Kandi Technologies Reports First Quarter 2021 Financial Results


--Revenue of $16 million, +151% y/y--

--Working Capital of $244 million—

JINHUA, China, May 10, 2021 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced financial results for the first quarter of 2021.

First Quarter Highlights

  • Total revenues increased by 150.7% to $16.0 million, from $6.4 million in the same period of 2020.

  • EV parts sales increased by 206.0% to $6.4 million, compared to $2.1 million in the same period of 2020.

  • Off-road vehicles sales increased by 39.2% to $5.6 million, compared to $4.0 million in the same period of 2020.

  • Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $3.9 million. As a new business, there was no revenue in the same period of 2020.

  • Gross margin was 27.3%, compared to 18.3% for the same period of 2020.

  • Net loss was $6.4 million, or $0.08 loss per fully diluted share due to investment in R&D for new products, compared to a net loss of $1.6 million, or $0.03 loss per fully diluted share for the same period of 2020.

  • As of March 31, 2021, working capital was $244.1 million; cash, cash equivalents, restricted cash and certificate of deposit totaled $162.5 million.

Mr. Hu Xiaoming, Chairman and CEO of Kandi commented: “The most promising EV opportunities we see today are short-distance small EVs in China and high-end electric Utility Terrain Vehicles in the U.S. We are focused on mass markets by developing vehicles for these segments with a cost of RMB 30,000 (approximately US$4,663) or less. For China we are developing a ‘neighborhood EV’. For the U.S., we are working on a fully enclosed high-end air-conditioned electric 4WD UTV. We expect to launch both products this year.”

Hu continued, “We intend to pursue the EV market more aggressively now that we are no longer constrained by the non-compete restrictions of our affiliation with Fengsheng. We spent a lot on R&D in the quarter, as we start to develop a new EV model. We are also considering EV product line expansion through acquisition, and are in various stages of discussions with several potential target companies.”

Turning to Kandi’s facility strategy, Hu elaborated, “In China our Jinhua facility relocation work was completed in the first quarter. We finished relocating production and offices to the new industrial park and vacated the old factory property. In early April, officials of the Jinhua Development Zone inspected and approved the work. We expect to soon receive the remaining payment of RMB 162 million, or approximately USD 25 million. Meanwhile, in late April our U.S. subsidiary SC Autosports moved its team to our newly purchased building in Dallas.”

Mr. Hu concluded, “Although our net loss grew in the first quarter, this was due to our extensive investment in R&D. Sales were solid and the EV product segment should soon recover as we execute our growth plan. We are well-funded, having collected payments for Fengsheng and the relocation. With our strong balance sheet and leading technologies, we intend to pursue exciting EV opportunities such as battery swap and the ride-sharing platform, among others.”

Q1 2021 Financial Results

Net Revenues and Gross Profit (in USD millions)

 1Q211Q20Y/Y%
Net Revenue$16.0 $6.4 150.7%
Gross Profit$4.4 $1.2 273.0%
Gross Margin 27.3% 18.3%

Net revenues of $16.0 million increased 150.7% from the first quarter of 2020. The increase in revenue was primarily due to growth in EV parts and the new segment of Electric Scooters, Electric Self-Balancing Scooters and associated parts.

Operating Income/Loss (in USD millions)

 1Q211Q20Y/Y%
Operating Expenses($27.2)($4.6)493.2%
Operating Loss($22.8)($3.4)568.4%
Operating Margin -143% -54%

Total operating expenses were $27.2 million, compared with $4.6 million in the first quarter of 2020. The increase was due to R&D spending to develop new products.

Net Loss (in USD millions)

 1Q211Q20Y/Y%
Net Loss($6.4)($1.6)306.6%
Loss per Weighted Average Common Share($0.08)($0.03)
Loss per Weighted Average Diluted Share($0.08)($0.03)

Net loss was $6.4 million, compared with a net loss of $1.6 million in the same period of 2020. The greater loss was primarily attributable to increased R&D expense for new products.

Conference Call Details

The Company has scheduled a conference call and live webcast to discuss its financial results at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time) on Monday, May 10, 2021. Management will deliver prepared remarks to be followed by a question and answer session. 

The dial-in details for the conference call are as follows:

The 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 Technologies Group Co., Ltd. (“Zhejiang Kandi Technologies”), formerly, Zhejiang Kandi Vehicles Co., Ltd.) and its subsidiaries including Zhejiang Kandi Smart Battery Swap Technology Co., Ltd, and SC Autosports, LLC (d/b/a Kandi America), the wholly-owned subsidiary of Kandi in the United States, and its wholly-owned subsidiary, Kandi America Investment, LLC. Zhejiang Kandi Technologies has established itself as one of China's leading manufacturers of pure electric vehicle parts and off-road vehicles.

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

Contacts:

Kandi Technologies Group, Inc.
Ms. Kewa Luo
+1 (212) 551-3610
IR@kandigroup.com

The Blueshirt Group
Mr. Gary Dvorchak, CFA
gary@blueshirtgroup.com

- Tables Below –

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

  March 31,
2021
  December 31,
2020
 
  (UNAUDITED)    
Current assets      
Cash and cash equivalents $146,714,469  $142,078,190 
Restricted cash  480,604   442,445 
Certificate of deposit  15,258,789   - 
Accounts receivable (net of allowance for doubtful accounts of $109,833 and
$110,269 as of March 31, 2021 and December 31, 2020, respectively)
  49,888,350   38,547,137 
Inventories  20,481,613   19,697,383 
Notes receivable  18,409,729   31,404,630 
Other receivables  38,596,446   1,875,245 
Prepayments and prepaid expense  14,910,522   13,708,149 
Advances to suppliers  16,731,376   36,733,182 
Amount due from the Affiliate Company  -   21,742,226 
Amount due from related party  883,484   886,989 
TOTAL CURRENT ASSETS  322,355,382   307,115,576 
         
NON-CURRENT ASSETS        
Property, plant and equipment, net  69,203,628   65,402,680 
Intangible assets, net  3,056,720   3,232,753 
Land use rights, net  3,222,094   3,257,760 
Construction in progress  16,864,585   16,317,662 
Deferred taxes assets  8,473,546   8,964,946 
Long term investment  152,588   45,958 
Investment in the Affiliate Company  -   28,892,638 
Goodwill  29,621,966   29,712,383 
Other long term assets  31,621,451   32,307,484 
TOTAL NON-CURRENT ASSETS  162,216,578   188,134,264 
         
TOTAL ASSETS $484,571,960  $495,249,840 
         
CURRENT LIABILITIES        
Accounts payable $29,846,891  $34,257,935 
Other payables and accrued expenses  4,648,178   7,218,395 
Notes payable  92,079   92,445 
Income tax payable  1,355,094   1,313,754 
Advance receipts  38,078,159   38,229,242 
Amount due to related party  500,000   500,000 
Other current liabilities  3,742,741   2,185,654 
TOTAL CURRENT LIABILITIES  78,263,142   83,797,425 
         
NON-CURRENT LIABILITIES        
Deferred taxes liability  3,483,171   3,483,171 
Contingent consideration liability  3,386,000   3,743,000 
Other long-term liabilities  457,764   459,580 
TOTAL NON-CURRENT LIABILITIES  7,326,935   7,685,751 
         
TOTAL LIABILITIES  85,590,077   91,483,176 
         
STOCKHOLDER'S EQUITY        
Common stock, $0.001 par value; 100,000,000 shares authorized; 77,308,499 and
77,298,499 shares issued and 75,387,555 and 75,377,555 outstanding at March
31,2021 and December 31,2020, respectively
  75,387   75,377 
Additional paid-in capital  442,343,280   439,549,338 
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at March
31,2021 and December 31,2020, respectively)
  (33,482,620)  (27,079,900)
Accumulated other comprehensive loss  (9,954,164)  (8,778,151)
TOTAL STOCKHOLDERS' EQUITY  398,981,883   403,766,664 
         
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $484,571,960  $495,249,840 
         


KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)

  Three Months Ended 
  March 31,
2021
  March 31,
2020
 
       
REVENUES FROM UNRELATED PARTIES, NET $15,976,170  $6,372,424 
REVENUES FROM THE AFFILIATE COMPANY AND RELATED PARTIES, NET  1,584   - 
         
REVENUES, NET  15,977,754   6,372,424 
         
COST OF GOODS SOLD  (11,623,403)  (5,205,165)
         
GROSS PROFIT  4,354,351   1,167,259 
         
OPERATING EXPENSES:        
Research and development  (21,624,597)  (640,240)
Selling and marketing  (1,146,866)  (878,306)
General and administrative  (4,430,123)  (3,066,735)
TOTAL OPERATING EXPENSES  (27,201,586)  (4,585,281)
         
LOSS FROM OPERATIONS  (22,847,235)  (3,418,022)
         
OTHER INCOME (EXPENSE):        
Interest income  528,592   338,944 
Interest expense  (126,348)  (982,934)
Change in fair value of contingent consideration  357,000   3,792,000 
Government grants  234,793   11,099 
Gain from sale of equity in the Affiliate Company  17,700,260   - 
Share of loss after tax of the Affiliate Company  (2,579,497)  (1,102,770)
Other income, net  498,901   19,650 
TOTAL OTHER INCOME, NET  16,613,701   2,075,989 
         
LOSS BEFORE INCOME TAXES  (6,233,534)  (1,342,033)
         
INCOME TAX EXPENSE  (169,186)  (232,613)
         
NET LOSS  (6,402,720)  (1,574,646)
         
OTHER COMPREHENSIVE INCOME (LOSS)        
Foreign currency translation adjustment  (1,176,013)  (3,523,065)
         
COMPREHENSIVE LOSS $(7,578,733) $(5,097,711)
         
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED  75,383,777   52,361,077 
         
NET LOSS PER SHARE, BASIC AND DILUTED $(0.08) $(0.03)
         


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, 2019  52,839,441  $52,839  $(2,477,965) $259,691,370  $(16,685,736) $(22,723,581) $217,856,927 
Stock issuance and award  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 


  Number of
Outstanding
Shares
  Common
Stock
  Treasury
Stock
  Additional
Paid-in
Capital
  Accumulated
Earning
(Deficit)
  Accumulated
Other
Comprehensive
Income
  Total 
Balance, December 31, 2020  75,377,555  $75,377  $      -  $439,549,338  $(27,079,900) $(8,778,151) $403,766,664 
Stock issuance and award  10,000   10   -   22,290   -   -   22,300 
Net loss  -   -   -   -   (6,402,720)  -   (6,402,720)
Foreign currency translation  -   -   -   -   -   (1,176,013)  (1,176,013)
Reversal of reduction in the Affiliate Company’s equity (net off tax effect of $491,400)  -   -   -   2,771,652   -   -   2,771,652 
                             
Balance, March 31, 2021  75,387,555  $75,387  $-  $442,343,280  $(33,482,620) $(9,954,164) $398,981,883 
                             


KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

  Three Months Ended 
  March 31,
2021
  March 31,
2020
 
       
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net loss $(6,402,720) $(1,574,646)
Adjustments to reconcile net income to net cash provided by operating activities        
Depreciation and amortization  2,212,965   2,037,045 
Impairments  -   24,316 
Share of loss after tax of the Affiliate Company  2,579,497   1,102,770 
Gain from equity sale in the Affiliate Company  (17,700,260)  - 
Change in fair value of contingent consideration  (357,000)  (3,792,000)
Stock based compensation expense  22,925   22,925 
         
Changes in operating assets and liabilities:        
         
Accounts receivable  8,916,548   5,540,503 
Inventories  (864,177)  (2,955,178)
Other receivables and other assets  (13,058,262)  (8,734,544)
Advances to supplier and prepayments and prepaid expenses  18,807,547   (8,311,506)
Amount due from the Affiliate Company  -   4,187,038 
         
Increase (Decrease) In:        
Accounts payable  (340,133)  (2,575,446)
Other payables and accrued liabilities  107,011   (781,409)
Notes payable  -   (10,745,294)
Income tax payable  58,779   29,357 
Net cash used in operating activities $(6,017,280) $(26,526,069)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchases of property, plant and equipment, net  (5,866,207)  (1,355)
Payment for construction in progress  (4,339,770)  - 
Repayments of loan to third party  13,113,237   - 
Certificate of deposit  (15,427,337)  - 
Cash received from sales of equity in the Affiliate Company  23,758,099   11,461,646 
Long Term Investment  (107,991)  - 
Net cash provided by investing activities $11,130,031  $11,460,291 
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from short-term loans  -   8,452,964 
Net cash provided by financing activities $-  $8,452,964 
         
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND
RESTRICTED CASH
 $5,112,751  $(6,612,814)
Effect of exchange rate changes $(438,313) $(145,928)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT
BEGINNING OF YEAR
 $142,520,635  $16,512,635 
         
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD $147,195,073  $9,753,893 
-CASH AND CASH EQUIVALENTS AT END OF PERIOD  146,714,469   3,719,142 
-RESTRICTED CASH AT END OF PERIOD  480,604   6,034,751 
         
SUPPLEMENTARY CASH FLOW INFORMATION        
Income taxes paid $110,407   203,256 
Interest paid $-   345,170 
         
SUPPLEMENTAL NON-CASH DISCLOSURES:        
Reversal of decrease in investment in the Affiliate Company due to change in its
equity (net off tax effect of $491,400)
 $2,807,696   - 
Increase of other receivable for equity transfer payment of the Affiliate Company $23,758,099   -