Zoom Technologies Reports Third Quarter 2013 Results and Conference Call

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Third Quarter 2013 Highlights:

  • Net loss of $14.09 million compared to net income of $0.75 million in same quarter last year
  • Net loss in the quarter resulted from the loss on disposal of Portables Unlimited, LLC

BEIJING, Dec. 2, 2013 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc. (Nasdaq:ZOOM) (the "Company"), is a holding company that invests in mobile and telecommunications businesses. On November 25, 2013, after the close of the market, ZOOM filed its quarterly financial report for the third quarter ended September 30, 2013.

The Company recorded material losses at the end of the third quarter of 2013 as a result of the loss of its ownership interest in Portables Unlimited, LLC ("Portables"). If the Company was to maintain its ownership in Portables, it would have had to deploy more capital. The Company performed a comprehensive analysis, and then decided against investing further in Portables. The Company's strategy moving forward is to invest in mobile advertising and technology based businesses with high expected futures earnings growth.

On November 21, 2013, the Company entered into a Letter of Intent (the "LOI") with Beijing Baifen Tonglian Information & Technology Co., Ltd. ("Baifen") to acquire, directly or indirectly, all the outstanding shares of Baifen. Please refer to the press release, "Zoom Technologies Inc. to Acquire Beijing Baifen Tonglian Information & Technology Co., Ltd.", dated November 27, 2013 for further details.

Conference Call

The Company will host an investor call at 9:00 a.m. ET (6:00 a.m. Pacific) on Tuesday, December 3, 2013. To access the conference call dial +1-855-500-8701 and then enter access code (conference ID) 18825421. Callers outside the U.S. and Canada should dial +65-6723-9385 and then enter access code 18825421.

A replay of the conference call will be available for 3 days, through December 6, 2013. To access the replay, please dial +1-855-452-5696 and enter access code 18825421. Callers outside the U.S. and Canada should dial +61-2-8199-0299 and enter access code 18825421.

About Zoom Technologies, Inc.

Zoom Technologies, Inc. (Nasdaq:ZOOM) (the "Company"), is a holding company that expects to invest in mobile and telecommunications businesses.

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
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30,
2013
DECEMBER 31,
2012
(Unaudited)
ASSETS
Current assets
Cash and equivalents $ 1,818,816 $ 8,351
Restricted cash 19,555,440 19,044,294
Other receivables and prepaid expenses 1,217,441 3,989,362
Due from related parties 13,619,198 20,528,155
Current assets of discontinued operations, held for sale 139,390,295 179,884,224
Total current assets 175,601,190 223,454,386
Intangible assets 349,600 349,600
Long-term investments 11,754,210 11,912,956
TOTAL ASSETS $ 187,705,000 $ 235,716,942
LIABILITIES AND EQUITY
Current liabilities
Notes payable 350,937 --
Accounts payable 36,948 38,695
Accrued expenses and other payables 535,530 1,237,505
Purchase deposit from buyer 8,240,490 8,740,490
Taxes payable 22,951 22,334
Due to related parties 2,966,000 5,362,597
Warrant liability -- 7,340
Current liabilities of discontinued operations 140,007,731 155,343,024
Total current liabilities 152,160,587 170,751,985
Long-term notes payables -- 317,500
TOTAL LIABILITIES 152,160,587 171,069,485
COMMITMENTS AND CONTINGENCIES
EQUITY
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; 3,008,517 shares issued and outstanding at September 30, 2013; 2,932,085 shares issued and 2,931,917 shares outstanding at December 31, 2012 30,085 29,319
Treasury shares: 168 shares at cost (7,322) (7,322)
Additional paid-in capital 52,625,042 51,372,282
Statutory surplus reserve 737,623 702,539
Accumulated other comprehensive income 2,739,347 4,058,655
Accumulated deficit (22,416,508) (4,098,798)
TOTAL STOCKHOLDERS' EQUITY 33,708,267 52,056,675
Non-controlling interest 1,836,146 12,590,782
TOTAL EQUITY 35,544,413 64,647,457
TOTAL LIABILITIES AND EQUITY $ 187,705,000 $ 235,716,942
ZOOM TECHNOLOGIES, INC., AFFILIATES & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
SEPTEMBER 30,
NINE MONTHS ENDED
SEPTEMBER 30,
2013 2012 2013 2012
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net revenues $ -- $ -- $ -- $ --
Cost of sales -- -- -- --
Gross profit -- -- -- --
Operating expenses:
Selling, general, and administrative expenses 110,308 135,646 885,947 869,938
Non-cash equity-based compensation 132,259 758,592 777,924 2,030,151
Total operating expenses 242,567 894,238 1,663,871 2,900,089
Loss from operations (242,567) (894,238) (1,663,871) (2,900,089)
Other income and (expenses)
Interest income 314 1 314 12
Interest expense (8,006) (901) (153,199) (27,151)
Change in fair value of warrants 4 523,078 7,340 523,078
Investment gain (loss) 174,895 (423,630) (158,746) (423,630)
Other (expense) income, net (309,838) 1,105 778 (293)
Other income (expense), net (142,631) 99,653 (303,513) 72,016
Loss before income taxes and noncontrolling interest (385,198) (794,585) (1,967,384) (2,828,073)
Income taxes for continuing operations -- 11,289 109,517 11,289
Loss attributable to Zoom Technologies, Inc. from continuing operations (385,198) (805,874) (2,076,901) (2,839,362)
Discontinued Operations:
(Loss) income from discontinued operations, net of tax (3,680,361) 1,748,821 (4,226,587) 5,064,578
less: (loss) income attributable to noncontrolling interest from discontinued operations (616,946) 190,633 (729,690) 177,708
(3,063,415) 1,558,188 (3,496,897) 4,886,870
Loss on disposal, net tax (10,642,204) -- (12,708,828) --
(Loss) income attributable to Zoom Technologies, Inc. from discontinued operations (13,705,619) 1,558,188 (16,205,725) 4,886,870
Net (loss) income attributable to Zoom Technologies, Inc. $ (14,090,817) $ 752,314 $ (18,282,626) $ 2,047,508
Basic and diluted loss per common share from continuing operations:
Basic $ (0.13) $ (0.28) $ (0.69) $ (1.07)
Diluted $ (0.13) $ (0.28) $ (0.69) $ (1.07)
Basic and diluted (loss) income per common share from discontinued operations:
Basic $ (4.57) $ 0.54 $ (5.42) $ 1.85
Diluted $ (4.57) $ 0.54 $ (5.42) $ 1.85
Basic and diluted (loss) income per common share
Basic $ (4.70) $ 0.26 $ (6.11) $ 0.77
Diluted $ (4.70) $ 0.26 $ (6.11) $ 0.77
Weighted average common shares outstanding:
Basic 2,999,387 2,911,470 2,990,836 2,643,145
Diluted 2,999,387 2,911,470 2,990,836 2,646,830
ZOOM TECHNOLOGIES, INC., AFFILIATES & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
THREE MONTHS ENDED
SEPTEMBER 30,
NINE MONTHS ENDED
SEPTEMBER 30,
2013 2012 2013 2012
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net (loss) income attributable to Zoom Technologies, Inc. $ (14,090,817) $ 752,314 $ (18,282,626) $ 2,047,508
Net (loss) income attributable to noncontrolling interest (616,946) 190,633 (729,690) 177,708
Other comprehensive income:
Foreign currency translation (loss) gain - Zoom Technologies, Inc. (2,097,745) (333,330) (1,319,310) 56,387
Foreign currency translation (loss) gain - noncontrolling interest (762,769) 588 (568,160) 24,481
Comprehensive (loss) income Zoom Technologies, Inc. (16,188,562) 418,984 (19,601,936) 2,103,895
Comprehensive (loss) income noncontrolling interest $ (1,379,715) $ 191,221 $ (1,297,850) $ 202,189
ZOOM TECHNOLOGIES, INC., AFFILIATES & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED
SEPTEMBER 30,
2013 2012
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net (loss) income attributable to Zoom Technologies, Inc. $ (18,282,626) $ 2,047,508
Adjustments to reconcile net (loss) income attributable to Zoom Technologies Inc. to cash provided by (used in) operating activities:
(Loss) income attributable to noncontrolling interest from discontinued operations (729,690) 177,708
Depreciation and amortization 844,603 1,268,053
Non-cash equity-based compensation 777,924 2,030,151
Provision for inventory obsolescence -- 361,039
Provision on accounts receivable 2,518,987 1,559,674
Loss on disposal 12,708,828 --
Loss on investment in joint venture 158,746 423,630
Fair value adjustment on warrants (7,340) (523,078)
Changes in deferred tax assets -- 56,649
Changes in operating assets and liabilities:
Accounts receivable (3,160,104) (38,096,887)
Inventories (6,076,358) (5,256,775)
Advances to suppliers (29,449) (728,846)
Prepaid expenses and other assets 9,431,490 (5,713,871)
Accounts payable 8,768,972 24,834,057
Advance from customers (203,745) 2,026,810
Related parties-net (434,012) 3,998,291
Accrued expenses and other current liabilities 2,752,907 6,278,056
Net cash provided by (used in) operating activities 9,039,133 (5,257,831)
Cash flows from investing activities:
Restricted cash (3,390,538) (792,581)
Purchase of property and equipment and other long-term assets (727,785) (359,098)
Proceeds from collection on notes receivable 234,078 (5,384,577)
Cash disposed upon disposal of subsidiary (740,616) --
Equity method investee -- (12,364,270)
Refund from factory construction deposit -- 10,261,417
Net cash used in investing activities (4,624,861) (8,639,109)
Cash flows from financing activities:
Proceeds from loans 23,042,792 3,201,559
Repayment to loans 1,134 (1,506,339)
Repayment on notes payable -- (4,457,729)
Receipt from related parties 103,721 25,697,445
Payments to related parties (20,173,332) (6,379,117)
Repayments on long-term loan -- (7,250)
Net cash provided by financing activities 2,974,315 16,548,569
Effect of exchange rate changes on cash & equivalents (515,174) 21,228
Net increase in cash and equivalents 6,873,413 2,672,857
Cash and equivalents, beginning of period 3,676,275 1,131,109
Cash and equivalents of continuing components 8,351 22,158
Cash and equivalents of discontinued components 3,667,924 1,108,951
Cash and equivalents, end of period $ 10,549,688 $ 3,803,966
Cash and equivalents of continuing components 1,818,816 11,484
Cash and equivalents of discontinued components 8,730,872 3,792,482
SUPPLEMENTARY DISCLOSURES:
Interest paid $ 2,136,419 $ 1,924,763
Income tax paid $ 109,517 $ 2,813,825

CONTACT: Investor Contact: Investor Relations Zoom Technologies, Inc. +86-10-5935-9576 ir@zoom.com

Source:Zoom Technologies, Inc.