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Kandi Technologies Reports 2021 Financial Results

·16 min read
  • 2021 revenue of $91.5 million, net income of $23 million

  • Year-end cash and equivalents of $129 million

  • Explosive growth in self-balancing scooter segment, up over 400%

JINHUA, CHINA, March 15, 2022 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the full year ended December 31, 2021.

Full Year 2021 Highlights

• Total revenue was $91.5 million, compared to $76.9 million in 2020.

• EV parts sales were $25.3million, compared to $40.6 million in 2020.

• Off-road vehicles sales were $29.3 million, compared to $29.8 million in 2020.

• EV product sales increased by 116% to $1.5 million, compared to $0.7 million in 2020.

• Electric Scooters, Electric Self-Balancing Scooters and associated parts sales increased by 420.6% to $30.0 million, compared with $5.8 million in 2020.

• Gross margin was 17.8%, compared to 17.5% in 2020.

• Operating income was $1.34 million, compared to $0.8 million in 2020.

• Net income was $22.9 million, or $0.30 income per fully diluted share, compared to a net loss of $10.4 million, or $0.19 loss per fully diluted share in 2020.

• As of December 31, 2021, working capital was $278.4 million; cash, cash equivalents, restricted cash and certificate of deposit totaled $223.7 million.

Mr. Hu Xiaoming, Chairman and CEO of Kandi commented, “As a company, our primary focus initially was the design, development, manufacture, and sale of electric vehicle products and electric vehicle parts. Nevertheless, some Chinese pure electric vehicle manufacturers have attempted to capture market share at any cost, resulting in substantial losses in recent years. It has become increasingly obvious that the pure electric vehicle market in China has not yet reached a healthy development stage. We do not believe it is prudent to participate in such loss-making competition given our current financial resources. It has always been our belief that pure electric vehicles can only become widely popular once the battery swap model matures. With our advanced pure electric vehicle intelligent battery swapping equipment, pure electric vehicle manufacturing capacity and dozens of patented technologies for battery swap, we will continue to focus on improving car-hailing using EVs with battery swap capability. As soon as the electric vehicle market in China enters an orderly stage of development, we will consider re-entering the market.”

Hu continued, “We see huge demand building for electrified off-road vehicles. In 2022, we will apply EV technology to off-road vehicle products and launch a variety of pure electric utility terrain vehicles (“UTVs”), neighborhood EVs (“NEVs”), golf carts, and off-road crossover vehicles. We will make full use of our high-end technology, which is the culmination of years of development work in the EVs, to aggressively pursue the off-road vehicle market. Our goal is to become the market leader in this field in China within three years.”

Regarding Company’s strategy, Hu commented, “The business transformation undertaken by the company in 2021 is already proving successful. Due to the strategic action, we took following the COVID-19 pandemic in 2020, our development has been reignited. We are concentrating our resources on markets with the best growth potential and a reasonable level of competition. Despite the challenges associated with this type of transformation, this is a step that Kandi must take to achieve sustainable growth.”

Hu concluded, “Looking forward, we are optimistic about the future of our company. Since we will be launching several pure electric off-road vehicles soon, we believe that our 100% electric off-road vehicle products that incorporate pure EV technology will be quite popular. Additionally, we look forward to the new opportunities brought about by China entering a healthy and orderly development stage for its pure electric vehicle market. In view of our outstanding technological innovation capabilities, solution integration capabilities and operational experience, we are in an excellent position to benefit from the development of the EV and electric off-road vehicle industries.”

Full Year 2021 Financial Results

Net Revenues and Gross Profit (in USD millions)

2021

2020

Y-o-Y%

Net Revenues

$

91.5

$

76.9

18.9

%

Gross Profit

$

16.2

$

13.5

20.5

%

Gross Margin%

17.8

%

17.5

%

-

Net revenues of $91.5 million increased 18.9% from 2020. The increase was due mainly to explosive growth in the Electric Scooters, Electric Self-Balancing Scooters and associated parts segment. Since entering this market in 2020, Kandi has driven growth through sales to more customers, and high growth of customers’ end-product sales. Gross margin was stable at 17.8%, compared with 17.5% in 2020.

Operating Income/Loss (in USD millions)

2021

2020

Y-o-Y%

Operating Expenses

$

(14.9

)

$

(12.7

)

17.1

%

Income from Operations

$

1.3

$

0.8

77.1

%

Operating Margin%

1.5

%

1.0

%

-

Total operating expenses were $14.9 million, compared with $12.7 million in 2020. The increase was due to higher R&D expense. Operating expenses were partially offset by the gain on disposal of long-lived assets recognized from the relocation of the Jinhua facility.

Net Income/Loss (in USD millions)

2021

2020

Y-o-Y%

Net Income (Loss)

$

22.9

$

(10.4

)

-320.0

%

Net Income (Loss) per Share, Basic and Diluted

$

0.30

$

(0.19

)

-

Net income was $22.9 million, comparing to a net loss of $10.4 million in 2020. The profitable result was attributable to the gain resulting from the relocation of the Jinhua headquarters.

Full Year 2021 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 Tuesday, March 15, 2022. 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:

• Toll-free dial-in number: +1-877-407-3982

• International dial-in number: + 1-201-493-6780

• Webcast and replay: https://themediaframe.com/mediaframe/webcast.html?webcastid=8oRuq5Ul

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.

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
CONSOLIDATED BALANCE SHEETS

December 31,
2021

December 31,
2020

Current assets

Cash and cash equivalents

$

129,223,443

$

142,078,190

Restricted cash

39,452,564

442,445

Certificate of deposit

55,041,832

-

Accounts receivable (net of allowance for doubtful accounts of $3,053,277 and $110,269 as of December 31, 2021 and December 31, 2020, respectively)

52,896,305

38,547,137

Inventories

33,171,973

19,697,383

Notes receivable

323,128

31,404,630

Other receivables

8,901,109

1,875,245

Prepayments and prepaid expense

17,657,326

13,708,149

Advances to suppliers

5,940,456

36,733,182

Amount due from the Affiliate Company

-

21,742,226

Amount due from related party

-

886,989

TOTAL CURRENT ASSETS

342,608,136

307,115,576

NON-CURRENT ASSETS

Property, plant and equipment, net

111,577,411

65,402,680

Intangible assets, net

13,249,079

3,232,753

Land use rights, net

3,250,336

3,257,760

Construction in progress

79,317

16,317,662

Deferred tax assets

2,219,297

8,964,946

Long-term investment

157,262

45,958

Investment in the Affiliate Company

-

28,892,638

Goodwill

36,027,425

29,712,383

Other long-term assets

10,992,009

32,307,484

TOTAL NON-CURRENT ASSETS

177,552,136

188,134,264

TOTAL ASSETS

$

520,160,272

$

495,249,840

CURRENT LIABILITIES

Accounts payable

$

36,677,802

$

34,257,935

Other payables and accrued expenses

9,676,973

7,218,395

Short-term loans

950,000

-

Notes payable

8,198,193

92,445

Income tax payable

1,620,827

1,313,754

Advance receipts

-

38,229,242

Amount due to related party

-

500,000

Other current liabilities

7,038,895

2,185,654

TOTAL CURRENT LIABILITIES

64,162,690

83,797,425

NON-CURRENT LIABILITIES

Long-term loans

2,210,589

-

Deferred tax liability

2,460,141

3,483,171

Contingent consideration liability

7,812,000

3,743,000

Other long-term liabilities

314,525

459,580

TOTAL NON-CURRENT LIABILITIES

12,797,255

7,685,751

TOTAL LIABILITIES

76,959,945

91,483,176

STOCKHOLDER’S EQUITY

Common stock, $0.001 par value; 100,000,000 shares authorized; 77,385,130 and 77,298,499 shares issued and 76,705,381 and 75,377,555 outstanding at December 31,2021 and December 31,2020, respectively

77,385

75,377

Less: Treasury stock (679,749 shares and 0 shares with average price of $3.52 at December 31,2021 and December 31,2020, respectively)

(2,392,203

)

-

Additional paid-in capital

449,479,461

439,549,338

Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at December 31,2021 and December 31,2020, respectively)

(4,216,102

)

(27,079,900

)

Accumulated other comprehensive income (loss)

251,786

(8,778,151

)

TOTAL STOCKHOLDERS’ EQUITY

443,200,327

403,766,664

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

520,160,272

$

495,249,840

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Years Ended

December 31,
2021

December 31,
2020

REVENUES FROM UNRELATED PARTIES, NET

$

91,484,792

$

76,176,609

REVENUES FROM THE AFFILIATE COMPANY AND RELATED PARTIES, NET

1,592

743,904

REVENUES, NET

91,486,384

76,920,513

COST OF GOODS SOLD

(75,238,522

)

(63,432,580

)

GROSS PROFIT

16,247,862

13,487,933

OPERATING INCOME (EXPENSE):

Research and development

(38,971,986

)

(7,246,312

)

Selling and marketing

(4,736,000

)

(6,619,355

)

General and administrative

(19,605,468

)

(13,042,103

)

Gain on disposal of long-lived assets

48,401,797

14,174,233

TOTAL OPERATING EXPENSE

(14,911,657

)

(12,733,537

)

INCOME FROM OPERATIONS

1,336,205

754,396

OTHER INCOME (EXPENSE):

Interest income

4,208,751

2,190,678

Interest expense

(407,620

)

(3,750,233

)

Change in fair value of contingent consideration

2,834,000

(565,000

)

Government grants

1,233,192

1,130,262

Gain from sale of equity in the Affiliate Company

17,788,351

-

Share of loss after tax of the Affiliate Company

(2,592,334

)

(17,252,662

)

Other income, net

4,809,743

2,051,226

TOTAL OTHER INCOME (EXPENSE), NET

27,874,083

(16,195,729

)

INCOME (LOSS) BEFORE INCOME TAXES

29,210,288

(15,441,333

)

INCOME TAX (EXPENSE) BENEFIT

(6,346,490

)

5,047,169

NET INCOME (LOSS)

22,863,798

(10,394,164

)

OTHER COMPREHENSIVE INCOME

Foreign currency translation adjustment

9,029,937

13,945,430

COMPREHENSIVE INCOME

$

31,893,735

$

3,551,266

WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED

76,148,688

55,960,010

NET INCOME (LOSS) PER SHARE, BASIC AND DILUTED

$

0.30

$

(0.19

)

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Number of Outstanding
Shares

Common Stock

Treasury Stock

Additional
Paid-in
Capital

Accumulated
Deficit

Accumulated Other Comprehensive Income
(Loss)

Total

BALANCE AS OF 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

1,771,317

1,771

-

4,058,052

-

-

4,059,823

Cancellation of the Treasury Stock

(487,155

)

(487

)

2,477,965

(2,477,478

)

-

-

-

Registered Direct Offering

18,253,952

18,254

-

151,904,993

-

-

151,923,247

Warrants issuance

-

-

-

-

-

-

Stock option exercise

3,000,000

3,000

-

29,157,000

-

-

29,160,000

Net loss

-

-

-

-

(10,394,164

)

-

(10,394,164

)

Foreign currency translation

-

-

-

-

13,945,430

13,945,430

Reduction in the Affiliate Company’s equity (net of tax effect of $491,400)

-

-

-

(2,784,599

)

-

-

(2,784,599

)

BALANCE AS OF DECEMBER 31, 2020

75,377,555

$

75,377

$

-

$

439,549,338

$

(27,079,900

)

$

(8,778,151

)

$

403,766,664

Stock issuance and award

2,007,575

2,008

-

7,178,928

-

-

7,180,936

Stock buyback

(2,392,203

)

-

-

(2,392,203

)

Commission in stock buyback

(20,457

)

(20,457

)

Net income

-

-

-

-

22,863,798

-

22,863,798

Foreign currency translation

-

-

-

-

9,029,937

9,029,937

Reversal of reduction in the Affiliate Company’s equity (net of tax effect of $491,400)

-

-

-

2,771,652

-

-

2,771,652

BALANCE AS OF DECEMBER 31, 2021

77,385,130

$

77,385

$

(2,392,203

)

$

449,479,461

$

(4,216,102

)

$

251,786

$

443,200,327

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Years Ended

December 31,
2021

December 31,
2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$

22,863,798

$

(10,394,164

)

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

10,038,976

8,222,984

Provision (reversal) of allowance for doubtful accounts

862,414

(152,809

)

Deferred taxes

4,073,315

(5,349,722

)

Share of loss after tax of the Affiliate Company

2,592,334

17,252,662

Gain from equity sale in the Affiliate Company

(17,788,351

)

-

Gain on disposal of long-lived assets

(48,401,797

)

(14,174,233

)

Change in fair value of contingent consideration

(2,834,000

)

565,000

Stock based compensation expense

1,484,576

902,666

Changes in operating assets and liabilities:

Accounts receivable

(2,542,692

)

19,247,519

Inventories

(7,522,761

)

9,246,455

Other receivables and other assets

(291,235

)

2,008,612

Advances to supplier and prepayments and prepaid expenses

27,786,143

(36,330,634

)

Amount due from the Affiliate Company

-

4,237,103

Due from related party

(500,000

)

(339,118

)

Increase (Decrease) In:

Accounts payable

2,176,638

(30,993,717

)

Other payables and accrued liabilities

10,513,511

(173,806

)

Notes payable

(2,423,514

)

(13,912,842

)

Income tax payable

154,334

(745,208

)

Net cash provided by (used in) operating activities

$

241,689

$

(50,883,252

)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment, net

(11,574,706

)

(7,483,743

)

Purchases of land use rights and other intangible assets

(2,356,626

)

(3,281,115

)

Acquisition of Jiangxi Huiyi

(7,117,310

)

-

Payment for construction in progress

(5,210,642

)

(7,419,644

)

Proceeds from disposal of long-lived assets

23,306,007

52,579,492

Loan to third party

31,783,439

(26,097,991

)

Certificate of deposit

(54,264,407

)

-

Cash received from sales of equity in the Affiliate Company

47,752,678

42,897,929

Long-term investment

(108,529

)

(43,478

)

Net cash provided by investing activities

$

22,209,904

$

51,151,450

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term loans

950,000

24,642,399

Repayments of short-term loans

-

(50,873,903

)

Repayments of long-term loans

-

(28,799,501

)

Proceeds from long-term loans

2,210,589

394,116

Proceeds from issuance of common stock and warrants

-

151,923,247

Purchase of treasury stock

(2,412,660

)

-

Proceeds from exercises stock options, stock awards and other financing

-

29,160,000

Net cash provided by financing activities

$

747,929

$

126,446,358

NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

$

23,199,522

$

126,714,556

Effect of exchange rate changes

$

2,955,850

$

(706,556

)

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

$

168,676,007

$

142,520,635

-CASH AND CASH EQUIVALENTS AT END OF PERIOD

129,223,443

142,078,190

-RESTRICTED CASH AT END OF PERIOD

39,452,564

442,445

SUPPLEMENTARY CASH FLOW INFORMATION

Income taxes paid

$

2,074,668

1,046,127

Interest paid

$

35,001

653,507

SUPPLEMENTAL NON-CASH DISCLOSURES:

Decrease in investment in the Affiliate Company due to change in its equity

-

3,099,193

Reversal of decrease in investment in the Affiliate Company due to change in its equity (net of tax effect of $491,400)

2,824,115

-

Purchase of construction in progress in accounts payable and other payable

-

7,945,414

Common stock issued from settlement of payables related to acquisitions

5,762,000

3,166,427