Kandi Technologies Reports First Quarter 2014 Financial Results and Revenue for EV Sales More Than Tripled

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| Source: Kandi Technologies, Corp.

-Q1 Revenue Increased 174.0% YoY to $40.2 Million-

-EV Sales Rose 384.5% YoY to $8.4 Million-

JINHUA, China, May 12, 2014 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the "Company" or "Kandi") (Nasdaq:KNDI), today reported its financial results for the first quarter ended March 31, 2014.

For the three months ended March 31, 2014:

  • Revenues grew 174.0% to $40.2 million from $14.7 million in the first quarter of 2013
  • Electric Vehicle ("EV") products revenues increased significantly by 384.5% to $8.4 million from $1.7 million in the first quarter of 2013
  • Revenue for EV Parts including battery packs was $25.0 million in the first quarter of 2014. The Company started this business in the first quarter of 2014.
  • All-terrain Vehicle ("ATV") sales grew slightly to $3.3 million from $2.5 million in the first quarter of 2013
  • Gross profit grew 44.1% to $4.9 million from $3.4 million in the first quarter of 2013
  • The income for the JV Company (Kandi Electric Vehicles Group Co., Ltd., a joint venture company established by the Company's wholly owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. with Shanghai Maple Guorun Automobile Co., Ltd. ("Shanghai Maple"), a 99%-owned subsidiary of Geely Automobile Holdings Ltd.) was $1.7 million and the profit for Kandi was $0.8 million in the first quarter of 2014
  • GAAP net loss for the first quarter was $14.1 million compared to a net income of $2.2 million in the same period last year due to changes relating to the fair value of financial derivatives resulted from the relatively high stock price during the first quarter period, stock awards to management, and increases in our general & administrative expenses
  • Non-GAAP net income*, excluding the effects of the stock award expense and the change of the fair value of financial derivatives, was $1.6 million, an increase of 30.4% compared with $1.3 million in the first quarter of 2013
  • Cash, cash equivalents totaled $20.5 million for the first quarter, a 60.2% increase from $12.8 million at the end of 2013

*Non-GAAP net income in this context means the net income excluding option-related expenses, stock award expenses, and the effects caused by the change of fair value of financial derivatives. We furnish non-GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations.

Mr. Xiaoming Hu, Chairman and CEO of the Company commented, "During the first quarter, Kandi has once again experienced the significant growth in EV related business sales. We are satisfied with the financial results we have achieved in the slowest quarter of the year. The Public EV Sharing Project in Hangzhou is making modest progress and several other cities have approached us to discuss implementation of the project in their cities. We are very confident about the continuous high growth of our EV business. Through our partnership with Geely and our advanced production capabilities, we soon expect to become the leading fully integrated provider of pure EVs in China."

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
     
  Three Months Ended
   March 31, 2014 March 31, 2013
REVENUES, NET  $ 40,171,304  $ 14,662,521
     
COST OF GOODS SOLD (35,310,895) (11,290,490)
     
GROSS PROFIT 4,860,409 3,372,031
Research and development (1,172,257) (689,665)
Selling and marketing (71,257) (89,614)
General and administrative (6,470,766) (692,964)
     
(LOSS) INCOME FROM CONTINUING OPERATIONS (2,853,871) 1,899,788
Interest (expense) income, net (471,180) (670,208)
Change in fair value of financial instruments  (12,314,171) 990,395
Government grants -- --
Share of (loss) in associated companies (15,805) (14,023)
Share of profit after tax of JV 1,728,356 --
Other income, net 59,580 122,365
     
(LOSS) INCOME BEFORE INCOME TAXES (13,867,091) 2,328,317
     
INCOME TAX EXPENSE (219,069) (91,444)
     
NET (LOSS) INCOME (14,086,160) 2,236,873
     
OTHER COMPREHENSIVE INCOME    
Foreign currency translation (1,211,116) 584,915
     
     
COMPREHENSIVE INCOME (LOSS)  $ (15,297,276)  $ 2,821,788
     
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC 39,597,785 32,298,832
     
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED 39,597,785 32,539,339
      
NET (LOSS) INCOME PER SHARE, BASIC  $ (0.36)  $ 0.07
      
NET (LOSS) INCOME PER SHARE, DILUTED  $ (0.36)  $ 0.07
     
     
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
     
ASSETS
     
    March 31, December 31,
   2014 2013
   (Unaudited)  
CURRENT ASSETS     
Cash and cash equivalents   $ 20,498,275  $ 12,762,369
Restricted cash  -- 1,636
Accounts receivable  22,674,057 31,370,862
Inventories (net of provision for slow moving inventory of $349,850 and $352,734 as of March 31, 2014 and December 31, 2013, respectively  13,646,998 9,187,714
Notes receivable  35,078,977 13,794,094
Other receivables  705,771 556,904
Prepayments and prepaid expenses  461,395 505,513
Due from employees  42,759 34,272
Advances to suppliers 16,470,855 8,867,074
Amount due from JV Company, net 21,625,758 2,917,592
Deferred tax 252,684 13,706
     
Total Current Assets 131,457,529 80,011,736
        
LONG-TERM ASSETS      
     
Plant and equipment, net 27,945,044 29,333,516
Land use rights, net 14,246,146 14,453,191
Construction in progress 16,222 16,356
Deferred taxes -- 81,076
Investment in associated company 80,356 96,838
Investment in JV Company 80,399,179 79,331,930
Goodwill 322,591 322,591
Intangible assets 638,972 659,496
Total Long-Term Assets 123,648,510 124,294,994
     
TOTAL ASSETS  $ 255,106,039  $ 204,306,730
     
     
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
     
    March 31, December 31,
   2014 2013
  (Unaudited)  
CURRENT LIABILITIES    
Accounts payable  $ 44,089,700  $ 22,843,143
Other payables and accrued expenses 3,332,258 2,422,613
Short-term bank loans 33,742,132 34,020,281
Customer deposits 135,398 44,404
Notes payable 14,599,961 16,683,023
Income tax payable 542,224 1,362,828
Due to employees 9,645 10,297
Due to related party -- --
Deferred taxes 21,626 --
Financial derivate - liability 21,332,440 9,256,827
Total Current Liabilities 117,805,384 86,643,416
        
LONG-TERM LIABILITIES      
Deferred tax 1,194,424 1,009,477
Bond payable 12,977,743 13,084,724
Financial derivatives - liability 4,014,614 15,042,994
Total Long-Term Liabilities 18,186,781 29,137,195
     
TOTAL LIABILITIES 135,992,165 115,780,611
     
        
STOCKHOLDERS' EQUITY      
Common stock, $0.001 par value; 100,000,000 shares authorized; 40,721,321 and 37,012,904 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively 40,721 37,013
Additional paid-in capital 122,636,097 76,754,774
Retained earnings (the restricted portion is $3,807,551 and $3,807,551 at March 31, 2014 and December 31, 2013, respectively) (9,967,074) 4,119,086
Accumulated other comprehensive income 6,404,130 7,615,246
TOTAL STOCKHOLDERS' EQUITY 119,113,874 88,526,119
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 255,106,039  $ 204,306,730
     
     
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
     
  Three Months Ended March 31
  2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net (loss) income  $ (14,086,160)  $ 2,236,873
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:    
Depreciation and amortization 1,386,527 2,109,977
Deferred taxes 44,801 (144,911)
Change of derivative instrument's fair value 12,314,171 (990,395)
Loss in investment in associated company 15,805 14,023
Share of (profit) after tax of JV (1,728,356) --
     
Changes in operating assets and liabilities:    
(Increase) Decrease In:    
Accounts receivable 8,501,760 (4,440,829)
Inventories (4,567,411) (2,901,362)
Other receivables and prepaid expenses (154,488) (88,166)
Due from employees (9,402) (2,418)
Prepayments and prepaid expenses (7,691,861) 2,717,021
Amount due from JV (18,868,380) --
     
Increase (Decrease) In:    
Accounts payable  21,589,347 1,990,665
Other payables and accrued liabilities  930,528 (85,177)
Customer deposits 92,022 (268,344)
Income tax payable (815,354) (425,109)
Net cash (used in) provided by operating activities  $ (3,046,451)  $ (278,152)
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of plant and equipment (119,476) (8,698)
Issuance of notes receivable (21,553,430) (1,940,690)
Deposit for acquisition -- (14,103,172)
Net cash provided by (used in) investing activities  $ (21,672,906)  $ (16,052,560)
     

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 one of the world's largest manufacturers 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. Kandi routinely posts important information on its website.

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: