-    Full Year Revenues of $135.7 m, up 20.7% yoy
-    Full Year Off-road Vehicles Sales of $22.7 m, up 70.5% yoy
-    Full Year Operating Income of $0.9 m, compared with operating loss of $1.6m in 2018

JINHUA, CHINA, April 28, 2020 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the full year ended December 31, 2019. 

Full Year 2019 Highlights 

  • Total revenues were $135.7 million in 2019, an increase of 20.7% from total revenues of $112.4 million in 2018.
  • EV parts sales increased by 11.7% to $110.7 million in 2019, compared with EV parts sales of $99.1 million in 2018.
  • Off-road vehicles sales increased by 70.5% to $22.7 million in 2019, compared with off-road vehicles sales of $13.3 million in 2018.
  • Gross margin for the year ended December 31, 2019 was 18.7%, compared to 18.0% for the year ended December 31, 2018.
  • Operating income in 2019 was $0.9 million, compared with an operating loss of $1.6 million in 2018.
  • Net loss in 2019 was $7.2 million, or $0.14 loss per fully diluted share, compared with a net loss of $5.7 million, or $0.11 loss per fully diluted share in 2018.
  • As of December 31, 2019, working capital was $63.7 million; cash, cash equivalents, and restricted cash totaled $16.5 million.

Mr. Hu Xiaoming, Chairman and CEO of Kandi commented: “Despite challenging market conditions, we delivered solid revenue growth of 20.7% year-over-year and improved gross margin to 18.7%.”

Hu continued, “During the year, we achieve two major strategic milestones that position us for strong growth in the years ahead. First, we completed the restructuring of the Affiliate Company, formerly defined as the JV Company by transferring 21.47% of its equity interests in the Affiliate Company to Geely for a total amount of RMB 516 million, or approximately $72.3 million. As a result of the completion of the equity transfer, Kandi’s 100% owned subsidiary Kandi Vehicles owns 22% of the Affiliate Company. The restructuring yielded us over $70 million, which will fund our other growth opportunities.”

“The second achievement was finalizing our transaction with Jinhua Economic and Technological Development Zone. Where Kandi’s Jinhua facility is located is required to be rebuilt into a central innovation District (CID) according to the Jinhua City Construction Plan, which resulted in relocation of the Company’s Jinhua facility. After two years of negotiation, we signed a real estate repurchase agreement with Jinhua Economic and Technological Development Zone in the first quarter of 2020. The Jinhua local government agreed to pay RMB 525 million, or approximately $75.6 million to purchase the land and facility. In addition, within the next eight years, the Jinhua local government will offer subsidies of no less than RMB 500 million, or approximately $71.9 million, based on Kandi Vehicle’s financial contribution to the local department of finance. This deal will yield significant cash, both currently and in future years, while enabling us to transfer production to a new, more modern and efficient facility. This deal frees up our old land for other development, and so is a win-win both for us and the local authorities.”

Concerning the current environment, Hu stated, “Coming off such a strong finish to 2019, we looked forward to more success in 2020, but the COVID-19 crisis has put the global economy on pause. Our foremost concern is the health and safety of our employees, customers, and business partners. As the pandemic unfolded, we immediately took action, such as closing our facilities and going to remote work when possible. Now, the pandemic appears under control in China, and we fully resumed production in the beginning of March.”

“The Chinese government has supported the EV industry during these turbulent times. Most importantly, state subsidies and tax breaks for new energy vehicles have been extended until the end of 2022, two years longer than the original expiration at the end of this year. This extension will encourage a more-rapid resumption of demand, and gives the whole industry more time to fully recover. We applaud the wisdom of the authorities in taking this long-term view. As an EV leader in China, we believe Kandi will benefit from this more supportive policy environment.”

Mr. Hu concluded, “Even as we focus in the near-term on business recovery, we are planning for strong growth over the long-term. In particular, our focus this year will be to make real progress on our smaller-city EV online ride-share operating platform with government-accredited ride-share vehicle service. Our partnership with Jinpeng is critical to this effort, and our collaboration is off to a good start. We look forward to building a compelling service that can drive high volume vehicles sales in the years ahead.”

Full Year 2019 Financial Results

Net Revenues and Gross Profit

 20192018Y-o-Y%
Net Revenues (US$mln)$135.7$112.420.7%
Gross Profit (US$mln)$25.4$20.225.6%
Gross Margin18.7%18.0%-

Net revenues for the full year 2019 increased 20.7% to $135.7 million from 2018. The increase in net revenues was mainly due to an increase in sales of EV parts and off-road vehicles. Gross margin for the full year 2019 expanded to 18.7%, compared with 18.0% in 2018. The increase in the gross margin was mainly due to higher selling prices for charging and exchange equipment, as well as an increased proportion of high-margin battery processing business.

Operating Income (Loss)

 20192018Y-o-Y%
Operating Expenses (US$mln)$24.5$21.912.0%
Operating Income (Loss) (US$mln)$0.9($1.6)-155.5%
Operating Margin0.7%-1.5%-

Total operating expenses in 2019 were $24.5 million, compared with $21.9 million in 2018. The increase in operating expenses was due to higher general and administrative expenses.

Net Loss

 20192018Y-o-Y%
Net Loss (US$mln)($7.2)($5.7)26.2%
Loss per Weighted Average Common Share($0.14)($0.11)-
Loss per Weighted Average Diluted Share($0.14)($0.11)-

Net loss in 2019 was $7.2 million, compared with a net loss of $5.7 million in 2018. The increase in net loss was primarily attributable to increased operation cost of Hainan facility.

Full Year 2019 Conference Call Details

The Company has scheduled a conference call and live webcast to discuss its financial results at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time) on Tuesday, April 28, 2020. Management will deliver prepared remarks to be followed by a question and answer session. 

The dial-in details for the conference call are as follows:

The live audio webcast of the call can also be accessed by visiting Kandi's Investor Relations page on the Company's website at http://www.kandivehicle.com. An archive of the webcast will be available on the Company's website following the live call.

About Kandi Technologies Group, Inc.

Kandi Technologies Group, Inc. (KNDI), headquartered in Jinhua Economic Development Zone, Zhejiang Province, is engaged in the research, development, manufacturing, and sales of various vehicular products. Kandi conducts its primary business operations through its wholly-owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. ("Kandi Vehicles") and its subsidiaries, SC Autosports, LLC, the wholly-owned subsidiary of Kandi in the United States and Fengsheng Automobile Technology Group Co., Ltd (formerly known as Kandi Electric Vehicles Group Co., Ltd., the “Affiliate Company”). Kandi Vehicles has established itself as one of China's leading manufacturers of pure electric vehicle parts and off-road vehicles.

In 2013, Kandi Vehicles and Geely Group, China's leading automaker, jointly invested in the establishment of the Affiliate Company in order to develop, manufacture and sell pure electric vehicle ("EV") products. Geely Group (including its affiliate) and Kandi Vehicles currently holds 78% and 22% of the equity interests in the Affiliate Company, respectively. The Affiliate Company has established itself as one of the driving forces in the development and the manufacturing of pure EV products in China.

More information about KNDI is available on the Company's corporate website at http://www.kandivehicle.com. The Company 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 applicable securities laws, the Company does not assume a duty to update these forward-looking statements.

Follow us on Twitter: @ Kandi_Group

Investor Relations Contact:


Kandi Technologies Group, Inc.
Ms. Kewa Luo
Phone: +1 (212) 551-3610
Email: IR@kandigroup.com 

The Blueshirt Group
Mr. Gary Dvorchak
Email: gary@blueshirtgroup.com 

Ms. Susie Wang
Phone: +86 (138) 1081-7454
Email: susie@blueshirtgroup.com 

- Tables Below -

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

  December 31,
2019
  December 31,
2018
 
       
Current assets      
Cash and cash equivalents $5,490,557  $15,662,201 
Restricted cash  11,022,078   6,690,870 
Accounts receivable (net of allowance for doubtful accounts of $254,665 and $120,010 as of December 31, 2019 and December 31, 2018, respectively)  61,181,849   34,274,728 
Inventories  27,736,566   21,997,868 
Notes receivable  42,487,225   72,712 
Notes receivable from the Affiliate Company and related party  -   3,861,032 
Prepayments and prepaid expense  10,615,063   11,136,408 
Amount due from the Affiliate Company, net  31,330,763   67,683,462 
Other current assets  5,708,335   5,970,507 
TOTAL CURRENT ASSETS  195,572,436   167,349,788 
         
LONG-TERM ASSETS        
Property, plant and equipment, net  74,407,858   82,045,923 
Intangible assets  3,654,772   4,328,127 
Land use rights, net  11,272,815   11,749,728 
Investment in the Affiliate Company  47,228,614   128,929,893 
Goodwill  28,270,400   28,552,215 
Other long term assets  10,811,501   5,873,590 
TOTAL Long-Term Assets  175,645,960   261,479,476 
         
TOTAL ASSETS $371,218,396  $428,829,264 
         
CURRENT LIABILITIES        
Accounts payable $72,093,940  $112,309,683 
Other payables and accrued expenses  6,078,041   4,251,487 
Short-term loans  25,980,364   30,539,236 
Notes payable  10,765,344   12,787,619 
Income tax payable  1,796,601   3,471,366 
Long term bank loans - current portion  13,779,641   - 
Other current liabilities  1,379,808   1,463,486 
Total Current Liabilities  131,873,739   164,822,877 
         
LONG-TERM LIABILITIES        
Long term bank loans  14,353,792   28,794,136 
Deferred taxes liability  1,362,786   1,711,343 
Contingent consideration liability  5,197,000   7,256,000 
Other long-term liability  574,152   622,034 
Total Long-Term Liabilities  21,487,730   38,383,513 
         
TOTAL LIABILITIES  153,361,469   203,206,390 
         
STOCKHOLDER’S EQUITY        
Common stock, $0.001 par value; 100,000,000 shares authorized; 56,263,102 and 55,992,002 shares issued and 52,839,441 and 51,484,444 outstanding at December 31,2019 and December 31,2018, respectively  52,839   51,484 
Less: Treasury stock (487,155 shares with average price of $5.09 and 0 shares at December 31,2019 and December 31,2018, respectively )  (2,477,965)  - 
Additional paid-in capital  259,691,370   254,989,657 
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at December 31, 2019 and December 31,2018, respectively)  (16,685,736)  (9,497,009)
Accumulated other comprehensive loss  (22,723,581)  (19,921,258)
TOTAL STOCKHOLDERS’ EQUITY  217,856,927   225,622,874 
         
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $371,218,396  $428,829,264 

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

  Year Ended 
  December 31,
2019
  December 31,
2018
 
       
REVENUES FROM UNRELATED PARTY, NET $119,879,895  $63,707,518 
REVENUES FROM THE AFFILIATE COMPANY AND RELATED PARTY, NET  15,861,441   48,731,310 
         
REVENUES, NET  135,741,336   112,438,828 
         
COST OF GOODS SOLD  (110,310,427)  (92,191,383)
         
GROSS PROFIT  25,430,909   20,247,445 
         
OPERATING EXPENSES:        
Research and development  (6,207,747)  (10,084,378)
Selling and marketing  (4,070,001)  (3,189,022)
General and administrative  (14,243,625)  (8,612,393)
Total Operating Expenses  (24,521,373)  (21,885,793)
         
INCOME (LOSS) FROM OPERATIONS  909,536   (1,638,348)
         
OTHER INCOME (EXPENSE):        
Interest income  791,888   1,324,812 
Interest expense  (4,822,734)  (1,871,851)
Change in fair value of contingent consideration  (1,107,427)  3,405,864 
Government grants  792,628   17,787,445 
Gain from equity dilution in the Affiliate Company  4,263,764   - 
Gain from equity sale in the Affiliate Company  20,438,986   - 
Share of loss after tax of the Affiliate Company  (30,716,938)  (17,888,706)
Other income, net  1,569,311   956,839 
Total other (expense) income, net  (8,790,522)  3,714,403 
         
(LOSS) INCOME BEFORE INCOME TAXES  (7,880,986)  2,076,055 
         
INCOME TAX BENEFIT (EXPENSE)  692,259   (7,770,754)
         
NET LOSS  (7,188,727)  (5,694,699)
         
OTHER COMPREHENSIVE LOSS        
Foreign currency translation  (2,802,323)  (13,610,495)
         
COMPREHENSIVE LOSS $(9,991,050) $(19,305,194)
         
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC  52,337,308   51,188,647 
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED  52,337,308   51,188,647 
         
NET LOSS PER SHARE, BASIC $(0.14) $(0.11)
NET LOSS PER SHARE, DILUTED $(0.14) $(0.11)

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

  Number of
Outstanding
Shares
  Common
Stock
  Treasury
Stock
  Additional
Paid-in
Capital
  Accumulated
Earning
(Deficit)
  Accumulated
Other
Comprehensive
Income
  Total 
BALANCE AT DECEMBER 31, 2017  48,036,538  $48,037  $-  $233,055,348  $(3,802,310) $(6,310,763) $222,990,312 
Stock issuance and award  3,447,906   3,447   -   21,934,309   -   -   21,937,756 
Net loss  -   -   -   -   (5,694,699)  -   (5,694,699)
Foreign currency translation  -   -   -   -   -   (13,610,495)  (13,610,495)
                             
BALANCE AT DECEMBER 31, 2018  51,484,444  $51,484  $-  $254,989,657  $(9,497,009) $(19,921,258) $225,622,874 
Stock issuance and award  1,354,997   1,355   -   4,716,328   -   -   4,717,683 
Stock buyback  -   -   (2,477,965)  -   -   -   (2,477,965)
Commission in stock buyback  -   -   -   (14,615)  -   -   (14,615)
Net loss  -   -   -   -   (7,188,727)  -   (7,188,727)
Foreign currency translation  -   -   -   -   -   (2,802,323)  (2,802,323)
                             
BALANCE AT DECEMBER 31, 2019  52,839,441  $52,839  $(2,477,965) $259,691,370  $(16,685,736) $(22,723,581) $217,856,927 

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

  Year Ended 
  December 31,
2019
  December 31,
2018
 
       
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net loss $(7,188,727) $(5,694,699)
Adjustments to reconcile net income to net cash provided by operating activities        
Depreciation and amortization  8,202,869   4,326,296 
Impairments  398,790   263,185 
Allowance for doubtful accounts  137,387   (213,809)
Deferred taxes  (1,066,536)  4,815,774 
Share of loss after tax of the Affiliate Company  30,716,938   17,888,706 
Gain from equity dilution in the Affiliate Company  (4,263,764)  - 
Gain from equity sale in the Affiliate Company  (20,438,986)  - 
Reserve for fixed assets  -   (52,744)
Change in fair value of contingent consideration  1,107,427   (3,405,864)
Stock compensation cost  1,360,258   285,609 
         
Changes in operating assets and liabilities:        
(Increase) Decrease In:        
Accounts receivable  (40,123,966)  (57,503,289)
Deferred taxes assets  -   375 
Notes receivable  246,120   483,778 
Notes receivable from the Affiliate Company and related party  434,329   6,231,669 
Inventories  (6,458,104)  (5,243,388)
Other receivables and other assets  (8,200,714)  (31,373,831)
Due from employee  (8,217)  1,045 
Advances to supplier and prepayments and prepaid expenses  4,379,925   (5,386,448)
Amount due from the Affiliate Company  8,803,542   (95,442,739)
Amount due from Affiliate Company-Longterm  -   15,907,183 
Due from related party  -   159,405 
         
Increase (Decrease) In:        
Accounts payable  10,440,338   137,390,139 
Other payables and accrued liabilities  6,069,133   60,736,669 
Notes payable  (12,743,628)  (30,542,040)
Customer deposits  (26,166)  (104,047)
Income tax payable  (1,619,659)  822,422 
Deferred income  (44,861)  (761,736)
Net cash (used in) provided by operating activities $(29,886,272) $13,587,621 
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchases of property, plant and equipment, net  (526,336)  (582,872)
Purchases of land use rights and other intangible assets  -   (103,871)
Acquisition of Jinhua An Kao (net of cash received)  -   (3,555,766)
Acquisition of SC Autosports  -   486,954 
Purchases of construction in progress  (71,862)  (418,755)
Reimbursement of capitalize interests for construction in progress  -   1,790,652 
Cash received from equity sale in the Affiliate Company  31,850,822   - 
Long Term Investment  -   1,436,217 
Net cash provided by (used in) investing activities $31,252,624  $(947,441)
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from short-term bank loans  34,746,352   32,503,855 
Repayments of short-term bank loans  (38,944,869)  (33,259,759)
Repayments of long-term bank loans  (289,553)  (302,361)
Proceeds from notes payable  -   54,348,577 
Repayment of notes payable  -   (58,588,036)
Stock buyback with commission  (2,492,579)  - 
Net cash used in financing activities $(6,980,649) $(5,297,724)
         
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH  (5,614,297)  7,342,456 
Effect of exchange rate changes on cash  (226,139)  (1,099,881)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR  22,353,071   16,110,496 
         
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD  16,512,635   22,353,071 
-CASH AND CASH EQUIVALENTS AT END OF PERIOD  5,490,557   15,662,201 
-RESTRICTED CASH AT END OF PERIOD  11,022,078   6,690,870 
         
SUPPLEMENTARY CASH FLOW INFORMATION        
Income taxes paid  1,994,526   2,056,670 
Interest paid  1,738,656   1,708,766 
         
SUPPLEMENTAL NON-CASH DISCLOSURES:        
Acquisition of Jinhua An Kao by stock  -   20,718,859 
Acquisition of SC Autosports by stock  -   756,664 
Amount due from the Affiliate Company converted to investment in the Affiliate Company  -   82,393,493 
Notes receivable from unrelated parties for equity transfer payment  42,853,834   -