8-K

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 2, 2018

ZOOM TELEPHONICS, INC.

(Exact Name Of Registrant As Specified In Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

000-53722	04-2621506
(Commission File Number)	(I.R.S. Employer Identification No.)

99 High Street, Boston, MA	02110
(Address of Principal Executive Offices)	(Zip Code)

(617) 423-1072

(Registrant’s Telephone Number, Including Area Code)

(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))

Indicate by check mark whether the registrant is an emerging growth company as defined 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 check mark 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 2, 2018, Zoom Telephonics, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2018. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.

Limitation on Incorporation by Reference.    The information furnished in this Item 2.02 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Cautionary Note Regarding Forward-Looking Statements.     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

Exhibit Number	Exhibit Description
99.1	Press release dated August 2, 2018 of Zoom Telephonics, Inc. announcing its financial results for the second quarter ended June 30, 2018.

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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.

	ZOOM TELEPHONICS, INC.
Date: August 2, 2018	By:	/s/ Frank Manning
		Frank Manning
		President and Chief Executive Officer and Acting Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Exhibit Description
99.1	Press release dated August 2, 2018 of Zoom Telephonics, Inc. announcing its financial results for the second quarter ended June 30, 2018.

4

EX-99.1

  Exhibit 99.1

Zoom Telephonics Reports Positive Net Income And Higher Sales For Q2 2018

Company to Host Conference Call on Thursday, August 2, 2018 at 4:30 p.m. ET

Boston, MA, August 2, 2018 – Zoom Telephonics, Inc. (“Zoom”) (OTCQB: ZMTP) (the “Company”), a leading producer of cable modems and other communication products, today reported financial results for its 2018 second quarter ended June 30, 2018.

2018 Second Quarter Financial Highlights (comparisons to prior year’s period)

●

Net sales increased 10.2% to $7.5 million due to the strength of Zoom’s Motorola brand products;

●

Gross margin improved to 36.3% from 32.1%; and

●

Net income was approximately $47 thousand or $0.00 per share, compared to a net loss of $269 thousand or $0.02 per share

Management Commentary

Frank Manning, Zoom’s President and CEO, commented on the quarter. “During the quarter we made significant progress and reported an increase in net income over the prior year. Our sales continued to show year-over-year growth, even with some short-term e-tailing issues that significantly lowered our sales. We are encouraged by the sales momentum from recent Motorola product introductions including our 24x8 cable modem, 24x8 AC1900 cable gateway, AC1700 and AC2600 routers, VDSL/ADSL AC1600 gateway, and MoCA Adapter. We recently announced our first Verizon Wireless certification, which we achieved for our ZoomCell LTE CAT1 USB Modem; and we are already seeing some good sales leads from Verizon. We are making good progress toward important new product introductions including our Motorola 24x8 AC1900 cable gateway with two telephone ports and our Motorola Cellular MultiSensor. We are still generating the vast majority of our revenues in the USA, but we are making progress to increase sales outside the USA. Our balance sheet is strong, and we are excited about our prospects in the coming quarters."

2018 Second Quarter Financial Review

The Company reported an increase in net sales of 10.2% to $7.5 million for the second quarter ended June 30, 2018, up from $6.8 million for the second quarter ended June 30, 2017. Sales of cable modems and gateways increased; but most of the sales increase was due to higher sales of routers, MoCA Adapters, and DSL products.

Gross profit was $2.7 million, or 36.3% of net sales, in the second quarter of 2018, as compared to $2.2 million, or 32.1% of net sales, for the second quarter of 2017.  The increase in gross profit and gross margin was primarily due to higher sales through e-tailers.

Operating expenses were $2.7 million, or 35.4% of net sales, in the second quarter of 2018, compared to $2.4 million, or 35.5% of net sales, in the same period of 2017. Selling expenses increased approximately $441 thousand to $2.1 million for the second quarter of 2018, primarily due to increases in advertising expenses and in Motorola trademark royalty costs. General and administrative expenses decreased approximately $166 thousand to $173 thousand for the second quarter of 2018, primarily due to a re-assessment of the Company's sales tax reserve. Research and development expenses were $368 thousand for the 2018 second quarter, compared to $402 thousand in the same period of 2017, largely due to decreases in certification expenses.

Zoom reported net income of $47 thousand or $0.00 per share for the second quarter of 2018, compared to a net loss of $269 thousand or $0.02 per share in the same period of 2017. The improvement in profitability in the second quarter of 2018 was due to an increase in sales and gross profits.

Balance Sheet Highlights

At June 30, 2018, Zoom had $118 thousand in cash, $191 thousand drawn on a $3.0 million line of credit, working capital of $3.6 million, a current ratio of 1.5, and no long-term debt.

(in thousands except for percentages)	6/30/2018	12/31/2017	% Change
Cash	$118	$229	(48.5%)
Total Current Assets	$10,461	$8,239	27.0%
Total Assets	$10,893	$8,793	23.9%
Total Current Liabilities	$6,907	$5,621	22.9%
Working Capital	$3,554	$2,618	35.7%
Stockholders’ Equity	$3,985	$3,172	25.6%

Conference Call Details

Date/Time:                    

Thursday, August 2, 2018 – 4:30 p.m. ET

Participant Dial-In Numbers:

(United States):             

866-393-7958

(International):                     

706-643-5255

Conference ID         

3565889

To access the call, please dial-in approximately five minutes before the start time and, when asked, provide the operator with the conference ID 3565889. An accompanying slide presentation will be available in PDF format via the Investor Relations section of Zoom Telephonics’ website at www.zoomtel.com/SQ218 shortly before the call.

About Zoom Telephonics

Zoom Telephonics, Inc. designs, produces, markets, and supports cable modems and other communication products. The Company’s worldwide Motorola license agreement includes cable modems and gateways, DSL modems and gateways, cellular modems and routers and sensors, and other Internet and network products. For more information about Zoom and its products, please visit www.zoomtel.com/investor 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 from China; 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:

Adam Prior, Senior Vice-President

The Equity Group Inc.

Phone: 212-836-9606

Email: aprior@equityny.com

ZOOM TELEPHONICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

For the Three Months and Six Months Ended June 30, 2018 and 2017

     (in thousands, except per share data)

	Three Months Ended		Six Months Ended
	6/30/18	6/30/17	6/30/18	6/30/17
Net sales	$7,522	$6,828	$15,859	$11,974
Cost of goods sold	4,790	4,634	9,845	8,046
Gross profit	2,732	2,194	6,014	3,928
Operating expenses:
Selling	2,123	1,682	4,177	3,528
General and administrative	173	339	621	770
Research and development	368	402	779	911
Total operating expenses	2,664	2,423	5,577	5,209
Operating profit (loss)	68	(229)	437	(1,281)
Other income (expense), net	(6)	(31)	(12)	(67)
Income (loss) before income taxes	62	(260)	425	(1,348)
Income tax expense (benefit)	15	9	19	9
Net income (loss)	$47	$(269)	$406	$(1,357)
Earnings (loss) per share:
Basic Earnings (loss) per share	$0.00	$(0.02)	$0.03	$(0.09)
Diluted Earnings (loss) per share	$0.00	$(0.02)	$0.02	$(0.09)
Weighted average number of shares outstanding:
Basic	15,935	14,817	15,832	14,800
Diluted	16,751	14,817	16,647	14,800

ZOOM TELEPHONICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except share data)

	06/30/18	12/31/17
ASSETS
Current assets:
Cash	$118	$229
Accounts receivable, net	2,648	2,230
Inventories, net	6,947	5,202
Prepaid expenses and other	749	578
Total current assets	10,461	8,239
Property and equipment, net	157	162
Other assets	274	392
Total assets	$10,893	$8,793
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Bank debt	$191	$90
Accounts payable	4,713	3,527
Accrued sales tax	263	831
Accrued other expenses	1,740	1,173
Total current liabilities	6,907	5,621
Total liabilities	6,907	5,621
Stockholders’ equity:
Common stock and additional paid-in capital	40,825	40,418
Retained earnings (accumulated deficit)	(36,840)	(37,246)
Total stockholders’ equity	3,985	3,172
Total liabilities and stockholders’ equity	$10,893	$8,793