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Kandi Technologies Announces Third Quarter 2014 Financial Results

– Quarterly revenue increased 157.8% YoY to $44.21 million –

– EV parts sales grew 107.9% to $35.81 million from previous quarter –

– GAAP net income increased 274.3% YoY to $13.53 Million with EPS of $0.31 –

– Non-GAAP adjusted net income surged to $5.37 million with EPS of $0.12 –

JINHUA, China, Nov. 10, 2014 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the "Company" or "Kandi") (Nasdaq:KNDI), today announced its financial results for the third quarter ended September 30, 2014.

Financial Highlights:

  • Revenue for the third quarter grew 157.78% to $44.21 million from $17.15 million in the third quarter last year;
  • Electric Vehicle ("EV") Parts sales increased by107.9% to $35.81 million as compared to $17.22 million in the second quarter of 2014;
  • Gross profit for the third quarter of 2014 increased 33.9% to $5,51 million, compared to $4.11 million for the same period last year;
  • The quarterly sales for the JV Company* was $46.8 million and net income was $4.4 million. Based on Kandi's 50% equity ownership in the JV Company, Kandi recorded $2.04 million net income (after tax and intra-entity elimination) in the third quarter of 2014;
  • The JV Company sold 1,950 EV products during the third quarter of 2014;
  • GAAP net income for the third quarter was $13.53 million, or $0.31 per fully diluted share, an increase of 274.3% from a net loss of $7.76 million, or ($0.21) per fully diluted share, from the third quarter of 2013;
  • Third quarter Non-GAAP adjusted net income** , which excludes stock award expense and change in the fair value of financial derivatives, was $5.37 million, or approximately $0.12 per fully diluted shares, a 716.5% increase from net loss of $0.87 million for the same period of 2013;
  • Working capital surplus was $108.1 million as of September 30, 2014, compared to a working capital deficit of $24.0 million as of September 30, 2013;
  • Cash, cash equivalents and restricted cash totaled $62.5 million as of September 30, 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 Maple"), 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.

"Our third quarter was another exciting quarter with strong top-line growth, improved financial condition and new strategic developments," commented Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi. "In particular, our EV manufacturing joint venture with Geely Auto, or the 'JV Company' achieved great quarterly net profit and net margin, despite the fact that the quarter was back-end loaded because the new EV purchase tax exemption did not become effective until September 1."

Mr. Hu continued: "During the quarter, we also made numerous business initiatives, including the initial delivery of Kandi brand EVs to Shanghai public pure EV sharing program, the unveiling of our new 4-seat pure EV model KD17 'Cyclone', and the successful completion of our $71 million registered direct offering. Given the increasing opportunities and demand for electric cars in China, as well as Kandi's solid foundation and financial strength, we believe we are in a great position to continue executing our current business strategy."

"Looking forward to the fourth quarter, we are confident that our business model is beginning to gain traction in both top-line and bottom-line growth," concluded Mr. Hu. "The Car-Share Program has been highly recognized and well received by the customers, we believe our EV business model will be expanded to more EV pilot cities in China. We are also thrilled with our recent partnership with Ant Financial Services Group to launch Alipay, including Alipay Wallet services and technology platform, to Kandi's EV end users. We hope to raise the market awareness of the Kandi brand through the 300 million registered Alipay users."

About the Car-Share Program

Zhejiang ZuoZhongYou Electric Vehicle Service Co., Ltd. ("ZZY") is the first in market to initiate the public pure EV sharing program (the "Car-Share" Program). Kandi, through its 50% ownership interest in Kandi Electric Vehicles Group Co., Ltd. (the "JV Company"), indirectly holds a 9.5% interest in ZZY.

Individually driven pure EVs are widely used in the Car-Share Program. The charging/parking stations which provide a variety of services, such as charging, maintenance, battery recycling, are located at airports, train stations, hotels, business centers, selected residential areas and other places that are typically congested. A network system provides EV rental service to individual drivers in and around the city. It also provides EV maintenance and battery charging to self-service users. Lastly, a tracking system allows the Car-Share Program management to keep a close watch at the status and precise location of each vehicle.

This Car-Share Program model has been implemented in Hangzhou since the second half of 2013, and has now begun to expand into other major cities in China.

The Group Long-term Lease Program is a lease model that uses enterprise, community or village as lease units and each unit leases a minimum of 100 EVs with a group lease term at a minimum of three years.

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 vehicle products. Kandi has established itself as the one of the world's largest manufacturers of pure electric vehicle ("EV") products, Go-Kart vehicles, three-wheel motorcycles and utility vehicles (UTVs), among others. More information can be viewed at its corporate website is http://www.kandivehicle.com. Kandi 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.

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, December 31,
2014 2013
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 49,500,712 $ 12,762,369
Restricted cash 12,995,452 1,636
Accounts receivable 13,982,830 31,370,862
Inventories, net of provision for slow moving inventory of $350,328 and $352,734 as of September 30, 2014 and December 31, 2013, respectively 14,599,901 9,187,714
Notes receivable 6,061,184 13,794,094
Other receivables 448,152 556,904
Prepayments and prepaid expenses 412,122 505,513
Due from employees 43,792 34,272
Advances to suppliers 58,777,479 8,867,074
Amount due from JV Company, net 52,028,753 2,917,592
Deferred tax -- 13,706
Total Current Assets 208,850,377 80,011,736
LONG-TERM ASSETS
Plant and equipment, net 26,134,626 29,333,516
Land use rights, net 15,740,126 14,453,191
Construction in progress 55,491 16,356
Deferred taxes -- 81,076
Investment in associated company -- 96,838
Investment in JV Company 82,544,376 79,331,930
Goodwill 322,591 322,591
Intangible assets 597,924 659,496
Total Long-Term Assets 125,395,134 124,294,994
TOTAL ASSETS $ 334,245,511 $ 204,306,730
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
September December
30, 31,
2014 2013
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 55,568,073 $ 22,843,143
Other payables and accrued expenses 4,847,485 2,422,613
Short-term bank loans 22,417,154 34,020,281
Customer deposits 152,030 44,404
Notes payable 12,995,452 16,683,023
Income tax payable 1,317,504 1,362,828
Due to employees 433,033 10,297
Due to related party -- --
Deferred taxes 426,767 --
Financial derivatives - liability 2,571,326 9,256,827
Total Current Liabilities 100,728,824 86,643,416
LONG-TERM LIABILITIES
Deferred tax 1,299,882 1,009,477
Bond payable 12,995,452 13,084,724
Financial derivatives - liability 9,488,193 15,042,994
Total Long-Term Liabilities 23,783,527 29,137,195
TOTAL LIABILITIES 124,512,351 115,780,611
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 September 30, 2014 and December 31, 2013, respectively 46,275 37,013
Additional paid-in capital 189,385,630 76,754,774
Retained earnings (the restricted portion is $3,807,551 and $3,807,551 at September 30, 2014 and December 31, 2013, respectively) 14,723,713 4,119,086
Accumulated other comprehensive income 5,577,542 7,615,246
TOTAL STOCKHOLDERS' EQUITY 209,733,160 88,526,119
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 334,245,511 $ 204,306,730
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE
INCOME (LOSS)
(UNAUDITED)
For Three Months For Nine Months Ended
Ended September 30, September 30,
2014 2013 2014 2013
REVENUE, NET $ 44,206,992 $ 17,145,512 $ 117,338,351 $ 43,975,463
COST OF GOODS SOLD (38,698,452) (13,032,352) (99,748,314) (33,673,048)
GROSS PROFIT 5,508,540 4,113,160 17,590,037 10,302,415
OPERATING EXPENSES:
Research and development (391,097) (500,864) (2,535,027) (1,863,020)
Selling expenses (432,365) (102,380) (939,516) (263,414)
General and administrative (2,076,749) (2,893,935) (11,720,693) (4,826,622)
Total operating expenses (2,900,211) (3,497,179) (15,195,236) (6,953,056)
INCOME (LOSS) FROM CONTINUING OPERATIONS 2,608,329 615,981 2,394,801 3,349,359
OTHER INCOME (EXPENSE):
Interest (expense) income, net (711,119) (1,184,282) (1,397,294) (2,472,377)
Change in fair value of financial instruments 10,187,277 (6,864,624) 6,814,675 (6,956,963)
Government grants 63,584 11,077 217,284 60,884
Share of gain (loss) in associated companies 38,702 (15,787) (54,290) (45,327)
Share of (loss) profit after tax of JV 2,038,388 (109,641) 3,757,218 (120,017)
Other income, net 21,814 40,647 141,641 217,160
Total other income (expense), net 11,638,646 (8,122,610) 9,479,234 (9,316,640)
INCOME (LOSS) FROM CONTINUING OPERATION BEFORE PROVISION FOR INCOME TAXES 14,246,975 (7,506,629) 11,874,035 (5,967,281)
PROVISION FOR INCOME TAXES (713,273) (257,222) (1,269,408) (502,123)
INCOME (LOSS) FROM CONTINUING OPERATION 13,533,702 (7,763,851) 10,604,627 (6,469,404)
DISCONTINUED OPERATION
Loss from discontinued operation -- (350,320) -- (452,194)
Gain from disposition of discontinued operation -- 425,129 -- 425,129
NET INCOME(LOSS) FROM DISCONTINUED OPERATION 74,809 -- (27,065)
NET INCOME (LOSS) 13,533,702 (7,689,042) 10,604,627 (6,496,469)
OTHER COMPREHENSIVE INCOME
Foreign currency translation (109,112) 322,798 (2,037,704) 1,632,143
COMPREHENSIVE INCOME (LOSS) $ 13,424,590 $ (7,366,244) $ 8,566,923 $ (4,864,326)
EARNINGS (LOSS) PER SHARE:
Basic $ 0.31 $ (0.21) $ 0.26 $ (0.19)
Diluted $ 0.31 $ (0.21) $ 0.26 $ (0.19)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
Basic 43,214,455 37,020,321 41,327,666 33,965,100
Diluted 43,530,185 37,020,321 41,462,490 33,965,100
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended September 30,
2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ 10,604,627 $ (6,496,469)
Net (loss) income from discontinued operation (27,065)
Net (loss) income from continuing operation 10,604,627 (6,469,404)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization 4,157,606 6,144,086
Deferred taxes 808,725 677,912
Change of derivative instrument's fair value (6,814,675) 6,956,963
Loss in investment in associated company 54,290 45,327
Share of (profit) loss after tax of JV (3,757,218) 120,017
Changes in operating assets and liabilities:
(Increase) Decrease In:
Accounts receivable 17,190,113 16,665,031
Inventories (5,480,008) (14,846,384)
Other receivables and prepaid expenses 105,092 (805,480)
Due from employees 413,441 5,187
Prepayments and prepaid expenses (49,927,475) (6,661,365)
Amount due from JV (49,177,160) --
Increase (Decrease) In:
Accounts payable 32,911,627 (144,929)
Other payables and accrued liabilities 2,441,464 (963,422)
Customer deposits 108,031 388,714
Due to related party -- --
Due to JV company -- 20,040,119
Income tax payable (36,060) (222,100)
Net cash (used in) provided by operating activities $ (46,397,580) $ 20,930,272
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of plant and equipment (813,246) (44,250)
Purchases of land use rights (1,667,986) --
Purchase of construction in progress (39,283) --
Issuance of notes receivable (21,698,986) (1,972,619)
Repayments of notes receivable 29,344,951 310,674
Investment in Joint Venture Company -- (80,366,213)
Disposal of subsidiary -- 64,292,970
Disposal of associated company (96,268)
Deposit for disposal of subsidiary -- 12,858,594
Assets acquisition, net of deposit -- (39,524,103)
Net cash provided by (used in) investing activities $ 5,029,182 $ (44,444,947)
CASH FLOWS FROM FINANCING ACTIVITIES:
Restricted cash $ (13,006,018) $ 4,820,363
Proceeds from short-term bank loans 28,616,816 29,735,499
Repayments of short-term bank loans (39,998,504) (28,931,837)
Proceeds from notes payable 13,007,644 68,473,621
Repayments of notes payable (16,584,746) (66,543,224)
Common stock and warrants issued 78,155,627 26,387,498
Warrant exercise 22,447,914 3,848,134
Option exercise & other financing 6,429,622 85,200
Repayment of bond (12,858,594)
Net cash provided by financing activities 79,068,355 25,016,660
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 37,699,957 1,501,985
Effect of exchange rate changes on cash (961,614) (1,188,737)
Cash and cash equivalents at beginning of period 12,762,369 12,135,096
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 49,500,712 $ 12,448,344
SUPPLEMENTARY CASH FLOW INFORMATION
Income taxes paid $ 1,305,468 $ 724,223
Interest paid $ 1,748,140 $ 2,959,231

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