T-Mobile products and services
in the United States.. As of the fourth quarter of 2012 the Company decided to
dispose of substantially all of its manufacturing, development, and sales
businesses in China (except its joint venture with Spreadtrum Communications
(Tianjin) Co., Ltd.), and redeploy its capital for the acquisition and
development of distribution channels for mobile products and consumer
electronics in North America.

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.

ZOOM TECHNOLOGIES, INC. AFFILIATES & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS 
                                                                 
                                                                 
                                                 AS OF DECEMBER 31,
                                                 2012           2011
ASSETS                                                           (Restated) 
Current assets                                                   
 Cash and equivalents                             $ 430,746      $ 214,683
 Restricted cash                                  19,044,294     -- 
 Accounts receivable, net                         3,246,247      3,377,491
 Inventories, net                                 928,881        700,488
 Other receivables and prepaid expenses           4,514,434      327,952
 Due from related parties                         20,964,025     8,743,535
 Current assets of discontinued operations, held  144,751,290    115,142,591
for sale
 Total current assets                             193,879,917    128,506,740
                                                                 
Property, plant and equipment, net                2,376,639      3,110,802
Equipment deposit                                 35,249         101,859
Intangible assets                                 480,690        370,995
Long-term investments                             11,912,956     -- 
Goodwill                                          27,031,492     36,332,497
Non-current assets of discontinued operations,    --             13,722,214
held for sale
TOTAL ASSETS                                      $ 235,716,943  $ 182,145,107
                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY                             
 Current liabilities                                             
 Short-term loans                                 3,519,999      902,614
 Accounts payable                                 6,409,278      9,994,990
 Accrued expenses and other payables              3,814,647      4,822,050
 Purchase deposit from buyer                      8,740,490      -- 
 Taxes payable                                    22,334         22,113
 Due to related parties                           9,889,037      6,742,373
 Warrant liability                                7,340          850,841
 Current liabilities of discontinued operations   138,348,859    70,725,238
 Total current liabilities                        170,751,984    94,060,219
                                                                 
Long-term payables                                --             145,000
Long-term notes payables                          317,500        500,000
Non-current liabilities of discontinued           --             10,458
operations
TOTAL LIABILITIES                                 171,069,484    94,715,677
                                                                 
COMMITMENTS AND CONTINGENCIES                                    
                                                                 
STOCKHOLDERS' EQUITY                                             
Preferred stock: authorized 1,000,000 shares,     --             -- 
par value $0.01 none issued and outstanding
Common stock: authorized 60,000,000 shares, par
value $0.01, 29,320,848 shares issued and
29,319,168 shares outstanding at December 31,     293,192        238,640
2012; 23,865,723 shares issued and 23,864,043
shares outstanding at December 31, 2011.
Treasury shares: 1,680 shares at cost             (7,322)        (7,322)
Shares to be issued                               --             1,000
Additional paid-in capital                        51,108,409     44,557,801
Statutory surplus reserve                         702,539        682,528
Accumulated other comprehensive income            4,058,657      2,081,429
Retained earnings                                 (4,098,798)    28,373,724
TOTAL STOCKHOLDERS' EQUITY                        52,056,677     75,927,800
                                                                 
Non-controlling interest                          12,590,782     11,501,630
                                                                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $ 235,716,943  $ 182,145,107
                                                                 
 The accompanying notes are an integral part of these consolidated financial
statements. 

 
ZOOM TECHNOLOGIES, INC. AFFILIATES & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)
                                                                 
                                                                 
                                              FOR THE YEARS ENDED DECEMBER 31,
                                              2012              2011
                                                                (Restated)
Net revenues                                   $ 49,773,552      $ 13,476,376
Cost of sales                                  40,813,304        11,185,774
 Gross profit                                  8,960,248         2,290,602
                                                                 
Operating expenses:                                              
 Selling, general, and administrative          10,088,605        4,785,332
expenses
 Non-cash equity-based compensation            7,416,937         2,413,992
 Total operating expenses                      17,505,542        7,199,324
                                                                 
Loss from operations                           (8,545,294)       (4,908,722)
                                                                 
Other income and (expenses)                                      
 Interest income                               --                51
 Interest expense                              (986,427)         (117,697)
 Change in fair value of warrants              843,501           3,673,243
 Investment loss                               (429,586)         -- 
 Other income (expense), net                   (31,211)          805,299
                                               (603,723)         4,360,896
                                                                 
Loss before income taxes and non-controlling   (9,149,017)       (547,826)
interest from continuing operations
                                                                 
Income taxes for continuing operations         190,845           -- 
                                                                 
Loss before non-controlling interest from      (9,339,862)       (547,826)
continuing operations
                                                                 
 less: Income (loss) attributable to
non-controlling interest of continuing         424,047           313,002
operations
                                                                 
Loss attributable to Zoom Technologies, Inc.   (9,763,909)       (860,828)
from continuing operations
                                                                 
Discontinued Operations:                                         
 Income (loss) from discontinued operations,   (11,178,671)      7,494,478
net of tax
 Loss on disposal, net tax                     (11,860,025)      -- 
                                                                 
 less: Income (loss) attributable to
non-controlling interest from discontinued     (350,094)         255,803
operations
                                                                 
Income (loss) attributable to Zoom
Technologies, Inc. from discontinued           (22,688,602)      7,238,675
operations
                                                                 
Net income (loss) attributable to Zoom         $ (32,452,511)    $ 6,377,847
Technologies, Inc.
                                                                 
                                                                 
Basic and diluted loss per common share from                     
continuing operations:
 Basic                                         $ (0.36)          $ (0.05)
 Diluted                                       $ (0.36)          $ (0.05)
                                                                 
Basic and diluted income (loss) per common                       
share from discontinued operations:
 Basic                                         $ (0.84)          $ 0.42
 Diluted                                       $ (0.84)          $ 0.36
                                                                 
Basic and diluted income (loss) per common                       
share
 Basic                                         $ (1.20)          $ 0.37
 Diluted                                       $ (1.20)          $ 0.32
                                                                 
Weighted average common shares outstanding:                      
 Basic                                         27,144,705        17,156,446
 Diluted                                       27,144,705        20,110,099
                                                                 
 The accompanying notes are an integral part of these consolidated financial
statements.

 
ZOOM TECHNOLOGIES, INC. AFFILIATES & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS 
                                                                 
                                                                 
                                              FOR THE YEARS ENDED DECEMBER 31,
                                              2012              2011
                                                                (Restated)
Cash flows from operating activities:                            
Loss including non-controlling interest        $ (9,339,862)     $ (547,826)
                                                                 
Adjustments to reconcile income including
non-controlling interest to cash provided by                     
(used in) operating activities:
 Depreciation and amortization                 1,209,846         108,222
 Non-cash equity-based compensation            7,416,927         2,413,992
 Provision for doubtful accounts               686,141           --
 Loss on investment in joint venture           429,586           --
 Fair value adjustment on warrants             (843,501)         (3,673,243)
Changes in operating assets and liabilities:                     
 Accounts receivable                           (554,897)         3,396,543
 Inventories                                   (194,108)         310,705
 Prepaid expenses and other assets             (1,356,515)       2,788,595
 Accounts payable                              (3,876,099)       (5,251,766)
 Related parties-net                           (29,561,132)      (464,441)
 Accrued expenses and other current            237,831           (1,048,743)
liabilities 
Net cash used in operating activities          (35,745,783)      (1,967,962)
                                                                 
Cash flows from investing activities:                            
 Purchase of property and equipment and other  (321,835)         (58,105)
long-term assets
 Cash received for the sale of disposed units  31,740,490        --
Net cash provided by (used in) investing       31,418,655        (58,105)
activities
                                                                 
Cash flows from financing activities:                            
 Issuance of shares for cash                   --                3,102,464
 Proceeds from short-term loans                2,617,384         (449,947)
 Repayment on notes payable                    (182,500)         (1,023,673)
 Receipts from (payments to) related parties   2,542,596         --
 Repayment on borrowing from related parties   (434,369)         (25,499)
Net cash provided by financing activities      4,543,111         1,603,345
                                                                 
Effect of exchange rate changes on cash &      80                417
equivalents
                                                                 
Net increase (decrease) in cash and            216,063           (422,305)
equivalents
                                                                 
Cash and equivalents, beginning balance        214,683           636,988
                                                                 
Cash and equivalents, ending balance           $ 430,746         $ 214,683
                                                                 
SUPPLEMENTARY DISCLOSURES:                                       
 Interest paid                                 $ 2,564,364       $ 1,324,331
 Income tax paid                               $ 2,802,488       $ 2,812,248
                                                                 
                                                                 
 The accompanying notes are an integral part of these consolidated financial
statements. 

CONTACT: Investor Contact:
        
         Lynn Wei
         Investor Relations Coordinator
         Zoom Technologies, Inc.
         +86-10-5935-9576
         weilin@zoom.com
         www.zoom.com

Zoom Technologies, Inc. Logo
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement