Kandi Technologies Announces Second Quarter 2014 Financial Results

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| Source: Kandi Technologies, Corp.

   – 2nd quarter revenue increased 171.1% YoY to $32.96 million –

      –  EV products sales increased 552.1% YoY to $13.25 million in 2nd quarter

       – Operating income increased 261.0% YoY to $2.64 million –

JINHUA, China, Aug. 11, 2014 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the "Company" or "Kandi") (Nasdaq:KNDI), today announced its financial results for the second quarter and six months ended June 30, 2014.

Financial Highlights:

  • Revenue for the second quarter grew 171.1% to $32.96 million from $12.16 million in the second quarter last year;
     
  • Electric Vehicle ("EV") products revenue increased by 552.1% to $13.25 million as compared to $2.03 million in the second quarter of 2013;
     
  • Gross profit of $7.22 million for the second quarter was up 157.2% from $2.81 million in the second quarter last year;
     
  • Operating income rose 261.0% to $2.64 million from $0.73 million in the second quarter of 2013;
     
  • The JV Company sold 4,114 EV products during the second quarter of 2014, a 238% increase from 1,215 EV products sold in the first quarter of 2014;
     
  • GAAP net income for the second quarter was $11.16 million, or $0.27 per fully diluted share, an increase of 1168.4% from a net loss of $1.04 million, or ($0.03) per fully diluted share, in the second quarter of 2013;
     
  • *Non-GAAP adjusted net income in the second quarter, which excludes the stock award expense and the change in the fair value of financial derivatives, was $3.22 million, or approximately $.08 per fully diluted shares, a 4,269.6% increase from net income of $73,785 for the same period of 2013;

"Our strong performance in the second quarter reflects sustained strong market demand for electric vehicles in China, especially our positive momentum in the Hangzhou Public EV Sharing System (the 'Car-Share' Project) and Group Long-Term Leasing Program ('Group Leasing'). The Car-Share Project has become one of most preferred business models for EV development in China. Such model is expected to be expanded into other major Chinese cities." Commented by Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi Technologies, "We are also pleased to see that the Chinese government has recently unveiled a series of aggressive new policies and incentives, such as EV sales tax break for consumers, government subsidy for manufactures and consumers, favorable electricity rate for EV users and incentive for building EV charging/parking infrastructure, to stimulate the electric car sales. All of those favorable policies are Chinese government's determination to reach 500,000 New Energy Vehicles (NEV) productions by 2015 and 2 million NEV productions by 2020, while only 20,000 NEV were produced and sold in China in the first half in 2014, according to the information from the Ministry of Industrial and Information Technology ('MIIT')."

"Being one of earlier movers in the Chinese EV industry, Kandi has just begun to enjoy the benefits from the favorable market trend as well as our company's strategy shift to focus on Chinese EV segment in recent two years. With the robust EV sales growth ahead of us, our management team will continue to work diligently to capture market share, refine our innovative business model, assist our partners in building out EV charging/parking infrastructure, improve corporate disclosure and investors communication, and deliver strong financial performance for our long-term shareholders," Mr. Hu concluded.

*Non-GAAP measures, including the Non-GAAP net income and Non-GAAP EPS are defined as the financial measures excluding the change of the fair value of financial derivatives and the effects of the stock award expense. We supply non-GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations. Any non-GAAP measures should not be considered as a substitute for, and should only be read in conjunction with, measures of financial performance prepared in accordance with GAAP.

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
ASSETS
 
   June 30, December 31,
  2014 2013
  (Unaudited)  
CURRENT ASSETS     
     
Cash and cash equivalents  $11,287,620 $12,762,369
Restricted cash  -- 1,636
Accounts receivable  19,218,760 31,370,862
Inventories, net of provision for slow moving inventory of $350,231 and $352,734 as of June 30, 2014 and December 31, 2013, respectively  17,647,686 9,187,714
Notes receivable  9,154,337 13,794,094
Other receivables  784,427 556,904
Prepayments and prepaid expenses  617,979 505,513
Due from employees  38,640 34,272
Advances to suppliers 52,841,904 8,867,074
Amount due from JV Company, net 34,507,160 2,917,592
Deferred tax -- 13,706
Total Current Assets 146,098,513 80,011,736
     
LONG-TERM ASSETS    
     
Plant and equipment, net 26,899,146 29,333,516
Land use rights, net 15,833,084 14,453,191
Construction in progress 39,235 16,356
Deferred taxes -- 81,076
Investment in associated company -- 96,838
Investment in JV Company 80,483,964 79,331,930
Goodwill 322,591 322,591
Intangible assets 618,448 659,496
Total Long-Term Assets 124,196,468 124,294,994
     
TOTAL ASSETS $270,294,981 $204,306,730
 
 
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
LIABILITIES AND STOCKHOLDERS' EQUITY
   
June 30,
December 31,
  2014 2013
  (Unaudited)  
CURRENT LIABILITIES    
 
     
Accounts payable $53,695,799 $22,843,143
Other payables and accrued expenses 4,747,185 2,422,613
Short-term bank loans 33,778,846 34,020,281
Customer deposits 151,051 44,404
Notes payable 12,991,864 16,683,023
Income tax payable 821,200 1,362,828
Due to employees 12,450 10,297
Due to related party -- --
Deferred taxes 648,077 --
Financial derivate - liability 10,543,927 9,256,827
Total Current Liabilities 117,390,399 86,643,416
     
LONG-TERM LIABILITIES    
     
Deferred tax 1,194,426 1,009,477
Bond payable 12,991,864 13,084,724
Financial derivatives - liability 3,205,411 15,042,994
Total Long-Term Liabilities 17,391,701 29,137,195
     
TOTAL LIABILITIES 134,782,100 115,780,611
     
STOCKHOLDERS' EQUITY    
     
Common stock, $0.001 par value; 100,000,000 shares authorized; 41,908,620 and 37,012,904 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively 41,909 37,013
Additional paid-in capital 128,594,307 76,754,774
Retained earnings (the restricted portion is $3,807,551 and $3,807,551 at June 30, 2014 and December 31, 2013, respectively) 1,190,011 4,119,086
Accumulated other comprehensive income  5,686,654 7,615,246
TOTAL STOCKHOLDERS' EQUITY 135,512,881 88,526,119
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $270,294,981 $204,306,730
 
 
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE
INCOME (LOSS)
(UNAUDITED)
 
  For Three Months Ended
June30,

For Six Months Ended June 30,
  2014 2013 2014 2013
REVENUE, NET $32,960,055 $12,157,827 $73,131,359 $26,820,348
         
COST OF GOODS SOLD (25,738,967) (9,350,206) (61,049,862) (20,640,696)
         
GROSS PROFIT 7,221,088 2,807,621 12,081,497 6,179,652
         
OPERATING EXPENSES:        
Research and development (971,673) (672,491) (2,143,930) (1,362,156)
Selling expenses (435,894) (71,420) (507,151) (161,034)
General and administrative (3,173,178) (1,332,279) (9,643,944) (2,025,243)
Total operating expenses (4,580,745) (2,076,190) (12,295,025) (3,548,433)
         
(LOSS) INCOME FROM CONTINUING OPERATIONS 2,640,343 731,431  (213,528) 2,631,219
         
OTHER INCOME (EXPENSE):        
Interest (expense) income, net (214,995) (617,601) (686,175) (1,287,810)
Change in fair value of financial instruments 8,941,569 (1,082,735) (3,372,602) (92,339)
Government grants 153,700 49,807 153,700 49,807
Share of (loss) in associated companies (77,187) (15,517) (92,992) (29,540)
Share of profit after tax of JV (9,526) (10,376) 1,718,830 (10,376)
Other income (expense), net 60,247 54,148 119,827 176,513
Total other (expense), net 8,853,808 (1,622,274) (2,159,412) (1,193,745)
         
INCOME BEFORE PROVISION FOR INCOME TAXES 11,494,151 (890,843) (2,372,940) 1,437,474
         
PROVISION FOR INCOME TAXES (337,066) (153,457) (556,135) (244,901)
         
NET (LOSS) INCOME 11,157,085 (1,044,300) (2,929,075) 1,192,573
         
OTHER COMPREHENSIVE INCOME        
Foreign currency translation (717,476)  724,430  (1,928,592)  1,309,345
         
COMPREHENSIVE INCOME (LOSS) $10,439,609 $(319,870) $(4,857,667) $2,501,918
EARNINGS (LOSS) PER SHARE:  
 
   
 
 
 
Basic $0.27 $(0.03) $(0.07) $0.04
Diluted $0.27 $(0.03) $(0.07) $0.04
WEIGHTED AVERAGE NUMBER OF COMMON SHARES:  
 
 
 
 
 
 
 
Basic 41,142,346 32,546,877 40,364,986 32,427,538
Diluted  41,254,507 2,546,877  40,364,986 32,676,702
 
 
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
  Six Months Ended June 30
  2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net (loss) income $ (2,929,075)  $ 1,192,573
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:    
Depreciation and amortization 2,764,984 4,245,026
Deferred taxes 924,449 337,149
Change of derivative instrument's fair value 3,372,602 92,339
Loss in investment in associated company 96,364 29,540
Share of (profit) loss after tax of JV (1,718,830) 10,376
     
Changes in operating assets and liabilities:    
(Increase) Decrease In:    
Accounts receivable 11,955,855 9,073,693
Inventories (8,544,033) (9,822,727)
Other receivables and prepaid expenses (231,945) 13,044
Due from employees (2,390) 8,421
Prepayments and prepaid expenses (44,194,377) (27,114,014)
Amount due from JV (31,680,191) --
     
Increase (Decrease) In:    
Accounts payable 31,083,370 1,787,019
Other payables and accrued liabilities 2,344,763 475,451
Customer deposits 107,199 (246,983)
Due to related party -- 4,001,319
Income tax payable (533,133) (342,863)
 Net cash (used in) operating activities $ (37,184,388)  $ (16,260,637)
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of plant and equipment (308,838) (54,451)
Purchases of land use rights (1,669,648) --
Purchase of construction in progress (23,046) (53,144)
Issuance of notes receivable (21,468,326) (1,964,278)
Repayments of notes receivable 26,020,234 --
Investment in Joint Venture Company -- (80,026,377)
Deposit for disposal of subsidiary -- 60,019,783
Deposit for acquisition -- (14,188,677)
Net cash provided by (used in) investing activities $ 2,550,376  $ (36,267,144)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Restricted cash $ 1,628 $ 4,799,980
Proceeds from short-term bank loans 16,764,023 22,407,385
Repayments of short-term bank loans (16,764,023) (22,407,385)
Proceeds from notes payable 13,020,600 68,184,073
Repayments of notes payable (16,601,265) (25,608,441)
Common stock and warrants issued 11,067,734 --
Warrant exercise 22,447,914 3,848,134
Option exercise & other financing 4,405,697 38,100
Net cash provided by financing activities 34,342,308 51,261,846
     
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (291,704) (1,265,935)
Effect of exchange rate changes on cash (1,183,045) (786,949)
Cash and cash equivalents at beginning of period 12,762,369 12,135,096
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 11,287,620 $ 10,082,212
     
SUPPLEMENTARY CASH FLOW INFORMATION    
Income taxes paid $ 1,145,600 $ 587,765
Interest paid $ 1,170,556 $ 1,964,649

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 vehicle (EV) products, 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: