@Geely: Kandi Technologies Reports Third Quarter 2021 Financial Results

— Revenue ~$17 million —
Working Capital of ~$289 million, cash1 balance $211 million —
— Sales into e-Scooter-related markets surge nearly 600% —

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

Third Quarter Highlights

  • Total revenues decreased by 10.3% to $16.8 million, from $18.7 million in the same period of 2020.
  • EV parts sales were $3.2 million, compared to $8.4 million in the same period of 2020.
  • Off-road vehicles sales were $6.8 million, compared to $8.9 million in the same period of 2020.
  • Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $6.3 million, compared to $0.9 million in the same period of 2020.
  • Battery exchange equipment and battery exchange service sales were $0.2 million. This new business had no revenue in the same period of 2020.
  • Gross margin was 16.4%, compared to 20.9% for the same period of 2020.
  • Net loss was $7.9 million, or ($0.10) per fully diluted share due to decreased sales and increased investment in R&D, compared to net loss of $1.5 million, or ($0.03) per fully diluted share for the same period of 2020.
  • As of September 30, 2021, working capital was $289.4 million. Cash, cash equivalents, restricted cash, and a certificate of deposit totaled $211.0 million.

________________________

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

Hu Xiaoming, Chairman and CEO of Kandi commented: “Sales are surging in the segment of e-Scooters, electric self-balancing scooters and associated parts sales. With explosive growth again this quarter, we are increasingly confident that our traction in this market can continue. Our strategic entry into this market last year represents a great success in identifying and developing intelligent transportation products to counteract the impact to EV market demand caused by the COVID-19 outbreak in 2020. We expect the EV-related business recovery to take time. Our restructuring of this business segment resulted in lower sales of EV products and parts.”

Hu continued, “Compared to the second quarter, our sales mix had a couple of notable shifts. Within EV parts, battery pack sales were impacted by supply chain constraints hitting the whole industry. Meanwhile, off-road vehicles sales grew more rapidly, indicating burgeoning customer demand for off-road and ATV recreation. We are excited about the new products we are introducing for this segment.”

Turning to the balance sheet, Hu commented, “During the quarter we received the final payment related to the sale of our 22% equity position in Fengsheng. Our liquidity has never been better. We are well-capitalized to pursue the most promising market opportunities: those that show high demand, are not oversupplied, and play to our competitive strengths. After we finish the ‘reset’ of our electric vehicle business, we can again achieve substantial growth.”

Q3 2021 Financial Results

Net Revenues and Gross Profit (in USD millions)

  3Q21 3Q20 Y/Y%
Net Revenue $16.8 $18.7 -10.3%
Gross Profit $2.7 $3.9 -29.7%
Gross Margin  16.4%  20.9%

Net revenues of $16.8 million decreased 10.3% from the third quarter of 2020. The decrease in revenue was primarily due to lower sales of EV parts. Gross margin was 16.4%, lower than the 20.9% recorded in the same period of 2020, primarily attributable to a lower proportion of revenue generated from off-road vehicles, which offers higher gross margin.

Operating Income/Loss (in USD millions)

  3Q21 3Q20 Y/Y%
Operating Expenses ($11.8) ($6.3) 87.2%
Loss from Operations ($9.0) ($2.4) 279.3%
Operating Margin  -53.7%  -12.7%

Operating expenses were $11.8 million, compared with expenses of $6.3 million in the third quarter of 2020. The greater expense was primarily attributable to increased R&D spending for new product development.

Net Loss (in USD millions)

  3Q21 3Q20 Y/Y%
Net Loss ($7.9) ($1.5) 439.6%
Net Loss per Share, Basic and Diluted ($0.10) ($0.03)

Net loss was $7.9 million, compared with a net loss of $1.5 million in the same period of 2020. The greater loss was primarily attributable to higher R&D spending and decreased revenue generated by certain EV parts.

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 (9:00 P.M. Beijing Time) on Tuesday, November 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:

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
(UNAUDITED)

    September 30,
2021
    December 31,
2020
 
             
Current assets                
Cash and cash equivalents   $ 132,866,957     $ 142,078,190  
Restricted cash     23,903,418       442,445  
Certificate of deposit     54,207,258        
Accounts receivable (net of allowance for doubtful accounts of $111,481 and $110,269 as of September 30, 2021 and December 31, 2020, respectively)     43,998,755       38,547,137  
Inventories     27,346,751       19,697,383  
Notes receivable     106,514       31,404,630  
Other receivables     23,754,321       1,875,245  
Prepayments and prepaid expense     19,371,962       13,708,149  
Advances to suppliers     12,506,543       36,733,182  
Amount due from the Affiliate Company           21,742,226  
Amount due from related party           886,989  
TOTAL CURRENT ASSETS     338,062,479       307,115,576  
                 
NON-CURRENT ASSETS                
Property, plant and equipment, net     90,461,708       65,402,680  
Intangible assets, net     2,770,152       3,232,753  
Land use rights, net     3,224,185       3,257,760  
Construction in progress     8,306,311       16,317,662  
Deferred taxes assets     7,852,209       8,964,946  
Long term investment     154,878       45,958  
Investment in the Affiliate Company           28,892,638  
Goodwill     29,963,965       29,712,383  
Other long term assets     11,946,463       32,307,484  
TOTAL NON-CURRENT ASSETS     154,679,871       188,134,264  
                 
TOTAL ASSETS   $ 492,742,350     $ 495,249,840  
                 
CURRENT LIABILITIES                
Accounts payable   $ 26,177,367     $ 34,257,935  
Other payables and accrued expenses     3,000,136       7,218,395  
Short-term loans     2,630,000        
Notes payable     371,707       92,445  
Income tax payable     11,660,654       1,313,754  
Advance receipts     601,644       38,229,242  
Amount due to related party     500,000       500,000  
Other current liabilities     3,682,386       2,185,654  
TOTAL CURRENT LIABILITIES     48,623,894       83,797,425  
                 
NON-CURRENT LIABILITIES                
Deferred taxes liability     602,435       3,483,171  
Contingent consideration liability           3,743,000  
Other long-term liabilities     464,634       459,580  
TOTAL NON-CURRENT LIABILITIES     1,067,069       7,685,751  
TOTAL LIABILITIES     49,690,963       91,483,176  
                 
STOCKHOLDER’S EQUITY                
Common stock, $0.001 par value; 100,000,000 shares authorized; 77,462,516 and 77,298,499 shares issued and 77,152,972 and 75,377,555 outstanding at September 30,2021 and December 31,2020, respectively     77,153       75,377  
Additional paid-in capital     448,591,602       439,549,338  
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at September 30,2021 and December 31,2020, respectively)     (421,965 )     (27,079,900 )
Accumulated other comprehensive loss     (5,195,403 )     (8,778,151 )
TOTAL STOCKHOLDERS’ EQUITY     443,051,387       403,766,664  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 492,742,350     $ 495,249,840  

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

    Three Months Ended     Nine Months Ended  
    September 30,
2021
    September 30,
2020
    September 30,
2021
    September 30,
2020
 
                         
REVENUES FROM UNRELATED PARTIES, NET   $ 16,795,712     $ 18,717,212     $ 62,647,714     $ 44,525,756  
REVENUES FROM THE AFFILIATE COMPANY AND RELATED PARTIES, NET           6       1,587       962  
                                 
REVENUES, NET     16,795,712       18,717,218       62,649,301       44,526,718  
                                 
COST OF GOODS SOLD     (14,046,041 )     (14,806,322 )     (49,447,497 )     (35,911,785 )
                                 
GROSS PROFIT     2,749,671       3,910,896       13,201,804       8,614,933  
                                 
OPERATING INCOME (EXPENSE):                                
Research and development     (6,747,934 )     (987,285 )     (31,937,436 )     (2,777,426 )
Selling and marketing     (1,290,544 )     (2,165,383 )     (3,494,927 )     (3,807,355 )
General and administrative     (3,733,230 )     (3,212,209 )     (13,522,925 )     (10,186,135 )
Gain on disposal of long-lived assets     2,238       76,159       48,255,905       13,983,733  
TOTAL OPERATING EXPENSE     (11,769,470 )     (6,288,718 )     (699,383 )     (2,787,183 )
                                 
(LOSS) INCOME FROM OPERATIONS     (9,019,799 )     (2,377,822 )     12,502,421       5,827,750  
                                 
OTHER INCOME (EXPENSE):                                
Interest income     1,247,544       558,059       2,750,241       1,118,795  
Interest expense     (63,368 )     (788,589 )     (267,785 )     (2,894,579 )
Change in fair value of contingent consideration           (1,069,000 )           1,794,000  
Government grants     220,967       13,431       570,162       111,329  
Gain from sale of equity in the Affiliate Company     822             17,734,733        
Share of loss after tax of the Affiliate Company     (119 )     (1,550,568 )     (2,584,520 )     (5,631,867 )
Other income, net     442,102       988,287       4,768,092       2,051,272  
TOTAL OTHER INCOME (EXPENSE), NET     1,847,948       (1,848,380 )     22,970,923       (3,451,050 )
                                 
(LOSS) INCOME BEFORE INCOME TAXES     (7,171,851 )     (4,226,202 )     35,473,344       2,376,700  
                                 
INCOME TAX (EXPENSE) BENEFIT     (696,968 )     2,767,939       (8,815,409 )     (1,354,563 )
                                 
NET (LOSS) INCOME     (7,868,819 )     (1,458,263 )     26,657,935       1,022,137  
                                 
OTHER COMPREHENSIVE INCOME (LOSS)                                
Foreign currency translation adjustment     (116,054 )     8,216,974       3,582,748       5,171,643  
                                 
COMPREHENSIVE (LOSS) INCOME   $ (7,984,873 )   $ 6,758,711     $ 30,240,683     $ 6,193,780  
                                 
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED     76,394,573       54,112,981       75,766,749       53,282,066  
                                 
NET (LOSS) INCOME PER SHARE, BASIC AND DILUTED   $ (0.10 )   $ (0.03 )   $ 0.35     $ 0.02  

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  
Stock issuance and award     258,600       259             870,837                   871,096  
Net loss                             (1,458,263 )           (1,458,263 )
Foreign currency translation                                   8,216,974       8,216,974  
Reduction in the Affiliate Company’s equity                       (3,144,213 )                 (3,144,213 )
Balance, September 30, 2020     54,610,758     $ 54,611     $ (2,477,965 )   $ 260,605,209     $ (15,663,602 )   $ (17,551,938 )   $ 224,966,315  
      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  
Stock issuance and award     1,526,817       1,527             4,874,224                   4,875,751  
Net loss                             (7,868,819 )           (7,868,819 )
Foreign currency translation                                   (116,054 )     (116,054 )
                                                         
Balance, September 30, 2021     77,152,972     $ 77,153     $     $ 448,591,602     $ (421,965 )   $ (5,195,403 )   $ 443,051,387  

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

    Nine Months Ended  
    September 30,
2021
    September 30,
2020
 
             
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net income   $ 26,657,935     $ 1,022,137  
Adjustments to reconcile net income to net cash provided by operating activities                
Depreciation and amortization     6,893,192       6,078,070  
(Reversal) provision of allowance for doubtful accounts           (150,756 )
Deferred taxes     (11,970 )     1,256,167  
Share of loss after tax of the Affiliate Company     2,584,520       5,631,867  
Gain from equity sale in the Affiliate Company     (17,734,733 )      
Gain on disposal of long-live assets     (48,255,905 )     (13,983,733 )
Change in fair value of contingent consideration           (1,794,000 )
Stock based compensation expense     1,452,381       870,471  
                 
Changes in operating assets and liabilities:                
                 
Accounts receivable     4,289,150       18,165,084  
Inventories     (7,443,414 )     (1,830,827 )
Other receivables and other assets     (17,537,034 )     (5,226,968 )
Advances to supplier and prepayments and prepaid expenses     18,776,708       (84,089 )
Amount due from the Affiliate Company           4,178,477  
                 
Increase (Decrease) In:                
Accounts payable     (4,116,153 )     (15,642,931 )
Other payables and accrued liabilities     7,052,572       2,675,156  
Notes payable     (93,278 )     (13,725,855 )
Income tax payable     8,053,977       (804,238 )
Net cash used in operating activities   $ (19,432,052 )   $ (13,365,968 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchases of property, plant and equipment, net     (10,948,968 )     (383,568 )
Prepayments for acquisition of Jiangxi Huiyi     (3,864,346 )      
Payment for construction in progress     (4,048,889 )     (1,604,427 )
Proceeds from disposal of long-lived assets     23,235,758       51,872,829  
Loan to third party     31,687,637       (45,958,247 )
Certificate of deposit     (54,100,844 )      
Cash received from sales of equity in the Affiliate Company     47,608,743       42,321,385  
Long Term Investment     (108,202 )      
Advance receipts of equity transfer     600,463        
Net cash provided by investing activities   $ 30,061,352     $ 46,247,972  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from short-term loans     2,630,000       24,163,223  
Repayments of short-term loans           (50,042,178 )
Repayments of long-term loans           (285,955 )
Proceeds from long-term loans           394,116  
Net cash provided by (used in) financing activities   $ 2,630,000     $ (25,770,794 )
                 
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH   $ 13,259,300     $ 7,111,210  
Effect of exchange rate changes   $ 990,440     $ 535,314  
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   $ 156,770,375     $ 24,159,159  
-CASH AND CASH EQUIVALENTS AT END OF PERIOD     132,866,957       23,909,159  
-RESTRICTED CASH AT END OF PERIOD     23,903,418       250,000  
                 
SUPPLEMENTARY CASH FLOW INFORMATION                
Income taxes paid   $ 688,160       901,021  
Interest paid   $ 17,536       644,724  
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        
Decrease in investment in the Affiliate Company due to change in its equity           3,057,540  
Common stock issued for settlement of payables related to acquisitions (see Note 21)   $ 4,853,451       3,166,427  

 


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