Kandi Technologies Reports Fourth Quarter and Full Year 2013 Financial Results

March 17, 2014 8:30 AM EDT | Source: Kandi Technologies, Corp.

-EV sales achieved 193.7% gains in Q4
-Q4 Revenue Increased 92.2% YoY to $50.6 Million
-Full Year Revenue Grew 46.5% YoY to $94.5 Million

Jinhua, China--(Newsfile Corp. - March 17, 2014) - Kandi Technologies Group, Inc. (NASDAQ: KNDI) (the 'Company' or 'Kandi'), today announced its financial results for the fourth quarter and full year ending December 31, 2013.

Fourth Quarter 2013 Highlights

  • Revenues rose 92.0% to $50.6 million from $26.3 million in the fourth quarter of 2012. EV sales increased significantly to $40.0 million, a 193.7% jump from the same period last year. During the quarter, the Company sold 3,568 units of pure electronic vehicles
  • Gross profit increased 152.0% to $11.4 million from $4.5 million in the same period last year
  • GAAP net loss was ($14.7 million) compared to a net income of $2.2 million in the same period of last year, mainly due to increases of non-cash charges, such as change of fair value of financial derivatives, higher income tax, general and administrative expenses, and interest expenses
  • Non-GAAP net income* was $4.6 million, up nearly 259% year-over-year from $1.3 million.

Full Year 2013 Highlights

  • Total revenues grew 46.5% to $94.5 million from $64.5 million in 2012
    • ATV sales increased 62.6% to 10.4 million
    • EV sales were up 144.9% to $46.6 million and the Company sold 4,694 units in the full year of 2013
    • UTV sales grew 262.1% to $1.2 million
       
  • Gross profit increased 68.6% to $21.7 million compared to $12.9 million in 2012
  • Gross margin increased about three hundred basis points to 23.0%
  • GAAP net loss in 2013 was ($21.1 million) due to a significant increase in the fair value of financial derivatives, general and administrative expenses, and interest expenses compared to net income of $6.0 million in 2012
  • Non-GAAP net income* increased 23.9% to $5.2 million from $4.2 million from the previous year

*Non-GAAP net income is defined as excluding the change of the fair value of financial derivatives, the effects of option related expenses, the stock award expense, the Convertible Note’s interest expense, and the effect caused by amortization of discount on Convertible Notes. We supply non-GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations.

Mr. Xiaoming Hu, Chairman and Chief Executive Officer of Kandi Technologies Commented, “We are very pleased to deliver an excellent financial performance for 2013, especially a robust Q4 result. As we have predicted in the past that 2013 was truly a breakthrough year for Kandi and our shareholders. The newly launched Public EV Sharing System in Hangzhou has been well received and highly recognized by our customers and various local governments as another innovative EV business model by Kandi. This EV sharing project was featured in the various national and international media outlets, such as China Central Television (CCTV), Associated Press (AP) and Bloomberg. During the year, we have formed and completed a strategic EV joint venture with Geely Auto which has already produced a profound impact on improving and expanding our EV business by a better consolidation of brands, resources and expertise to gain more market shares in China’s pure EV sector.”

“With the newly unveiled EV subsidy policy in China, many of our pending EV orders have begun to be fulfilled during the fourth quarter in which we sold 3,568 units. For full year 2013, we achieved our expectations for revenue growth, including that almost 50% of total revenue came from EV sales. We expect this growth momentum will carry well into 2014. Together with JV partner, Geeley Auto, we now have three full-scale specialized EV production facilities, located in Shanghai, Changxing and Jinhua, which enable us to meet the strong market demand for electric vehicles in coming years.”

“It is noteworthy that Kandi was upgraded for the NASDAQ Global Select Market in the beginning of this year, which is another indication of our hard work to maximize shareholders’ value. We look forward to another stellar year in 2014 as Kandi continues to expand our EV sharing business in our existing markets as well as other major cities in China. ” Mr. Hu concluded.

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

   2013   2012  
REVENUES, NET $ 94,536,045  $ 64,513,670  
          
COST OF GOODS SOLD  (72,793,517)  (51,620,280)
          
GROSS PROFIT  21,742,528   12,893,390  
Research and development  (3,728,730)  (2,877,283)
Selling and marketing  (399,504)  (455,983)
General and administrative  (16,056,107)  (4,250,832)
INCOME FROM CONTINUING OPERATIONS  1,558,187   5,309,292  
Interest income  1,516,477   2,658,104  
Interest (expense)  (4,395,353)  (2,775,891)
Government grants  228,396   132,139  
Other, net  676,257   332,936  
Change in fair value of financial instruments  (16,647,283)  1,986,063  
Share of (loss) in associated companies  (69,056)  (69,429)
Share of profit after tax of JV  (2,414,354)  -  
          
          
INCOME (LOSS) BEFORE INCOME TAXES  (19,546,729)  7,573,214  
          
INCOME TAX EXPENSE  (1,593,994)  (1,523,735)
          
NET (LOSS) INCOME  (21,140,723)  6,049,479  
          
OTHER COMPREHENSIVE INCOME         
          
Foreign currency translation  2,112,902   424,623  
          
COMPREHENSIVE INCOME $ (19,027,821) $ 6,474,102  
          
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC  34,707,973   29,439,328  
          
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED  34,707,973   29,677,325  
          
NET INCOME PER SHARE, BASIC $ (0.61) $ 0.21  
          
NET INCOME PER SHARE, DILUTED $ (0.61) $ 0.20  
       

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

ASSETS    
          
          
          
   December 31,   December 31,  
   2013   2012  
          
CURRENT ASSETS         
Cash and cash equivalents $ 12,762,369  $ 12,135,096  
Restricted cash  1,636   15,835,364  
Accounts receivable  31,370,862   33,557,534  

Inventories (net of provision for slow moving inventory of $352,734 and $56,248 as of December 31, 2013 and 2012 respectively

 9,187,714   7,630,715  
Notes receivable  13,794,094   9,562,429  
Other receivables  556,904   501,448  
Prepayments and prepaid expenses  505,513   563,861  
Due from employees  34,272   40,936  
Advances to suppliers  8,867,074   4,769,825  
Amount due from JV Company, net  2,917,592   -  
Deferred tax  13,706   -  
Deposit for acquisition  -   24,397,967  
         Total Current Assets  80,011,736   108,995,175  
          
LONG-TERM ASSETS         
          
Plant and equipment, net  29,333,516   35,725,740  
Land use rights, net  14,453,191   14,337,691  
Construction in progress  16,356   -  
Deferred taxes  81,076   695  
Investment in associated company  96,838   161,507  
Investment in JV Company  79,331,930   -  
Goodwill  322,591   322,591  
Intangible assets  659,496   741,591  
         Total Long-Term Assets  124,294,994   51,289,815  
          
TOTAL ASSETS $ 204,306,730  $ 160,284,990  

                                                           LIABILITIES AND STOCKHOLDERS’ EQUITY  

 
          
          
   December 31,   December 31,  
   2013   2012  

CURRENT LIABILITIES

        

Accounts payable

$ 22,843,143  $ 8,668,478  

Other payables and accrued expenses

 2,422,613   3,092,045  

Short-term bank loans

 34,020,281   32,615,063  

Customer deposits

 44,404   292,389  

Notes payable

 16,683,023   25,332,088  

Income tax payable

 1,362,828   680,253  

Due to employees

 10,297   7,132  

Due to related party

 -   841,251  

Deferred taxes

 -   55,166  

Financial derivate - liability

 9,256,827   1,513,013  

             Total Current Liabilities

 86,643,416   73,096,878  

 

        

LONG-TERM LIABILITIES

        

Deferred tax

 1,009,477   -  

Bond payable

 13,084,724   12,666,044  

Financial derivatives - liability

 15,042,994   -  

             Total Long-Term Liabilities

 29,137,195   12,666,044  

 

        

            TOTAL LIABILITIES

 115,780,611   85,762,922  

 

        

 

        

STOCKHOLDERS’ EQUITY

        

Common stock, $0.001 par value; 100,000,000 shares authorized; 37,012,904 and 31,696,794 shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively

 37,013   31,697  

Additional paid-in capital

 76,754,774   43,728,218  

Retained earnings (the restricted portion is $3,807,551 and $2,831,005 at December 31, 2013 and December 31, 2012, respectively)

 4,119,086   25,259,809  

Accumulated other comprehensive income

 7,615,246   5,502,344  

         TOTAL STOCKHOLDERS’ EQUITY

 88,526,119   74,522,068  

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 204,306,730  $ 160,284,990  

 

      

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

 

 2013   2012  

CASH FLOWS FROM OPERATING ACTIVITIES:

        

Net (loss) income

$(21,140,723) $ 6,049,479  

Adjustments to reconcile net income to net cash provided by operating

        

activities:

        

Depreciation and amortization

 7,708,923   4,978,626  

Assets impairments

 355,876   465,199  

Deferred taxes

 876,255   92,521  

Change in value of financial instruments

 16,647,283   (1,986,063)

Loss in investment in associated company

 69,056   69,429  

Share of profit after tax of JV

 2,414,354   -  

Option cost

 -   19,053  

 

        

Changes in operating assets and liabilities, net of effects of acquisition:

    

(Increase) Decrease In:

        

Accounts receivable

 3,251,168   (20,513,099)

Inventories

 (1,287,045)  (904,355)

Other receivables

 (38,491)  1,955,055  

Due from employees

 10,797   37,117  

Prepayments and prepaid expenses

 (3,810,447)  (4,285,489)

Amount due from JV

 (2,877,972)  -  

 

        

Increase (Decrease) In:

        

Accounts payable

 13,699,528   3,566,354  

Other payables and accrued liabilities

 (746,838)  (50,333)

Customer deposits

 (254,151)  (740,419)

Income tax payable

 651,124   525,030  

Due to related party

 (841,251)  -  

         Net cash (used in) provided by operating activities

 14,687,446   (10,721,895)

 

        

CASH FLOWS FROM INVESTING ACTIVITIES:

        

(Purchases)/Disposal of plant and equipment, net

 (158,830)  (9,072,230)

Purchases of construction in progress

 (16,134)  -  

Deposit for acquisition

 -   (24,383,529)

Asset acquisition, net of deposit

 (39,673,000)  -  

Disposal of subsidiary

 64,535,177   -  

Issuance of notes receivable

 (4,174,247)  (1,011,821)

Repayments of notes receivable

 311,844   29,603,171  

Investment in JV

 (80,668,972)  -  

Cash acquired in acquisition

 -   112,551  

         Net cash provided by (used in) investing activities

 (59,844,162)  (4,751,858)

 

        

CASH FLOWS FROM FINANCING ACTIVITIES:

        
         Restricted cash  16,135,044   (9,143,907)

         Proceeds from short-term bank loans

 

52,918,845   41,504,215  

         Repayments of short-term bank loans

 

(52,596,170)  (45,539,128)

         Proceeds from notes payable

 

83,251,992   40,491,531  

         Repayments of notes payable

 

(92,609,593)  (21,063,559)

         Proceeds from bond payable

 

12,907,035   12,658,548  

         Repayments of bond payable

 

(12,907,035)  -  

         Fund raising through issuing common stock and warrants

 

26,387,498   -  

         Option exercise, stock award & other financing

 

9,659,103   1,258,231  

         Warrant exercise

 

3,171,259   1,672,739  

         Common stock issued for acquisition, net of cost of capital

 

-   3,784,149  

                 Net cash provided by financing activities

 

46,317,978   25,622,819  

 

 

       

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

1,161,262   10,149,066  

         Effect of exchange rate changes on cash

 

(533,989)  (308,322)

         Cash and cash equivalents at beginning of year

 

12,135,096   2,294,352  

CASH AND CASH EQUIVALENTS AT END OF YEAR

$

 12,762,369  $ 12,135,096  

 

 

       

SUPPLEMENTARY CASH FLOW INFORMATION

 

       

         Income taxes paid

$

 942,870  $ 998,706  

         Interest paid

$

 3,565,496  $ 2,570,691  

         Issuance of Common stock for acquisition

$

 -   8,616,416  

 

 

     

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 the one of the world's largest manufacturer of pure electric vehicles (EVs), 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.

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.

Contact:

Kandi Technologies Group, Inc.
Ms. Kewa Luo
Phone: 1-212-551-3610
Email: IR@kandigroup.com

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