Boston, Mass. -- Zoom Telephonics, Inc. ("Zoom" or "the Company") (OTCQB: ZMTP), a leading producer of cable modems and other communication products, today reported financial results for its third quarter ended September 30, 2019.
2019 Third Quarter Financial Highlights (with comparisons to 2018 third quarter)
- Net sales increased 20.8% to $10.9 million due primarily to strong, improved sales from both E-tail and Best Buy.
- Gross margin was 28.8%, down from 36.4%, as China tariffs increased COGS by $1.03 million
- Net loss was approximately $200 thousand or $0.01 per diluted share, compared to net income of $346 thousand or $0.02 per diluted share.
Frank Manning, Zoom's CEO, commented on the quarter, "In Q3 2019 we achieved our highest Q3 net sales since 2002. We would have had $800 thousand in net income without the China tariffs, and we will discuss expected improvements in our tariff status in our conference call tomorrow. Sales through E-tail were strong. We have dramatically increased our product placement and shelf position at Best Buy, and Q4 2019 sales should benefit from a recent increase in our Target shelf space.
The Company reported an increase in net sales of 20.8% to $10.9 million for the third quarter ended September 30, 2019, up from $9.0 million for the third quarter ended September 30, 2018. The increase in sales was driven by increased sales through Best Buy, Amazon, and Target. Gross profit was $3.1 million or 28.8% of net sales in the third quarter of 2019, as compared to $3.3 million or 36.4% of net sales for the third quarter of 2018. The decrease in gross profit and gross margin was primarily due to China tariffs increasing cost of goods by $1.03 million or 9.5% of net revenues in Q3 2019.
At September 30, 2019 Zoom had $2.3 million in cash; $0 drawn on a $3.0 million line of credit; no long-term debt; $7.2 million stockholders' equity; working capital of $6.6 million; and a current ratio of 1.92.