@Geely: Kandi Technologies Reports Second Quarter 2021 Financial Results

–Revenue of approx. $30 million, +54% y/y–
–Net Income of approx. $41 million ($0.54 per fully diluted share), +900% y/y–
–Working Capital of approx. $300 million, cash1 totaled $202.4 million

JINHUA, CHINA, Aug. 09, 2021 (GLOBE NEWSWIRE) — Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced financial results for the second quarter of 2021.

Second Quarter Highlights

  • Total revenues increased by 53.7% to $29.9 million, from $19.4 million in the same period of 2020.
  • EV parts sales were $6.7 million, compared to $12.5 million in the same period of 2020.
  • Off-road vehicles sales were $5.5 million, compared to $6.6 million in the same period of 2020.
  • Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $16.5 million, compared to $0.4 million in the same period of 2020, This growth represents a successful strategic initiative to sell intelligent transportation products after the COVID-19 outbreak seriously impacted the EV market in 2020.
  • Battery exchange equipment and battery exchange service sales were $0.6 million. As a new business, there was no such revenue in the same period of 2020.
  • Gross margin was 20.4%, compared to 18.2% for the same period of 2020.
  • Net income was $40.9 million, or $0.54 per fully diluted share primarily due to a gain on the disposal of a long-live asset recognized as part of our Jinhua facility relocation that was completed in the second quarter. This compares to a net income of $4.1 million, or $0.08 per fully diluted share for the same period of 2020.
  • As of June 30, 2021, working capital was $297.3 million. Cash, cash equivalents, restricted cash, and certificate of deposit totaled $202.4 million.

1 Includes cash, cash equivalents, restricted cash, and certificate of deposit.

Mr. Hu Xiaoming, Chairman and CEO of Kandi commented: “We are excited to see both strong revenue growth and profitability.  Last year, as the Covid-19 pandemic impacted our EV business, we undertook a strategic initiative to find new markets for our industry-leading technology.  This pivot to new markets is proved successful, as you can see by our strong growth in intelligent mobility sector and associated parts.  Furthermore, we are with our operating cash flow as robust because we received final payments for the Jinhua Facility relocation.  The vacated old factory property met the inspection authorities’ stipulated conditions, it was returned to the government, and we received the agreed payments. With this cash inflow, our balance sheet is even stronger for pursuing the multiple growth opportunities we see ahead of us.” 

Elaborating on Kandi’s commitment to R&D, Hu elaborated, “As we noted last quarter, there are significant growth opportunities in affordable short-distance EVs for the China market, and in UTVs for the U.S. market. In May, we unveiled the K32 premium UTV, which is produced at our factory in Hainan, China. The K32 features pure electric four-wheel-drive propulsion and a fully enclosed cockpit with air conditioning. We intend to sell the K32 in the U.S. by the end of this year.”

Turning to acquisitions, Hu commented, “Last month, we announced the acquisition of Jiangxi Huiyi, which pushes us further into the battery cell business. Jiangxi Huiyi is a leading battery cell producer with intelligent production lines that each day can manufacture approximately 250,000 units of 18650 lithium-ion rechargeable cells.  Today, the cells are implemented in various consumer applications. Equipped with this technology, Kandi will now focus on EV battery packs as well as other appropriate consumer products.” 

Q2 2021 Financial Results

Net Revenues and Gross Profit (in USD millions)

      2Q21       2Q20       Y/Y%  
Net Revenue   $ 29.9     $ 19.4       53.7 %
Gross Profit   $ 6.1     $ 3.5       72.4 %
Gross Margin     20.4 %     18.2 %      

Net revenues of $29.9 million increased 53.7% from the second quarter of 2020. The increase in revenue was primarily due to the growth in sales of Electric Scooters, Electric Self-Balancing Scooters and associated parts. This segment had a higher gross margin than other segments, resulting in 20.4% gross margin in the second quarter of 2021, higher than 18.2% for the same period of 2020. 

Operating Income/Loss (in USD millions)

      2Q21       2Q20       Y/Y%  
Operating Income   $ 38.3     $ 8.1       373.3 %
Income from Operations   $ 44.4     $ 11.6       281.7 %
Operating Margin     148.5 %     59.8 %      

Operating income was $38.3 million, compared with $8.1 million in the second quarter of 2020. The increase was primarily attributable to the gain on disposal of a long-lived asset related to the Jinhua facility relocation. 

Net Income (in USD millions) 

      2Q21       2Q20       Y/Y%  
Net Income   $ 40.9     $ 4.1       909.3 %
Net Income per Weighted Average Common Share   $ 0.54     $ 0.08        
Net Income per Weighted Average Diluted Share   $ 0.54     $ 0.08        

Net income was $40.9 million, compared with a net income of $4.1 million in the same period of 2020.The greater income was primarily attributable to the gain on disposal of a long-lived asset recognized in the second quarter of 2021.

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 Monday, August 9, 2021. 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:

  • Toll-free dial-in number: +1-877-407-3982
  • International dial-in number: + 1-201-493-6780
  • Webcast and replay: http://public.viavid.com/index.php?id=146195

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 Technologies Group Co., Ltd. (“Zhejiang Kandi Technologies”), formerly, Zhejiang Kandi Vehicles Co., Ltd.) and its subsidiaries including Zhejiang Kandi Smart Battery Swap Technology Co., Ltd, and SC Autosports, LLC (d/b/a Kandi America), the wholly-owned subsidiary of Kandi in the United States, and its wholly-owned subsidiary, Kandi America Investment, LLC. Zhejiang Kandi Technologies has established itself as one of China’s leading manufacturers of pure electric vehicle parts and off-road vehicles.

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

Contacts:

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

The Blueshirt Group
Mr. Gary Dvorchak, CFA
gary@blueshirtgroup.com

– Tables Below –

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

    June 30,
2021
    December 31,
2020
 
    (UNAUDITED)        
Current assets                
Cash and cash equivalents   $ 132,071,957     $ 142,078,190  
Restricted cash     16,117,526       442,445  
Certificate of deposit     54,222,374        
Accounts receivable (net of allowance for doubtful accounts of $111,512 and $110,269 as of June 30, 2021 and December 31, 2020, respectively)     48,713,854       38,547,137  
Inventories     23,232,234       19,697,383  
Notes receivable     8,985,422       31,404,630  
Other receivables     40,574,115       1,875,245  
Prepayments and prepaid expense     16,791,928       13,708,149  
Advances to suppliers     13,274,911       36,733,182  
Amount due from the Affiliate Company           21,742,226  
Amount due from related party           886,989  
TOTAL CURRENT ASSETS     353,984,321       307,115,576  
                 
NON-CURRENT ASSETS                
Property, plant and equipment, net     81,579,358       65,402,680  
Intangible assets, net     2,936,697       3,232,753  
Land use rights, net     3,248,223       3,257,760  
Construction in progress     6,123,956       16,317,662  
Deferred taxes assets     7,852,209       8,964,946  
Long term investment     154,921       45,958  
Investment in the Affiliate Company           28,892,638  
Goodwill     29,970,415       29,712,383  
Other long term assets     18,012,160       32,307,484  
TOTAL NON-CURRENT ASSETS     149,877,939       188,134,264  
                 
TOTAL ASSETS   $ 503,862,260     $ 495,249,840  
                 
CURRENT LIABILITIES                
Accounts payable   $ 31,373,506     $ 34,257,935  
Other payables and accrued expenses     8,930,573       7,218,395  
Short-term loans     250,000        
Notes payable     232,382       92,445  
Income tax payable     11,280,164       1,313,754  
Advance receipts           38,229,242  
Amount due to related party     500,000       500,000  
Other current liabilities     4,067,928       2,185,654  
TOTAL CURRENT LIABILITIES     56,634,553       83,797,425  
                 
NON-CURRENT LIABILITIES                
Deferred taxes liability     602,435       3,483,171  
Contingent consideration liability           3,743,000  
Other long-term liabilities     464,763       459,580  
TOTAL NON-CURRENT LIABILITIES     1,067,198       7,685,751  
                 
TOTAL LIABILITIES     57,701,751       91,483,176  
                 
STOCKHOLDER’S EQUITY                
Common stock, $0.001 par value; 100,000,000 shares authorized; 77,547,099 and 77,298,499 shares issued and 75,626,155 and 75,377,555 outstanding at June 30,2021 and December 31,2020, respectively     75,626       75,377  
Additional paid-in capital     443,717,378       439,549,338  
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at June 30,2021 and December 31,2020, respectively)     7,446,854       (27,079,900 )
Accumulated other comprehensive loss     (5,079,349 )     (8,778,151 )
TOTAL STOCKHOLDERS’ EQUITY     446,160,509       403,766,664  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 503,862,260     $ 495,249,840  

 

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)

    Three Months Ended     Six Months Ended  
    June 30,
2021
    June 30,
2020
    June 30,
2021
    June 30,
2020
 
                         
REVENUES FROM UNRELATED PARTIES, NET   $ 29,875,835     $ 19,436,120     $ 45,852,002     $ 25,808,544  
REVENUES FROM THE AFFILIATE COMPANY AND RELATED PARTIES, NET           956       1,587       956  
                                 
REVENUES, NET     29,875,835       19,437,076       45,853,589       25,809,500  
                                 
COST OF GOODS SOLD     (23,778,053 )     (15,900,298 )     (35,401,456 )     (21,105,463 )
                                 
GROSS PROFIT     6,097,782       3,536,778       10,452,133       4,704,037  
                                 
OPERATING INCOME (EXPENSE):                                
Research and development     (3,564,905 )     (1,149,901 )     (25,189,502 )     (1,790,141 )
Selling and marketing     (1,057,517 )     (763,666 )     (2,204,383 )     (1,641,972 )
General and administrative     (5,359,572 )     (3,907,191 )     (9,789,695 )     (6,973,926 )
Gain on disposal of long-lived assets     48,253,667       13,907,574       48,253,667       13,907,574  
TOTAL OPERATING INCOME     38,271,673       8,086,816       11,070,087       3,501,535  
                                 
INCOME FROM OPERATIONS     44,369,455       11,623,594       21,522,220       8,205,572  
                                 
OTHER INCOME (EXPENSE):                                
Interest income     974,105       221,792       1,502,697       560,736  
Interest expense     (78,069 )     (1,123,056 )     (204,417 )     (2,105,990 )
Change in fair value of contingent consideration     (357,000 )     (929,000 )           2,863,000  
Government grants     114,402       86,799       349,195       97,898  
Gain from sale of equity in the Affiliate Company     33,651             17,733,911        
Share of loss after tax of the Affiliate Company     (4,904 )     (2,978,529 )     (2,584,401 )     (4,081,299 )
Other income, net     3,827,089       1,043,335       4,325,990       1,062,985  
TOTAL OTHER INCOME (EXPENSE), NET     4,509,274       (3,678,659 )     21,122,975       (1,602,670 )
                                 
INCOME BEFORE INCOME TAXES     48,878,729       7,944,935       42,645,195       6,602,902  
                                 
INCOME TAX EXPENSE     (7,949,255 )     (3,889,889 )     (8,118,441 )     (4,122,502 )
                                 
NET INCOME     40,929,474       4,055,046       34,526,754       2,480,400  
                                 
OTHER COMPREHENSIVE INCOME (LOSS)                                
Foreign currency translation adjustment     4,874,815       477,734       3,698,802       (3,045,331 )
                                 
COMPREHENSIVE INCOME (LOSS)   $ 45,804,289     $ 4,532,780     $ 38,225,556     $ (564,931 )
                                 
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED     75,510,788       53,369,602       75,447,633       52,862,043  
                                 
NET INCOME PER SHARE, BASIC AND DILUTED   $ 0.54     $ 0.08     $ 0.46     $ 0.05  

 

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)

    Number of
Outstanding
Shares
    Common
Stock
    Treasury
Stock
    Additional
Paid-in
Capital
    Accumulated
Deficit
    Accumulated
Other
Comprehensive
Loss
    Total  
Balance, December 31, 2019     52,839,441     $ 52,839     $ (2,477,965 )   $ 259,691,370     $ (16,685,736 )   $ (22,723,581 )   $ 217,856,927  
Stock issuance and award     10,000       10             22,290                   22,300  
Net loss                             (1,574,646 )           (1,574,646 )
Foreign currency translation                                   (3,523,065 )     (3,523,065 )
                                                         
Balance, March 31, 2020     52,849,441     $ 52,849     $ (2,477,965 )   $ 259,713,660     $ (18,260,382 )   $ (26,246,646 )   $ 212,781,516  
Stock issuance and award     1,502,717       1,503               3,164,925                       3,166,428  
Net income                                     4,055,043               4,055,043  
Foreign currency translation                                             477,734       477,734  
                                                         
Balance, June 30, 2020     54,352,158     $ 54,352     $ (2,477,965 )   $ 262,878,585     $ (14,205,339 )   $ (25,768,912 )   $ 220,480,721  
                                                         
      Number of
Outstanding
Shares
      Common
Stock
      Treasury
Stock
      Additional
Paid-in
Capital
      Accumulated
Earning
(Deficit)
      Accumulated
Other
Comprehensive
Income
      Total  
Balance, December 31, 2020     75,377,555     $ 75,377     $     $ 439,549,338     $ (27,079,900 )   $ (8,778,151 )   $ 403,766,664  
Stock issuance and award     10,000       10             22,290                   22,300  
Net loss                             (6,402,720 )           (6,402,720 )
Foreign currency translation                                   (1,176,013 )     (1,176,013 )
Reversal of reduction in the Affiliate Company’s equity (net off tax effect of $491,400)                       2,771,652                   2,771,652  
                                                         
Balance, March 31, 2021     75,387,555     $ 75,387     $     $ 442,343,280     $ (33,482,620 )   $ (9,954,164 )   $ 398,981,883  
Stock issuance and award     238,600       239               1,374,098                       1,374,337  
Net income                                     40,929,474               40,929,474  
Foreign currency translation                                             4,874,815       4,874,815  
                                                         
Balance, June 30, 2021     75,626,155     $ 75,626     $     $ 443,717,378     $ 7,446,854     $ (5,079,349 )   $ 446,160,509  

 

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

    Six Months Ended  
    June 30,
2021
    June 30,
2020
 
             
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net income   $ 34,526,754     $ 2,480,400  
Adjustments to reconcile net income to net cash provided by operating activities                
Depreciation and amortization     4,443,218       4,022,676  
Impairments           (148,054 )
Deferred taxes     (11,970 )     2,089,505  
Share of loss after tax of the Affiliate Company     2,584,401       4,081,299  
Gain from equity sale in the Affiliate Company     (17,733,911 )      
Gain on disposal of long-live assets     (48,253,667 )     (13,907,574 )
Change in fair value of contingent consideration           (2,863,000 )
Stock based compensation expense     1,429,456       847,546  
                 
Changes in operating assets and liabilities:                
                 
Accounts receivable     2,054,930       (1,431,388 )
Inventories     (3,328,120 )     (743,483 )
Other receivables and other assets     (14,040,619 )     (11,248,701 )
Advances to supplier and prepayments and prepaid expenses     20,596,182       (12,586,777 )
Amount due from the Affiliate Company           4,129,516  
                 
Increase (Decrease) In:                
Accounts payable     (1,044,040 )     (282,560 )
Other payables and accrued liabilities     (463,016 )     736,715  
Notes payable     (93,273 )     (10,664,922 )
Income tax payable     7,671,740       1,161,312  
Net cash used in operating activities   $ (11,661,935 )   $ (34,327,490 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchases of property, plant and equipment, net     (6,565,755 )     (59,670 )
Payment for construction in progress     (1,869,028 )      
Proceeds from disposal of long-lived assets     23,234,680       34,696,547  
Repayments of loan to third party     31,686,168        
Certificate of deposit     (54,098,335 )      
Cash received from sales of equity in the Affiliate Company     23,803,268       15,641,886  
Long Term Investment     (108,197 )      
Net cash provided by investing activities   $ 16,082,801     $ 50,278,763  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from short-term loans     250,000       24,031,625  
Repayments of short-term loans           (49,769,638 )
Repayments of long-term loans           (284,398 )
Proceeds from long-term loans           394,116  
Net cash provided by (used in) financing activities   $ 250,000     $ (25,628,295 )
                 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH   $ 4,670,866     $ (9,677,022 )
Effect of exchange rate changes   $ 997,982     $ (157,062 )
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR   $ 142,520,635     $ 16,512,635  
                 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD   $ 148,189,483     $ 6,678,551  
-CASH AND CASH EQUIVALENTS AT END OF PERIOD     132,071,957       3,457,498  
-RESTRICTED CASH AT END OF PERIOD     16,117,526       3,221,053  
                 
SUPPLEMENTARY CASH FLOW INFORMATION                
Income taxes paid   $ 373,433       870,082  
Interest paid   $       641,213  
                 
SUPPLEMENTAL NON-CASH DISCLOSURES:                
Reversal of decrease in investment in the Affiliate Company due to change in its equity (net off tax effect of $491,400)   $ 2,813,968        
Increase of other receivable for equity transfer payment of the Affiliate Company   $ 23,803,268        


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