Kandi Technologies Reports Full Year 2012 Financial Results and Achieved Significant Gains in EV Sales

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| Source: Kandi Technologies, Corp.

-Q4 Revenue Increases 131.2% YoY to $26.3 Million-

-Full Year Revenue Increases 60.6% YoY to $64.5 Million-

-Full Year Operating Income Increases 74.9% YoY to $5.3 Million-

-EV sales rose 204.4% YoY to $19.0 Million-

JINHUA, China, April 1, 2013 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the 'Company' or 'Kandi') (Nasdaq:KNDI), a leading Chinese manufacturer and developer of pure electric vehicles (EVs) and all-terrain vehicles (ATVs), today announced its financial results for the fourth quarter and full year ending December 31, 2012.

Full Year 2012 Highlights

  • Revenues grew 60.6% to $64.5 million from $40.2 million in 2011
  • ATV sales increased 32.0% to 6.4 million
  • Go-kart sales increased 34.3% to 30.8 million
  • EV sales significantly increased 204.4% or $12.8 million to $19.0 million and the Company sold 3,915 units in the full year
  • Refitted car sales increased 70.5% to $3.2 million
  • Gross profit for the full year of 2012 increased 39.9% to $12.9 million compared to $9.2 million in 2011
  • Income from operations grew 74.9% to $5.3 million from $3.0 million in 2011
  • GAAP net income decreased 33.6% to $6.0 million from $9.1 million in 2011 due to a change in the fair value of financial derivatives, higher income tax, and an increase in general and administrative expenses, research and development expenses, and interest expenses in 2012
  • Non-GAAP net income* increased 3.2% to $4.2 million from $4.0 million from the previous year
  • Cash, cash equivalents and restricted cash totaled $28.0 million at year end, a 213.2% increase from $8.9 million at the end of 2011
  • Working capital surplus was $35.9 million at the end of December 31, 2012, an increase from a working capital surplus of $17.5 million as of December 31, 2011

Fourth Quarter 2012 Highlights

  • Revenues rose significantly: 131.2% to $26.3 million from $11.4 million in the same period last year
  • Gross profit increased 82.8% to $4.5 million compared to $2.5 million in the fourth quarter of 2011
  • GAAP net income increased to $2.2 million from a net loss of $829,831 for the same period of last year

"We are very pleased about the fourth quarter of 2012 and full year financial results. While our legacy business experienced solid growth, EV sales have achieved a significant growth in both unit sales and revenue contributions." Mr. Xiaoming Hu, Chief Executive Officer and Chairman of Kandi Technologies commented, "2012 was a breakout year for Kandi, we not only launched China's largest EV leasing program in Hangzhou, but also have negotiated new EV expansion plans in the Shandong and Hainan markets. Kandi is now even better prepared for the increasing EV demand from Chinese consumers and well positioned to benefit from further government initiatives to promote electric vehicles in China."

"We remain confident about the future growth of our EV and legacy business. With our recent joint venture partnership with Geely Auto, we expect to become a more fully integrated provider of pure electric vehicles to escalate our market position," concluded by Mr. Hu.

*Non-GAAP net income is defined as excluding the change of the fair value of financial derivatives, the effects of option related expenses, the stock award expense, the Convertible Note's interest expense, and the effect caused by amortization of discount on Convertible Notes. We supply non-GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations.

 
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
     
   2012 2011
REVENUES, NET $64,513,670 $40,177,148
      
COST OF GOODS SOLD -51,620,280 -30,964,173
      
GROSS PROFIT 12,893,390 9,212,975
Research and development -2,877,283 -2,304,373
Selling and marketing -455,983 -414,255
General and administrative -4,250,832 -3,458,388
INCOME FROM CONTINUING OPERATIONS 5,309,292 3,035,959
Interest income 2,658,104 2,200,678
Interest (expense) -2,775,891 -1,945,260
Government grants 132,139 298,072
Investment income (expense) in trading security -- 9,653
Other, net 332,936 717,495
Change in fair value of financial instruments 1,986,063 5,401,929
Investment (loss) in associated companies -69,429 -52,696
INCOME (LOSS) BEFORE INCOME TAXES 7,573,214 9,665,830
      
INCOME TAX EXPENSE -1,523,735 -551,060
      
NET INCOME 6,049,479 9,114,770
        
OTHER COMPREHENSIVE INCOME      
        
Foreign currency translation 424,623 1,816,639
      
COMPREHENSIVE INCOME $6,474,102 $10,931,409
      
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC 29,439,328 27,438,725
      
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED 29,677,325 28,735,748
      
NET INCOME PER SHARE, BASIC $0.21 $0.33
       
NET INCOME PER SHARE, DILUTED $0.20 $0.32
See notes to consolidated financial statements    
     
     
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
     
ASSETS     
     
   December 31, December 31,
   2012 2011
      
CURRENT ASSETS     
Cash and cash equivalents  $12,135,096 $2,294,352
Restricted cash  15,835,364 6,634,989
Accounts receivable  33,557,534 12,932,776
Inventories (net of reserve for slow moving inventory of $56,248 and $72,487 as of December 31, 2012 and 2011 respectively  7,630,715 6,674,467
Notes receivable  9,562,429 37,879,243
Other receivables  501,448 2,438,917
Prepayments and prepaid expenses  563,861 185,037
Due from employees  40,936 79,857
Advances to suppliers 4,769,825 852,638
Deposit for acquisition 24,397,967 --
Total Current Assets 108,995,175 69,972,276
        
LONG-TERM ASSETS      
Plant and equipment, net 35,725,740 20,981,893
Land use rights, net 14,337,691 10,992,769
Construction in progress -- 10,007,601
Deferred taxes 695 89,998
Investment in associated companies 161,507 229,213
Goodwill 322,591 --
Intangible assets 741,591 --
Total Long-Term Assets 51,289,815 42,301,474
     
TOTAL ASSETS $160,284,990 $112,273,750
     
LIABILITIES AND STOCKHOLDERS' EQUITY  
     
   December 31, December 31,
   2012 2011
CURRENT LIABILITIES    
Accounts payable $8,668,478 $5,061,069
Other payables and accrued expenses 3,092,045 3,137,983
Short-term bank loans 32,615,063 36,372,492
Customer deposits 292,389 1,025,357
Notes payable, net of discount of $0 and $71 as of December 31, 2012 and 2011 respectively 25,332,088 5,847,552
Income tax payable 680,253 153,730
Due to employees 7,132 9,455
Due to related party 841,251 841,251
Deferred taxes 55,166 56,362
Financial derivate - liability 1,513,013 213
Total Current Liabilities 73,096,878 52,505,464
        
LONG-TERM LIABILITIES      
Note payable, net of discount of $0 and $0 as of December 31, 2012 and 2011 respectively -- --
Bond payable 12,666,044 --
Financial derivatives - liability -- 3,919,411
Total Long-Term Liabilities 12,666,044 3,919,411
     
TOTAL LIABILITIES 85,762,922 56,424,875
     
STOCKHOLDERS' EQUITY      
Common stock, $0.001 par value; 100,000,000 shares authorized; 31,696,794 and 27,445,600 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively 31,697 27,446
Additional paid-in capital 43,728,218 31,533,378
Retained earnings (the restricted portion is $2,831,005 and $1,940,832 at December 31, 2012 and December 31, 2011, respectively) 25,259,809 19,210,330
Accumulated other comprehensive income 5,502,344 5,077,721
TOTAL STOCKHOLDERS' EQUITY 74,522,068 55,848,875
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $160,284,990 $112,273,750
See notes to consolidated financial statements  
   
   
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
     
   2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $6,049,479 $9,114,770
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization 4,978,626 4,696,848
Asset impairments 465,199 --
Deferred taxes 92,521 207,327
Change in value of financial instruments -1,986,063 -5,401,929
Loss in investment (including investment in associated company) 69,429 52,696
Notes and warrant issuance payments -- --
Option cost 19,053 252,632
      
Changes in operating assets and liabilities, net of effects of acquisition:   
(Increase) Decrease In:     
Accounts receivable -20,513,099 4,647,184
Inventories -904,355 -550,024
Other receivables 1,955,055 -1,566,603
Due from employees 37,117 -45,096
Prepayments and prepaid expenses -4,285,489 -730,321
Marketable equity securities (trading) -- 307,098
      
Increase (Decrease) In:    
Accounts payable 3,566,354 -1,614,496
Other payables and accrued liabilities -50,333 2,326,656
Customer deposits -740,419 924,241
Income tax payable 525,030 21,087
Net cash (used in) provided by operating activities -10,721,895 12,642,070
       
CASH FLOWS FROM INVESTING ACTIVITIES:     
Purchases of plant and equipment -19,150,867 -646,143
Change of construction in progress 10,078,637 -9,839,388
Deposit for acquisition -24,383,529 --
Issuance of notes receivable -1,011,821 -22,992,866
Repayments of notes receivable 29,603,171 11,147,503
Cash acquired in acquisition 112,551 --
Net cash provided by (used in) investing activities -4,751,858 -22,330,894
Restricted cash -9,143,907 11,246,288
Proceeds from short-term bank loans 41,504,215 48,891,560
Repayments of short-term bank loans -45,539,128 -42,171,867
Proceeds from notes payable 40,491,531 35,562,160
Repayments of notes payable -21,063,559 -49,260,448
Proceeds from bond payable 12,658,548 --
Option exercise & other financing 1,258,231 65,544
Warrant exercise 1,672,739 --
Common stock issued, net of cost of capital 3,784,149 --
Net cash provided by financing activities 25,622,819 4,333,237
       
NET DECREASE IN CASH AND CASH EQUIVALENTS 10,149,066 -5,355,587
Effect of exchange rate changes on cash -308,322 -104,227
Cash and cash equivalents at beginning of year 2,294,352 7,754,166
CASH AND CASH EQUIVALENTS AT END OF YEAR $12,135,096 $2,294,352
      
SUPPLEMENTARY CASH FLOW INFORMATION    
Income taxes paid $998,706 $529,973
Interest paid $2,570,691 $2,509,808
Issuance of Common stock for acquisition $8,616,416 $--
     

About Kandi Technologies Group, Inc.

Kandi Technologies Group, Inc. (Nasdaq:KNDI) is a manufacturer and exporter of a variety of vehicles in China, making it a world leader in the production of popular off-road vehicles (ORVs). It also ranks among the leading manufacturers in China of all-terrain vehicles (ATVs), specialized utility vehicles (UTVs), and a recently introduced second-generation high mileage, two-seat three-wheeled motorcycle. Another major company focus has been on the manufacture and sale of the COCO electric vehicle (EV), a highly economical, beautifully designed, all-electric super mini-car for neighborhood driving and commuting. The convertible and hardtop models of the COCO EV are available in the United States and other countries, while the Chinese government has approved the sale of Kandi EVs in China since 2010. More information can be viewed at its corporate website is http://www.kandivehicle.com/.

Safe Harbor Statement

This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Kandi Technologies Group, Inc.
China:
Email: 
Phone: 86-579-82239856

U.S.A.:
Email: 
Phone: 1-212-551-3610