Extraordinarily improving ZAP numbers posted in 10Q ending Sept 2015
Interest expense, net decreased [42%] $0.47 million from $1.12 million for the three months ended September 30, 2014 to $0.65 million for the quarter ended September 30, 2015. In the third quarter of 2015, the amortization of the previous year’s discount on the convertible debt was lower and we are incurring less interest on our notes and short term borrowings as the debts have decreased.
Other income increased [76%] by $162,000 from $212,000 for the three months ended September 30, 2014 to $374,000 for the three months ended September 30, 2015. The increase of other income is due to the increase of government grants.
Net loss [decreased 23%] for the three months ended September 30, 2015 was $3.7 million compared to $4.8 million loss for the three months ended September 30, 2014 due to increase of net sales.
Net sales increased [7%] by $1.3 million to $20.9 million for the nine months ended September 30, 2015 from $19.6 million for the nine months ended September 30, 2014.
Jonway Auto’s revenue for the nine months ended September 30, 2015 increased [9%] by $1.7 million from $18.9 million for the nine months ended September 30, 2014 to $20.6 million for the nine months ended September 30, 2015. The sales volume increase was due to the increase of sales for SUV and the significantly increased sales for EV products.
Gross loss decreased [38%] by $0.6 million from $1.6 million for the nine months ended September 30, 2014 to $1.0 million for the nine months ended September 30, 2015.
Jonway Auto’s gross loss decreased [40%] by $0.71 million from $1.76 million for the first nine months of 2014 to $1.05 million for the nine months ended September 30, 2015. The decrease in gross loss in the nine months ended September 30, 2015 was principally related to the higher profit margin on SUV and EV products. Management expects gross margin will be increased and become positive along with the increase in sales of EV products.
Interest expense, net decreased [30%] by $0.9 million from an interest expense of $3.0 million for the nine months ended September 30 2014 to interest expense of $2.1 million for the nine months ended September 30 2015. The decrease was due to repayment of convertible notes and bank acceptance notes.
Also from 10Q:
ZAP and Jonway Auto has increased its factory production capacity and running its operations at 7 days per week, single shift, with production of around 50 EV minivans per day in order to meet pressing backlog orders from Dong Feng Motor Corporation. Dong Feng is demanding delivery of at least 3,000 EV minivan this quarter by December 31, 2015 and be able to ramp to no less than 2,000 per month starting January 2016. Jonway Auto is on target to produce 800 EV minivans for October, and will be ramping up to meet the 3,000 EV minivans for this year. A second shift with additional factory equipment may have to be added to reliably meet volumes of 2,000 or more per month.
The target is to reach sales of no less than 20,000 of Jonway’s EV minivans in 2016 and aggregating to sales of 100,000 of ZAP and Jonway’s EV minivans as projected by Dong Feng over the next three years. The partnership with Dong Feng Motor facilitated by Shi Kong from Hangzhou enables Jonway Auto to offload the cost of lithium battery and the electric motor cost to Dong Feng and Shi Kong. This represents more than half of the cost of materials for the EV minivans.
Also stated in the 10Q, "The goal of the Company is to become cash flow positive by the end of 2015".
Lastly, according to a Oct 2015 ZAP news release, "projected revenues of the 20,000 EV minivans would exceed US$150 million... with reasonable margins to achieve profitability in 2016"
