Kandi Technologies Reports Record Full Year 2014 Financial Results

March 16, 2015 9:00 AM EDT | Source: Kandi Technologies, Corp.

– Full year 2014 revenue increased 80% YoY to $170.2 Million -
– Full year 2014 EV parts sales jumped 6653% YoY to $116.4 Million -
– Full year GAAP net income increased 158% YoY to $12.3 Million -
– Full year EPS of $0.29 compared to 2013 EPS of ($0.61) -

Jinhua, China--(Newsfile Corp. - March 16, 2015) - Kandi Technologies Group, Inc.  (NASDAQ GS: KNDI), (the "Company" or "Kandi") today announced its financial results for the full year ending December 31, 2014.

Full Year 2014 Highlights

  • Total revenues grew 80.1% to $170.2 million from $94.5 million in 2013;
  • Electric Vehicle ("EV") Parts sales increased significantly by 6,653.4% to $116.4 million compared to $1.7 million in the previous year;
  • Full year sales for our joint venture company, Kandi Electric Vehicles Group Co., Ltd. (the "JV Company"),* were $215.5 million, with net income of $7.5 million. Based on Kandi’s 50% equity ownership in the JV Company, Kandi recorded $4.5 million in net income (after tax and intra-entity elimination) in 2014;
  • The JV Company sold 10,935 EV products during the full year of 2014, with 3,656 EVs sold in the fourth quarter;
  • GAAP net income in 2014 was $12.3 million, or approximately $0.29 per fully diluted share, a 158.0% increase compared to a net loss of $21.1 million, or approximately ($0.61) in 2013;
  • Non-GAAP adjusted net income**, which excludes stock award expense and change in the fair value of financial derivatives, was $14.2 million, or approximately $0.33 per fully diluted share, a 174.8% increase from $5.2 million for 2013;
  • Working capital surplus was $39.2 million as of December 31, 2014, compared to a working capital deficit of $6.6 million as of December 31, 2013;
  • Cash, cash equivalents and restricted cash totaled $39.3 million as of December 31, 2014 compared to $12.8 million as of December 31, 2013;

*Kandi Electric Vehicles Group Co., Ltd., a joint venture company established by the Company’s wholly owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. with Shanghai Maple Guorun Automobile Co., Ltd. ("Shanghai Guorun"), a 99%-owned subsidiary of Geely Automobile Holdings Ltd. ("Geely Auto")

**Non-GAAP measures, including the Non-GAAP net income and Non-GAAP EPS are defined as the financial measures excluding the change of the fair value of financial derivatives and the effects of the stock award expense. We supply non-GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations. Any non-GAAP measures should not be considered as a substitute for, and should only be read in conjunction with, measures of financial performance prepared in accordance with GAAP.

Mr. Xiaoming Hu, Chairman and Chief Executive Officer of Kandi Technologies Commented, "Our robust financial results were driven by the growing market demand for electric vehicles. In 2014, we invested a tremendous amount of time and resources on building our EV business. Kandi’s electric vehicle model has been highly appraised by China’s Science and Technology Minister and other senior government officials. At the end of 2014, Micro Public Transportation (MPT), an EV Sharing Program we have been advocating, has expanded to nine Chinese cities with 14,398 pure EVs delivered since the beginning of its trial operation in the second half of 2013."

"Looking ahead, we are extremely excited about Kandi’s business prospects for continued growth. Given the government’s strong commitment towards policies that encourage the adoption of electric vehicles nationwide, including the national and local government subsidies, the electric vehicle tax breaks, along with the prevailing favorable market conditions in China, we are confident in our ability to execute our strategy to further grow market shares in China. Recently, the management team of our joint venture company has decided to expand its EV sales effort directly to the end customers, which, together with JV’s existing fleet sales model, will be a key catalyst that boost consumer demand for our electric vehicles. We look forward to enhancing our overall product and service, while leveraging the JV Company’s flexible business model and its leading position in both EV sharing and EV sales businesses, and finally making Kandi a leader in the EV market in China." Mr. Hu concluded.

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012

    2014     2013     2012  
REVENUES, NET $  170,229,006   $  94,536,045   $  64,513,670  
                   
COST OF GOODS SOLD   (146,825,073 )   (72,793,517 )   (51,620,280 )
                   
GROSS PROFIT   23,403,933     21,742,528     12,893,390  
                   
OPERATING EXPENSES:                  
Research and development   (2,755,637 )   (3,728,730     (2,877,283 )
Selling and marketing   (1,345,588 )   (399,504 )   (455,983 )
General and administrative   (14,058,548 )   (16,056,107 )   (4,250,832 )
    Total operating expenses   (18,159,773 )   (20,184,341 )   (7,584,098 )
                   
INCOME FROM OPERATIONS   5,244,160     1,558,187     5,309,292  
                   
OTHER INCOME (EXPENSE):                  
Interest income   1,701,121     1,516,477     2,658,104  
Interest (expense)   (3,480,646 )   (4,395,353 )   (2,775,891 )
Change in fair value of financial instruments   6,531,308     (16,647,283 )   1,986,063  
Government grants   288,498     228,396     132,139  
Share of (loss) in associated companies   (54,308 )   (69,056 )   (69,429 )
Share of profit (loss) after tax of JV   4,490,266     (2,414,354 )   -  
Other income (expense), net   (34,649 )   676,257     332,936  
   Total other income (expense), net   9,441,590     (21,104,916 )   2,263,922  
                   
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES   14,685,750     (19,546,729 )   7,573,214  
                   
PROVISION FOR INCOME TAXES   (2,414,412 )   (1,593,994 )   (1,523,735 )
                   
NET INCOME (LOSS)   12,271,338     (21,140,723 )   6,049,479  
                   
OTHER COMPREHENSIVE INCOME                  
                   
Foreign currency translation   (2,725,143 )   2,112,902     424,623  
                   
COMPREHENSIVE INCOME (LOSS) $  9,546,195   $ (19,027,821 ) $  6,474,102  
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC   42,583,495     34,707,973     29,439,328  
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED   42,715,818     34,707,973     29,677,325  
                   
NET INCOME (LOSS) PER SHARE, BASIC $  0.29   $  (0.61 ) $  0.21  
NET INCOME (LOSS) PER SHARE, DILUTED $  0.29   $  (0.61 ) $  0.20  
                   

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

ASSETS  

             
             
    December 31,     December 31,  
    2014     2013  
CURRENT ASSETS            
Cash and cash equivalents $  26,379,460   $  12,762,369  
Restricted cash   13,000,731     1,636  
Accounts receivable   15,736,805     31,370,862  
Inventories (net of provision for slow moving inventory of $315,584 and $352,734 as of December 31, 2014 and 2013 respectively   15,403,840     9,187,714  
Notes receivable   9,060,441     13,794,094  
Other receivables   238,567     556,904  
Prepayments and prepaid expenses   120,761     505,513  
Due from employees   34,475     34,272  
Advances to suppliers   6,901,505     8,867,074  
Amount due from JV Company, net   51,450,612     2,917,592  
Deferred tax   -     13,706  
     Total Current Assets   138,327,197     80,011,736  
             
LONG-TERM ASSETS            
Plant and equipment, net   26,215,356     29,333,516  
Land use rights, net   15,649,152     14,453,191  
Construction in progress   58,510,051     16,356  
Deferred taxes   -     81,076  
Investment in associated company   -     96,838  
Investment in JV Company   83,309,095     79,331,930  
Goodwill   322,591     322,591  
Intangible assets   577,401     659,496  
Other long-term assets   162,509     -  
     Total Long-Term Assets   184,746,155     124,294,994  
TOTAL ASSETS $  323,073,352   $  204,306,730  
             

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY   
             
    December 31,     December 31,  
    2014     2013  
CURRENT LIABILITIES            
Accounts payable $  45,772,481   $  22,843,143  
Other payables and accrued expenses   5,101,740     2,422,613  
Short-term bank loans   35,589,502     34,020,281  
Customer deposits   2,630,723     44,404  
Notes payable   5,702,121     16,683,023  
Income tax payable   1,835,685     1,362,828  
Due to employees   15,787     10,297  
Deferred taxes   230,864     -  
Financial derivate - liability   2,245,610     9,256,827  
     Total Current Liabilities   99,124,513     86,643,416  
             
LONG-TERM LIABILITIES            
Deferred tax   2,266,725     1,009,477  
Bond payable   -     13,084,724  
Financial derivatives - liability   10,097,275     15,042,994  
     Total Long-Term Liabilities   12,364,000     29,137,195  
TOTAL LIABILITIES   111,488,513     115,780,611  
             
STOCKHOLDERS' EQUITY            
Common stock, $0.001 par value; 100,000,000 shares authorized; 46,274,855            
   and 37,012,904 shares issued and outstanding at December 31, 2014 and            
   2013, respectively   46,275     37,013  
Additional paid-in capital   190,258,037     76,754,774  
Retained earnings (the restricted portion is $4,172,324 and $3,807,551 at December 31, 2014 and 2013, respectively)   16,390,424     4,119,086  
Accumulated other comprehensive income   4,890,103     7,615,246  
     TOTAL STOCKHOLDERS' EQUITY   211,584,839     88,526,119  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $  323,073,352   $  204,306,730  
             

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012

    2014     2013     2012  
CASH FLOWS FROM OPERATING ACTIVITIES:                  
Net income (loss) $  12,271,338   $  (21,140,723 ) $  6,049,479  
Adjustments to reconcile net income to net cash provided by operating activities:            
Depreciation and amortization   5,571,465     7,708,923     4,978,626  
Assets impairments   -     355,876     465,199  
Deferred taxes   1,579,855     876,255     92,521  
Change in value of financial instruments   (6,531,308 )   16,647,283     (1,986,063 )
Loss in investment in associated company   54,308     69,056     69,429  
Share of profit after tax of JV   (4,490,266 )   2,414,354     -  
Decrease in reserve for fixed assets   (302,023 )   -     -  
Option cost   -     -     19,053  
                   
Changes in operating assets and liabilities, net of effects of acquisition:            
(Increase) Decrease In:                  
    15,445,962           (20,513,099 )
Accounts receivable         3,251,168        
Inventories   (6,280,502 )   (1,287,045 )   (904,355 )
Other receivables   315,071     (38,491 )   1,955,055  
Due from employees   5,139     10,797     37,117  
Prepayments and prepaid expenses   (5,360,637 )   (3,810,447 )   (4,285,489 )
Amount due from JV   (48,593,522 )   (2,877,972 )   -  
                   
Increase (Decrease) In:                  
Accounts payable   23,095,825     13,699,528     3,566,354  
Other payables and accrued liabilities   2,694,689     (746,838 )   (50,333 )
Customer deposits   2,588,830     (254,151 )   (740,419 )
Income tax payable   482,020     651,124     525,030  
Due to related party   -     (841,251 )   -  
     Net cash (used in) provided by operating activities   (7,453,756 )   14,687,446     (10,721,895 )
                   
CASH FLOWS FROM INVESTING ACTIVITIES:                  
(Purchases)/Disposal of plant and equipment, net   (2,101,355 )   (158,830 )   (9,072,230 )
Purchases of land use rights   (1,668,534 )   -     -  
Purchases of construction in progress   (50,891,170 )   (16,134 )   -  
Deposit for acquisition   -     -     (24,383,529 )
Asset acquisition, net of deposit   -     (39,673,000 )   -  
Disposal of subsidiary   (96,299 )   64,535,177     -  
Issuance of notes receivable   (24,705,489 )   (4,174,247 )   (1,011,821 )
Repayments of notes receivable   29,354,592     311,844     29,603,171  
Investment in JV   -     (80,668,972 )   -  
Cash acquired in acquisition   -     -     112,551  
     Net cash (used in) investing activities   (50,108,255 )   (59,844,162 )   (4,751,858 )
CASH FLOWS FROM FINANCING ACTIVITIES:                  
   Restricted cash   (13,010,291 )   16,135,044     (9,143,907 )
   Proceeds from short-term bank loans   48,306,743     52,918,845     41,504,215  
   Repayments of short-term bank loans   (46,517,604 )   (52,596,170 )   (45,539,128 )
   Proceeds from notes payable   18,718,944     83,251,992     40,491,531  
   Repayments of notes payable   (29,602,112 )   (92,609,593 )   (21,063,559 )
   Proceeds from bond payable   -     12,907,035     12,658,548  
   Repayments of bond payable   (13,011,917 )   (12,907,035 )   -  
   Fund raising through issuing common stock and warrants   78,358,991     26,387,498     -  
   Option exercise, stock award & other financing   8,431,247     9,659,103     1,258,231  
   Warrant exercise   21,101,039     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   72,775,040     46,317,978     25,622,819  
                   
NET INCREASE IN CASH AND CASH EQUIVALENTS   15,213,029     1,161,262     10,149,066  
   Effect of exchange rate changes on cash   (1,595,938 )   (533,989 )   (308,322 )
   Cash and cash equivalents at beginning of year   12,762,369     12,135,096     2,294,352  
CASH AND CASH EQUIVALENTS AT END OF YEAR $  26,379,460   $  12,762,369   $  12,135,096  
                   
SUPPLEMENTARY CASH FLOW INFORMATION                  
   Income taxes paid $  1,932,392   $  942,870   $  998,706  
   Interest paid $  3,475,893   $  3,565,496   $  2,570,691  
   Issuance of Common stock for acquisition $  -   $  -   $  8,616,416  
                   
SUPPLEMENTAL NON-CASH DISCLOSURES:                  
   Prepayments transferred to construction in progress $  7,652,959   $  -   $  -  
   Construction in progress transferred to plant and equipment $  -   $  -   $  10,078,637  
                   

About Kandi Technologies Group, Inc.

Kandi Technologies Group, Inc. (NASDAQ GS: KNDI), headquartered in Jinhua, Zhejiang Province, is engaged in the research and development, manufacturing and sales of various vehicle products. Kandi has established itself as the one of the China's leading manufacturers of pure electric vehicle ("EV") products, EV parts and off road vehicles. More information can be viewed at its corporate website is http://www.kandivehicle.com. The Company routinely posts important information on its website.

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.

IR Contact:

Kandi Technologies Group, Inc.

Ms. Kewa Luo
Phone: 1-212-551-3610
Email: IR@kandigroup.com

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