ZAP Sales Up 145 Percent For Third Quarter 1998
17 November 1998
ZAP Sales Up 145 Percent For Third Quarter 1998
SEBASTOPOL, Calif.--Nov. 16, 1998--ZAP Power Systems (OTC BB:ZAPP) today reported its unaudited financial results for the three months ended September 30, 1998.
Net sales for the third quarter fiscal 1998 were up 145% over 1997.
Net sales for the nine months ended September 30, 1998 are $2,554,600 compared with $1,327,100 in the nine months ended September 30, 1997, an increase of $1,227,500 or 92%. The increase is attributed to sales of the new ZAPPY(TM) scooter, that was introduced into the marketplace at the beginning of 1998, as well as a greater acceptance of ZAP's other products in the marketplace and stronger than expected foreign sales.
Net loss for the nine months ended September 30, 1998 are $550,500 or $0.21 per share, compared with $831,500 or $0.37 per share for the same period in 1997.
Net sales for the quarter ended September 30, 1998, were $1,229,700 compared to $501,000 in the prior year. Gross profit increased as a percentage of net sales to 37% from 34%. The total gross profit increased $278,600 or 161%. This increase in gross margin is attributed to margins generated from sales of the ZAPPY(TM) and efficiency increases in manufacturing and reductions in cost of raw materials in the current quarter as compared to the quarter ended September 30, 1997.
Net loss dropped $101,200 to a loss of $91,100 or $0.03 per share for the three months ended September 30, 1998 from a loss of $192,300 or $0.08 per share for the same quarter last year. The net loss improvement was primarily attributed to the Company's marketing campaign, which generated greater sales and supported higher prices for specialty products, as well as its cost cutting initiatives, which ensured manufacturing and personnel efficiencies to increase gross profit margins.
Last month, ZAP announced the receipt of $800,000 in private capital from Preferred Capital Equities Corporation. Larry Zuckerman, President of Preferred Capital, said: "We believe that ZAP has strong growth and profit potential, is socially responsible, and has a solid management team that is poised for success."
"Our early years of investments in infrastructure and product development, which provided for increased sales and larger volume production in 1998, are now paying off with larger orders and sales worldwide," said ZAP president James McGreen. "Due to our growing sales volume and new manufacturing partnerships, we are seeing margins beginning to rise in all product areas, and total revenues are reaching new heights in 1998, setting the stage for an exciting 1999."
ZAP Power Systems develops, manufactures, markets and distributes a full line of competitively priced electric vehicles worldwide through distributors, dealers, electric vehicle outlets, and its Web Site http://www.zapbikes.com. Founded in 1994, ZAP products include electric bicycles, tricycles, scooters and motorcycles. For current holiday gift specials, call ZAP at 800/251-4555.
ZAP POWER SYSTEMS
SELECTED CONDENSED BALANCE SHEET
SEPTEMBER 30, 1998
(Unaudited)
Sept. 30, 1998
ASSETS
Cash and receivables $1,024,140
Total current assets $1,736,500
Total assets $1,981,600
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $1,028,200
Long-term debt, less current maturities $16,200
Total liabilities and stockholders' equity $1,981,600
ZAP POWER SYSTEMS
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Quarter ended Nine Months ended
Sept. 30 Sept. 30
1998 1997 1998 1997
NET SALES $1,229,700 $501,000 $2,554,600 $1,327,100
COST OF GOODS SOLD 778,500 328,400 1,684,900 1,035,100
GROSS PROFIT 451,200 172,600 869,700 292,000
OPERATING EXPENSES
Selling 255,700 159,500 665,400 424,900
General and
administrative 225,600 136,700 608,000 500,900
Research and development 51,500 66,500 131,400 185,000
------- ------ --------- ---------
532,800 362,700 1,404,800 1,110,800
LOSS FROM OPERATIONS (81,600) (190,100) (535,100) (818,800)
OTHER INCOME (EXPENSE)
Interest expense (4,500) (6,400) (10,800) (22,200)
Other (5,000) 4,200 (4,600) 9,500
------ ------ ------- -------
(9,500) (2,200) (15,400) (12,700)
NET LOSS $(91,100) $(192,300) $(550,500) $(831,500)
NET LOSS PER COMMON SHARE
BASIC AND DILUTED $ (0.03) $ (0.08) $ (0.21) $ (0.37)
WEIGHTED AVERAGE OF COMMON
SHARES OUTSTANDING 2,633,500 2,319,300 2,592,400 2,233,400
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.