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 |