Kandi Technologies Reports Strong Third Quarter 2017 Financial Results
– Q3 JV Company sold 6,765 units of EV products, a 3576.6% increase yoy –
– Q3 GAAP net income of $1.9 million compared to net loss of $0.6 million in the same period last year –
Jinhua, China--(Newsfile Corp. - November 9, 2017) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the third quarter of 2017.
Third Quarter Highlights
- Total revenues were $28.4 million for the third quarter of 2017, an increase of 345.4% from total revenues of $6.4 million for the same period in 2016.
- Electric Vehicle (“EV”) parts sales increased by 473.2%, to $27.0 million for the third quarter of 2017, compared with EV parts sales of $4.7 million for the same period in 2016.
- Kandi Electric Vehicles Group Co., Ltd. (the "JV Company") sold 6,765 units of EV products, including 2,747 units of model K17 and 4,018 of model K12 for the third quarter of 2017 compared to 184 units sold in the same period last year;
- GAAP net income for the third quarter of 2017 was $1.9 million, or earnings of $0.04 per fully diluted share compared with GAAP net loss of $0.6 million, or loss of $0.01 per fully diluted share for the same period in 2016
- Non-GAAP adjusted net income1, which excludes stock award expenses and the change of the fair value of financial derivatives, was $3.0 million in the third quarter of 2017, compared with non-GAAP net loss of $1.8 million for the same period in 2016. Non- GAAP adjusted income per share1 was approximately $0.06 per fully diluted share for the third quarter of 2017, compared with Non-GAAP adjusted loss per share1 of $0.04 per fully diluted share for the same period in 2016.
- Working capital surplus was $45.3 million as of September 30, 2017. Cash, cash equivalents and restricted cash totaled $24.3 million as of September 30, 2017.
Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, “We're pleased with our solid business performance in the third quarter. Our production and sales have increased significantly year over year as the JV Company has resumed normal production and sales of EV products. Due to confusion surrounding the reusable battery exchange model, our business had been heavily impacted since last year. We have been working diligently since then to overcome that difficult time in order to turn it into a great success. This quarter represents a turning point and an exciting time for Kandi as the Company continues preparing for the tremendous opportunities available in the renewable energy industry. We remain confident in our ability to continue to successfully execute our long-term business plan and regain our leading market position in the EV industry in the near future.”
Net Revenues and Gross Profit
|Net Revenues (US$million)||$||28.4||$||6.4||345.4%|
|Gross Profit (US$million)||$||4.8||$||0.7||642.0%|
Net revenues for the third quarter of 2017 increased by 345.4% compared to the same period last year. The increase in net revenue was mainly due to the increase in EV parts sales during this quarter. The selling price of our products for the three months ended September 30, 2017 decreased on average from the same period last year. The increase in revenues was primarily due to the increase in sales volume.
Operating Income (Loss)
|Operating Expenses (US$million)||$||3.1||$||1.3||141.7%|
|Operating Income (Loss) (US$million)||$||1.8||($0.6||)||384.4%|
|Operating Income (Loss) (US$million) (Non- GAAP)||$||2.8||($1.8||)||- |
Total operating expenses in the third quarter of 2017 were $3.1 million, compared with $1.3 million in the same quarter of 2016. The increase in total operating expenses was due to increased G&A expenses, which were $2.2 million in this quarter compared with $0.4 million in the same quarter last year.
GAAP Net Income (Loss)
|Net Income (Loss) (US$million)||$||1.9||($0.6||)||438.9%|
|Earnings (Loss)per Weighted Average Common Share||$||0.04||($0.01||)||-|
|Earnings(Loss) per Weighted Average Diluted Share||$||0.04||($0.01||)||-|
|Stock Award Expenses (Reversal) (US$million)||$||1.0||($1.2||)||185.5 %|
|Change in the Fair Value of Financial Derivatives (US$million)||-||-||-|
|Non-GAAP Net Income (Loss) from Continuing Operations (US$million)||$||2.9||($1.8||)||265.6%|
Net income was $1.9 million in the third quarter, compared with net loss of $0.6 million in the same quarter of 2016. The net income for this quarter was primarily attributable to significantly increased revenue and gross profits this period as compared to the same period of last year.
Non-GAAP net income was $2.9 million in the third quarter of 2017, an increase of $4.7 million compared to Non-GAAP net loss of $1.8 million in the same quarter of 2016. The increase in net income (non-GAAP) was primarily attributable to the significantly increased revenue and gross profits in the third quarter of 2017.
Kandi Electric Vehicles Group Co., Ltd. (the “JV Company”) Financial Results
In the third quarter of 2017, the JV Company sold 6,765 units of EV products.
The condensed financial income statements of the JV Company in the first quarter are as set forth below:
|Net Revenues (US$million)||$||86.2||$||11.7||637.3%|
|Gross Income (US$million)||$||5.3||$||5.9||-11.1%|
|Net loss (US$million)||($0.5||)||($0.4||)||-12.6%|
|% of Net revenue||-||-||-|
Revenue for the JV Company was $86.2 million in the third quarter of 2017, an increase of 637.3% compared to the same quarter of 2016. Net loss was $0.5 million, a 12.6% decrease compared to the same quarter of 2016.
Kandi’s investments in the JV Company are accounted for using the equity method of accounting because Kandi has a 50% ownership interest in the JV Company. As a result, Kandi recorded 50% of the JV Company’s losses of $0.2 million for this quarter. After eliminating intra-entity profits and losses, Kandi’s share of the after-tax profit of the JV Company was $0.4 million for the third quarter of 2017.
Third Quarter 2017 Conference Call Details
The Company has scheduled a conference call and live webcast to discuss its second quarter 2017 financial results at 8:00 A.M. Eastern Time (9:00 P.M. Beijing Time) on November 9, 2017. Mr. Hu Xiaoming, Chief Executive Officer of the Company, and Mr. Mei Bing, Chief Financial Officer of the Company, will deliver prepared remarks to be followed by a question and answer session.
Dial-in details for the conference call are as follows:
- Toll-free dial-in number: +1-855-327-6838
- International dial-in number: + 1-604-235-2082
- Webcast and replay: http://public.viavid.com/index.php?id=127124
A 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, Zhejiang Province, is engaged in the research and development, manufacturing and sales of various vehicle products. Kandi has established itself as one of China's leading manufacturers of pure electric vehicle ("EV") products (through its joint venture), EV parts and off-road vehicles. More informationcan be viewed at the Company's corporate website at 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.
Follow us on Twitter: @ Kandi_Group
Ms. Kewa Luo
Kandi Technologies Group, Inc.
1Non-GAAP measures, including Non-GAAP net income and Non-GAAP EPS are defined as the financial measures excluding the change of fair value of financial derivatives and the effects of stock award expenses. We supply non- GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations. Any non-GAAP measure 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.
- Tables Below -
KANDI TECHNOLOGIES GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
|September 30,||December 31,|
Cash and cash equivalents
Short term investment
Inventories (net of provision for slow moving inventory of $574,165 and $415,797 as of September 30, 2017 and December 31, 2016, respectively
| ||15,176,578|| || ||11,914,110|| |
Notes receivable from JV Company and related party
Prepayments and prepaid expense
Due from employees
Advances to suppliers
Amount due from JV Company, net
Amount due from related party
TOTAL CURRENT ASSETS
Property, Plant and equipment, net
Land use rights, net
Construction in progress
Deferred taxes assets
Long Term Investment
Investment in JV Company
|Advances to suppliers||27,695,209||33,819,419|
|Other long term assets||7,726,179||8,271,952|
|Amount due from JV Company, net||15,907,183||-|
|TOTAL Long-Term Assets||197,758,047||175,672,253|
|Other payables and accrued expenses||6,523,693||4,835,952|
|Income tax payable||2,282,514||1,364,235|
|Due to employees||31,956||21,214|
|Deferred taxes liabilities||-||118,643|
|Total Current Liabilities||200,835,800||177,677,907|
Long term bank loans
Deferred taxes liabilities
Total Long-Term Liabilities
Common stock, $0.001 par value; 100,000,000 shares authorized; 48,034,038 and 47,699,638 shares issued and outstanding at September 30,2017 and December 31,2016, respectively
Additional paid-in capital
Retained earnings (the restricted portion is $4,217,753 and $4,219,808 at September 30,2017 and December 31,2016, respectively)
Accumulated other comprehensive loss
TOTAL STOCKHOLDERS’ EQUITY
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
KANDI TECHNOLOGIES GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
|Three Months||Nine Months|
|Ended September 30,||Ended September 30,|
|REVENUES FROM UNRELATED PARTY, NET|| ||6,604,109|| || ||5,211,201|| ||$||10,720,595|| ||$||46,165,105|| |
|REVENUES FROM JV COMPANY AND RELATED PARTY, NET|| ||21,749,790|| || ||1,155,179|| || ||49,233,156|| || ||66,076,536|| |
|COST OF GOODS SOLD|| ||23,522,406|| || ||5,715,211|| || ||50,697,990|| || ||96,417,337|| |
|Research and development|| ||657,851|| || ||522,806|| || ||26,569,624|| || ||1,222,967|| |
|Selling and marketing|| ||216,351|| || ||374,102|| || ||976,913|| || ||1,150,880|| |
|General and administrative|| ||2,196,201|| || ||373,411|| || ||12,074,147|| || ||18,031,487|| |
|Total Operating Expenses|| ||3,070,403|| || ||1,270,319|| || ||39,620,684|| || ||20,405,334|| |
|INCOME (LOSS) FROM OPERATIONS|| ||1,761,090|| || ||(619,150||)|| ||(30,364,923||)|| ||(4,581,030||)|
|Change in fair value of financial instruments|| ||-|| || ||10,692|| || ||-|| || ||3,823,590|| |
|Share of income|
|(loss) after tax of JV||444,181||(299,538||)||(13,455,786||)||(203,375||)|
|Other expense, net||(6,560||)||(106,299||)||143,617||202,878|
|Total other income (expense), net||933,971||606,057||(7,559,404||)||7,213,088|
|INCOME (LOSS) BEFORE INCOME TAXES||2,695,061||(13,093||)||(37,924,327||)||2,632,058|
|INCOME TAX (EXPENSE) BENEFIT||(776,985||)||(552,848||)||4,130,951||(316,399||)|
|NET INCOME (LOSS)||1,918,076||(565,941||)||(33,793,376||)||2,315,659|
|OTHER COMPREHENSIVE INCOME (LOSS)|| || || || |
|Foreign currency translation||4,032,652||(805,216||)||8,942,931||(6,433,480||)|
|COMPREHENSIVE INCOME (LOSS)||$||5,950,728||$||(1,371,157||)||$||(24,850,445||)||$||(4,117,821||)|
|WEIGHTED AVERAGE SHARES OUTSTANDING BASIC||48,028,467||47,695,290||47,913,028||47,436,418|
|WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED||48,028,467||47,695,290||47,913,028||47,436,418|
|NET INCOME (LOSS) PER SHARE, BASIC||$||0.04||$||(0.01||)||(0.71||)||$||0.05|
|NET INCOME (LOSS) PER SHARE, DILUTED||$||0.04||$||(0.01||)||(0.71||)||$||0.05|
KANDI TECHNOLOGIES GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|September 30,||September 30,|
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization
Change in fair value of financial instruments
Share of loss after tax of JV Company
Stock Compensation cost
Changes in operating assets and liabilities, net of effects of acquisition:
(Increase) Decrease In:
Notes receivable from JV Company and related party
Other receivables and other assets
Due from employee
Advances to supplier and Prepayments and prepaid expenses
Advances to suppliers-Long term
Amount due from JV Company
Amount due from JV Company-Long-term
Due from related party
Increase (Decrease) In:
Other payables and accrued liabilities
Income Tax payable
Net cash used in operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of plant and equipment, net
Purchases of construction in progress
Repayment of notes receivable
Short Term Investment
Net cash provided by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term bank loans
Repayments of short-term bank loans
Proceeds from notes payable
Repayment of notes payable
Net cash (used) provided by financing activities
NET DECREASE IN CASH AND CASH EQUIVALENTS
Effect of exchange rate changes on cash
Cash and cash equivalents at beginning of year
CASH AND CASH EQUIVALENTS AT END OF PERIOD
SUPPLEMENTARY CASH FLOW INFORMATION
Income taxes paid
SUPPLEMENTAL NON-CASH DISCLOSURES:
Prepayment transferred to construction in progress
Purchase of construction in progress by accounts payable
Advances to suppliers-long term adjusted for other payable
Settlement of due from JV Company and related parties with notes receivable
Settlement of accounts receivables with notes receivable from unrelated parties
Assignment of notes receivable to supplier to settle accounts payable
Settlement of accounts payable with notes payables
Deferred tax change to other comprehensive income