JINHUA, China, May 10, 2016 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ:KNDI), announced a correction to its press release issued on Tuesday, May 10, 2016 entitled, “Kandi Technologies Reports First Quarter 2016 Financial Results.”
In the press release issued at 7:00 am ET, “Amount due from JV Company, net”, “Land use rights, net”, “Construction in progress” were missing from Balance Sheets and “Due from related party” was missing from Statements of Cash Flows due to the table format adjustment. There are also cosmetic edits in the wording of certain entries in the financial statement tables.
The complete press release with corrected information is as follows:
Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ:KNDI), today announced its financial results for the first quarter of 2016.
First Quarter Highlights
- Total revenues grew 15.7% to $50.7 million for the first quarter of 2016, from $43.8 million for the same period of 2015.
- Electric Vehicle (“EV”) parts sales increased 7.5% to $46.2 million for the first quarter of 2016, compared with $43.0 million in the same period of 2015.
- GAAP net income for the first quarter of 2016 was $0.1 million, or $0.00 per fully diluted share, compared with $6.1 million, or $0.13 per fully diluted share in the same period of 2015.
- Non-GAAP adjusted net income1, which excludes stock award expenses and changes in the fair value of financial derivatives, was $3.7 million in the first quarter of 2016, compared with $3.4 million of the same period of 2015. Non-GAAP adjusted earnings per share1 was approximately $0.08 per fully diluted share for the first quarter of 2016 compared with $0.07 per fully diluted share for the same quarter of 2015;
- Working capital surplus was $72.5 million as of March 31, 2016. Cash, cash equivalents and restricted cash totaled $29.7 million as of March 31, 2016.
“In this quarter, various elements, including the newly approved product list from Ministry of Industrial and Information Technology of China (“MIIT”) for national subsidies and the subsequent pending of the list of vehicles entitled to purchase tax exemption from the National Tax Bureau heavily impacted the JV Company’s sales and also Kandi’s financial performance,” commented Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, “After confirming that four EV products of the JV Company were on the newly approved list which qualified for purchase tax exemption, the JV Company has started to sell EV products since April 2016. Although the JV Company has no sales in the first quarter, I believe it will catch up in the rest of the year and achieve the full year target. We expect to deliver 5,500-6,000 EV products in the second quarter and no less than 35,000 EVs for the full year. Out of our full year targets of 35,000 EVs, we anticipate 10,000 of them be used for our Micro Public Transportation Program while 25,000 EVs be allocated to the direct sales channel.”
“In 2016, the JV Company continues to develop more distribution channels and service stores to achieve the direct sales target of 25,000 or more EVs.” Mr. Hu Xiaoming commented further, “Till May 2016, the JV Company has establish 74 service stores countrywide to cover the main market in those important cities, some of which are shared with Geely’s distribution channel, such as Beijing, Shanghai, Nanjing, Suzhou, Haikou. Meanwhile, the JV Company also works with independent distributors closely and plans to establish the strategic partnership with 4-5 strategic distribution partners, including Pangda Automobiles Sales Group Inc., Henxing Automobiles Group Inc. and others.”
“Despite of the lack of EV products sales by our JV Company in this quarter, Kandi still has revenue growth of 15.7% during this quarter compared to the same period of 2015. However, our net profit has been significantly impacted by the JV Company’s net profit during the quarter.” added Mr. Wang Cheng, Chief Financial Officer of Kandi, “I believe we can achieve good financial performance in line with the revenue growth from the JV Company for the rest of the 2016.”
|Net Revenues and Gross Profit|
|Net Revenues (US$mln)||$||50.7||$||43.8||15.7||%|
|Gross Profit (US$mln)||$||6.7||$||6.4||5.5||%|
Net revenues for the first quarter increased 15.7% compared to the same period last year. The increase in net revenues was mainly due to the 7.5% EV parts sales growth and the EV products sales by the Company of $3.8 million on the EV products in the stock.
|Operating Income (Loss)|
|Operating Expenses (US$mln)||$||8.3||$||4.5||85.5||%|
|Operating Income (Loss) (US$mln)||($||1.6||)||$||1.9||-|
|Operating Income (Loss) (US$mln) (Non-GAAP)||$||5.3||$||4.0||34.5||%|
Total operating expenses in the first quarter were $8.3 million, compared with $4.5 million in the same quarter of 2015. The increase in total operating expenses was due to the increased stock compensation expense, which was $6.9 million in this quarter, compared with $2.0 million in the same quarter last year. Excluding stock compensation expenses, operation expenses in the first quarter of 2016 were $1.4 million, compared with $2.4 million in the same quarter last year. The decrease was mainly due to research and development expenses savings of $0.4 million and the one-time legal expense $0.5 million occurred in 2015.
|GAAP Net Income|
|Net Income (Loss) (US$mln)||$||0.1||$||6.1||-98.6||%|
|Earnings per Weighted Average Common Share||$||0.00||$||0.13||-|
|Earnings per Weighted Average Diluted Share||$||0.00||$||0.13||-|
|Stock award expenses||$||6.9||$||2.0||236.0||%|
|Change of the fair value of financial derivatives||($||3.3||)||($||4.8||)||-|
|Non-GAAP net income (loss) from continuing operations||$||3.7||$||3.4||7.5||%|
Net income was $0.1 million in the first quarter, compared with $6.1 million in the same quarter of 2015. Net income was affected by significant increases in stock option expense amortization and the loss from the JV Company and also the change of the fair value of financial derivatives.
Non-GAAP net income was $3.7 million, a 7.5% increase in the first quarter of 2016 compared to $3.4 million in the same quarter of 2015. The increase in Non-GAAP net income was in line with the revenue growth in the quarter.
JV Company Financial Results
In the first quarter, the JV Company has no EV products sales, compared to 1,670 EV products sold in the same quarter of 2015. In this quarter, the newly approved product list from the MIIT for national subsidies and the subsequent pending for the list of vehicles entitled to purchase tax exemption from the National Tax Bureau heavily impacted the JV Company’s sales and also Kandi’s financial performance. After confirming that four EV products of the JV Company were on the newly approved list which qualified for the purchase tax exemption, the JV Company has started to sell EV products since April 2016.
The condensed financial income statement of the JV Company in the first quarter is as below:
|Net Revenues (US$mln)||($||0.5||)||$||30.6||-101.6||%|
|Gross Profit (US$mln)||($||1.1||)||$||8.0||-113.3||%|
|% of Net revenue||-||2.6||%||-|
There was no EV products sold by the JV Company in the first quarter and the negative amount was a small price discount occurred in this quarter.
Kandi’s investments in the JV Company are accounted for under the equity method of accounting, as Kandi has a 50% ownership interest in the JV Company. As a result, Kandi recorded 50% of the JV Company’s loss for $4.0 million for the this quarter. After eliminating intra-entity profits and losses, Kandi’s share of the after tax loss of the JV Company was $4.8 million for the first quarter of 2016.
For the second quarter of 2016, Kandi expects net revenues to be in the range of $55 million to $57 million, with gross margin in the range of 12.5% to 13.5%. For the full year 2016, Kandi expects net revenues to be in the range of $270 million to $300 million.
The Company also expects the JV Company to deliver 5,500-6,000 EV products in the second quarter and a total of 35,000 or more EV products in the full year of 2016.
This outlook reflects the current view of the management, which is subject to change.
First Quarter of 2016 Conference Call Details
The Company has scheduled a conference call and live webcast to discuss the financial results at 8:00 AM (U.S. Eastern time) on May 10, 2016 (8:00 PM Beijing time on May 10, 2016). Mr. Hu Xiaoming, Chief Executive Officer and Mr. Wang Cheng (Henry), Chief Financial Officer, will deliver prepared remarks, followed by a question and answer session.
The dial-in details for the conference call are as follows:
- Toll-free dial-in number: +1 855-327-6837
- International dial-in number: +1 631-891-4304
- Conference ID: 10001128
- Webcast and replay: http://public.viavid.com/index.php?id=119454
The live audio webcast of the call can also be accessed by visiting Kandi's Investor Relations website at http://ir.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 information can 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
1 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.
- Tables Below -
|KANDI TECHNOLOGIES GROUP, INC.|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|March 31,||December 31,|
|Cash and cash equivalents||$||13,447,666||$||16,738,559|
|Short term investment||3,100,391||1,613,727|
|Inventories (net of provision for slow moving inventory of 489,057 and 485,901 as of March 31, 2016 and December 31, 2015, respectively||25,814,430||17,773,679|
|Prepayments and prepaid expense||353,628||181,534|
|Due from employees||105,868||34,434|
|Advances to suppliers||348,761||71,794|
|Amount due from JV Company, net||92,789,649||76,172,471|
|Amount due from related party||5,585,613||40,606,162|
|Deferred taxes assets||744,910||-|
|TOTAL CURRENT ASSETS||211,199,129||190,867,027|
|Plant and equipment, net||19,539,908||20,525,126|
|Land use rights, net||12,934,208||12,935,121|
|Construction in progress||54,750,430||54,368,753|
|Long Term Investment||1,472,686||1,463,182|
|Investment in JV Company||86,034,442||90,337,899|
|Other long term assets||155,020||154,019|
|TOTAL Long-Term Assets||175,684,067||180,601,997|
|Other payables and accrued expenses||1,678,011||9,544,909|
|Income tax payable||1,822,276||624,276|
|Due to employees||11,944||9,423|
|Deferred taxes liabilities||-||2,374,924|
|Financial derivate - liability||537,250||3,823,590|
|Total Current Liabilities||138,709,317||130,949,874|
|Deferred taxes liabilities||312,693||1,593,582|
|Financial derivate - liability||-||-|
|Total Long-Term Liabilities||312,693||1,593,582|
|Common stock, $0.001 par value; 100,000,000 shares authorized; 47,019,638 and 46,964,855 shares issued and outstanding at March 31,2016 and December 31,2015, respectively||47,020||46,965|
|Additional paid-in capital||219,886,837||212,564,334|
|Retained earnings (the restricted portion is $4,172,324 and $4,172,324 at March 31,2016 and December 31,2015, respectively)||31,144,340||31,055,919|
|Accumulated other comprehensive loss||(3,217,011||)||(4,741,650||)|
|TOTAL STOCKHOLDERS' EQUITY||247,861,186||238,925,568|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$||386,883,196||$||371,469,024|
|KANDI TECHNOLOGIES GROUP, INC.|
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND|
|COMPREHENSIVE INCOME (LOSS)|
|Three Months Ended|
|March 31,||March 31,|
|COST OF GOODS SOLD||43,939,795||37,410,353|
|Research and development||205,968||571,020|
|Selling and marketing||46,335||113,895|
|General and administrative||8,032,882||3,780,648|
|Total Operating Expenses||8,285,185||4,465,563|
|INCOME(LOSS) FROM OPERATIONS||(1,567,087||)||1,905,170|
|Change in fair value of financial instruments||3,286,340||4,750,300|
|Share of profit after tax of JV||(4,822,470||)||469,356|
|Other income, net||22,387||23,847|
|Total other income (loss), net||(981,168||)||5,235,392|
|INCOME BEFORE INCOME TAXES||(2,548,255||)||7,140,562|
|INCOME TAX BENEFIT (EXPENSE)||2,636,675||(1,008,909||)|
|OTHER COMPREHENSIVE INCOME|
|Foreign currency translation||1,524,639||493,211|
|WEIGHTED AVERAGE SHARES OUTSTANDING BASIC||47,009,834||46,281,299|
|WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED||47,027,744||46,397,993|
|NET INCOME PER SHARE, BASIC||$||0.00||$||0.13|
|NET INCOME PER SHARE, DILUTED||$||0.00||$||0.13|
|KANDI TECHNOLOGIES GROUP, INC.|
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS|
|Three Months Ended|
|March 31, 2016||March 31, 2015|
|CASH FLOWS FROM OPERATING ACTIVITIES:|
|Adjustments to reconcile net income to net cash provided by operating activities|
|Depreciation and amortization||1,223,243||1,479,384|
|Change in fair value of financial instruments||(3,286,340||)||(4,750,300||)|
|Share of profit after tax of JV Company||4,822,470||(469,356||)|
|Stock Compensation cost||6,887,892||2,049,683|
|Changes in operating assets and liabilities, net of effects of acquisition:|
|(Increase) Decrease In:|
|Due from employee||(67,798||)||(10,225||)|
|Prepayments and prepaid expenses||(441,602||)||(527,687||)|
|Amount due from JV Company||(15,899,018||)||(19,570,708||)|
|Increase (Decrease) In:|
|Other payables and accrued liabilities||(7,875,311||)||(1,438,571||)|
|Income Tax payable||1,165,635||(130,488||)|
|Due from related party||34,781,767||-|
|Net cash used in operating activities||$||(6,153,618||)||$||(9,476,551||)|
|CASH FLOWS FROM INVESTING ACTIVITIES:|
|Purchases of plant and equipment, net||(29,696||)||(233,343||)|
|Disposal of land use rights and other intangible assets||13,767||-|
|Purchases of construction in progress||(28,140||)||(39,266||)|
|Issuance of notes receivable||(614,592||)||(4,225,884||)|
|Repayment of notes receivable||2,430,657||2,584,147|
|Short Term Investment||(1,455,727||)||-|
|Net cash provided by (used in) investing activities||$||316,269||$||(1,914,346||)|
|CASH FLOWS FROM FINANCING ACTIVITIES:|
|Proceeds from short-term bank loans||-||6,338,475|
|Proceeds from notes payable||2,063,766||6,663,525|
|Net cash provided by financing activities||$||2,498,432||$||635,799|
|NET INCREASE IN CASH AND CASH EQUIVALENTS||(3,338,917||)||(10,755,098||)|
|Effect of exchange rate changes on cash||48,024||11,296|
|Cash and cash equivalents at beginning of year||16,738,559||26,379,460|
|CASH AND CASH EQUIVALENTS AT END OF PERIOD||13,447,666||15,635,658|
|SUPPLEMENTARY CASH FLOW INFORMATION|
|Income taxes paid||595,518||1,139,397|
Company Contact: Ms. Kewa Luo Kandi Technologies Group, Inc. Phone: 1-212-551-3610 Email: IR@kandigroup.com
Source:Kandi Technologies Group, Inc.