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   -