Zoom Telephonics Reports Results for Q3 2009

Zoom Telephonics, Inc. (OTCBB: ZMTP), a leading producer of modems and other communication products, today reported a net loss of $0.9 million or $0.44 per share for its third quarter ending September 30, 2009, a slight improvement over its net loss of $1.0 million or $0.50 per share for Q3 2008. Over half of the Q3 2009 loss was due to expenses relating to the previously announced September 2009 merger involving Zoom Technologies and the simultaneous spinoff of Zoom Telephonics. Zoom Telephonics reported net sales of $2.5 million for Q3 2009, down 34.8% from $3.9 million for the third quarter of 2008.

Gross profit was $0.7 million or 26.2% of net sales in Q3 2009 compared to a gross profit of $0.7 million or 19.3% in Q3 2008. The improvement in gross margin percentage was due to reductions in fixed manufacturing costs and a sales mix that favored higher margin products.

Operating expenses were $1.5 million or 60.5% of net sales in Q3 2009, down from $1.8 million or 46.0% of net sales in Q3 2008. Operating expenses in Q3 2009 included $0.25 million professional expenses and $0.18 million in stock option expenses in connection with the recently announced merger/spinoff. Normal operating expenses were down $0.7 million due primarily to lower costs for personnel, space, and variable selling expenses.

Zoom's cash balance on September 30, 2009 was $1.5 million, up from $1.2 million on December 31, 2008. The cash balance on September 30, 2009 included $0.8 million cash received from the Q3 2009 sale of Zoom's interest in Unity Business Networks. Zoom's current ratio on September 30, 2009 was 3.0, and Zoom has no long-term debt.

"During Q3 2009 the Zoom merger/spinoff transaction helped cause a dramatic increase in the Zoom Technologies' share price," said Frank Manning, Zoom's President and CEO. "Zoom Telephonics was also very pleased to receive cash from our Unity investment. However, Zoom Telephonics needs to find a way to grow its revenues and return to profitability. We recently introduced the first products in our 3G mobile broadband product line, and we hope that 3G can be a strong area for Zoom. We are also refreshing our product line with some new broadband modems and new wireless-N networking products. We are also excited about our coming new products for enjoying the Internet on an HDTV. Zoom has strong assets including a great team of people, strong products and brands, and powerful market channels. We need to use these assets and others to work our way back to growth and profits."

Zoom has scheduled a conference call for November 5, 2009 at 10:00 a.m. Eastern Time. You may access the conference call by dialing (866) 393-7958 for calls made within the United States and (706) 643-5255 for calls made from outside the United States. The conference ID is 40170382. The call will also be simulcast to stock analysts and other interested parties on Zoom's website, www.zoom.com/Q3, and to other financial and investor-oriented websites. Shortly after the conference call, a recording of the call will be available on Zoom's website. For additional information, please contact Investor Relations, Zoom Telephonics, 207 South Street, Boston, MA 02111, telephone (617) 753-0897, email investor@zoom.com, or visit Zoom's website at www.zoom.com.

About Zoom Telephonics

Zoom Telephonics, Inc. designs, produces, and supports 3G modems and routers, ADSL modems and gateways, cable modems, dial-up modems, voice over IP adapters and gateways, Bluetooth products, and other communications products under the Zoom, Hayes and Global Village brands. For more information about Zoom and its products, please see www.zoom.com.

Forward-Looking Statements

This release contains forward-looking information relating to Zoom Telephonics' plans, expectations, and intentions, including statements relating to Zoom's new products and investments. Actual results may be materially different from expectations as a result of known and unknown risks, including: the potential need for additional funding which Zoom may be unable to obtain; declining demand for certain of Zoom's products; fluctuations in the foreign currency exchange rate in relation to the U.S. dollar; delays, unanticipated costs, interruptions or other uncertainties associated with Zoom's production and shipping capabilities in Mexico; Zoom's reliance on an outsourcing partner to conduct production operations in Mexico; Zoom's dependence on key employees; the uncertainty of future demand from any specific customer or for all of Zoom's customers as a group; Zoom's reliance on a relatively limited number of customers for sale of its products; Zoom's reliance on international sales; the uncertainty of the regulatory environment for Zoom's products; uncertainty of new product development and introduction, including budget overruns, project delays, and the risk that newly introduced products may contain undetected errors or defects or otherwise not perform as anticipated; Zoom's dependence on one or a limited number of suppliers for certain key components; rapid technological change; competition; factors affecting Zoom's liquidity; 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.

                          ZOOM TELEPHONICS, INC.
                        Consolidated Balance Sheets
                               In thousands
                                (Unaudited)


                                                      9/30/09    12/31/08
                                                    ----------- -----------

ASSETS

Current assets:

  Cash                                              $     1,465 $     1,205
  Accounts receivable, net                                1,208       1,163
  Inventories                                             1,729       2,903
  Prepaid expenses and other                                166         235
                                                    ----------- -----------

     Total current assets                                 4,568       5,506

Property and equipment, net                                  67         102
Deferred other receivable                                   172           -
Investment                                                    -         960
                                                    ----------- -----------
     Total assets                                   $     4,807 $     6,568
                                                    ----------- -----------

LIABILITIES AND STOCKHOLDERS' EQUITY


                                                    ----------- -----------
Current liabilities:
  Accounts payable                                  $     1,048 $     1,211
  Accrued expenses                                          451         400
                                                    ----------- -----------

     Total current liabilities                            1,499       1,611

                                                    ----------- -----------
     Total liabilities                                    1,499       1,611
                                                    ----------- -----------

Stockholders' equity:

  Common stock and additional paid-in capital            32,415      31,879
  Treasury stock                                             (7)        (7)
  Accumulated other comprehensive income (loss)             361         345
  Retained earnings (accumulated deficit)               (29,461)   (27,260)

                                                    ----------- -----------
     Total stockholders' equity                           3,308       4,957
                                                    ----------- -----------

                                                    ----------- -----------
     Total liabilities & stockholders' equity       $     4,807 $     6,568
                                                    ----------- -----------




                          ZOOM TELEPHONICS, INC.
                  Consolidated Statements of Operations
                  In thousands, except for per share data
                                (Unaudited)



                                    Three Months Ended  Nine Months Ended
                                    9/30/09   9/30/08   9/30/09   9/30/08
                                    --------  --------  --------  --------

Net sales                           $  2,533  $  3,885  $  7,947  $ 11,527
Cost of goods sold                     1,869     3,136     5,806     9,136
                                    --------  --------  --------  --------

  Gross profit                           664       749     2,141     2,391

Operating expenses:
  Selling                                445       749     1,383     2,311
  General and administrative             740       620     1,994     1,757
  Research and development               347       419       999     1,322
                                    --------  --------  --------  --------
       Total operating expenses        1,532     1,788     4,376     5,390

  Operating profit (loss) before
   building sale                        (868)   (1,039)   (2,235)   (2,999)

  Gain on sale of real estate             --        96        --       288
                                    --------  --------  --------  --------

  Operating profit (loss)               (868)     (943)   (2,235)   (2,711)

Other income (expense), net               --       (50)       38       (37)
                                    --------  --------  --------  --------

  Income (loss) before income taxes     (868)     (993)   (2,197)   (2,748)

Income tax expense (benefit)               4        --         4        --

  Net income (loss)                 $   (872) $   (993) $ (2,201) $ (2,748)
                                    ========  ========  ========  ========

Basic and diluted earnings (loss)
 per share:

  Earnings (loss) per share         $  (0.44) $  (0.50) $  (1.11) $  (1.39)

                                    ========  ========  ========  ========

Weighted average number of shares
 outstanding:

  Basic and Diluted                    1,981     1,981     1,981     1,981
                                    ========  ========  ========  ========

Because Zoom Telephonics' common stock was not publicly traded prior to the September 22, 2009 Spin-Off, common shares outstanding of 1,980,978 at September 22, 2009 have been included in the earnings per share calculation as if the shares were outstanding for all periods prior to September 22, 2009.