Zapworld.Com (ZAP, Sebastopol, CA) reported its financial results for the first quarter ended March 31, 2001. Revenue for the quarter was $2.0 million, up 6.1 percent compared with $1.9 million in 2000. The company incurred a net loss of $1.3 million, or $0.22 per share, after accounting for other income and the dividend on the preferred stock. Operating expenses of $1.8 million in 2001 increased $600,000 over the $1.2 million in 2000, or 65 percent to 88 percent as a percentage of net sales.
“Our first-quarter numbers are lower than anticipated as we responded to pressures from lower-cost competitors by reducing our pricing, which temporarily hurt our margins. At the same time we are moving manufacturing for our more popular products to overseas contract manufacturers, which we expect will ultimately improve our manufacturing costs by 25 to 40 percent. Unfortunately, however, none of this happened as quickly as we would ideally have liked. Assessing economic conditions, we also carefully reviewed our internal operations and have cut our personnel by 30 percent, while we continue to explore all other opportunities to reduce expenses," said Gary Starr, CEO of ZAP.
