ZAPWORLD.COM Reports a 93% Increase in 2000 Net Sales
SEBASTOPOL, Calif.--March 29, 2001--ZAPWORLD.COM today reported its financial results for the year ended December 31, 2000."ZAPWORLD.COM (ZAP)'s growth in revenue reflects our corporate goal to dominate the personal electric vehicle (EV) market," said ZAP Chief Executive Officer Gary Starr. "2000 was a year marked by substantial expansion of our product line and customer base, yet it was accompanied by higher costs and expenses than desired. In 2001, we intend to continue revenue expansion, have undertaken an extensive corporate cost cutting program, and are shifting production overseas to improve our bottom line results. Demand for our products continues to be strong with a backlog of orders and purchase contracts in hand reaching $6.4 million as of today."
"We continue to push ahead with an aggressive research and product development program," says Starr. "Our emphasis on developing, protecting and acquiring proprietary technology related to EVs enhances our long-term competitive advantage."
This past year ZAP expanded its product line by introducing the following electric vehicles: ZAPPY(R) JR., an electric motor scooter targeted to children six to ten; ZAPPY Turbo, an improved version of our popular ZAPPY scooter with faster acceleration; SWIMMY(TM), a water scooter which has been named a finalist for the NASDAQ Sports Product of the Year; LECTRA(TM), the only electric motorcycle in production; POWERBIKE(R), an improved electric mountain bike with a new low price targeting mass merchants; and POWERSKI(R), a two-wheeled device that pulls skaters on land like a water or snow skier.
ZAP is now the holder of 14 patents and is developing one of the strongest brand names in the EV industry. ZAP is now the registered owner the trademarks ZAP(R), ELECTRICRUIZER(R), POWERBIKE(R), POWERSKI(R), ZERO AIR POLLUTION(R), ZAP ELECTRIC VEHICLE OUTLET(R), and ZAPPY(R). In 2000, approximately $700,000 was invested to: establish ZAP's patented technology; acquire financial and technology partners; and to fund related legal work. Mr. Starr explained, "We intend to vigorously defend our intellectual property rights and have engaged a law firm to act on our behalf in a patent infringement matter."
In 2000, ZAP acquired Electric Vehicles Systems, Inc., Aquatic Propulsion Technology, Inc. and Electric Motorbike Inc. These acquisitions give ZAP products for inline skating, electric water scooters, and motorbikes, respectively. Strategic alliances were also formed during 2000 to provide ZAP with distribution arrangements to offer new items such as electric motor scooters, go-karts and pedicabs.
As of December 31, 2000, ZAP's cash position was the strongest at any of our fiscal year-ends with cash totaling $3.5 million and shareholders equity totaling $11 million. Cash increased primarily due to investments made by a group of investors through Union Atlantic during the year.
ZAP's revenues for 2000 were $12.4 million, compared with $6.4 million in 1999; an increase of 93%, again reflecting increased revenues from ZAP's products and an expansion in its customer base. Sales generated from the Internet increased 134% in 2000 growing from $259,000 in 1999 to $605,000 in 2000.
The Gross Profit increased from $1.9 million in 1999 to $4.6 million in 2000, or 31% to 37% as a percentage of net sales, respectively. The increase was primarily due to product mix and greater efficiencies in the manufacturing process. ZAP anticipates further improvement in 2001 as it works off the current inventory of parts and shifts its production facilities overseas.
Operating expenses of $6.7 million in 2000 and $3.5 million in 1999 remained fairly consistent at 54% of net sales. However, improvements must be made in cost controls to reduce expenses in 2001. Delays in shifting production overseas also caused an increase in overhead expenses in 2000.
The net operating loss for the year of $1.9 million remained fairly consistent with the $1.7 million loss in 1999. The net loss per share, which includes a non-cash preferred dividend of $2.6 million in 2000, is $0.85 versus a loss of $0.43 in 1999. In connection with the investment funds received during the year, a deemed, that is an accounting entry, preferred dividend was recorded to reflect the beneficial conversion feature of the issued preferred stock. The net loss was further increased as the result of growth acceleration in product development, good will and warrant write-downs associated with acquisitions, financing costs, and Company expenditures for market positioning in the EV industry.
ZAP has set an annual meeting date for June 16, 2001 in Sebastopol, California. ZAP's Common shares are listed on the NASDAQ Small Cap Stock Exchange under the trading symbol "ZAPP." For more information on ZAP, its ZAPPYLAND(TM) outlet stores, or for ordering an EV, go to www.zapworld.com.
ZAPWORLD.COM and Subsidiaries
Consolidated Balance Sheet
December 31, 2000
(Amounts in Thousands Except Share Amounts)
Year ended
December 31, 2000
ASSETS -----------------
Cash and cash equivalents $ 3,543
Total assets $ 12,827
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 1,696
Total liabilities and stockholders' equity $ 12,827
ZAPWORLD.COM and Subsidiaries
Consolidated Statements of Operations
For the years ended December 31, 2000 and 1999
(Amounts in $000's except per share)
Year Ended December 31,
2000 1999
------------ ------------
Net sales $ 12,443 $ 6,437
Cost of Goods Sold $ 7,860 $ 4,446
--------- ---------
Gross Profit $ 4,583 $ 1,991
Gross Profit as a % of Net Sales 37% 31%
Operating Expenses $ 6,727 $ 3,497
Net loss $ (1,897) $ (1,693)
Net loss per common share
after preferred dividend,
basic and diluted $ (0.85) $ (0.43)
Weighted average of
common shares outstanding 5,361,905 3,927,633
This release contains forward-looking statements reflecting ZAPWORLD.COM's current expectations as contemplated under the Safe Harbor provisions of the US Private Securities Litigation Reform Law of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including, without limitation, product development delays, changing environmental regulations, the ability to attract and retain business partners, future levels of government incentives, competition from other electric vehicle manufacturers, competition from other advanced energy transportation technologies, competition from existing energy technologies, evolving markets for electric transportation vehicles, and the ability to provide the capital required for product development and distribution.