Kandi Technologies Reports Third Quarter 2020 Financial Results

Nachrichtenquelle: globenewswire
09.11.2020, 13:30  |  291   |   |   

 - Off-road vehicles sales increased 51.6% to $8.9 million
- Gross margin of 20.9% up versus 16.7% year-ago

JINHUA, CHINA, Nov. 09, 2020 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the third quarter of 2020.

Operating Highlights

During the third quarter, Kandi achieved:

  • In September, established China Battery Exchange Technology Company, a wholly-owned subsidiary for its battery swapping services.
  • On August 18, Kandi America held a successful virtual launch event to introduce its K23 and K27 EVs into the U.S. market.
  • In August, delivered its fully automatic intelligent battery exchange system to the rideshare operator in Haikou City, Hainan.
  • In July, the Affiliate Company Fengsheng Automotive launched sales of the Maple 30X, its first pure electric SUV.
  • Fengsheng Automative’s Maple 60V all-electric multi-purpose vehicle) was approved for purchase subsidies by China’s Ministry of Industry and Information Technology.

More recently, Kandi also announced:

  • A strategic cooperation agreement with the Zhejiang State Grid Electric Vehicle Service Company in the area of battery exchange for pure electric vehicles.
  • The establishment of Zhejiang Ruiheng Technology Company, which intends to operate a ridesharing service across China.
  • Initiated the IPO process for its wholly owned subsidiary, Zhejiang Kandi Smart Battery Swap Technology, to list on the Shanghai Stock Exchange STAR market.
  • Kandi America, the U.S. subsidiary has received the required clearance from the United States Environmental Protection Agency (EPA) for its two electric vehicle models – the K23 and K27 – via Certificates of Conformity. 

Financial Highlights

All figures refer to the third quarter of 2020 unless noted otherwise. All comparisons are with the third quarter of 2019, unless noted otherwise.

  • Total revenues were down 40.9% to $18.7 million.
  • Electric Vehicle (“EV”) parts sales decreased by 67.4% to $8.4 million.
  • Off-road vehicle sales increased by 51.6% to $8.9 million.
  • Gross margin of 20.9% increased 42 basis points versus the year-ago period.
  • Net loss was $1.5 million, or $0.03 per fully diluted share. This compares to net income of $12.1 million, or $0.23 last year.
  • As of September 30, 2020, working capital was $79.8 million. Cash, cash equivalents and restricted cash was $24.2 million. 

Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, “As we approach year-end, we are proud of our progress despite the challenges posed by COVID-19 around the world. We were productive in the third quarter. Most importantly, after a lengthy process of preparation, the ‘300,000 government-accredited pure EV within 5 years rideshare’ program—of which Kandi was a co-founder-- has begun its trial with the gradual delivery of 1,000 EVs to the city of Haikou in Hainan province and 2,500 EVs to the city of Shaoxing in Zhejiang province. All the EVs delivered for the program include our battery swap feature. We believe that this program can drive the production and sales of our EV parts and battery swap equipment, and we can thus restore growth in our pure EV business.”

Hu also discussed the plan to list Kandi’s Battery Swap Subsidiary on the Shanghai Stock Exchange’s STAR Board: “Based on feedback from three world-class advisors’ preliminary due diligence, we are confident about this proposed spin-off listing on the STAR market. By tapping China’s capital markets, listing on the STAR Board will accelerate the Company’s business growth and also enable Kandi to unlock and realize the value of this emerging business.”

Net Revenues and Gross Profit

    3Q20     3Q19     Y-o-Y%  
Net Revenues (US$million)   $ 18.7     $ 31.7       -40.9 %
Gross Profit (US$million)   $ 3.9     $ 5.3       -25.9 %
Gross Margin     20.9 %     16.7 %     -  

  
The decline in revenue was due mainly to slower sales of EV parts, a result of reduced demand from our customers due to the economic effects of the COVID-19 pandemic. 

Operating Loss

    3Q20     3Q19     Y-o-Y%  
Operating Expenses (US$million)   $ 6.3     $ 5.0       26.8 %
Operating (Loss) Income (US$million)   ($ 2.4 )   $ 0.3       -851.3 %
Operating Margin     -12.7 %     1.0 %     -  

  
Operating expenses increased due to higher sales and marketing expense related to the Company’s entry into the U.S. electric vehicle market.

Net Income (Loss)

    3Q20     3Q19     Y-o-Y%  
Net  (Loss) Income (US$million)   ($ 1.5 )   $ 12.1       -112.1 %
(Loss) Earnings per Weighted Average Common Share   ($ 0.03 )   $ 0.23       -  
(Loss) Earnings per Weighted Average Diluted Share   ($ 0.03 )   $ 0.23       -  

Net loss was $1.5 million in the third quarter of 2020, compared with net income of $12.1 million in the same quarter of 2019. The decline was due to recognition in the third quarter of 2019 of a $20.6 million gain from the sale of equity in the Affiliate Company.

Financial Condition

As of September 30, 2020, the Company had cash and cash equivalents of $23.9 million, restricted cash of $0.25 million, and working capital of $79.8 million. This compares to $5.5 million, $11.0 million, $63.7 million as of December 31, 2019, respectively.

As of September 30, 2020, accounts receivable were $38.4 million, compared to $61.2 million as of December 31, 2019.

For the first three quarters of 2020, cash used in operating activities was $13.4 million, as compared to cash used in operating activities of $14.6 million for the same period last year.

Third Quarter 2020 Conference Call Details

The Company will conduct a conference call and live webcast to discuss its third quarter 2020 financial results at 8:00 A.M. Eastern Time (9:00 P.M. Beijing Time) on November 9, 2020. Management 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: +1-877-407-3982
  • International dial-in number: + 1-201-493-6780
  • Webcast and replay: http://public.viavid.com/index.php?id=142327  

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 Economic Development Zone, Zhejiang Province, is engaged in the research, development, manufacturing, and sales of various vehicular products. Kandi conducts its primary business operations through its wholly-owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. ("Kandi Vehicles") and its subsidiaries including Zhejiang Kandi Smart Battery Swap Technology Co., Ltd, SC Autosports, LLC (d/b/a Kandi America), the wholly-owned subsidiary of Kandi in the United States and Fengsheng Automobile Technology Group Co., Ltd (formerly known as Kandi Electric Vehicles Group Co., Ltd., the “Affiliate Company”). Kandi Vehicles has established itself as one of China's leading manufacturers of pure electric vehicle parts and off-road vehicles.

In 2013, Kandi Vehicles and Geely Group, China's leading automaker, jointly invested in the establishment of the Affiliate Company in order to develop, manufacture and sell pure electric vehicle ("EV") products. Geely Group (including its affiliate) and Kandi Vehicles currently holds 78% and 22% of the equity interests in the Affiliate Company, respectively. The Affiliate Company has established itself as one of the driving forces in the development and the manufacturing of pure EV products in China.

More information about KNDI is available on 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 applicable securities laws, the Company does not assume a duty to update these forward-looking statements.

Follow us on Twitter: @ Kandi_Group

For More Information:

Kandi Technologies Group, Inc.

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

The Blueshirt Group

U.S.:
Mr. Gary Dvorchak
Email: gary@blueshirtgroup.com

China:
Ms. Susie Wang
Email: susie@blueshirtgroup.com

- Tables Below -

KANDI TECHNOLOGIES GROUP, INC. 
AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

  

    September 30,
2020
    December 31,
2019
 
    (UNAUDITED)        
Current assets            
Cash and cash equivalents   $ 23,909,159     $ 5,490,557  
Restricted cash     250,000       11,022,078  
Accounts receivable (net of allowance for doubtful accounts of $105,833 and $254,665 as of September 30, 2020 and December 31, 2019, respectively)     38,370,898       61,181,849  
Inventories     30,244,514       27,736,566  
Notes receivable     235,249       42,487,225  
Other receivables     54,654,688       5,019,971  
Prepayments and prepaid expense     10,980,473       10,615,063  
Amount due from the Affiliate Company     20,869,315       31,330,763  
Other current assets     4,262,285       688,364  
TOTAL CURRENT ASSETS     183,776,581       195,572,436  
                 
NON-CURRENT ASSETS                
Property, plant and equipment, net     71,132,470       74,407,858  
Intangible assets, net     3,264,500       3,654,772  
Land use rights, net     9,042,991       11,272,815  
Investment in the Affiliate Company     39,442,126       47,228,614  
Goodwill     28,792,031       28,270,400  
Other long term assets     13,132,240       10,811,501  
TOTAL NON-CURRENT ASSETS     164,806,358       175,645,960  
                 
TOTAL ASSETS   $ 348,582,939     $ 371,218,396  
                 
CURRENT LIABILITIES                
Accounts payable   $ 42,154,366     $ 72,093,940  
Other payables and accrued expenses     5,857,897       6,078,041  
Short-term loans     -       25,980,364  
Notes payable     -       10,765,344  
Income tax payable     1,087,338       1,796,601  
Advance receipts     36,691,372       -  
Long term loans - current portion     16,761,501       13,779,641  
Other current liabilities     1,456,108       1,379,808  
TOTAL CURRENT LIABILITIES     104,008,582       131,873,739  
                 
NON-CURRENT LIABILITIES                
Long term loans     12,156,573       14,353,792  
Deferred taxes liability     3,460,346       1,362,786  
Contingent consideration liability     3,403,000       5,197,000  
Other long-term liabilities     588,123       574,152  
TOTAL NON-CURRENT LIABILITIES     19,608,042       21,487,730  
                 
TOTAL LIABILITIES     123,616,624       153,361,469  
                 
STOCKHOLDER'S EQUITY                
Common stock, $0.001 par value; 100,000,000 shares authorized; 56,531,702 and 56,263,102 shares issued and 54,610,758 and 52,839,441 outstanding at September 30, 2020 and December 31, 2019, respectively     54,611       52,839  
Less: Treasury stock (487,155 shares with average price of $5.09 at September 30, 2020 and December 31, 2019, respectively)     (2,477,965 )     (2,477,965 )
Additional paid-in capital     260,605,209       259,691,370  
Accumulated deficit     (15,663,602 )     (16,685,736 )
Accumulated other comprehensive loss     (17,551,938 )     (22,723,581 )
TOTAL STOCKHOLDERS' EQUITY     224,966,315       217,856,927  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 348,582,939     $ 371,218,396  

KANDI TECHNOLOGIES GROUP, INC. 
AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS) 
(UNAUDITED)

    Three Months Ended     Nine Months Ended  
    September 30,
2020
    September 30,
2019
    September 30,
2020
    September 30,
2019
 
                         
REVENUES FROM UNRELATED PARTIES, NET   $ 18,717,212     $ 26,968,385     $ 44,525,756     $ 63,360,044  
REVENUES FROM THE AFFILIATE COMPANY AND RELATED PARTIES, NET     6       4,720,159       962       10,543,190  
                                 
REVENUES, NET     18,717,218       31,688,544       44,526,718       73,903,234  
                                 
COST OF GOODS SOLD     (14,806,322 )     (26,412,129 )     (35,911,785 )     (61,288,228 )
                                 
GROSS PROFIT     3,910,896       5,276,415       8,614,933       12,615,006  
                                 
OPERATING EXPENSES:                                
Research and development     (987,285 )     (596,187 )     (2,777,426 )     (1,766,210 )
Selling and marketing     (2,165,383 )     (930,810 )     (3,807,355 )     (2,448,291 )
General and administrative     (3,212,209 )     (3,432,920 )     (10,186,135 )     (11,096,246 )
Gain on disposal of long-lived assets     76,159       -       13,983,733       -  
TOTAL OPERATING EXPENSES, NET     (6,288,718 )     (4,959,917 )     (2,787,183 )     (15,310,747 )
                                 
(LOSS) INCOME FROM OPERATIONS     (2,377,822 )     316,498       5,827,750       (2,695,741 )
                                 
OTHER INCOME (EXPENSE):                                
Interest income     558,059       209,736       1,118,795       559,954  
Interest expense     (788,589 )     (435,524 )     (2,894,579 )     (1,304,062 )
Change in fair value of contingent consideration     (1,069,000 )     57,000       1,794,000       694,000  
Government grants     13,431       502,146       111,329       725,189  
Gain (loss) from equity dilution in the Affiliate Company     -       (49,285 )     -       4,291,974  
Gain from sale of equity in the Affiliate Company     -       20,574,217       -       20,574,217  
Share of loss after tax of the Affiliate Company     (1,550,568 )     (8,433,767 )     (5,631,867 )     (22,883,126 )
Other income, net     988,287       57,833       2,051,272       357,626  
TOTAL OTHER (EXPENSE) INCOME, NET     (1,848,380 )     12,482,356       (3,451,050 )     3,015,772  
                                 
(LOSS) INCOME BEFORE INCOME TAXES     (4,226,202 )     12,798,854       2,376,700       320,031  
                                 
INCOME TAX BENEFIT (EXPENSE)     2,767,939       (709,413 )     (1,354,563 )     41,780  
                                 
NET (LOSS) INCOME     (1,458,263 )     12,089,441       1,022,137       361,811  
                                 
OTHER COMPREHENSIVE INCOME (LOSS)                                
Foreign currency translation adjustment     8,216,974       (8,531,043 )     5,171,643       (8,042,604 )
                                 
COMPREHENSIVE INCOME (LOSS)   $ 6,758,711     $ 3,558,398     $ 6,193,780     $ (7,680,793 )
                                 
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED     54,112,981       52,613,642       53,282,066       52,332,260  
                                 
NET (LOSS) INCOME PER SHARE, BASIC AND DILUTED   $ (0.03 )   $ 0.23     $ 0.02     $ 0.01  

  

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
Condensed CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)

    Number of
Outstanding
Shares
    Common
Stock
    Treasury
Stock
    Additional
Paid-in
Capital
    Accumulated
Deficit
    Accumulated
Other
Comprehensive
Loss
    Total  
Balance, December 31, 2018     51,484,444     $ 51,484     $ -     $ 254,989,657     $ (9,497,009 )   $ (19,921,258 )   $ 225,622,874  
Stock issuance and awards     1,096,397       1,097       -       3,387,379       -       -       3,388,476  
Net loss     -       -       -       -       (4,409,472 )     -       (4,409,472 )
Foreign currency translation     -       -       -       -       -       5,404,028       5,404,028  
Balance, March 31, 2019     52,580,841     $ 52,581     $ -     $ 258,377,036     $ (13,906,481 )   $ (14,517,230 )   $ 230,005,906  
Stock issuance and awards     238,600       238       -       1,259,569       -       -       1,259,807  
Net loss     -       -       -       -       (7,318,158 )     -       (7,318,158 )
Foreign currency translation     -       -       -       -       -       (4,915,589 )     (4,915,589 )
Balance, June 30, 2019     52,819,441     $ 52,819     $ -     $ 259,636,605     $ (21,224,639 )   $ (19,432,819 )   $ 219,031,966  
Stock issuance and awards     20,000       20       -       69,380       -       -       69,400  
Stock buyback     -       -       (2,477,965 )     -       -       -       (2,477,965 )
Commission in stock buyback     -       -       -       (14,615 )     -       -       (14,615 )
Net income                     -       -       12,089,441       -       12,089,441  
Foreign currency translation     -       -       -       -       -       (8,531,043 )     (8,531,043 )
Balance, September 30, 2019     52,839,441     $ 52,839     $ (2,477,965 )   $ 259,691,370     $ (9,135,198 )   $ (27,963,862 )   $ 220,167,184  


    Number of
Outstanding
Shares
    Common
Stock
    Treasury
Stock
    Additional
Paid-in
Capital
    Accumulated
Deficit
    Accumulated
Other
Comprehensive
Loss
    Total  
Balance, December 31, 2019     52,839,441     $ 52,839     $ (2,477,965 )   $ 259,691,370     $ (16,685,736 )   $ (22,723,581 )   $ 217,856,927  
Stock issuance and awards     10,000       10       -       22,290       -       -       22,300  
Net loss     -       -       -       -       (1,574,646 )     -       (1,574,646 )
Foreign currency translation     -       -       -       -       -       (3,523,065 )     (3,523,065 )
Balance, March 31, 2020     52,849,441     $ 52,849     $ (2,477,965 )   $ 259,713,660     $ (18,260,382 )   $ (26,246,646 )   $ 212,781,516  
Stock issuance and awards     1,502,717       1,503       -       3,164,925       -       -       3,166,428  
Net income     -       -       -       -       4,055,043       -       4,055,043  
Foreign currency translation     -       -       -       -       -       477,734       477,734  
Balance, June 30, 2020     54,352,158     $ 54,352     $ (2,477,965 )   $ 262,878,585     $ (14,205,339 )   $ (25,768,912 )   $ 220,480,721  
Stock issuance and awards     258,600       259       -       870,837       -       -       871,096  
Net loss     -       -       -       -       (1,458,263 )     -       (1,458,263 )
Foreign currency translation     -       -       -       -       -       8,216,974       8,216,974  
Reduction in the Affiliate Company’s equity     -       -       -       (3,144,213 )     -       -       (3,144,213 )
Balance, September 30, 2020     54,610,758     $ 54,611     $ (2,477,965 )   $ 260,605,209     $ (15,663,602 )   $ (17,551,938 )   $ 224,966,315  

KANDI TECHNOLOGIES GROUP, INC. 
AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

    Nine Months Ended  
    September 30,
2020
    September 30,
2019
 
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net income   $ 1,022,137     $ 361,811  
Adjustments to reconcile net income to net cash provided by operating activities                
Depreciation and amortization     6,078,070       6,443,422  
(Reversal) provision of allowance for doubtful accounts     (150,756 )     15,366  
Deferred taxes     1,256,167       50,693  
Share of loss after tax of the Affiliate Company     5,631,867       22,883,126  
Gain from equity dilution in the Affiliate Company     -       (4,291,974 )
Gain from sale of equity in the Affiliate Company     -       (20,574,217 )
Gain on disposal of long-lived assets     (13,983,733 )     -  
Change in fair value of contingent consideration     (1,794,000 )     (694,000 )
Stock based compensation expense     870,471       1,337,333  
                 
Changes in operating assets and liabilities:                
Accounts receivable     18,165,084       (36,822,184 )
Notes receivable     -       174,881  
Notes receivable from the Affiliate Company and related party     -       437,203  
Inventories     (1,830,827 )     (14,768,603 )
Other receivables and other assets     (5,226,968 )     (7,746,801 )
Prepayments and prepaid expenses     (84,089 )     1,357,001  
Amount due from the Affiliate Company     4,178,477       30,549,072  
                 
Increase (Decrease) In:                
Accounts payable     (15,642,931 )     11,383,411  
Other payables and accrued liabilities     2,675,156       8,934,397  
Notes payable     (13,725,855 )     (11,836,950 )
Income tax payable     (804,238 )     (1,803,574 )
Net cash used in operating activities   $ (13,365,968 )   $ (14,610,587 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchases of property, plant and equipment, net     (383,568 )     (955,670 )
Payment for construction in progress     (1,604,427 )     (18,491 )
Proceeds from disposal of long-lived assets     51,872,829       -  
Loan to third party     (45,958,247 )     (9,555,014 )
Cash received from sales of equity in the Affiliate Company     42,321,385       32,061,558  
Net cash provided by investing activities   $ 46,247,972     $ 21,532,383  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from short-term loans     24,163,223       27,864,409  
Repayments of short-term loans     (50,042,178 )     (26,261,331 )
Repayments of long-term loans     (285,955 )     (145,734 )
Proceeds from long-term loans     394,116       -  
Repayments of loan from third party     -       (1,259,551 )
Stock buyback with commission     -       (2,492,579 )
Net cash used in financing activities   $ (25,770,794 )   $ (2,294,786 )
                 
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH     7,111,210       4,627,010  
Effect of exchange rate changes     535,314       (928,440 )
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR     16,512,635       22,353,071  
                 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD   $ 24,159,159     $ 26,051,641  
-CASH AND CASH EQUIVALENTS AT END OF PERIOD     23,909,159       14,338,637  
-RESTRICTED CASH AT END OF PERIOD     250,000       11,713,004  
                 
SUPPLEMENTARY CASH FLOW INFORMATION                
Income taxes paid   $ 901,021     $ 1,711,101  
Interest paid   $ 644,724     $ 1,304,062  
                 
SUPPLEMENTAL NON-CASH DISCLOSURES:                
Decrease in investment in the Affiliate Company due to change in its equity   $ 3,057,540     $ -  
Notes receivable from unrelated parties for equity transfer payment   $ -     $ 43,137,369  
Common stock issued for settlement of payables related to acquisitions (see Note 20)   $ 3,166,427     $ 3,357,425  

Kandi Technologies Group Aktie jetzt über den Testsieger (Finanztest 11/2020) handeln, ab 0 € auf Smartbroker.de



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Kandi Technologies Reports Third Quarter 2020 Financial Results  - Off-road vehicles sales increased 51.6% to $8.9 million - Gross margin of 20.9% up versus 16.7% year-ago JINHUA, CHINA, Nov. 09, 2020 (GLOBE NEWSWIRE) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), …

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