– 2nd quarter revenue increased 171.1% YoY to $32.96 million –
– EV products sales increased 552.1% YoY to $13.25 million in 2nd quarter–
– Operating income increased 261.0% YoY to $2.64 million –
JINHUA, China, Aug. 11, 2014 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the "Company" or "Kandi") (Nasdaq:KNDI), today announced its financial results for the second quarter and six months ended June 30, 2014.
Financial Highlights:
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Revenue for the second quarter grew 171.1% to $32.96 million from $12.16 million in the second quarter last year;
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Electric Vehicle ("EV") products revenue increased by 552.1% to $13.25 million as compared to $2.03 million in the second quarter of 2013;
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Gross profit of $7.22 million for the second quarter was up 157.2% from $2.81 million in the second quarter last year;
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Operating income rose 261.0% to $2.64 million from $0.73 million in the second quarter of 2013;
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The JV Company sold 4,114 EV products during the second quarter of 2014, a 238% increase from 1,215 EV products sold in the first quarter of 2014;
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GAAP net income for the second quarter was $11.16 million, or $0.27 per fully diluted share, an increase of 1168.4% from a net loss of $1.04 million, or ($0.03) per fully diluted share, in the second quarter of 2013;
- *Non-GAAP adjusted net income in the second quarter, which excludes the stock award expense and the change in the fair value of financial derivatives, was $3.22 million, or approximately $.08 per fully diluted shares, a 4,269.6% increase from net income of $73,785 for the same period of 2013;
"Our strong performance in the second quarter reflects sustained strong market demand for electric vehicles in China, especially our positive momentum in the Hangzhou Public EV Sharing System (the 'Car-Share' Project) and Group Long-Term Leasing Program ('Group Leasing'). The Car-Share Project has become one of most preferred business models for EV development in China. Such model is expected to be expanded into other major Chinese cities." Commented by Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi Technologies, "We are also pleased to see that the Chinese government has recently unveiled a series of aggressive new policies and incentives, such as EV sales tax break for consumers, government subsidy for manufactures and consumers, favorable electricity rate for EV users and incentive for building EV charging/parking infrastructure, to stimulate the electric car sales. All of those favorable policies are Chinese government's determination to reach 500,000 New Energy Vehicles (NEV) productions by 2015 and 2 million NEV productions by 2020, while only 20,000 NEV were produced and sold in China in the first half in 2014, according to the information from the Ministry of Industrial and Information Technology ('MIIT')."
"Being one of earlier movers in the Chinese EV industry, Kandi has just begun to enjoy the benefits from the favorable market trend as well as our company's strategy shift to focus on Chinese EV segment in recent two years. With the robust EV sales growth ahead of us, our management team will continue to work diligently to capture market share, refine our innovative business model, assist our partners in building out EV charging/parking infrastructure, improve corporate disclosure and investors communication, and deliver strong financial performance for our long-term shareholders," Mr. Hu concluded.
*Non-GAAP measures, including the Non-GAAP net income and Non-GAAP EPS are defined as the financial measures excluding the change of the fair value of financial derivatives and the effects of the stock award 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.
| KANDI TECHNOLOGIES GROUP, INC. | ||
| AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| ASSETS | ||
| June 30, | December 31, | |
| 2014 | 2013 | |
| (Unaudited) | ||
| CURRENT ASSETS | ||
| Cash and cash equivalents | $11,287,620 | $12,762,369 |
| Restricted cash | -- | 1,636 |
| Accounts receivable | 19,218,760 | 31,370,862 |
| Inventories, net of provision for slow moving inventory of $350,231 and $352,734 as of June 30, 2014 and December 31, 2013, respectively | 17,647,686 | 9,187,714 |
| Notes receivable | 9,154,337 | 13,794,094 |
| Other receivables | 784,427 | 556,904 |
| Prepayments and prepaid expenses | 617,979 | 505,513 |
| Due from employees | 38,640 | 34,272 |
| Advances to suppliers | 52,841,904 | 8,867,074 |
| Amount due from JV Company, net | 34,507,160 | 2,917,592 |
| Deferred tax | -- | 13,706 |
| Total Current Assets | 146,098,513 | 80,011,736 |
| LONG-TERM ASSETS | ||
| Plant and equipment, net | 26,899,146 | 29,333,516 |
| Land use rights, net | 15,833,084 | 14,453,191 |
| Construction in progress | 39,235 | 16,356 |
| Deferred taxes | -- | 81,076 |
| Investment in associated company | -- | 96,838 |
| Investment in JV Company | 80,483,964 | 79,331,930 |
| Goodwill | 322,591 | 322,591 |
| Intangible assets | 618,448 | 659,496 |
| Total Long-Term Assets | 124,196,468 | 124,294,994 |
| TOTAL ASSETS | $270,294,981 | $204,306,730 |
| KANDI TECHNOLOGIES GROUP, INC. | ||
| AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
|
June 30, |
December 31, | |
| 2014 | 2013 | |
| (Unaudited) | ||
| CURRENT LIABILITIES |
|
|
| Accounts payable | $53,695,799 | $22,843,143 |
| Other payables and accrued expenses | 4,747,185 | 2,422,613 |
| Short-term bank loans | 33,778,846 | 34,020,281 |
| Customer deposits | 151,051 | 44,404 |
| Notes payable | 12,991,864 | 16,683,023 |
| Income tax payable | 821,200 | 1,362,828 |
| Due to employees | 12,450 | 10,297 |
| Due to related party | -- | -- |
| Deferred taxes | 648,077 | -- |
| Financial derivate - liability | 10,543,927 | 9,256,827 |
| Total Current Liabilities | 117,390,399 | 86,643,416 |
| LONG-TERM LIABILITIES | ||
| Deferred tax | 1,194,426 | 1,009,477 |
| Bond payable | 12,991,864 | 13,084,724 |
| Financial derivatives - liability | 3,205,411 | 15,042,994 |
| Total Long-Term Liabilities | 17,391,701 | 29,137,195 |
| TOTAL LIABILITIES | 134,782,100 | 115,780,611 |
| STOCKHOLDERS' EQUITY | ||
| Common stock, $0.001 par value; 100,000,000 shares authorized; 41,908,620 and 37,012,904 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively | 41,909 | 37,013 |
| Additional paid-in capital | 128,594,307 | 76,754,774 |
| Retained earnings (the restricted portion is $3,807,551 and $3,807,551 at June 30, 2014 and December 31, 2013, respectively) | 1,190,011 | 4,119,086 |
| Accumulated other comprehensive income | 5,686,654 | 7,615,246 |
| TOTAL STOCKHOLDERS' EQUITY | 135,512,881 | 88,526,119 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $270,294,981 | $204,306,730 |
| KANDI TECHNOLOGIES GROUP, INC. | |||||
| AND SUBSIDIARIES | |||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE | |||||
| INCOME (LOSS) | |||||
| (UNAUDITED) | |||||
|
For Three Months Ended June30, |
For Six Months Ended June 30, |
||||
| 2014 | 2013 | 2014 | 2013 | ||
| REVENUE, NET | $32,960,055 | $12,157,827 | $73,131,359 | $26,820,348 | |
| COST OF GOODS SOLD | (25,738,967) | (9,350,206) | (61,049,862) | (20,640,696) | |
| GROSS PROFIT | 7,221,088 | 2,807,621 | 12,081,497 | 6,179,652 | |
| OPERATING EXPENSES: | |||||
| Research and development | (971,673) | (672,491) | (2,143,930) | (1,362,156) | |
| Selling expenses | (435,894) | (71,420) | (507,151) | (161,034) | |
| General and administrative | (3,173,178) | (1,332,279) | (9,643,944) | (2,025,243) | |
| Total operating expenses | (4,580,745) | (2,076,190) | (12,295,025) | (3,548,433) | |
| (LOSS) INCOME FROM CONTINUING OPERATIONS | 2,640,343 | 731,431 | (213,528) | 2,631,219 | |
| OTHER INCOME (EXPENSE): | |||||
| Interest (expense) income, net | (214,995) | (617,601) | (686,175) | (1,287,810) | |
| Change in fair value of financial instruments | 8,941,569 | (1,082,735) | (3,372,602) | (92,339) | |
| Government grants | 153,700 | 49,807 | 153,700 | 49,807 | |
| Share of (loss) in associated companies | (77,187) | (15,517) | (92,992) | (29,540) | |
| Share of profit after tax of JV | (9,526) | (10,376) | 1,718,830 | (10,376) | |
| Other income (expense), net | 60,247 | 54,148 | 119,827 | 176,513 | |
| Total other (expense), net | 8,853,808 | (1,622,274) | (2,159,412) | (1,193,745) | |
| INCOME BEFORE PROVISION FOR INCOME TAXES | 11,494,151 | (890,843) | (2,372,940) | 1,437,474 | |
| PROVISION FOR INCOME TAXES | (337,066) | (153,457) | (556,135) | (244,901) | |
| NET (LOSS) INCOME | 11,157,085 | (1,044,300) | (2,929,075) | 1,192,573 | |
| OTHER COMPREHENSIVE INCOME | |||||
| Foreign currency translation | (717,476) | 724,430 | (1,928,592) | 1,309,345 | |
| COMPREHENSIVE INCOME (LOSS) | $10,439,609 | $(319,870) | $(4,857,667) | $2,501,918 | |
| EARNINGS (LOSS) PER SHARE: |
|
|
|
||
| Basic | $0.27 | $(0.03) | $(0.07) | $0.04 | |
| Diluted | $0.27 | $(0.03) | $(0.07) | $0.04 | |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES: |
|
|
|
|
|
| Basic | 41,142,346 | 32,546,877 | 40,364,986 | 32,427,538 | |
| Diluted | 41,254,507 | 2,546,877 | 40,364,986 | 32,676,702 | |
| KANDI TECHNOLOGIES GROUP, INC. | ||
| AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (UNAUDITED) | ||
| Six Months Ended June 30 | ||
| 2014 | 2013 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net (loss) income | $ (2,929,075) | $ 1,192,573 |
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
| Depreciation and amortization | 2,764,984 | 4,245,026 |
| Deferred taxes | 924,449 | 337,149 |
| Change of derivative instrument's fair value | 3,372,602 | 92,339 |
| Loss in investment in associated company | 96,364 | 29,540 |
| Share of (profit) loss after tax of JV | (1,718,830) | 10,376 |
| Changes in operating assets and liabilities: | ||
| (Increase) Decrease In: | ||
| Accounts receivable | 11,955,855 | 9,073,693 |
| Inventories | (8,544,033) | (9,822,727) |
| Other receivables and prepaid expenses | (231,945) | 13,044 |
| Due from employees | (2,390) | 8,421 |
| Prepayments and prepaid expenses | (44,194,377) | (27,114,014) |
| Amount due from JV | (31,680,191) | -- |
| Increase (Decrease) In: | ||
| Accounts payable | 31,083,370 | 1,787,019 |
| Other payables and accrued liabilities | 2,344,763 | 475,451 |
| Customer deposits | 107,199 | (246,983) |
| Due to related party | -- | 4,001,319 |
| Income tax payable | (533,133) | (342,863) |
| Net cash (used in) operating activities | $ (37,184,388) | $ (16,260,637) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchases of plant and equipment | (308,838) | (54,451) |
| Purchases of land use rights | (1,669,648) | -- |
| Purchase of construction in progress | (23,046) | (53,144) |
| Issuance of notes receivable | (21,468,326) | (1,964,278) |
| Repayments of notes receivable | 26,020,234 | -- |
| Investment in Joint Venture Company | -- | (80,026,377) |
| Deposit for disposal of subsidiary | -- | 60,019,783 |
| Deposit for acquisition | -- | (14,188,677) |
| Net cash provided by (used in) investing activities | $ 2,550,376 | $ (36,267,144) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Restricted cash | $ 1,628 | $ 4,799,980 |
| Proceeds from short-term bank loans | 16,764,023 | 22,407,385 |
| Repayments of short-term bank loans | (16,764,023) | (22,407,385) |
| Proceeds from notes payable | 13,020,600 | 68,184,073 |
| Repayments of notes payable | (16,601,265) | (25,608,441) |
| Common stock and warrants issued | 11,067,734 | -- |
| Warrant exercise | 22,447,914 | 3,848,134 |
| Option exercise & other financing | 4,405,697 | 38,100 |
| Net cash provided by financing activities | 34,342,308 | 51,261,846 |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (291,704) | (1,265,935) |
| Effect of exchange rate changes on cash | (1,183,045) | (786,949) |
| Cash and cash equivalents at beginning of period | 12,762,369 | 12,135,096 |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 11,287,620 | $ 10,082,212 |
| SUPPLEMENTARY CASH FLOW INFORMATION | ||
| Income taxes paid | $ 1,145,600 | $ 587,765 |
| Interest paid | $ 1,170,556 | $ 1,964,649 |
About Kandi Technologies Group, Inc.
Kandi Technologies Group, Inc. (Nasdaq:KNDI), headquartered in Jinhua, Zhejiang Province, is engaged in the research and development, manufacturing and sales of various vehicles. Kandi has established itself as one of the world's largest manufacturers of pure electric vehicle (EV) products, Go-Kart vehicles, and tricycle and utility vehicles (UTVs), among others. More information can be viewed at its corporate website is http://www.kandivehicle.com. Kandi 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.