FIEE 8-K
FiEE, Inc. (FIEE)
8-K
2020-08-11
For: 2020-08-11
View Original
Added on
April 09, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current
Report Pursuant
to
Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported) August 11, 2020
ZOOM TELEPHONICS, INC.
(Exact
Name Of Registrant As Specified In Its Charter)
Delaware
(State
or Other Jurisdiction of Incorporation)
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000-53722
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04-2621506
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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225
Franklin Street, Boston, MA
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02110
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(617) 423-1072
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
(Former
Name or Former Address, if Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
[
]
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[
]
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
[
]
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act: None.
Indicate
by check mark whether the registrant
is an emerging growth company as defined in in Rule 405 of
the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of
this chapter).
Emerging
growth company ☐
If an
emerging growth company, indicate by checkmark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
Item 2.02 Results of
Operations and Financial Condition
On
August 11, 2020, Zoom Telephonics, Inc. (the “Company”)
issued a press release announcing its financial results for the
quarter ended June 30, 2020. A copy of the press release is
attached hereto as Exhibit 99.1 and is incorporated herein in
its entirety by reference.
The
information furnished pursuant to Item 2.02 of this Current Report
on Form 8-K and in Exhibit 99.1 shall not be deemed to be
“filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, is not subject to the
liabilities of that section and is not deemed incorporated by
reference in any filing of the Company’s under the Securities
Act of 1933, as amended, except as otherwise expressly stated in
such filing.
Except
for historical information contained in the press release attached
as an exhibit hereto, the press release contains forward-looking
statements which involve certain risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied by these statements. Please refer to the cautionary note in
the press release regarding these forward-looking
statements.
Item
9.01
Financial Statements and Exhibits .
(d) Exhibits.
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Exhibit Number
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Title
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Press
release of Zoom Telephonics, Inc., dated August 11, 2020,
announcing
its financial results for the quarter ended June 30,
2020.
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SIGNATURE
Pursuant to the
requirements of the Securities Exchange Act of 1934, the Registrant
has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
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ZOOM
TELEPHONICS, INC.
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Dated:
August 11, 2020
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By:
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/s/
JACQUELYN BARRY
HAMILTON
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Jacquelyn
Barry Hamilton
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Chief
Financial Officer
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Exhibit 99.1
Zoom Telephonics Reports Sales of $10.3 Million for Q2 2020 and
Shares Long Term Plan Expanding Two Major Categories
Company
to Host Conference Call on Wednesday, August 12, 2020 – 10:00
a.m. ET
Boston,
MA, August 11, 2020 – Zoom Telephonics, Inc.
(“Zoom”) (OTCQB: ZMTP), a leading creator of cable
modems and other Internet access products, reported financial
results for its 2020 second quarter ended June 30,
2020.
Second Quarter 2020 Financial Highlights
●
Net sales were
$10.3 million, up 26% year over year
●
Gross profit was
$2.1 million, down 23% year over year.
●
Gross profit margin
was 21%, down from 34% in prior second quarter.
Second Quarter 2020 Business Overview
We've
seen record demand as customers focus on optimizing home networks
on the already popular gateway products, which are available
through online shopping and brick and mortar platforms such as
Amazon, BestBuy, Target and now on
Shop.MotoManage.com.
Jeremy
Hitchcock, Zoom’s Executive Chairperson, comments on the
quarter. “We are working to capture the growing market of
home connected, WiFi, cyber security, and IoT products. Over the
next few quarters, you will see our long-term plan unfold. We are
launching in two major categories with Whole Home WiFi and our
software platform MotoManage. Not only will we have a better
relationship with our customers, but we will also be able to
deliver software services sold as recurring
revenue”.
Mr.
Hitchcock continued, “With our expanded manufacturing
footprint and the upcoming launch of the new products, we are now
positioned to double manufacturing capacity. While this has created
a short-term increase in expense, we feel that the continuity of
supply for our customers has set us apart from other
producers.”
2020 Second Quarter Financial Review
The
Company reported an increase in net sales of 25.9% to $10.3 million
for the second quarter ended June 30, 2020, up from $8.2 million
for the second quarter ended June 30, 2019. This growth was driven
by increases across all product lines (cable modems, routers, and
other communications products).
Gross
profit was $2.1 million or 20.7% of net sales for the second
quarter of 2020, as compared to $2.8 million or 33.9% of net sales
for the second quarter of 2019. Tariff expense related to imports
from China declined by $0.5 million between Q1 2020 and Q2 2020, to
$1.0 million. The impact of tariff expense in Q2 2020 reduced gross
margin by 10.1% of net revenues. The transition from China to
Vietnam of the company’s primary manufacturing was
substantially complete by June 30, 2020. During this factory
transition and while recovering from the COVID-related supply chain
shock, the company temporarily shifted from the use of primarily
ocean freight during prior quarters to the use of primarily air
freight during Q2 2020 to keep up with demand and replenish supply.
This resulted in an additional $0.9 million in freight expense
incurred during the second quarter.
Operating
expenses were $3.6 million or 35.5% of net sales for the second
quarter of 2020, compared to $3.5 million or 43.5% of net sales for
the same period in 2019. Selling and Marketing expenses decreased
by approximately $270 thousand to $2.3 million in Q2 2020 due to
decreases in advertising and retailer-focused marketing expenses,
partially offset by increases in Motorola trademark royalty costs.
General and administrative expenses increased by approximately $159
thousand to $716 thousand in Q2 2020 reflecting higher legal
expenses and related investments in corporate infrastructure.
Research and development expenses were $644 thousand for Q2 2020,
up from $438 thousand for the same period in 2019, reflecting
increased investments in people and new product
development.
Zoom
reported a net loss of $1.5 million or $0.07 per share for the
second quarter of 2020, compared to a net loss of $805 thousand or
$0.04 per share for the same period in 2019. The decline in
profitability in Q2 2020 was due to the 25% import tariffs imposed
on products manufactured in China during the quarter and increased
air freight costs incurred to meet high customer demand while the
Company’s primary manufacturing partners recovered from
COVID-19 related disruptions in the supply channel during the
quarter.
Balance Sheet Highlights
As of
June 30, 2020, Zoom had $8.4 million in cash, cash equivalents and
restricted cash; $0 drawn on a $4 million line of credit;$0.3
million in short-term debt; $0.3 million in long-term debt; $7.6
million stockholders’ equity; working capital of $6.9
million; and a current ratio of 1.61.
Conference Call Details Date/Time:
Conference
Call Details Wednesday, August 12, 2020 – 10:00 a.m.
ET
Participant
Dial-In Numbers:
(United
States): (866) 393-7958
(International):
(706) 643-5255
Please
dial-in five minutes prior to the start time of the call and
provide the operator with the conference ID of 1919679.
A
slide presentation will accompany management’s remarks and
will be accessible five minutes prior to the start of the call via
the following link: www.zoom.net/SQ220. A recording of the call
will also be made available afterwards through the investor
information section of the Company’s website
About Zoom Telephonics
Zoom
Telephonics, Inc. (“Zoom”) (OTCQB: ZMTP) is the creator
of innovative Internet access products that dependably connect
people to the information they need and the people they love.
Founded in 1977 in Boston, MA, the company now delivers cable
modems, routers, and other communications products under the
globally recognized Motorola brand. For more information about Zoom
and its products, please visit www.zoom.net and
www.motorolanetwork.com.
MOTOROLA
and the Stylized M Logo are trademarks or registered trademarks of
Motorola Trademark Holdings, LLC and are used under
license.
Forward Looking Statements
This
release contains forward-looking information relating to
Zoom’s plans, expectations, and intentions. Actual results
may be materially different from expectations as a result of known
and unknown risks, including: the potential increase in tariffs on
the Company's imports; potential difficulties and supply
interruptions from moving the manufacturing of most of the
Company’s products to Vietnam; potential changes in NAFTA;
the potential need for additional funding which Zoom may be unable
to obtain; declining demand for certain of Zoom’s products;
delays, unanticipated costs, interruptions or other uncertainties
associated with Zoom’s production and shipping; Zoom’s
reliance on several key outsourcing partners; uncertainty of key
customers’ plans and orders; risks relating to product
certifications; Zoom’s dependence on key employees;
uncertainty of new product development, including certification and
overall project delays, budget overruns, and the risk that newly
introduced products may contain undetected errors or defects or
otherwise not perform as anticipated; costs and senior management
distractions due to patent related matters; and other risks set
forth in Zoom’s filings with the Securities and Exchange
Commission. Zoom cautions readers not to place undue reliance upon
any such forward-looking statements, which speak only as of the
date made. Zoom expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any such statements
to reflect any change in Zoom’s expectations or any change in
events, conditions or circumstance on which any such statement is
based.
Investor
Relations Contact:
Jacquelyn
Barry Hamilton, CFO Zoom Telephonics, Inc.
Phone:
617-753-0040
Email:
[email protected]
ZOOM TELEPHONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months and Six Months Ended June 30, 2020 and
2019
(in thousands, except per share
data)
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Three Months Ended
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Six Months Ended
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6/30/20
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6/30/19
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6/30/20
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6/30/19
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Net sales
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$10,273
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$8,159
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$22,228
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$16,169
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Cost of goods sold
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8,149
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5,391
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17,009
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10,983
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Gross
profit
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2,124
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2,768
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5,219
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5,186
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Operating expenses:
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Selling
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2,284
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2,554
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4,638
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5,001
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General
and administrative
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716
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556
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1,544
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1,124
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Research
and development
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644
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438
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1,297
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920
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Total
operating expenses
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3,644
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3,548
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7,479
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7,045
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Operating
loss
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(1,520)
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(780)
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(2,260)
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(1,859)
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Other expense, net
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(1)
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(12)
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(7)
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(46)
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Loss
before income taxes
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(1,521)
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(792)
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(2,267)
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(1,905)
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Income tax benefit
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7
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13
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13
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21
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Net
loss
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$(1,528)
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$(805)
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$(2,280)
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$(1,926)
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Loss per share:
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Basic
& Diluted loss per share
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$(0.07)
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$(0.04)
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$(0.10)
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$(0.11)
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Weighted average number of shares outstanding:
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Basic
& Diluted
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22,275
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19,067
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21,776
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17,623
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ZOOM TELEPHONICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited
(in thousands, except share data)
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3/30/20
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12/31/19
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ASSETS
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Current assets:
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Cash
and cash equivalents
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$7,552
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$1,217
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Restricted
Cash
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800
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150
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Accounts
receivable, net
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5,001
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4,071
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Inventories,
net
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4,622
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7,440
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Prepaid
expenses and other
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225
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270
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Total
current assets
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18,200
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13,148
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Property and equipment, net
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308
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303
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Operating lease right-of-use assets
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144
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103
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Other assets
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628
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349
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Total
assets
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$19,280
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$13,903
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Current
maturities of long-term debt
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$257
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$––
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Accounts
payable
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7,088
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5,025
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Current
maturities of operating lease liabilities
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97
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103
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Accrued
other expenses
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3,865
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2,666
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Total
current liabilities
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11,307
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7,794
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Long-term
debt, less current maturities
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326
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––
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Operating
lease liabilities, less current maturities
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48
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––
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Total
liabilities
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11,681
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7,794
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Stockholders’ equity:
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Common
stock and additional paid-in capital
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50,476
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46,706
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Retained
earnings (accumulated deficit)
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(42,877)
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(40,597)
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Total
stockholders’ equity
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7,599
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6,109
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Total
liabilities and stockholders’ equity
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$19,280
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$13,903
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