EX-99.1 2 ea183044ex99-1_kanditech.htm EARNINGS RELEASE DATED AUGUST 8, 2023

Exhibit 99.1

 

Kandi Technologies Reports Second Quarter 2023 Financial Results

 

Strategic product transformation has borne fruitful outcomes, leading to a remarkable turnaround to profitability

 

JINHUA, China, Aug. 08, 2023 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company”, “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the second quarter of 2023.

 

Second Quarter Highlights

 

●Total revenues of $36.0 million increased by 72.5% year-over-year.

 

●Gross profit of $13.7 million and gross margin of 38.2%, compared to gross profit of $2.7 million and gross margin of 13.0% in the same period of 2022.

 

●Net income was $4.4 million, or $0.06 income per fully diluted share, compared to a net loss of $1.9 million, or $0.02 loss per fully diluted share for the same period of 2022.

 

●Cash and equivalents, restricted cash, and certificate of deposit totaled $232.5 million as of June 30, 2023.

 

Dr. Xueqin Dong, CEO of Kandi commented, “The Company's efforts invested in product transformation over the past few years have finally borne fruit this year, leading to a successful turnaround from losses to profits. Net income reached $4.4 million, demonstrating a significant recovery from the challenges we faced in the prior years. The continued growth of gross profit reflects our commitment to drive our product mix toward higher-profit and more rapidly growing categories. The success of our all-electric off-road vehicles is the driving force behind our sales recovery and return to profitability. We see immense potential in the US off-road vehicle market, and we are dedicated to expanding our product offerings to meet the evolving demands of our customers.”

 

Q2 2023 Financial Results

 

Net Revenues and Gross Profit (in USD millions)

   Q2 2023   Q2 2022   Y-o-Y% 
Net Revenues  $36.0   $20.8    +72.5%
Gross Profit  $13.7   $2.7    +405.2%
Gross Margin%   38.2%   13.0%   - 

 

Net revenues of $36.0 million increased by 72.5% from the same period of 2022. Kandi’s focus on innovation, production, and commercialization of electric off-road vehicles -- particularly crossover golf carts, go karts, and all-terrain vehicles or ATVs -- boosted sales of off-road vehicles and associated parts to achieve its largest proportion ever of quarterly sales. Gross margin grew versus the year-earlier period because of the greater profitability of off-road vehicles, with crossover golf carts being a significant contributor to this increase.

 

Operating Income/Loss (in USD millions)

   Q2 2023   Q2 2022   Y-o-Y% 
Operating Expenses  $(14.0)  $(9.0)   +55.1%
Loss from Operations  $(0.2)  $(6.3)   -96.4%
Operating Margin%   -0.6%   -30.1%   - 

 

Operating expenses rose to $14.0 million from $9.0 million in the same period of 2022. While operating expenses were up, significantly higher gross profits resulted in improvement in operating income. The rise in operating expenses can be attributed mainly to increased sales and marketing expenses associated with increasing number of electric off-road vehicles exported to the U.S. market, and higher general and administration expenses due to increased stock-based compensation.

 

 

 

 

Net Income/Loss (in USD millions)

   Q2 2023   Q2 2022   Y-o-Y% 
Net Income (Loss)  $4.4   $(1.9)   -333.9%
Net Income (Loss) per Share, Basic and Diluted  $0.06   $(0.02)   - 

 

Net income was $4.4 million, a noteworthy improvement compared to a net loss of $1.9 million during the same period in 2022. The primary factor for the swing to profit was the better gross margins.

 

Second Quarter 2023 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 Tuesday, Aug 8, 2023. 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://viavid.webcasts.com/starthere.jsp?ei=1627967&tp_key=83400af773

 

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 -

 

 2

 

 

KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   June 30,
2023		   December 31,
2022		 
   (Unaudited)     
CURRENT ASSETS        
Cash and cash equivalents  $69,406,103   $84,063,717 
Restricted cash   54,238,569    66,976,554 
Certificate of deposit   108,902,429    81,191,191 
Accounts receivable (net of allowance for doubtful accounts of $2,679,598 and $2,285,386 as of June 30, 2023 and December 31, 2022, respectively)   23,137,337    38,150,876 
Inventories   57,107,433    40,475,366 
Notes receivable   256,276    434,461 
Other receivables   9,813,439    11,912,615 
Prepayments and prepaid expense   3,159,764    2,970,261 
Advances to suppliers   2,073,612    3,147,932 
TOTAL CURRENT ASSETS   328,094,962    329,322,973 
           
NON-CURRENT ASSETS          
Property, plant and equipment, net   89,909,721    97,168,753 
Intangible assets, net   5,927,783    7,994,112 
Land use rights, net   2,725,604    2,909,950 
Construction in progress   36,854    199,837 
Deferred tax assets   1,427,290    1,432,527 
Long-term investment   137,851    144,984 
Goodwill   31,335,036    33,178,229 
Other long-term assets   9,911,534    10,630,911 
TOTAL NON-CURRENT ASSETS   141,411,673    153,659,303 
           
TOTAL ASSETS  $469,506,635   $482,982,276 
           
CURRENT LIABILITIES          
Accounts payable  $36,693,759   $35,321,262 
Other payables and accrued expenses   11,736,250    14,131,414 
Short-term loans   6,967,612    5,569,154 
Notes payable   16,310,719    19,123,476 
Income tax payable   1,011,755    1,270,617 
Other current liabilities   5,476,994    6,089,925 
TOTAL CURRENT LIABILITIES   78,197,089    81,505,848 
           
NON-CURRENT LIABILITIES          
Deferred taxes liability   1,172,820    1,378,372 
Contingent consideration liability   –    1,803,000 
Other long-term liabilities   465,784    602,085 
TOTAL NON-CURRENT LIABILITIES   1,638,604    3,783,457 
           
TOTAL LIABILITIES   79,835,693    85,289,305 
           
STOCKHOLDER’S EQUITY          
Common stock, $0.001 par value; 100,000,000 shares authorized; 75,010,171 and 77,668,730 shares issued and 75,010,171 and 74,180,171 outstanding at June 30,2023 and December 31,2022, respectively   75,010    77,669 
Less: Treasury stock (null shares and 3,488,559 shares with average price of $2.81 at June 30, 2023 and December 31, 2022 )   –    (9,807,820)
Additional paid-in capital   446,260,170    451,373,645 
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at June 30, 2023 and December 31, 2022, respectively)   (12,640,763)   (16,339,765)
Accumulated other comprehensive loss   (46,029,611)   (28,333,239)
TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY   387,664,806    396,970,490 
           
Non-controlling interests   2,006,136    722,481 
TOTAL STOCKHOLDERS’ EQUITY   389,670,942    397,692,971 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $469,506,635   $482,982,276 

 

 3

 

 

KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

 

   Three Months Ended   Six Months Ended 
   June 30,
2023		   June 30,
2022		   June 30,
2023		   June 30,
2022		 
                 
REVENUES FROM UNRELATED PARTIES, NET  $35,953,339   $20,841,183   $58,815,447   $45,732,587 
REVENUES FROM THE FORMER AFFILIATE COMPANY AND RELATED PARTIES, NET   –    –    –    – 
                     
REVENUES, NET   35,953,339    20,841,183    58,815,447    45,732,587 
                     
COST OF GOODS SOLD   (22,218,767)   (18,122,316)   (37,051,645)   (40,626,557)
                     
GROSS PROFIT   13,734,572    2,718,867    21,763,802    5,106,030 
                     
OPERATING EXPENSE:                    
Research and development   (874,562)   (1,253,843)   (1,753,542)   (2,394,429)
Selling and marketing   (2,780,515)   (1,172,528)   (4,608,244)   (2,366,227)
General and administrative   (8,838,319)   (6,574,079)   (16,397,771)   (12,330,610)
Impairment of goodwill   (507,603)   –    (507,603)   – 
Impairment of long-lived assets   (962,737)   –    (962,737)   – 
TOTAL OPERATING EXPENSE   (13,963,736)   (9,000,450)   (24,229,897)   (17,091,266)
                     
LOSS FROM OPERATIONS   (229,164)   (6,281,583)   (2,466,095)   (11,985,236)
                     
OTHER INCOME (EXPENSE):                    
Interest income   1,954,563    1,378,774    4,054,906    2,601,078 
Interest expense   (194,239)   (138,433)   (367,609)   (286,577)
Change in fair value of contingent consideration   2,164,000    (391,000)   1,803,000    2,299,000 
Government grants   189,948    463,219    810,352    707,317 
Other income, net   807,315    2,373,528    1,073,780    2,417,310 
TOTAL OTHER INCOME, NET   4,921,587    3,686,088    7,374,429    7,738,128 
                     
INCOME (LOSS) BEFORE INCOME TAXES   4,692,423    (2,595,495)   4,908,334    (4,247,108)
                     
INCOME TAX (EXPENSE) BENEFIT   (305,223)   719,843    74,323    752,443 
                     
NET INCOME (LOSS)   4,387,200    (1,875,652)   4,982,657    (3,494,665)
                     
LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS   659,088    61,619    1,283,655    58,662 
                     
NET INCOME (LOSS) ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS   3,728,112    (1,937,271)   3,699,002    (3,553,327)
                     
OTHER COMPREHENSIVE LOSS                    
Foreign currency translation adjustment   (19,279,059)   (19,966,230)   (17,696,372)   (18,956,419)
                     
COMPREHENSIVE LOSS  $(14,891,859)  $(21,841,882)  $(12,713,715)  $(22,451,084)
                     
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC   74,378,083    75,863,479    74,282,823    76,075,484 
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED   76,315,953    75,863,479    75,786,201    76,075,484 
                     
NET INCOME (LOSS) PER SHARE, BASIC  $0.06   $(0.02)  $0.07   $(0.05)
NET INCOME (LOSS) PER SHARE, DILUTED  $0.06   $(0.02)  $0.07   $(0.05)

 

 4

 

 

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
Earning
(Deficit)		   Accumulated
Other
Comprehensive
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 
Stock issuance and award   238,600    239    –    584,331    –    –    –    584,570 
Stock buyback   –    –    (1,974,490)   (22,578)   –    –    –    (1,997,068)
Net income (loss)   –    –    –    –    (1,937,271)   –    61,619    (1,875,652)
Foreign currency translation   –    –    –    –    –    (19,966,230)   (63,460)   (20,029,690)
                                         
Balance, June 30, 2022   77,648,730   $77,649   $(5,937,017)  $ 450,120,903   $(7,769,429)  $(18,704,633)   1,193,600   $ 418,981,073 

 

 5

 

 

   Number of
Outstanding
Shares		   Common
Stock		   Treasury
Stock		   Additional
Paid-in
Capital		   Accumulated
Earning
(Deficit)		   Accumulated
Other
Comprehensive
Income		   Non-controlling
interests		   Total 
Balance, December 31, 2022   77,668,730   $77,669   $ (9,807,820)  $ 451,373,645   $(16,339,765)  $(28,333,239)  $722,481   $ 397,692,971 
Stock issuance and award   10,000    10    –    22,290    –    –    –    22,300 
Stock based compensation   –    –    –    980,893    –    –    –    980,893 
Net income (loss)   –    –    –    –    (29,110)   –    624,567    595,457 
Foreign currency translation   –    –    –    –    –    1,582,687    –    1,582,687 
                                         
Balance, March 31, 2023   77,678,730   $77,679   $(9,807,820)  $ 452,376,828   $(16,368,875)  $(26,750,552)  $1,347,048   $  400,874,308 
Stock issuance and award   820,000    820    –    2,706,780    –    –    –    2,707,600 
Stock based compensation   –    –    –    980,893    –    –    –    980,893 
Cancellation of the Treasury Stock   (3,488,559)   (3,489)   9,807,820    (9,804,331)   –    –    –    – 
Net income   –    –    –    –    3,728,112    –    659,088    4,387,200 
Foreign currency translation   –    –    –    –    –    (19,279,059)   –    (19,279,059)
                                         
Balance, June 30, 2023   75,010,171   $75,010   $–   $ 446,260,170   $(12,640,763)  $(46,029,611)  $2,006,136   $389,670,942 

 

 6

 

 

KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   Six Months Ended 
   June 30,
2023		   June 30,
2022		 
         
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income (loss)  $4,982,657   $(3,494,665)
Adjustments to reconcile net (loss) income to net cash provided by operating activities          
Depreciation and amortization   6,044,494    6,447,548 
Impairments   1,470,340    – 
Provision of allowance for doubtful accounts   530,759    4,301 
Deferred taxes   (200,316)   (116,206)
Change in fair value of contingent consideration   (1,803,000)   (2,299,000)
Stock award and stock based compensation expense   4,724,507    639,690 
           
Changes in operating assets and liabilities:          
           
Accounts receivable   6,424,500    (9,108,858)
Notes receivable   588,417    1,925,896 
Inventories   (17,938,859)   (9,949,597)
Other receivables and other assets   1,302,745    (2,806,192)
Advances to supplier and prepayments and prepaid expenses   680,110    13,475,591 
           
Increase (Decrease) In:          
Accounts payable   20,729,603    32,751,997 
Other payables and accrued liabilities   (1,071,220)   4,198,349 
Notes payable   (15,133,991)   (7,788,622)
Income tax payable   (70,636)   (777,068)
Net cash provided by operating activities  $11,260,110   $23,103,164 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchases of property, plant and equipment, net   (1,360,492)   (1,491,918)
Payment for construction in progress   (76,792)   (308,304)
Certificate of deposit   (33,214,435)   (21,617,615)
Net cash used in investing activities  $(34,651,719)  $(23,417,837)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from short-term loans   7,928,212    5,070,582 
Repayments of short-term loans   (6,398,565)   (4,570,582)
Contribution from non-controlling shareholder   –    787,499 
Purchase of treasury stock   –    (3,580,628)
Net cash provided by (used in) financing activities  $1,529,647   $(2,293,129)
           
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH  $(21,861,962)  $(2,607,802)
Effect of exchange rate changes  $(5,533,637)  $(6,734,387)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR  $151,040,271   $168,676,007 
           
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD  $123,644,672   $159,333,818 
-CASH AND CASH EQUIVALENTS AT END OF PERIOD   69,406,103    87,098,779 
-RESTRICTED CASH AT END OF PERIOD   54,238,569    72,235,039 
           
SUPPLEMENTARY CASH FLOW INFORMATION          
Income taxes paid  $76,016   $140,831 
Interest paid  $198,793   $102,722 
           
SUPPLEMENTAL NON-CASH DISCLOSURES:          
Contribution from non-controlling shareholder by inventories, fixed assets and intangible assets  $–   $393,986 

 

 

7