@Geely: Kandi Technologies Reports First Quarter 2022 Financial Results

– Revenue of $24.9 million, up nearly 56% year-over-year- Off-road vehicles and lithium-ion cells were primary revenue contributors- Quarter-end cash balance1 of $229.2 million

JINHUA, China, May 09, 2022 (GLOBE NEWSWIRE) — Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the first quarter of 2022.

First Quarter Highlights

Total revenues increased by 55.8% to $24.9 million, from $16.0 million in the same period of 2021.
EV parts sales were $3.7 million, compared to $6.4 million in the same period of 2021.
EV products sales increased by 179.8% to $0.3 million, compared to $0.1 million in the same period of 2021.
Off-road vehicles sales increased by 90.7% to $10.7 million, compared to $5.6 million in the same period of 2021.
Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $2.1 million, compared with $3.9 million in the same period of 2021.
Lithium-ion cells sales were $8.0 million. There were no comparable sales for the same period of 2021 since Jiangxi Huiyi New Energy CO., Ltd. (“Jiangxi Huiyi”), the entity that manufactures Lithium-ion cells, was acquired by the Company in October 2021.
Gross margin was 9.6%, compared to 27.3% for the same period of 2021.
Net loss was $1.6 million, or $0.02 loss per fully diluted share, compared to a net loss of $6.4 million, or $0.08 loss per fully diluted share for the same period of 2021.
As of March 31, 2022, working capital was $276.4 million; cash, cash equivalents, restricted cash and certificate of deposit totaled $229.2 million.

Mr. Hu Xiaoming, Chairman and CEO of Kandi commented, “We kicked off 2022 with solid revenue growth. One highlight was our all-electric off-road vehicles, which we developed last year in response to the growing demand we observed. Our team made substantial progress in the quarter. In February 2022, we established Hainan Kandi Holding New Energy Technology Co., Ltd. in Hainan province (“Hainan Kandi Holding”), which produces ‘crossover’ electric golf carts (“golf carts”). On February 22, 2022, SC Autosports and Coleman Powersports Inc. signed a memorandum of understanding (“MOU”) regarding the sales of $29 million (equivalent to 5,000 units) golf carts. In addition, on March 3, 2022, SC Autosports signed a sales MOU of $39 million (equivalent to 5,000 units) luxury golf carts with more than twenty dealers. Hainan Kandi Holding is already manufacturing the vehicles. By the end of April, a total of 778 units were shipped from Hainan province to SC Autosports. We are planning to deliver another 2,000 units in May this year.”

Hu continued, “Lithium-ion battery cells also contributed meaningfully to revenue. This is the principal product of Jiangxi Huiyi, the leading battery manufacturer that we acquired last fall. That acquisition is making an immediate revenue contribution from production of batteries, strengthening our battery business. Also, it boosts our capability of integrating the supply chain of battery-powered vehicle products, which can be leveraged to generate substantial growth in the electric off-road vehicles and other battery-powered vehicle products.”

Q1 2022 Financial Results

Net Revenues and Gross Profit (in USD millions)

  Q1 2022 Q1 2021 Y-o-Y%
Net Revenues $24.9 $16.0 55.8%
Gross Profit $2.4 $4.4 -45.2%
Gross Margin% 9.6% 27.3%

Net revenues of $24.9 million in the first quarter 2022 increased 55.8% from the same period of 2021. Revenue growth was primarily due to higher sales of off-road vehicles and the addition of lithium-ion cell sales, which were generated from the Jiangxi Huiyi acquisition in October 2021. Gross margin declined due to a mix shift to lower margin products such as the lithium-ion cells. Furthermore, margin was impacted by the introduction of the new off-road vehicles into the US market, where value pricing was used to promote sales.

Operating Income/Loss (in USD millions)

  Q1 2022 Q1 2021 Y-o-Y%
Operating Expenses ($8.1) ($27.2) -70.3%
Loss from Operations ($5.7) ($22.8) -75.0%
Operating Margin% -22.9% -143.0%

Total operating expenses in the first quarter of 2022 were $8.1 million, compared with $27.2 million for the same period of 2021. The decrease was primarily due to lower R&D expense, as the Company’s R&D expenditure for new products was largely incurred in the first quarter of 2021.

Net Income/Loss (in USD millions)

  Q1 2022 Q1 2021 Y-o-Y%
Net Loss ($1.6) ($6.4) -74.7%
Net Loss per Share, Basic and Diluted ($0.02) ($0.08)

Net loss of $1.6 million in the first quarter of 2022 compares to a net loss of $6.4 million for the same period of 2021, with the decrease primarily coming from lower R&D expense.

First Quarter 2022 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, May 9, 2022. 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: https://event.choruscall.com/mediaframe/webcast.html?webcastid=sMgsHhtu

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) 551-3610IR@kandigroup.com

The Blueshirt GroupMr. Gary Dvorchak, CFAgary@blueshirtgroup.com

– Tables Below –

KANDI TECHNOLOGIES GROUP, INC.AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS

    March 31,2022     December 31,2021  
    (Unaudited)        
Current assets            
Cash and cash equivalents   $ 99,997,938     $ 129,223,443  
Restricted cash     58,222,796       39,452,564  
Certificate of deposit     70,957,772       55,041,832  
Accounts receivable (net of allowance for doubtful accounts of $3,065,854 and $3,053,277 as of March 31, 2022 and December 31, 2021, respectively)     40,262,353       52,896,305  
Inventories     30,958,762       33,171,973  
Notes receivable     837,302       323,128  
Other receivables     8,798,534       8,901,109  
Prepayments and prepaid expense     17,275,378       17,657,326  
Advances to suppliers     4,998,703       5,940,456  
TOTAL CURRENT ASSETS     332,309,538       342,608,136  
                 
NON-CURRENT ASSETS                
Property, plant and equipment, net     110,004,425       111,577,411  
Intangible assets, net     12,770,134       13,249,079  
Land use rights, net     3,235,497       3,250,336  
Construction in progress     326,641       79,317  
Deferred tax assets     2,219,297       2,219,297  
Long-term investment     157,684       157,262  
Goodwill     36,109,089       36,027,425  
Other long-term assets     11,898,416       10,992,009  
TOTAL NON-CURRENT ASSETS     176,721,183       177,552,136  
                 
TOTAL ASSETS   $ 509,030,721     $ 520,160,272  
                 
CURRENT LIABILITIES                
Accounts payable   $ 27,966,224     $ 36,677,802  
Other payables and accrued expenses     7,747,034       9,676,973  
Short-term loans     1,450,000       950,000  
Notes payable     10,548,203       8,198,193  
Income tax payable     1,512,342       1,620,827  
Other current liabilities     6,726,257       7,038,895  
TOTAL CURRENT LIABILITIES     55,950,060       64,162,690  
                 
NON-CURRENT LIABILITIES                
Long-term loans     2,210,589       2,210,589  
Deferred taxes liability     2,460,141       2,460,141  
Contingent consideration liability     5,122,000       7,812,000  
Other long-term liabilities     989,018       314,525  
TOTAL NON-CURRENT LIABILITIES     10,781,748       12,797,255  
                 
TOTAL LIABILITIES     66,731,808       76,959,945  
                 
STOCKHOLDERS EQUITY                
Common stock, $0.001 par value; 100,000,000 shares authorized; 77,410,130 and 77,385,130 shares issued and 76,271,345 and 76,705,381 outstanding at March 31,2022 and December 31,2021, respectively     77,410       77,385  
Less: Treasury stock (1,138,785 shares with average price of $3.48 and 679,749 shares with average price of $3.52 at March 31,2022 and December 31,2021, respectively )     (3,962,527 )     (2,392,203 )
Additional paid-in capital     449,559,150       449,479,461  
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at March 31,2022 and December 31,2021, respectively)     (5,832,158 )     (4,216,102 )
Accumulated other comprehensive loss     1,261,597       251,786  
TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY     441,103,472       443,200,327  
                 
Non-controlling interests     1,195,441        
TOTAL STOCKHOLDERS’ EQUITY     442,298,913       443,200,327  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 509,030,721     $ 520,160,272  

KANDI TECHNOLOGIES GROUP, INC.AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ANDCOMPREHENSIVE INCOME (LOSS)(UNAUDITED)

    Three Months Ended  
    March 31,2022     March 31,2021  
             
REVENUES FROM UNRELATED PARTIES, NET   $ 24,891,404     $ 15,976,170  
REVENUES FROM THE FORMER AFFILIATE COMPANY AND RELATED PARTIES, NET           1,584  
                 
REVENUES, NET     24,891,404       15,977,754  
                 
COST OF GOODS SOLD     (22,504,241 )     (11,623,403 )
                 
GROSS PROFIT     2,387,163       4,354,351  
                 
OPERATING INCOME (EXPENSE):                
Research and development     (1,140,586 )     (21,624,597 )
Selling and marketing     (1,193,699 )     (1,146,866 )
General and administrative     (5,756,531 )     (4,430,123 )
TOTAL OPERATING EXPENSE     (8,090,816 )     (27,201,586 )
                 
EXPENSE FROM OPERATIONS     (5,703,653 )     (22,847,235 )
                 
OTHER INCOME (EXPENSE):                
Interest income     1,222,304       528,592  
Interest expense     (148,144 )     (126,348 )
Change in fair value of contingent consideration     2,690,000       357,000  
Government grants     244,098       234,793  
Gain from sale of equity in the Former Affiliate Company           17,700,260  
Share of loss after tax of the Former Affiliate Company           (2,579,497 )
Other income, net     43,782       498,901  
TOTAL OTHER INCOME , NET     4,052,040       16,613,701  
                 
LOSS BEFORE INCOME TAXES     (1,651,613 )     (6,233,534 )
                 
INCOME TAX BENEFIT (EXPENSE)     32,600       (169,186 )
                 
NET LOSS     (1,619,013 )     (6,402,720 )
                 
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTERESTS     2,957        
                 
NET LOSS ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS     (1,616,056 )     (6,402,720 )
                 
OTHER COMPREHENSIVE INCOME (LOSS)                
Foreign currency translation adjustment     1,009,811       (1,176,013 )
                 
COMPREHENSIVE INCOME (LOSS)   $ (609,202 )   $ (7,578,733 )
                 
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED     76,289,846       75,383,777  
                 
NET LOSS PER SHARE, BASIC AND DILUTED   $ (0.02 )   $ (0.08 )

KANDI TECHNOLOGIES GROUP, INC.AND SUBSIDIARIESCONDENSED 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     Non-controlling interests     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 Former Affiliate Company’s equity (net of 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  
    Number of Outstanding Shares     Common Stock     Treasury Stock     Additional Paid-in Capital     Accumulated Earning (Deficit)     AccumulatedOtherComprehensive Income     Non-controlling interests     Total  
Balance, December 31, 2021     77,385,130     $ 77,385     $ (2,392,203 )   $ 449,479,461     $ (4,216,102 )   $ 251,786     $     $ 443,200,327  
Stock issuance and award     25,000       25             92,925                         92,950  
Stock buyback                     (1,570,324 )     (13,236 )                             (1,583,560 )
Capital contribution from shareholder                                         1,198,398       1,198,398  
Net loss                             (1,616,056 )           (2,957 )     (1,619,013 )
Foreign currency translation                                   1,009,811             1,009,811  
                                                                 
                                                                 
Balance, March 31, 2022     77,410,130     $ 77,410     $ (3,962,527 )   $ 449,559,150     $ (5,832,158 )   $ 1,261,597     $ 1,195,441     $ 442,298,913  

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

    Three Months Ended  
    March 31,2022     March 31,2021  
             
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net loss   $ (1,619,013 )   $ (6,402,720 )
Adjustments to reconcile net income to net cash provided by operating activities                
Depreciation and amortization     3,294,499       2,212,965  
Provision (reversal) of allowance for doubtful accounts     4,389        
Share of loss after tax of the Former Affiliate Company           2,579,497  
Loss from equity sale in the Former Affiliate Company           (17,700,260 )
Change in fair value of contingent consideration     (2,690,000 )     (357,000 )
Stock based compensation expense     22,925       22,925  
                 
Changes in operating assets and liabilities:                
                 
Accounts receivable     5,197,268       8,916,548  
Notes receivable     1,965,596        
Inventories     2,498,914       (864,177 )
Other receivables and other assets     (790,486 )     (13,058,262 )
Advances to supplier and prepayments and prepaid expenses     1,425,684       18,807,547  
                 
Increase (Decrease) In:                
Accounts payable     3,088,095       (340,133 )
Other payables and accrued liabilities     (1,688,414 )     107,011  
Notes payable     (4,401,457 )      
Income tax payable     (119,559 )     58,779  
Net cash provided by (used in) operating activities   $ 6,188,441     $ (6,017,280 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchases of property, plant and equipment, net     (709,881 )     (5,866,207 )
Payment for construction in progress     (246,971 )     (4,339,770 )
Repayment from (loan to) third party           13,113,237  
Certificate of deposit     (15,759,448 )     (15,427,337 )
Proceeds from sales of equity in the Former Affiliate Company           23,758,099  
Long-term Investment           (107,991 )
Net cash (used in) provided by investing activities   $ (16,716,300 )   $ 11,130,031  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
 Proceeds from short-term loans     500,000        
Contribution from non-controlling shareholder     803,732        
Purchase of treasury stock     (1,583,561 )      
Net cash used in financing activities   $ (279,829 )   $  
                 
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH   $ (10,807,688 )   $ 5,112,751  
Effect of exchange rate changes   $ 352,415     $ (438,313 )
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR   $ 168,676,007     $ 142,520,635  
                 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD   $ 158,220,734     $ 147,195,073  
-CASH AND CASH EQUIVALENTS AT END OF PERIOD     99,997,938       146,714,469  
-RESTRICTED CASH AT END OF PERIOD     58,222,796       480,604  
                 
SUPPLEMENTARY CASH FLOW INFORMATION                
Income taxes paid   $ 5,496       110,407  
Interest paid   $ 37,116        
                 
SUPPLEMENTAL NON-CASH DISCLOSURES:                
Reversal of decrease in investment in the Former Affiliate Company due to change in its equity (net of tax effect of $491,400)           2,807,696  
Increase of other receivable for equity transfer payment of the Former Affiliate Company           23,758,099  
Contribution from non-controlling shareholder by inventories and fixed assets     393,986        

_______________________

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


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