EX-99.1 2 ea178250ex99-1_kanditech.htm PRESS RELEASE DATED MAY 10, 2023

Exhibit 99.1

 

Kandi Technologies Reports First Quarter 2023 Financial Results

 

- Successful Pivot to Fully Electric Off-road Vehicles Continued to Boost Revenue

 

- High Gross Margin Driven by Fully Electric Crossover Golf Carts

 

JINHUA, CHINA-- (May 10, 2023) - Kandi Technologies Group, Inc. (the “Company”, “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the first quarter of 2023.

 

First Quarter Highlights

 

●Total revenues of $22.9 million compared to $24.9 million in the same period of 2022.

 

●Off-road vehicles and associated parts sales increased by 94.0% to $20.8 million, compared to $10.7 million in the same period of 2022.

 

●EV products and parts sales totaled $0.03 million, compared with $4.0 million total for the first quarter of 2022, attributed to the Company’s shift in focus towards production of off-road vehicles with higher demand and better margins.

 

●Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $0.1 million, compared with $2.1 million in the same period of 2022.

 

●Battery exchange equipment and battery exchange service sales were $0.10 million, compared with $0.03 million in the same period of 2022.

 

●Lithium-ion cells sales of $1.8 million compared to $8.0 million in the same period of 2022.

 

●Net income was $0.6 million, or $0.01 income per fully diluted share, compared to a net loss of $1.6 million, or $0.02 loss per fully diluted share for the same period of 2022.

 

●Working capital totaled $253.1 million as of March 31, 2023.

 

●Cash and equivalents, restricted cash, and certificate of deposit totaled $238.6 million as of March 31, 2023.

 

Dr. Xueqin Dong, CEO of Kandi commented, “We are pleased to report that sales of our off-road vehicles have significantly contributed to our overall revenue and gross margin. Our all-electric crossover golf cart has been successfully launched and well received by customers, enabling our company to maintain a strong growth momentum in the rapidly expanding market for all-electric off-road vehicles. As the trend towards electrification of off-road fuel vehicles continues globally, we will continue to introduce a variety of fully electric off-road vehicles. We are confident that we will achieve sustained growth in this field.”

 

Dr. Dong continued, “Our successful transition in the fully electric off-road vehicles demonstrates our commitment to innovation and development. We are confident in our continued focus on this market, which will not only bring significant financial benefits but also meaningful benefits in terms of environmental sustainability and social responsibility.”

 

 

 

 

Q1 2023 Financial Results

 

Net Revenues and Gross Profit (in USD millions)

 

   Q1 2023   Q1 2022   Y-o-Y% 
Net Revenues  $22.9   $24.9    -8.2%
Gross Profit  $8.0   $2.4    236.4%
Gross Margin%   35.1%   9.6%   - 

 

Net revenues of $22.9 million decreased by 8.2% from the same period of 2022. This decrease was primarily due to a reduction in sales of EV parts and products, as the Company saw a lower demand for EV and shifted its focus towards off-road vehicles and associated parts with surging demand. However, the year-over-year gross margins were higher, attributed to the higher-margin features of off-road vehicles particularly crossover golf carts.

 

Operating Income/Loss (in USD millions)

 

   Q1 2023   Q1 2022   Y-o-Y% 
Operating Expenses  $(10.3)  $(8.1)   26.9%
Loss from Operations  $(2.2)  $(5.7)   -60.8%
Operating Margin%   -9.8%   -22.9%   - 

 

Operating expenses amounted to $10.3 million, compared to $8.1 million during the corresponding period in 2022. The rise in operating expenses can be attributed to higher sales and marketing expenses, which is mainly due to increased commission offered for the sales of off-road vehicles, as well as higher shipping and related expenses due to larger exports to the US market. Additionally, the increase in OpEx was also driven by higher general and administrative expenses resulting from an increase in hires and increased storage fees due to a rise in inventories kept in the US.

 

Net Income/Loss (in USD millions)

 

   Q1 2023   Q1 2022   Y-o-Y% 
Net Income (Loss)  $0.6   $(1.6)   136.8%
Net Income (Loss) per Share, Basic and Diluted  $0.01   $(0.02)   - 

 

Net income was $0.6 million, compared with a net loss of $1.6 million for the same period of 2022. The primary factor contributing to the rise in net income was the increase in gross profit, driven by a greater proportion of sales from off-road vehicles with larger gross margins.

 

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First 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 Wednesday, May 10, 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: +1-844-826-3035
     
  ● International dial-in number: + 1-412-317-5195

 

●Webcast and replay: https://viavid.webcasts.com/starthere.jsp?ei=1614390&tp_key=71bb235f2c

 

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 -

 

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KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

 

   March 31,
2023		   December 31,
2022		 
   (Unaudited)     
CURRENT ASSETS        
Cash and cash equivalents  $75,133,544   $84,063,717 
Restricted cash   62,949,702    66,976,554 
Certificate of deposit   100,484,949    81,191,191 
Accounts receivable (net of allowance for doubtful accounts of $2,295,570 and $2,285,386 as of March 31, 2023 and December 31, 2022, respectively)   28,275,773    38,150,876 
Inventories   47,303,083    40,475,366 
Notes receivable   291,202    434,461 
Other receivables   8,940,359    11,912,615 
Prepayments and prepaid expense   3,227,740    2,970,261 
Advances to suppliers   1,049,800    3,147,932 
TOTAL CURRENT ASSETS   327,656,152    329,322,973 
           
NON-CURRENT ASSETS          
Property, plant and equipment, net   95,606,862    97,168,753 
Intangible assets, net   7,631,452    7,994,112 
Land use rights, net   2,901,166    2,909,950 
Construction in progress   232,485    199,837 
Deferred tax assets   1,432,527    1,432,527 
Long-term investment   145,630    144,984 
Goodwill   33,301,291    33,178,229 
Other long-term assets   10,568,944    10,630,911 
TOTAL NON-CURRENT ASSETS   151,820,357    153,659,303 
           
TOTAL ASSETS  $479,476,509   $482,982,276 
           
CURRENT LIABILITIES          
Accounts payable  $31,681,798   $35,321,262 
Other payables and accrued expenses   11,696,505    14,131,414 
Short-term loans   4,210,589    5,569,154 
Notes payable   20,047,569    19,123,476 
Income tax payable   850,729    1,270,617 
Other current liabilities   6,024,221    6,089,925 
TOTAL CURRENT LIABILITIES   74,511,411    81,505,848 
           
NON-CURRENT LIABILITIES          
Deferred taxes liability   1,378,372    1,378,372 
Contingent consideration liability   2,164,000    1,803,000 
Other long-term liabilities   548,418    602,085 
TOTAL NON-CURRENT LIABILITIES   4,090,790    3,783,457 
           
TOTAL LIABILITIES   78,602,201    85,289,305 
           
STOCKHOLDER’S EQUITY          
Common stock, $0.001 par value; 100,000,000 shares authorized; 77,678,730 and 77,668,730 shares issued and 74,190,171 and 74,180,171 outstanding at March 31,2023 and December 31,2022, respectively   77,679    77,669 
Less: Treasury stock (3,488,559 shares with average price of $2.81 at both March 31,2023 and December 31,2022 )   (9,807,820)   (9,807,820)
Additional paid-in capital   452,376,828    451,373,645 
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at March 31, 2023 and December 31, 2022, respectively)   (16,368,875)   (16,339,765)
Accumulated other comprehensive loss   (26,750,552)   (28,333,239)
TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY   399,527,260    396,970,490 
           
Non-controlling interests   1,347,048    722,481 
TOTAL STOCKHOLDERS’ EQUITY   400,874,308    397,692,971 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $479,476,509   $482,982,276 

  

4

 

 

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

 

   Three Months Ended 
   March 31,
2023		   March 31,
2022		 
         
REVENUES FROM UNRELATED PARTIES, NET  $22,862,108   $24,891,404 
REVENUES FROM THE FORMER AFFILIATE COMPANY AND RELATED PARTIES, NET   -    - 
           
REVENUES, NET   22,862,108    24,891,404 
           
COST OF GOODS SOLD   (14,832,878)   (22,504,241)
           
GROSS PROFIT   8,029,230    2,387,163 
           
OPERATING INCOME (EXPENSE):          
Research and development   (878,980)   (1,140,586)
Selling and marketing   (1,827,729)   (1,193,699)
General and administrative   (7,559,452)   (5,756,531)
TOTAL OPERATING EXPENSE   (10,266,161)   (8,090,816)
           
LOSS FROM OPERATIONS   (2,236,931)   (5,703,653)
           
OTHER INCOME (EXPENSE):          
Interest income   2,100,343    1,222,304 
Interest expense   (173,370)   (148,144)
Change in fair value of contingent consideration   (361,000)   2,690,000 
Government grants   620,404    244,098 
Other income, net   266,465    43,782 
TOTAL OTHER INCOME, NET   2,452,842    4,052,040 
           
INCOME (LOSS) BEFORE INCOME TAXES   215,911    (1,651,613)
           
INCOME TAX BENEFIT   379,546    32,600 
           
NET INCOME (LOSS)   595,457    (1,619,013)
           
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTERESTS   624,567    2,957 
           
NET LOSS ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS   (29,110)   (1,616,056)
           
OTHER COMPREHENSIVE INCOME          
Foreign currency translation adjustment   1,582,687    1,009,811 
           
COMPREHENSIVE INCOME (LOSS)  $2,178,144   $(609,202)
           
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC   74,186,504    76,289,846 
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED   75,095,595    76,289,846 
           
NET INCOME (LOSS) PER SHARE, BASIC  $0.01   $(0.02)
NET INCOME (LOSS) PER SHARE, DILUTED  $0.01   $(0.02)

 

5

 

 

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 

 

   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 

 

6

 

 

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

 

   Three Months Ended 
   March 31,
2023		   March 31,
2022		 
         
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income (loss)  $595,457   $(1,619,013)
Adjustments to reconcile net (loss) income to net cash provided by operating activities          
Depreciation and amortization   3,051,089    3,294,499 
Provision (reversal) of allowance for doubtful accounts   -    4,389 
Change in fair value of contingent consideration   361,000    (2,690,000)
Stock award and stock based compensation expense   1,003,818    22,925 
           
Changes in operating assets and liabilities:          
           
Accounts receivable   6,275,418    5,197,268 
Notes receivable   358,114    1,965,596 
Inventories   (6,750,531)   2,498,914 
Other receivables and other assets   3,108,680    (790,486)
Advances to supplier and prepayments and prepaid expenses   1,865,040    1,425,684 
           
Increase (Decrease) In:          
Accounts payable   6,097,620    3,088,095 
Other payables and accrued liabilities   (2,752,663)   (1,688,414)
Notes payable   (5,413,459)   (4,401,457)
Income tax payable   (437,385)   (119,559)
Net cash provided by operating activities  $7,362,198   $6,188,441 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchases of property, plant and equipment, net   (562,717)   (709,881)
Payment for construction in progress   (72,188)   (246,971)
Certificate of deposit   (19,001,959)   (15,759,448)
Net cash used in investing activities  $(19,636,864)  $(16,716,300)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from short-term loans   5,040,000    500,000 
Repayments of short-term loans   (6,398,565)   - 
Contribution from non-controlling shareholder   -    803,732 
Purchase of treasury stock   -    (1,583,561)
Net cash used in by financing activities  $(1,358,565)  $(279,829)
           
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH  $(13,633,231)  $(10,807,688)
Effect of exchange rate changes  $676,206   $352,415 
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  $138,083,246   $158,220,734 
-CASH AND CASH EQUIVALENTS AT END OF PERIOD   75,133,544    99,997,938 
-RESTRICTED CASH AT END OF PERIOD   62,949,702    58,222,796 
           
SUPPLEMENTARY CASH FLOW INFORMATION          
Income taxes paid  $17,433   $5,496 
Interest paid  $99,960   $37,116 
           
SUPPLEMENTAL NON-CASH DISCLOSURES:          
Contribution from non-controlling shareholder by inventories, fixed assets and intangible assets  $-   $393,986 

 

 

 

 7