-Q1 revenue increased 95.0% YoY to $8.3 million
-Q1 JV sold 3,295 EV products
- Q1 GAAP net income achieved $3.7 million, or $0.07 EPS compared to GAAP net loss of $24.2 million, or $0.51 loss per share
JINHUA, China, May 10, 2018 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS:KNDI), today announced its financial results for the first quarter of 2018.
First Quarter Highlights
- Total revenues increased 95.0% to $8.3 million for the first quarter of 2018, from $4.3 million for the same period of 2017.
- Electric Vehicle (“EV”) parts sales increased 139.1% to $6.4 million for the first quarter of 2018, compared with $2.7million in the same period of 2017.
- Kandi Electric Vehicles Group Co., Ltd. (the “JV Company”) sold 3,295 EV products in the first quarter of 2018, compared to no EV products sold in the same period in 2017.
- Off-road vehicle revenues increased 22.0% to $2.0 million for the first quarter of 2018 compared with $1.6 million in the same period of 2017.
- GAAP net income for the first quarter of 2018 was $3.7 million, or $0.07 per fully diluted share, compared with net loss of $24.2 million, or $0.51 loss per fully diluted share in the same period of 2017.
- Non-GAAP adjusted net loss1, which excludes stock compensation expenses of $1.0 million net of a reversal for forfeited stock option of $2.6 million and the change in fair value of contingent consideration which was a gain of $2.7 million, was $0.6 million in the first quarter of 2018, compared with non-GAAP net loss of $21.7 million for the same period of 2017. Non-GAAP adjusted loss per share1 was approximately $0.01 per fully diluted share for the first quarter of 2018 compared with Non-GAAP adjusted loss per share1 of $0.45 per fully diluted share for the same quarter of 2017.
- Working capital surplus was $50.1 million as of March 31, 2018.Cash, cash equivalents and restricted cash totaled $8.5 million as of March 31, 2018.
_________________________________
1Non-GAAP measures, including the Non-GAAP net income (loss) and Non-GAAP EPS are defined as the financial measures excluding the change of the fair value of contingent consideration and the effects of the stock compensation expense. We supply non-GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations. Any non-GAAP measures should not be considered as a substitute for, and should only be read in conjunction with, measures of financial performance prepared in accordance with GAAP.
Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, “We have taken strides to accelerate our EV sales and we are very pleased with our strong performance given the first quarter being a slow season. In March, the JV Company unveiled its first all-electric SUV model Geely Global HawkEX3, although it is not yet in production, there has already been overwhelming requests from interested dealers. At the end of March, Kandi Model K23 production was launched and sales are expected to be advanced in the second half of 2018. We are confident in these new EV products becoming a driving force that will fuel the growth of Kandi’s EV business.”
“In the first quarter, we completed the acquisition of Jinhua An Kao Power Technology Co., Ltd. and have consolidated its financial statements. An Kao’s unique system of pure electric car battery replacement technology is a major step forward to our existing EV offering. The acquisition is expected to generate additional revenues and provide a considerably competitive advantage in product delivery and services that will lead to market share gain. Looking forward, we expect continued momentum of Kandi’s EV business to a new phase of growth in 2018.” Mr. Hu concluded.
Net Revenues and Gross Profit
| 1Q18 | 1Q17 | Y-o-Y% | ||||||
| Net Revenues (US$mln) | $8.3 | $4.3 | 95.0% | |||||
| Gross Profit (US$mln) | $1.3 | $0.7 | 101.7% | |||||
| Gross Margin | 16.1% | 15.6% | - | |||||
Net revenues for the first quarter increased 95.0%compared to the same period last year. The increase in revenue was mainly due to the increase in EV parts sales during this quarter.
Operating Income (Loss)
| 1Q18 | 1Q17 | Y-o-Y% | ||||||
| Operating Expenses (US$mln) | $1.1 | $29.4 | (96.2%) | |||||
| Operating Income (Loss) (US$mln) | $0.2 | ($28.8) | (100.8%) | |||||
| Operating Margin | 2.9% | (673.3%) | - | |||||
Total operating expenses in the first quarter were $1.1 million, compared with $29.4 million in the same quarter of 2017. The decrease in total operating expenses was primarily due to decreased research and development, which was$0.8 million in this quarter, compared with $20.8 million in the same quarter last year.
GAAP Net Income
| 1Q18 | 1Q17 | Y-o-Y% | ||||||
| Net Income (Loss) (US$mln) | $3.7 | ($24.2) | (115.4%) | |||||
| Earnings（loss） per Weighted Average Common Share Outstanding Basic | $0.07 | ($0.51) | - | |||||
| Earnings (loss) per Weighted Average Common Share Outstanding Diluted | $0.07 | ($0.51) | - | |||||
| Stock Compensation expenses | ($1.6) | $2.5 | - | |||||
| Change in fair value of contingent consideration | ($2.7) | - | - | |||||
| Non-GAAP net loss | ($0.6) | ($21.7) | (97.4%) | |||||
Net income was $3.7 million in the first quarter, compared with net loss of $24.2 million in the same quarter of 2017. The increase was primarily attributable to increased sales and gross profits, increased profits from the JV Company and significantly decreased R&D expenses this period.
Non-GAAP net loss was $0.6million, a 97.4% decreased loss in the first quarter of 2018 compared to net loss of $21.7 million in the same quarter of 2017. The decrease in Non-GAAP net loss was primarily attributable to increased sales and gross profits, increased profits from the JV Company and significantly decreased R&D expenses this period.
JV Company Financial Results
In the first quarter, the JV Company sold a total of 3,295 units of EV products, compared to no EV product sales in the same period of 2017.In this quarter, total revenue was $33.8 million as compared to $1.3 million for the quarter ended March 31, 2017.
The condensed financial income statement of the JV Company in the first quarter is as below:
| 1Q18 | 1Q17 | Y-o-Y% | ||||||
| Net Revenues (US$mln) | $33.8 | $1.3 | 2500.0% | |||||
| Gross Profit (Loss) (US$mln) | $5.6 | ($0.3) | (1966.7%) | |||||
| Gross Margin | 16.5% | (26.4%) | - | |||||
| Net Income (Loss) | $1.0 | ($10.6) | (109.4%) | |||||
| % of Net revenue | 3.0% | (830.3%) | - | |||||
Kandi’s investments in the JV Company are accounted for under the equity method of accounting, as Kandi has a 50% ownership interest in the JV Company. As a result, Kandi recorded 50% of the JV Company’s income for $0.5 million for this quarter. After eliminating intra-entity profits and losses, Kandi’s share of the after tax profit of the JV Company was $0.8 million for the first quarter of 2018.
First Quarter of 2018 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 May 10, 2018. Mr. Hu Xiaoming, Chief Executive Officer of the Company, and Mr. Mei Bing, Chief Financial Officer of the Company, 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: +1-866-548-4713
- International dial-in number: +1-323-794-2093
- Webcast and replay: http://public.viavid.com/index.php?id=129741
The live audio webcast 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, Zhejiang Province, is engaged in the research and development, manufacturing and sales of various vehicle products. Kandi has established itself as one of China's leading manufacturers of pure electric vehicle ("EV") products (through its joint venture), EV parts and off-road vehicles. More information can be viewed at 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 securities laws, the Company does not assume a duty to update these forward-looking statements.
Follow us on Twitter: @ Kandi_Group
Company Contact:
Ms. Kewa Luo
Kandi Technologies Group, Inc.
Phone: 1-212-551-3610
Email: IR@kandigroup.com
- Tables Below -
| KANDI TECHNOLOGIES GROUP, INC. | ||||||||
| AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEET | ||||||||
| March 31, 2018 | December 31, 2017 | |||||||
| (Unaudited) | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 1,041,781 | $ | 4,891,808 | ||||
| Restricted cash | 7,491,324 | 11,218,688 | ||||||
| Accounts receivable(net of allowance for doubtful accounts of $382,108 and $133,930 as of March 31, 2018 and December 31, 2017, respectively) | 27,236,661 | 34,397,858 | ||||||
| Inventories (net of provision for slow moving inventory of $643,318 and $620,919 as of March 31, 2018 and December 31, 2017, respectively) | 17,439,458 | 15,979,794 | ||||||
| Notes receivable from JV Company and related party | 7,611,283 | 1,137,289 | ||||||
| Other receivables | 2,356,811 | 2,650,668 | ||||||
| Prepayments and prepaid expense | 6,744,641 | 6,536,839 | ||||||
| Due from employees | 6,847 | 7,070 | ||||||
| Advances to suppliers | 12,290,705 | 14,908,385 | ||||||
| Amount due from JV Company, net | 141,716,559 | 146,422,440 | ||||||
| Amount due from related party | 167,894 | 162,048 | ||||||
| TOTAL CURRENT ASSETS | 224,103,964 | 238,312,887 | ||||||
| LONG-TERM ASSETS | ||||||||
| Property, Plant and equipment, net | 14,091,019 | 12,000,971 | ||||||
| Land use rights, net | 13,133,595 | 12,666,047 | ||||||
| Construction in progress | 58,840,459 | 53,083,925 | ||||||
| Deferred taxes assets | 3,607,478 | 4,383,425 | ||||||
| Long Term Investment | 1,512,703 | 1,460,034 | ||||||
| Investment in JV Company | 74,035,495 | 70,681,013 | ||||||
| Goodwill | 25,344,151 | 322,591 | ||||||
| Intangible assets | 5,224,868 | 331,116 | ||||||
| Advances to suppliers | 22,371,860 | 21,592,918 | ||||||
| Other long term assets | 7,549,153 | 7,590,734 | ||||||
| Amount due from JV Company, net | 15,907,183 | 15,907,183 | ||||||
| TOTAL Long-Term Assets | 241,617,964 | 200,019,957 | ||||||
| TOTAL ASSETS | $ | 465,721,928 | $ | 438,332,844 | ||||
| CURRENT LIABILITIES | ||||||||
| Accounts payables | $ | 117,258,483 | $ | 111,595,540 | ||||
| Other payables and accrued expenses | 5,289,475 | 6,556,209 | ||||||
| Short-term loans | 34,234,851 | 33,042,864 | ||||||
| Customer deposits | 334,885 | 205,544 | ||||||
| Notes payable | 10,466,183 | 28,075,945 | ||||||
| Income tax payable | 2,421,168 | 2,902,699 | ||||||
| Due to employees | 11,699 | 35,041 | ||||||
| Deferred income | 3,960,698 | 2,191,143 | ||||||
| Total Current Liabilities | 173,977,442 | 184,604,985 | ||||||
| LONG-TERM LIABILITIES | ||||||||
| Long term bank loans | 31,846,373 | 30,737,547 | ||||||
| Contingent liability | 6,032,817 | - | ||||||
| Other long-term liability | 579,224 | - | ||||||
| Total Long-Term Liabilities | 38,458,414 | 30,737,547 | ||||||
| TOTAL LIABILITIES | 212,435,856 | 215,342,532 | ||||||
| STOCKHOLDER’S EQUITY | ||||||||
| Common stock, $0.001 par value; 100,000,000 shares authorized; 53,968,712 and 48,036,538 shares issued and 51,008,875 and 48,036,538 outstanding at March 31, 2018 and December 31, 2017, respectively | 51,009 | 48,037 | ||||||
| Additional paid-in capital | 252,154,904 | 233,055,348 | ||||||
| Retained earnings (the restricted portion is $4,422,033 and $4,422,033 at March 31, 2018 and December 31, 2017, respectively) | (74,318 | ) | (3,802,310 | ) | ||||
| Accumulated other comprehensive loss | 1,154,477 | (6,310,763 | ) | |||||
| TOTAL STOCKHOLDERS’ EQUITY | 253,286,072 | 222,990,312 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 465,721,928 | $ | 438,332,844 | ||||
| KANDI TECHNOLOGIES GROUP, INC. | ||||||||
| AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND | ||||||||
| COMPREHENSIVE INCOME (LOSS) | ||||||||
| (UNAUDITED) | ||||||||
| Three Months Ended | ||||||||
| March 31, 2018 | March 31, 2017 | |||||||
| REVENUES FROM UNRELATED PARTY, NET | $ | 5,732,463 | $ | 2,962,931 | ||||
| REVENUES FROM JV COMPANY AND RELATED PARTY, NET | 2,603,444 | 1,311,642 | ||||||
| REVENUES, NET | 8,335,907 | 4,274,573 | ||||||
| COST OF GOODS SOLD | (6,989,956 | ) | (3,607,241 | ) | ||||
| GROSS PROFIT | 1,345,951 | 667,332 | ||||||
| OPERATING EXPENSES: | ||||||||
| Research and development | (757,298 | ) | (20,769,732 | ) | ||||
| Selling and marketing | (748,225 | ) | (358,309 | ) | ||||
| General and administrative | 398,171 | (8,319,294 | ) | |||||
| Total Operating Expenses | (1,107,352 | ) | (29,447,335 | ) | ||||
| INCOME (LOSS) FROM OPERATIONS | 238,599 | (28,780,003 | ) | |||||
| OTHER INCOME(EXPENSE): | ||||||||
| Interest income | 942,993 | 530,642 | ||||||
| Interest expense | (550,417 | ) | (614,453 | ) | ||||
| Change in fair value of contingent consideration | 2,680,179 | - | ||||||
| Government grants | 95,255 | 5,067,474 | ||||||
| Share of income (loss) after tax of JV | 795,055 | (5,161,713 | ) | |||||
| Other income, net | 22,977 | 28,621 | ||||||
| Total other income (expense), net | 3,986,042 | (149,429 | ) | |||||
| INCOME (LOSS) BEFORE INCOME TAXES | 4,224,641 | (28,929,432 | ) | |||||
| INCOME TAX (EXPENSE) BENEFIT | (496,646 | ) | 4,775,997 | |||||
| NET INCOME (LOSS) | 3,727,995 | (24,153,435 | ) | |||||
| OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||
| Foreign currency translation | 7,465,240 | 1,791,816 | ||||||
| COMPREHENSIVE INCOME (LOSS) | $ | 11,193,235 | $ | (22,361,619 | ) | |||
| WEIGHTED AVERAGE SHARES OUTSTANDING BASIC | 50,643,423 | 47,732,388 | ||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED | 50,643,423 | 47,732,388 | ||||||
| NET INCOME (LOSS) PER SHARE, BASIC | $ | 0.07 | $ | (0.51 | ) | |||
| NET INCOME (LOSS) PER SHARE, DILUTED | $ | 0.07 | $ | (0.51 | ) | |||
| KANDI TECHNOLOGIES GROUP, INC. | ||||||||
| AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (UNAUDITED) | ||||||||
| Three Months Ended | ||||||||
| March 31, 2018 | March 31, 2017 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | 3,727,995 | $ | (24,153,435 | ) | |||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
| Depreciation and amortization | 875,463 | 1,162,795 | ||||||
| Assets impairments | - | 45,831 | ||||||
| Allowance for doubtful accounts | 240,419 | - | ||||||
| Deferred taxes | (308,406 | ) | (4,775,997 | ) | ||||
| Share of income after tax of JV Company | (795,055 | ) | 5,161,713 | |||||
| Change in fair value of contingent consideration | (2,680,179 | ) | - | |||||
| Stock compensation cost | (1,615,706 | ) | 2,476,519 | |||||
| Changes in operating assets and liabilities, net of effects of acquisition: | ||||||||
| (Increase) Decrease In: | ||||||||
| Accounts receivable | 12,343,813 | (1,399,372 | ) | |||||
| Deferred taxes assets | (53,414 | ) | - | |||||
| Notes receivable from JV Company and related party | (5,015,238 | ) | 3,704,957 | |||||
| Inventories | 265,800 | (2,779,644 | ) | |||||
| Other receivables and other assets | 752,017 | (210,503 | ) | |||||
| Due from employee | (23,838 | ) | (46,692 | ) | ||||
| Advances to supplier and prepayments and prepaid expenses | 3,144,325 | 21,948,470 | ||||||
| Advances to suppliers-long term | (3,712,576 | ) | (5,682,460 | ) | ||||
| Amount due from JV Company | (9,902,514 | ) | (15,542,072 | ) | ||||
| Due from related party | - | (300,000 | ) | |||||
| Increase (Decrease) In: | ||||||||
| Accounts payable | 19,319,570 | 9,986,016 | ||||||
| Other payables and accrued liabilities | (2,503,830 | ) | (297,408 | ) | ||||
| Notes payable | (16,117,038 | ) | (1,855,353 | ) | ||||
| Customer deposits | 120,458 | 127,216 | ||||||
| Income tax payable | (819,372 | ) | (789,661 | ) | ||||
| Deferred income | 1,670,173 | (5,067,474 | ) | |||||
| Loss contingency-litigation | - | 4,622,066 | ||||||
| Net cash used in operating activities | $ | (1,087,133 | ) | $ | (13,664,488 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of property, plant and equipment, net | (109,160 | ) | (23,492 | ) | ||||
| Purchases of land use rights and other intangible assets | (99,404 | ) | - | |||||
| Acquisition of Jinhua An Kao (net of cash received) | (3,699,801 | ) | - | |||||
| Purchases of construction in progress | (82,792 | ) | (1,488,409 | ) | ||||
| Short term investment | - | 4,418,065 | ||||||
| Net cash (used in) provided by investing activities | $ | (3,991,157 | ) | $ | 2,906,164 | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from short-term bank loans | 3,775,587 | 3,629,407 | ||||||
| Repayments of short-term bank loans | (3,775,587 | ) | (5,661,875 | ) | ||||
| Proceeds from notes payable | 25,539,803 | 3,669,853 | ||||||
| Repayment of notes payable | (28,607,869 | ) | - | |||||
| Net cash (used in) provided by financing activities | $ | (3,068,066 | ) | $ | 1,637,385 | |||
| NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (8,146,356 | ) | (9,120,939 | ) | ||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 568,965 | 194,084 | ||||||
| Cash, cash equivalents and restricted cash at beginning of year | 16,110,496 | 25,193,298 | ||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 8,533,105 | 16,266,443 | ||||||
| SUPPLEMENTARY CASH FLOW INFORMATION | ||||||||
| Income taxes paid | 1,466,761 | 786,172 | ||||||
| Interest paid | 414,319 | 386,973 | ||||||
| SUPPLEMENTAL NON-CASH DISCLOSURES: | ||||||||
| Advances to suppliers-long term transferred to Construction in progress | 3,712,576 | 8,023,030 | ||||||
| Purchase of construction in progress in accounts payable | - | 980,292 | ||||||
| Settlement of due from JV Company and related parties with notes receivable | 20,337,201 | 22,713,442 | ||||||
| Settlement of accounts receivables with notes receivable from unrelated parties | 7,866 | - | ||||||
| Assignment of notes receivable from unrelated parties to supplier to settle accounts payable | 7,866 | - | ||||||
| Assignment of notes receivable from JV Company and related parties to supplier to settle accounts payable | 18,996,867 | 18,082,140 | ||||||
| Settlement of accounts payable with notes payables | 786,581 | 2,032,468 | ||||||
| Deferred tax changed to other comprehensive income | 42,528 | - | ||||||