EX-99.1 2 ea168201ex99-1_kanditech.htm PRESS RELEASE DATED NOVEMBER 8, 2022

Exhibit 99.1

 

Kandi Technologies Reports Third Quarter 2022 Financial Results

 

- Steady Growth in Off-road Vehicles

 

- Revenue growth drove significantly narrowed loss

 

JINHUA, China, Nov. 08, 2022 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the third quarter of 2022.

 

Third Quarter Highlights

 

●Total revenues of $33.7 million compared to $16.8 million in the same period of 2021.

 

●Off-road vehicles and associated parts sales increased by 217.6% to $21.7 million, compared to $6.8 million in the same period of 2021.
  
●EV products sales increased significantly to $1.7 million from $0.3 million in the same period of 2021.

 

●EV parts sales were $2.6 million, compared to $3.2 million in the same period of 2021.

 

●Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $1.2 million, compared with $6.3 million in the same period of 2021.

 

●Net income was $1.1 million, or $0.01 income per fully diluted share, compared to a net loss of $7.9 million, or $0.10 loss per fully diluted share for the same period of 2021. A turn to profitability from loss was largely attributed to higher total revenue, resulted from highly performed off-road vehicles and associated parts sales, and lower operating expenses.

 

●Working capital totaled $252.9 million as of September 30, 2022

 

●Cash and equivalents, restricted cash, and certificate of deposit totaled $210.2 million as of September 30, 2022

 

Mr. Hu Xiaoming, Chairman and CEO of Kandi commented, “During the third quarter, our strategic pivot enabled us to make inroads in electric off-road vehicles. With high market interest in the electrification of off-road vehicles, we successfully developed and delivered “crossover” electric golf carts that are seeing high acceptance by our customers. Growing demand, and positive market feedback gives us more confidence to invest more in electric off-road vehicles. Our next step is to launch more models in the categories of golf crossovers, utility terrain vehicles, and more. We believe that our top line growth and disciplined control of operating expenses can drive improved profitability, which will be increasingly recognized by investors.”

 

Q3 2022 Financial Results

 

Net Revenues and Gross Profit (in USD millions)

 

   Q3 2022   Q3 2021   Y-o-Y% 
Net Revenues  $33.7   $16.8    100.5%
Gross Profit  $6.4   $2.7    131.6%
Gross Margin%   18.9%   16.4%   - 

 

Net revenues of $33.7 million in the third quarter of 2022 increased 100.5% from the same period of 2021. The increase in revenue and gross margin was primarily due to a product mix shift to off-road vehicles, a segment with a higher gross margin that achieved significant growth in the past quarter.

 

Operating Income/Loss (in USD millions)

 

   Q3 2022   Q3 2021   Y-o-Y% 
Operating Expenses  $(8.6)  $(11.8)   27.3%
Loss from Operations  $(2.2)  $(9.0)   75.7%
Operating Margin%   -6.5%   -53.7%   - 

 

Operating expenses were $8.6 million, compared with operating expense of $11.8 million for the same period of 2021. Operating expenses decreased as the Company moved past the 2021 peak research and development effort on new products.

 

Net Income/Loss (in USD millions)

 

   Q3 2022   Q3 2021   Y-o-Y% 
Net Income (Loss)  $1.1   $(7.9)   113.6%
Net Income (Loss) per Share, Basic and Diluted  $0.01   $(0.1)   - 

 

Net income was $1.1 million comparing to a net loss of $7.9 million for the same period of 2021. The turn to profitability was primarily due to higher total revenue and lower operating expenses.

 

 

 

 

Third 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 (9:00 P.M. Beijing Time) on Tuesday, November 8, 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: +1-844-825-9789

 

●International dial-in number: + 1-412-317-5180

 

●Webcast and replay: https://viavid.webcasts.com/starthere.jsp?ei=1581599&tp_key=a040e098ec

 

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

(UNAUDITED)

 

   September 30,
2022		   December 31,
2021		 
         
Current assets        
Cash and cash equivalents  $99,029,118   $129,223,443 
Restricted cash   40,855,710    39,452,564 
Certificate of deposit   70,324,477    55,041,832 
Accounts receivable (net of allowance for doubtful accounts of $2,734,642 and $3,053,277 as of September 30, 2022 and December 31, 2021, respectively)   40,034,961    52,896,305 
Inventories   43,673,888    33,171,973 
Notes receivable   1,371,773    323,128 
Other receivables   19,293,487    8,901,109 
Prepayments and prepaid expense   4,006,808    17,657,326 
Advances to suppliers   5,800,659    5,940,456 
TOTAL CURRENT ASSETS   324,390,881    342,608,136 
           
NON-CURRENT ASSETS          
Property, plant and equipment, net   94,908,520    111,577,411 
Intangible assets, net   10,785,106    13,249,079 
Land use rights, net   2,843,944    3,250,336 
Construction in progress   329,726    79,317 
Deferred tax assets   2,171,890    2,219,297 
Long-term investment   140,649    157,262 
Goodwill   32,960,659    36,027,425 
Other long-term assets   10,423,361    10,992,009 
TOTAL NON-CURRENT ASSETS   154,563,855    177,552,136 
           
TOTAL ASSETS  $478,954,736   $520,160,272 
           
CURRENT LIABILITIES          
Accounts payable  $33,281,208   $36,677,802 
Other payables and accrued expenses   7,894,152    9,676,973 
Short-term loans   5,604,312    950,000 
Notes payable   17,170,279    8,198,193 
Income tax payable   1,121,744    1,620,827 
Other current liabilities   6,425,151    7,038,895 
TOTAL CURRENT LIABILITIES   71,496,846    64,162,690 
           
NON-CURRENT LIABILITIES          
Long-term loans   2,210,589    2,210,589 
Deferred taxes liability   2,462,901    2,460,141 
Contingent consideration liability   3,266,000    7,812,000 
Other long-term liabilities   777,211    314,525 
TOTAL NON-CURRENT LIABILITIES   8,716,701    12,797,255 
           
TOTAL LIABILITIES   80,213,547    76,959,945 
           
STOCKHOLDER’S EQUITY          
Common stock, $0.001 par value; 100,000,000 shares authorized; 77,658,730 and 77,385,130 shares issued and 75,343,594 and 76,705,381 outstanding at September 30,2022 and December 31,2021, respectively   77,659    77,385 
Less: Treasury stock (2,315,136 shares with average price of $2.96 and 679,749 shares with average price of $3.52 at September 30,2022 and December 31,2021, respectively )   (6,848,731)   (2,392,203)
Additional paid-in capital   450,380,994    449,479,461 
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at September 30,2022 and December 31,2021, respectively)   (7,390,410)   (4,216,102)
Accumulated other comprehensive loss   (39,637,503)   251,786 
TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY   396,582,009    443,200,327 
           
Non-controlling interests   2,159,180    - 
TOTAL STOCKHOLDERS’ EQUITY   398,741,189    443,200,327 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $478,954,736   $520,160,272 

 

3

 

 

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)

 

   Three Months Ended   Nine Months Ended 
   September 30,
2022		   September 30,
2021		   September 30,
2022		   September 30,
2021		 
                 
REVENUES FROM UNRELATED PARTIES, NET  $33,673,201   $16,795,712   $79,405,788   $62,647,714 
REVENUES FROM THE FORMER AFFILIATE COMPANY AND RELATED PARTIES, NET   -    -    -    1,587 
                     
REVENUES, NET   33,673,201    16,795,712    79,405,788    62,649,301 
                     
COST OF GOODS SOLD   (27,304,038)   (14,046,041)   (67,930,595)   (49,447,497)
                     
GROSS PROFIT   6,369,163    2,749,671    11,475,193    13,201,804 
                     
OPERATING INCOME (EXPENSE):                    
Research and development   (1,433,649)   (6,747,934)   (3,828,078)   (31,937,436)
Selling and marketing   (1,440,995)   (1,290,544)   (3,807,222)   (3,494,927)
General and administrative   (5,686,233)   (3,733,230)   (18,016,843)   (13,522,925)
Gain on disposal of long-lived assets   -    2,238    -    48,255,905 
TOTAL OPERATING EXPENSE   (8,560,877)   (11,769,470)   (25,652,143)   (699,383)
                     
(LOSS) INCOME FROM OPERATIONS   (2,191,714)   (9,019,799)   (14,176,950)   12,502,421 
                     
OTHER INCOME (EXPENSE):                    
Interest income   2,138,130    1,247,544    4,739,208    2,750,241 
Interest expense   (177,417)   (63,368)   (463,994)   (267,785)
Change in fair value of contingent consideration   434,995    -    2,733,995    - 
Government grants   829,539    220,967    1,536,856    570,162 
Gain from sale of equity in the Former Affiliate Company   -    822    -    17,734,733 
Share of loss after tax of the Former Affiliate Company   -    (119)   -    (2,584,520)
Other income, net   536,726    442,102    2,954,036    4,768,092 
TOTAL OTHER INCOME , NET   3,761,973    1,847,948    11,500,101    22,970,923 
                     
INCOME (LOSS) BEFORE INCOME TAXES   1,570,259    (7,171,851)   (2,676,849)   35,473,344 
                     
INCOME TAX (EXPENSE) BENEFIT   (497,211)   (696,968)   255,232    (8,815,409)
                     
NET INCOME (LOSS)   1,073,048    (7,868,819)   (2,421,617)   26,657,935 
                     
LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS   694,029    -    752,691    - 
                     
NET INCOME (LOSS) ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS   379,019    (7,868,819)   (3,174,308)   26,657,935 
                     
OTHER COMPREHENSIVE INCOME (LOSS)                    
Foreign currency translation adjustment   (20,932,870)   (116,054)   (39,889,289)   3,582,748 
                     
COMPREHENSIVE (LOSS) INCOME  $(19,859,822)  $(7,984,873)  $(42,310,906)  $30,240,683 
                     
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC   75,741,399    76,394,573    75,962,899    75,766,749 
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED   75,885,630    76,394,573    76,061,190    75,766,749 
                     
NET INCOME (LOSS) PER SHARE, BASIC  $0.01   $(0.10)  $(0.03)  $0.35 
NET INCOME (LOSS) PER SHARE, DILUTED  $0.01   $(0.10)  $(0.03)  $0.35 

 

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
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 
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 
Stock issuance and award   1,526,817    1,527    -    4,874,224    -    -    -    4,875,751 
Net loss   -    -    -    -    (7,868,819)   -    -    (7,868,819)
Foreign currency translation   -    -    -    -    -    (116,054)   -    (116,054)
                                         
Balance, September 30, 2021   77,152,972   $77,153   $-   $448,591,602   $(421,965)  $(5,195,403)  $-   $443,051,387 

 

   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 
Stock issuance and award   10,000    10    -    22,290    -    -    -    22,300 
Stock based compensation                  250,673                   250,673 
Stock buyback   -    -    (911,714)   (12,872)   -    -    -    (924,586)
Capital contribution from shareholder   -    -    -    -    -    -    337,557    337,557 
Net income (loss)   -    -    -    -    379,019    -    694,029    1,073,048 
Foreign currency translation   -    -    -    -    -    (20,932,870)   (66,006)   (20,998,876)
                                         
Balance, September 30, 2022   77,658,730   $77,659   $(6,848,731)  $450,380,994   $(7,390,410)  $(39,637,503)   2,159,180   $398,741,189 

 

5

 

 

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

 

   Nine Months Ended 
   September 30,
2022		   September 30,
2021		 
         
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net (loss) income  $(2,421,617)  $26,657,935 
Adjustments to reconcile net income to net cash provided by operating activities          
Depreciation and amortization   9,512,970    6,893,192 
Provision (reversal) of allowance for doubtful accounts   4,220    - 
Deferred taxes   (116,206)   (11,970)
Share of loss after tax of the Former Affiliate Company   -    2,584,520 
Gain from equity sale in the Former Affiliate Company   -    (17,734,733)
Gain on disposal of long-lived assets   -    (48,255,905)
Change in fair value of contingent consideration   (2,733,995)   - 
Stock award and stock based compensation expense   913,288    1,452,381 
           
Changes in operating assets and liabilities:          
           
Accounts receivable   (20,932,970)   4,289,150 
Notes receivable   1,927,621    - 
Inventories   (13,183,546)   (7,443,414)
Other receivables and other assets   (10,264,805)   (17,537,034)
Advances to supplier and prepayments and prepaid expenses   12,405,615    18,776,708 
           
Increase (Decrease) In:          
Accounts payable   46,796,615    (4,116,153)
Other payables and accrued liabilities   4,951,022    7,052,572 
Notes payable   (13,574,849)   (93,278)
Income tax payable   (60,313)   8,053,977 
Net cash provided by (used in) operating activities  $13,223,050   $(19,432,052)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchases of property, plant and equipment, net   (1,674,445)   (10,948,968)
Acquisition of Jiangxi Huiyi   -    (3,864,346)
Payment for construction in progress   (278,777)   (4,048,889)
Proceeds from disposal of long-lived assets   -    23,235,758 
(Loan to) Repayment from third party   (4,545,386)   31,687,637 
Certificate of deposit   (22,726,928)   (54,100,844)
Proceeds from sales of equity in the Former Affiliate Company   -    47,608,743 
Long-term Investment   -    (108,202)
Advance receipts of equity transfer   -    600,463 
Net cash (used in) provided by investing activities  $(29,225,536)  $30,061,352 
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from short-term loans   20,642,224    2,630,000 
Repayments of short-term loans   (15,987,912)   - 
Contribution from non-controlling shareholder   772,716    - 
Purchase of treasury stock   (4,505,213)   - 
Net cash provided by financing activities  $921,815   $2,630,000 
           
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH  $(15,080,671)  $13,259,300 
Effect of exchange rate changes  $(13,710,508)  $990,440 
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  $139,884,828   $156,770,375 
-CASH AND CASH EQUIVALENTS AT END OF PERIOD   99,029,118    132,866,957 
-RESTRICTED CASH AT END OF PERIOD   40,855,710    23,903,418 
           
SUPPLEMENTARY CASH FLOW INFORMATION          
Income taxes paid  $274,037    688,160 
Interest paid  $225,479    17,536 
           
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)   -    2,813,968 
Contribution from non-controlling shareholder by inventories, fix assets and intangible assets   393,986    - 
Common stock issued for settlement of payables related to acquisitions (see Note 19)   -    4,853,451 

 

 

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