ZAP Reports Second Quarter 2001 Financial Results
SEBASTOPOL, Calif.--Aug. 14, 2001--ZAP , formerly known as ZAPWORLD.COM, today reported its financial results for the second quarter ended June 30 of fiscal year 2001.Total revenues for the quarter ended June 30, 2001, were $940,000 compared to $2,283,000 in the prior year, a decrease of $1,343,000 or 59%. Net loss for the same period was $1,953,000, or $ 0.31 per share, compared to a net loss of $477,000 or $ 0.09 per share in 2000. Revenues for the six months ended June 30, 2001 were $2,953,000 compared to $4,180,000 in the prior year. The net loss for the first six months of 2001 was $3,237,000 or $ 0.54 per share, compared to a loss of $960,000 or $ 0.19 per share in the prior year.
According to the company, the decline in sales can be linked to several factors, including sales returns from large distributors experiencing cash flow difficulties, and negative gross profits which are in response to lower-cost competition from alleged patent infringements by products manufactured in China and overseas.
"The company is taking several corrective actions to affect a turnaround plan, improve margins and reduce costs. Comprehensive restructuring and cost cutting has helped streamline the workforce by eliminating 65% of employees since January 2001. We also have moved our production overseas to lower cost contract manufacturers. In addition, the company is narrowing its sales and marketing focus to develop a core group of products that will be promoted for the holiday season. We are making progress with restructuring the Company's balance sheet, reducing costs and creating a new strategic business plan," said Bill Hartman, CFO of ZAP.
In elaborating on some business developments during the second quarter, Mr. Hartman continued, "In June, ZAP launched production of its new model POWERBIKE(R) electric bicycle with a Taiwanese contract manufacturer, specifically designed for the worldwide mass retail market. On June 5, 2001 ZAP also announced that it has formed a partnership with a fuel cell company to develop an electric-assist bicycle powered by a hydrogen fuel cell."
ZAP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands, except share amounts)
Quarter ended Six Months ended
June 30, June 30,
2001 2000 2001 2000
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Net sales $ 940 $ 2,283 $ 2,953 $ 4,180
Cost of goods sold 1,376 1,475 2,918 2,658
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Gross profit (loss) (436) 808 35 1,522
Gross profit (loss)
as a % of net sales (46)% 35% 1% 36%
Operating expenses 1,525 1,328 3,302 2,554
Other income 8 43 30 72
Net loss $(1,953) $ (477) $(3,237) $ (960)
Net loss per share
after preferred
dividend, basic
and diluted $ (0.31) $ (0.09) $ (0.54) $ (0.19)
Weighted average of
common shares
outstanding 6,374 5,224 6,170 5,187
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Forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the Company's products, increased levels of competition for the Company, new products and technological changes, the Company's dependence upon third-party suppliers, intellectual property rights, and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.