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| 8-K - CURRENT REPORT - MINIM, INC. | minm_8k.htm |
Exhibit 99.1
Minim Reports Fourth Quarter and Year-End 2020 Results
Record quarterly and yearly revenue; gross margin improvement;
successful new product initiatives
MANCHESTER,
NH, March 9, 2021 -- Zoom Telephonics, Inc., doing business as
Minim (OTCQB: MINM) today reported fourth quarter and full year
preliminary financial results for the period ended December 31,
2020.
Q4 2020
highlights include:
●
Record
net revenue of $13.7 million and record revenue growth of 30% year
over year, and a 14% increase sequentially from Q3
2020.
●
Continued
gross margin improvement at 33%, 25% higher year over year and 16%
improvement sequentially from Q3 2020.
●
Successful launch of high-value, software-enabled
Motorola®-branded
modem to Amazon and Target.
●
Closed
merger between Zoom Telephonics, Inc. and Minim Inc. - combined
company offers intelligent software and powerful software-enabled
hardware focused on a rapidly growing market, led by a proven
team.
Full-year
2020 highlights include:
●
Record
net revenue of $48.0 million, a 28% increase over
2019.
●
28%
gross margin representing a 64 basis point decline over
2019.
“We
are extremely proud of our operational and financial
accomplishments in 2020, which position our company well for
continued growth in 2021,” said Gray Chynoweth, Chief
Executive Officer of Minim. “As the pandemic underlined, the
need for high-quality home networking products and services is
increasing rapidly. We intend to remain a leader in this market,
providing continued innovation in best-in-class software, hardware
and services to connect more customers and more homes in the U.S.
and internationally.”
Sean
Doherty, Chief Financial Officer of Minim, commented, “We
made important progress in the fourth quarter of 2020, including
the speedy completion of our merger. We see our 2020 results as an
early demonstration of our sustainable business model with
expanding growth opportunities.”
Non-GAAP
net loss in the fourth quarter of 2020 was $0.8 million, a $1.0
million year over year decrease (primarily driven by Payroll
Protection Program loan forgiveness in the amount of $1.1 million)
and a $1.5 million decrease sequentially from Q3 2020. Net loss per
share on a GAAP basis for the fourth quarter of 2020 was ($0.04),
compared with ($0.06) in the comparable period of Q4 2019, and
($0.01) in the prior quarter in Q3 2020.
For the
full year, non-GAAP net income was $1.0 million, a $1.0 million
increase compared to 2019, reflecting the lessening impact of China
tariffs over the course of the year as production was shifted out
of China being partially offset by the need for air freight
shipping earlier in 2020 in response to delays caused by the
pandemic. As of the fourth quarter, the company had completely
shifted production out of China and resumed ocean freight shipping.
Net loss per share on a GAAP basis in 2020 was ($0.15), compared to
($0.18) in 2019, again reflecting the increased costs associated
with tariffs and the temporary use of air freight.
The
company ended the year with $1.6 million cash, cash equivalents,
and restricted cash compared to $4.8 million at the end of Q3 2020,
due to expenses associated with the merger as well as inventory
build. The company also increased its credit facility with
Rosenthal & Rosenthal from $4.0M to $5.0M to increase financial
flexibility at a time of high customer demand and enable it to
continue to scale operations for higher product levels
and to ensure the uninterrupted introduction of new
products.
The
results reported above are preliminary and are subject to audit
adjustments.
Business
Outlook
“We
remain focused on pursuing the large opportunity ahead of us as we
build out our relationships to reach more customers in more
geographies,” said Nicole Zheng, Chief Marketing Officer of
Minim. “In addition, our retail strategy continues to expand,
with the addition of important customers in 2020 leading to greater
demand. We are committed to continuing to launch innovative
solutions that leverage our technological strength to address new
customer needs. We look forward to a robust year of new product
introductions along with market expansion as we attain new growth
under the Minim brand.”
Non-GAAP Financial Measure
Minim
is providing certain a supplemental financial measure for non-GAAP
net loss that excludes material one-time expenses and income, which
include temporary supplemental air freight, China tariffs, merger
deal costs, and income from the forgiveness of the Payroll
Protection Program loan. This supplemental financial measure is not
a measurement of financial performance under generally accepted
accounting principles in the United States (“GAAP”)
and, as a result, this supplemental financial measure may not be
comparable to similarly titled measures of other companies.
Management uses this non-GAAP financial measure internally to help
understand, manage, and evaluate business performance and to help
make operating decisions.
Minim
believes that this non-GAAP financial measure is also useful to
investors and analysts in comparing its performance across
reporting periods on a consistent basis. This supplemental
financial measure excludes temporary supplemental air freight
resulting from supply chain interruptions resulting from a global
pandemic; China tariffs as the Company believes these costs are not
part of normal business operations (the imposed tariff rates
increased mid-2019 from 10% to 25% on the value of imported goods
and remained at 25% until the Company relocated its manufacturing
source from China to Vietnam by June 2020); costs incurred and
related to the merger with Minim Inc. as the Company deems these
costs as one-time in nature; and the one-time income from the
forgiveness of the Payroll Protection Program loan.
Conference
Call Details Date/Time:
Minim
will host a conference call tomorrow, March 9, 2021, at 8:30 a.m.
ET to discuss these results. To participate, please access the live
webcast at https://ir.minim.co/, or by
dialing 1-866-393-7958 (US) or 1-706-643-5255 (international) and
referencing code 9895079.
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: https://ir.minim.co. A recording of the call will
also be made available afterwards through the investor information
section of the company’s website.
About Minim
Zoom
Telephonics Inc., doing business as Minim (OTCQB: MINM) is the
creator of innovative internet access products that dependably
connect people to the information they need and the people they
love. Headquartered in Manchester, NH, the company delivers smart
software-driven communications products under the globally
recognized Motorola® brand. Minim end users benefit from a
personalized and secure WiFi experience, leading to happy and safe
homes where things just work. To learn more,
visit https://www.minim.co.
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
Minim’s plans, expectations, and intentions, including
statements about the effects of the merger. Actual results may be
materially different from expectations as a result of known and
unknown risks, including: risks associated with Minim’s
potential inability to realize intended benefits of the merger; 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
Minim may be unable to obtain; declining demand for certain of
Minim’s products; delays, unanticipated costs, interruptions
or other uncertainties associated with Minim’s production and
shipping; Minim’s reliance on several key outsourcing
partners; uncertainty of key customers’ plans and orders;
risks relating to product certifications; Minim’s dependence
on key employees; uncertainty of new product development, including
certification and overall project delays, budget overruns, 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; the impact
of the COVID-19 pandemic; and other risks set forth in
Minim’s filings with the Securities and Exchange Commission.
Minim cautions readers not to place undue reliance upon any such
forward-looking statements, which speak only as of the date made.
Minim expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any such statements to reflect
any change in Minim’s expectations or any change in events,
conditions or circumstance on which any such statement is
based.
Investor Relations Contact:
Beth
Kurth
Conway
Communications
617.584.9650
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ZOOM TELEPHONICS, INC.
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Condensed Consolidated Balance Sheet
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(Unaudited)
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(in thousands, except share data)
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ASSETS
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December 31,
2020
(unaudited)
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December 31,
2019
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Current Assets
|
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Cash and cash
equivalents
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$772
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$1,217
|
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Restricted
cash
|
800
|
150
|
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Accounts
receivable, net
|
9,203
|
4,071
|
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Inventories,
net
|
15,324
|
7,440
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Prepaid expenses
and other current assets
|
399
|
270
|
|
Total current
assets
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26,498
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13,148
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Equipment,
net
|
455
|
303
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Operating lease
right-of-use asset, net
|
87
|
103
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Goodwill
|
59
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-
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Intangible assets,
net
|
389
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-
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Other
assets
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942
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349
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Total
assets
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$28,430
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$13,903
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LIABILITIES
AND STOCKHOLDERS' EQUITY
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Current Liabilities
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Accounts
payable
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$11,745
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$5,025
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Current maturities
of long-term debt
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2,507
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-
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Current maturities
of operating lease liabilities
|
66
|
103
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Accrued other
expenses
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6,284
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2,667
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Total current
liabilities
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20,602
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7,795
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Long-term debt,
less current maturities
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15
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-
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Operating lease
liabilities, less current maturities
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22
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-
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Total
liabilities
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20,639
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7,795
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Stockholders' equity
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Common stock:
Authorized: 40,000,000 shares at $0.01 par value; issued and
outstanding: 35,074,922 shares at December 31, 2020 and 20,929,928
shares at December 31, 2019, respectively
|
351
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209
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Additional paid-in
capital
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64,527
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46,496
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Accumulated
deficit
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(57,087)
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(40,597)
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Total stockholders'
equity
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7,791
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6,108
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Total liabilities
and stockholders' equity
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$28,430
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$13,903
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ZOOM TELEPHONICS, INC.
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Condensed Consolidated Statements of Operations
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(Unaudited)
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(in thousands, except per share data)
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Three Months Ended
December 31,
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Twelve Months Ended
December 31,
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2020
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2019
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2020
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2019
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Net
sales
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$13,733
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$10,571
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$47,989
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$37,614
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Cost of
sales
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9,222
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7,980
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34,382
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26,709
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Gross
profit
|
4,511
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2,591
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13,607
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10,905
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Operating
expenses:
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Selling and
marketing expenses
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2,506
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2,152
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9,155
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9,223
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General and
administrative expenses
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2,431
|
809
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5,444
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2,667
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Research and
development expenses
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1,803
|
753
|
3,828
|
2,237
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Total operating
expenses
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6,740
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3,714
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18,427
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14,127
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|
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|
|
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Operating
loss
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(2,229)
|
(1,123)
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(4,820)
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(3,222)
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Other income
(expense):
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Interest income
(expense), net
|
(34)
|
4
|
(47)
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(34)
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Other,
net
|
1,037
|
(30)
|
1,036
|
5
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Total other income
(expense)
|
1,003
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(26)
|
989
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(29)
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Loss before income
taxes
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(1,226)
|
(1,149)
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(3,831)
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(3,251)
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Income
taxes
|
11
|
1
|
27
|
25
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Net
loss
|
$(1,237)
|
$(1,150)
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$(3,858)
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$(3,276)
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Net
loss per share:
|
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Basic
and diluted
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$(0.04)
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$(0.06)
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$(0.15)
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$(0.18)
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Basic
and diluted weighted average
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common
and common equivalent shares
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33,834
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20,893
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25,301
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18,051
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ZOOM TELEPHONICS, INC.
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Reconciliation of GAAP to Non-GAAP Measure
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(Unaudited)
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(in thousands)
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Three Months Ended
December 31,
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Twelve Months Ended
December 31,
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2020
|
2019
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2020
|
2019
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GAAP
based net loss
|
$(1,237)
|
$(1,150)
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$(3,858)
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$(3,276)
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Non-GAAP
adjustments:
|
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Air
freight costs
|
96
|
-
|
1,540
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-
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Tariff
costs
|
110
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1,307
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2,757
|
3,197
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Merger
deal costs
|
1,270
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-
|
1,594
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-
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PPP
loan forgiveness
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(1,064)
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-
|
(1,064)
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-
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Total
Non-GAAP adjustments
|
412
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1,307
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4,827
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3,197
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Non-GAAP
based net income (loss)
|
$(825)
|
$157
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$969
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$(79)
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