Kandi Technologies Reports Fourth Quarter and Full Year 2013 Financial Results

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| Source: Kandi Technologies, Corp.

-EV sales achieved 193.7% gains in Q4
-Q4 Revenue Increased 92.2% YoY to $50.6 Million
-Full Year Revenue Grew 46.5% YoY to $94.5 Million

JINHUA, China, March 17, 2014 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the 'Company' or 'Kandi') (Nasdaq:KNDI), today announced its financial results for the fourth quarter and full year ending December 31, 2013.

Fourth Quarter 2013 Highlights

  • Revenues rose 92.0% to $50.6 million from $26.3 million in the fourth quarter of 2012. EV sales increased significantly to $40.0 million, a 193.7% jump from the same period last year. During the quarter, the Company sold 3,568 units of pure electronic vehicles
  • Gross profit increased 152.0% to $11.4 million from $4.5 million in the same period last year
  • GAAP net loss was ($14.7 million) compared to a net income of $2.2 million in the same period of last year, mainly due to increases of non-cash charges, such as change of fair value of financial derivatives, higher income tax, general and administrative expenses, and interest expenses
  • Non-GAAP net income* was $4.6 million, up nearly 259% year-over-year from $1.3 million.

Full Year 2013 Highlights

-- Total revenues grew 46.5% to $94.5 million from $64.5 million in 2012

  • ATV sales increased 62.6% to 10.4 million
  • EV sales were up 144.9% to $46.6 million and the Company sold 4,694 units in the full year of 2013
  • UTV sales grew 262.1% to $1.2 million

-- Gross profit increased 68.6% to $21.7 million compared to $12.9 million in 2012
-- Gross margin increased about three hundred basis points to 23.0%
-- GAAP net loss in 2013 was ($21.1 million) due to a significant increase in the fair value of financial derivatives, general and administrative expenses, and interest expenses compared to net income of $6.0 million in 2012
-- Non-GAAP net income* increased 23.9% to $5.2 million from $4.2 million from the previous year

*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.

Mr. Xiaoming Hu, Chairman and Chief Executive Officer of Kandi Technologies commented, "We are very pleased to deliver an excellent financial performance for 2013, especially a robust Q4 result. As we have predicted in the past that 2013 was truly a breakthrough year for Kandi and our shareholders. The newly launched Public EV Sharing System in Hangzhou has been well received and highly recognized by our customers and various local governments as another innovative EV business model by Kandi. This EV sharing project was featured in the various national and international media outlets, such as China Central Television (CCTV), Associated Press (AP) and Bloomberg. During the year, we have formed and completed a strategic EV joint venture with Geely Auto which has already produced a profound impact on improving and expanding our EV business by a better consolidation of brands, resources and expertise to gain more market shares in China's pure EV sector."

"With the newly unveiled EV subsidy policy in China, many of our pending EV orders have begun to be fulfilled during the fourth quarter in which we sold 3,568 units. For full year 2013, we achieved our expectations for revenue growth, including that almost 50% of total revenue came from EV sales. We expect this growth momentum will carry well into 2014. Together with JV partner, Geeley Auto, we now have three full-scale specialized EV production facilities, located in Shanghai, Changxing and Jinhua, which enable us to meet the strong market demand for electric vehicles in coming years."

"It is noteworthy that Kandi was upgraded for the NASDAQ Global Select Market in the beginning of this year, which is another indication of our hard work to maximize shareholders' value. We look forward to another stellar year in 2014 as Kandi continues to expand our EV sharing business in our existing markets as well as other major cities in China. " Mr. Hu concluded.

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
     
     
  2013 2012
REVENUES, NET $94,536,045 $64,513,670
     
COST OF GOODS SOLD (72,793,517) (51,620,280)
     
GROSS PROFIT 21,742,528 12,893,390
Research and development (3,728,730) (2,877,283)
Selling and marketing (399,504) (455,983)
General and administrative (16,056,107) (4,250,832)
INCOME FROM CONTINUING OPERATIONS 1,558,187 5,309,292
Interest income 1,516,477 2,658,104
Interest (expense) (4,395,353) (2,775,891)
Government grants 228,396 132,139
Other, net 676,257 332,936
Change in fair value of financial instruments (16,647,283) 1,986,063
Share of (loss) in associated companies (69,056) (69,429)
Share of profit after tax of JV (2,414,354) --
     
     
INCOME (LOSS) BEFORE INCOME TAXES (19,546,729) 7,573,214
     
INCOME TAX EXPENSE (1,593,994) (1,523,735)
     
NET (LOSS) INCOME  (21,140,723) 6,049,479
     
OTHER COMPREHENSIVE INCOME    
     
Foreign currency translation 2,112,902 424,623
     
COMPREHENSIVE INCOME $(19,027,821) $6,474,102
     
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC 34,707,973 29,439,328
     
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED 34,707,973 29,677,325
     
NET INCOME PER SHARE, BASIC $(0.61) $0.21
     
NET INCOME PER SHARE, DILUTED $(0.61) $0.20
 
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
     
ASSETS 
     
  December 31, December 31,
  2013 2012
     
CURRENT ASSETS    
Cash and cash equivalents  $12,762,369 $12,135,096
Restricted cash  1,636 15,835,364
Accounts receivable  31,370,862 33,557,534
Inventories (net of provision for slow moving inventory of $352,734 and $56,248 as of December 31, 2013 and 2012 respectively)  9,187,714 7,630,715
Notes receivable  13,794,094 9,562,429
Other receivables  556,904 501,448
Prepayments and prepaid expenses  505,513 563,861
Due from employees  34,272 40,936
Advances to suppliers 8,867,074 4,769,825
Amount due from JV Company, net 2,917,592 --
Deferred tax 13,706 --
Deposit for acquisition -- 24,397,967
Total Current Assets 80,011,736 108,995,175
     
LONG-TERM ASSETS    
     
Plant and equipment, net 29,333,516 35,725,740
Land use rights, net 14,453,191 14,337,691
Construction in progress 16,356 --
Deferred taxes 81,076 695
Investment in associated company 96,838 161,507
Investment in JV Company 79,331,930 --
Goodwill 322,591 322,591
Intangible assets 659,496 741,591
Total Long-Term Assets 124,294,994 51,289,815
     
TOTAL ASSETS $204,306,730 $160,284,990
 
LIABILITIES AND STOCKHOLDERS' EQUITY
     
     
  December 31, December 31,
  2013 2012
CURRENT LIABILITIES    
Accounts payable $22,843,143 $8,668,478
Other payables and accrued expenses 2,422,613 3,092,045
Short-term bank loans 34,020,281 32,615,063
Customer deposits 44,404 292,389
Notes payable 16,683,023 25,332,088
Income tax payable 1,362,828 680,253
Due to employees 10,297 7,132
Due to related party -- 841,251
Deferred taxes -- 55,166
Financial derivative - liability 9,256,827 1,513,013
Total Current Liabilities 86,643,416 73,096,878
     
LONG-TERM LIABILITIES    
Deferred tax 1,009,477 --
Bond payable 13,084,724 12,666,044
Financial derivatives - liability 15,042,994 --
Total Long-Term Liabilities 29,137,195 12,666,044
     
TOTAL LIABILITIES 115,780,611 85,762,922
     
     
STOCKHOLDERS' EQUITY    
Common stock, $0.001 par value; 100,000,000 shares authorized; 37,012,904 and 31,696,794 shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively 37,013 31,697
Additional paid-in capital 76,754,774 43,728,218
Retained earnings (the restricted portion is $3,807,551 and $2,831,005 at December 31, 2013 and December 31, 2012, respectively) 4,119,086 25,259,809
Accumulated other comprehensive income 7,615,246 5,502,344
TOTAL STOCKHOLDERS' EQUITY 88,526,119 74,522,068
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $204,306,730 $160,284,990
 
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012
     
  2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net (loss) income $(21,140,723) $6,049,479
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 7,708,923 4,978,626
Assets impairments 355,876 465,199
Deferred taxes 876,255 92,521
Change in value of financial instruments 16,647,283 (1,986,063)
Loss in investment in associated company 69,056 69,429
Share of profit after tax of JV 2,414,354 --
Option cost -- 19,053
     
Changes in operating assets and liabilities, net of effects of acquisition:    
(Increase) Decrease In:    
Accounts receivable 3,251,168 (20,513,099)
Inventories (1,287,045) (904,355)
Other receivables (38,491) 1,955,055
Due from employees 10,797 37,117
Prepayments and prepaid expenses (3,810,447) (4,285,489)
Amount due from JV (2,877,972) --
     
Increase (Decrease) In:    
Accounts payable 13,699,528 3,566,354
Other payables and accrued liabilities (746,838) (50,333)
Customer deposits (254,151) (740,419)
Income tax payable 651,124 525,030
Due to related party (841,251) --
Net cash (used in) provided by operating activities 14,687,446 (10,721,895)
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
(Purchases)/Disposal of plant and equipment, net (158,830) (9,072,230)
Purchases of construction in progress (16,134) --
Deposit for acquisition -- (24,383,529)
Asset acquisition, net of deposit (39,673,000) --
Disposal of subsidiary 64,535,177 --
Issuance of notes receivable (4,174,247) (1,011,821)
Repayments of notes receivable 311,844 29,603,171
Investment in JV (80,668,972) --
Cash acquired in acquisition -- 112,551
Net cash provided by (used in) investing activities (59,844,162) (4,751,858)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Restricted cash 16,135,044 (9,143,907)
Proceeds from short-term bank loans 52,918,845 41,504,215
Repayments of short-term bank loans (52,596,170) (45,539,128)
Proceeds from notes payable 83,251,992 40,491,531
Repayments of notes payable (92,609,593) (21,063,559)
Proceeds from bond payable 12,907,035 12,658,548
Repayments of bond payable (12,907,035) --
Fund raising through issuing common stock and warrants 26,387,498 --
Option exercise, stock award & other financing 9,659,103 1,258,231
Warrant exercise 3,171,259 1,672,739
Common stock issued for acquisition, net of cost of capital -- 3,784,149
Net cash provided by financing activities 46,317,978 25,622,819
     
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,161,262 10,149,066
Effect of exchange rate changes on cash (533,989) (308,322)
Cash and cash equivalents at beginning of year 12,135,096 2,294,352
CASH AND CASH EQUIVALENTS AT END OF YEAR $12,762,369 $12,135,096
     
SUPPLEMENTARY CASH FLOW INFORMATION    
Income taxes paid $942,870 $998,706
Interest paid $3,565,496 $2,570,691
Issuance of Common stock for acquisition $-- $8,616,416

About Kandi Technologies Group, Inc.

Kandi Technologies Group, Inc. (Nasdaq:KNDI), headquartered in Jinhua, Zhejiang Province, is engaged in the research and development, manufacturing and sales of various vehicles. Kandi has established itself as the one of the world's largest manufacturer of pure electric vehicles (EVs), Go-Kart vehicles, and tricycle and utility vehicles (UTVs), among others. 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.

Ms. Kewa Luo
Phone: 1-212-551-3610
Email: