ZAP Reports Profits of $1.15 Million for Fiscal 2002
SEBASTOPOL, Calif., April 1 -- Electric transportation company ZAP (BULLETIN BOARD: ZAPZ) today announced that it has recorded net profits of $1.15 Million for the fiscal year ended December 31, 2002 after recording a $3.9 million extraordinary gain of long-term debt that was converted into common stock. Net earnings were $0.28 per share.
In addition to the extraordinary gain, results for ZAP's operations during 2002 also reflect mergers with The RAP Group, Inc. and Voltage Vehicles (VV), two automotive marketing companies. Management notes that the results for 2002 include two quarters activity for the newly acquired companies as of July 1, 2002. Net sales for the year ended December 31, 2002 were $4.4 million compared with $5 million in the prior year. RAP's net sales for the period accounted for $2.6 million. Prior to the extraordinary gain and mergers, net sales for ZAP were $1.8 million versus $4.9 million for the same period in 2001. Net operating losses prior to the extraordinary gains were $2.6 million in 2002 versus $9.2 million in 2001.
Officials at ZAP say the Company has taken action in 2002 to decrease the prior year's operating losses, such as the reorganization, the mergers with RAP and VV, cost-cutting, and making the transition from a manufacturer to a marketing company. The groundwork laid in 2002 has helped position ZAP to move forward with its business plan and respond to increasing demand for electric transportation. ZAP noted the following new developments:
-- In 2002, ZAP signed an exclusive agreement with Daka Development Ltd,
for the design, manufacturing and marketing of a full line of advanced
transportation and alternative energy products, including Daka's SEA-
DOO(R) SEASCOOTER(TM). In June, Daka granted ZAP a $500,000 loan for
inventory financing of Daka's items. In September, Daka exercised its
option to convert the entire amount of the note to ZAP common stock and
has agreed to additional financing in 2003.
-- VIENTO(TM) -- In January 2003, ZAP signed an agreement with The
Electric Cycle Company, a California company that makes a new moped-
class electric scooter called the VIENTO that ZAP says sets a new
standard in electric vehicle performance. The VIENTO is one of the
only purpose-built electric motorbikes in production, representing more
than seven years of research and development in electric propulsion
design and engineering.
-- ZAP received worldwide media coverage in January 2003 at the Consumer
Electronics Show (CES) in Las Vegas, the world's largest new technology
exposition, where it showcased a new electric car under development and
announced a lithium-ion battery technology that has the potential to
quadruple the range of today's electric vehicles.
-- SEASCOOTER(TM) -- Based on the holiday response as well as first
quarter sales for the new SEASCOOTER, ZAP has expanded its marketing
program for the electric dive propulsion vehicle. In February, ZAP
announced it had received a $250,000 sales order from a distribution
company in Mexico. The affordability of the dive and snorkeling
vehicle has attracted additional demand from boat owners and the
swimming pool market.
-- ZAP's new Light Utility Vehicle (ZAP L.U.V.(TM)) has received
international media coverage with CNN, the Discovery Channel, TECH-TV,
Home & Garden television and others, as well as popular magazines like
Motortrend. Voltage Vehicles, a subsidiary of ZAP, has signed an
exclusive agreement with a European-based group of companies involved
in the design and manufacturing of electric automobiles. The group has
started production on several different types of light electric utility
vehicles for urban transportation and commercial use. The L.U.V., a 25
MPH neighborhood electric car, is the first of these vehicles to be
available.
-- On March 25, 2003, ZAP purchased a three-story office building in
downtown Santa Rosa, California at 501 Fourth Street with approximately
20,000 square feet of space. The new facility will be the corporate
headquarters and a retail store for ZAP.
-- ZAP to date has delivered more than 80,000 electric vehicles worldwide
and has been acknowledged as a leader in electric transportation by
Time Magazine, The Wall Street Journal, Advertising Age and Industry
Week. Company officials believe ZAP is one of the strongest brand
names in alternative transportation. The names ZAP and ZAPPY have
become a generic term for electric bicycles and scooters.
-- Record gas prices in March 2003 have directed worldwide recognition
towards battery-powered vehicles, particularly in light of mounting
concerns about air pollution, energy security, global climate change,
ozone depletion, dependence on foreign oil, as well as concerns for
global political, military and economic conditions.
-- The Company has a $2.1 million backlog of orders and purchase contracts
in hand for electric vehicles as of March 28, 2003. The Company expects
to fill its entire backlog within the current fiscal year.
About ZAP
Established in 1994, ZAP helped pioneer the market for electric bicycles, scooters and other short-range electric vehicles. Last year, the publicly owned company completed mergers with two automotive companies, and announced in January that it would enter the electric car market. For more information about ZAP, visit http://www.zapworld.com/ or call 800-251-4555.
ZAP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands; except per share data)
Year ended December 31
2002 2001
Net sales $4,413 $4,998
Cost of goods sold 4,159 5,850
Gross profit (loss) 254 (852)
Operating expenses:
Sales and marketing 541 1,098
General and administrative 2,302 4,083
Research and development 30 500
Impairment write-off 50 2,610
Total operating expenses 2,923 8,291
Loss from operations (2,669) (9,143)
Other income (expense):
Interest expense (12) (11)
Other income (expense) 39 (44)
27 (55)
Loss before reorganization fees,
extraordinary gain and income taxes (2,642) (9,198)
Reorganization fees (170) --
Loss before extraordinary gain and
income taxes (2,812) (9,198)
Provision for income taxes 2 1
Loss before extraordinary gain (2,814) (9,199)
Extraordinary gain 3,964 --
Net income (loss) $1,150 $(9,199)
Loss per share before extraordinary gain:
Basic $(0.69) $(8.53)
Diluted $(0.69) $(8.53)
Earnings (loss) per share:
Basic $ 0.28 $(8.53)
Diluted $ 0.17 $(8.53)
Weighted average number of common
shares outstanding:
Basic 4,051 1,079
Diluted 6,945 1,079
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.