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Kandi Technologies Reports Second Quarter 2021 Financial Results

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--Revenue of approx. $30 million, +54% y/y--
--Net Income of approx. $41 million ($0.54 per fully diluted share), +900% y/y--
--Working Capital of approx. $300 million, cash1 totaled $202.4 million --

JINHUA, CHINA, Aug. 09, 2021 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced financial results for the second quarter of 2021.

Second Quarter Highlights

  • Total revenues increased by 53.7% to $29.9 million, from $19.4 million in the same period of 2020.

  • EV parts sales were $6.7 million, compared to $12.5 million in the same period of 2020.

  • Off-road vehicles sales were $5.5 million, compared to $6.6 million in the same period of 2020.

  • Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $16.5 million, compared to $0.4 million in the same period of 2020, This growth represents a successful strategic initiative to sell intelligent transportation products after the COVID-19 outbreak seriously impacted the EV market in 2020.

  • Battery exchange equipment and battery exchange service sales were $0.6 million. As a new business, there was no such revenue in the same period of 2020.

  • Gross margin was 20.4%, compared to 18.2% for the same period of 2020.

  • Net income was $40.9 million, or $0.54 per fully diluted share primarily due to a gain on the disposal of a long-live asset recognized as part of our Jinhua facility relocation that was completed in the second quarter. This compares to a net income of $4.1 million, or $0.08 per fully diluted share for the same period of 2020.

  • As of June 30, 2021, working capital was $297.3 million. Cash, cash equivalents, restricted cash, and certificate of deposit totaled $202.4 million.

1 Includes cash, cash equivalents, restricted cash, and certificate of deposit.

Mr. Hu Xiaoming, Chairman and CEO of Kandi commented: “We are excited to see both strong revenue growth and profitability. Last year, as the Covid-19 pandemic impacted our EV business, we undertook a strategic initiative to find new markets for our industry-leading technology. This pivot to new markets is proved successful, as you can see by our strong growth in intelligent mobility sector and associated parts. Furthermore, we are with our operating cash flow as robust because we received final payments for the Jinhua Facility relocation. The vacated old factory property met the inspection authorities’ stipulated conditions, it was returned to the government, and we received the agreed payments. With this cash inflow, our balance sheet is even stronger for pursuing the multiple growth opportunities we see ahead of us.”

Elaborating on Kandi’s commitment to R&D, Hu elaborated, “As we noted last quarter, there are significant growth opportunities in affordable short-distance EVs for the China market, and in UTVs for the U.S. market. In May, we unveiled the K32 premium UTV, which is produced at our factory in Hainan, China. The K32 features pure electric four-wheel-drive propulsion and a fully enclosed cockpit with air conditioning. We intend to sell the K32 in the U.S. by the end of this year.”

Turning to acquisitions, Hu commented, “Last month, we announced the acquisition of Jiangxi Huiyi, which pushes us further into the battery cell business. Jiangxi Huiyi is a leading battery cell producer with intelligent production lines that each day can manufacture approximately 250,000 units of 18650 lithium-ion rechargeable cells. Today, the cells are implemented in various consumer applications. Equipped with this technology, Kandi will now focus on EV battery packs as well as other appropriate consumer products.”

Q2 2021 Financial Results

Net Revenues and Gross Profit (in USD millions)

2Q21

2Q20

Y/Y%

Net Revenue

$

29.9

$

19.4

53.7

%

Gross Profit

$

6.1

$

3.5

72.4

%

Gross Margin

20.4

%

18.2

%

-

Net revenues of $29.9 million increased 53.7% from the second quarter of 2020. The increase in revenue was primarily due to the growth in sales of Electric Scooters, Electric Self-Balancing Scooters and associated parts. This segment had a higher gross margin than other segments, resulting in 20.4% gross margin in the second quarter of 2021, higher than 18.2% for the same period of 2020.

Operating Income/Loss (in USD millions)

2Q21

2Q20

Y/Y%

Operating Income

$

38.3

$

8.1

373.3

%

Income from Operations

$

44.4

$

11.6

281.7

%

Operating Margin

148.5

%

59.8

%

-

Operating income was $38.3 million, compared with $8.1 million in the second quarter of 2020. The increase was primarily attributable to the gain on disposal of a long-lived asset related to the Jinhua facility relocation.

Net Income (in USD millions)

2Q21

2Q20

Y/Y%

Net Income

$

40.9

$

4.1

909.3

%

Net Income per Weighted Average Common Share

$

0.54

$

0.08

-

Net Income per Weighted Average Diluted Share

$

0.54

$

0.08

-

Net income was $40.9 million, compared with a net income of $4.1 million in the same period of 2020.The greater income was primarily attributable to the gain on disposal of a long-lived asset recognized in the second quarter of 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 Monday, August 9, 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:

  • 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=146195

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
CONDENSED CONSOLIDATED BALANCE SHEETS

June 30,
2021

December 31,
2020

(UNAUDITED)

Current assets

Cash and cash equivalents

$

132,071,957

$

142,078,190

Restricted cash

16,117,526

442,445

Certificate of deposit

54,222,374

-

Accounts receivable (net of allowance for doubtful accounts of $111,512 and $110,269 as of June 30, 2021 and December 31, 2020, respectively)

48,713,854

38,547,137

Inventories

23,232,234

19,697,383

Notes receivable

8,985,422

31,404,630

Other receivables

40,574,115

1,875,245

Prepayments and prepaid expense

16,791,928

13,708,149

Advances to suppliers

13,274,911

36,733,182

Amount due from the Affiliate Company

-

21,742,226

Amount due from related party

-

886,989

TOTAL CURRENT ASSETS

353,984,321

307,115,576

NON-CURRENT ASSETS

Property, plant and equipment, net

81,579,358

65,402,680

Intangible assets, net

2,936,697

3,232,753

Land use rights, net

3,248,223

3,257,760

Construction in progress

6,123,956

16,317,662

Deferred taxes assets

7,852,209

8,964,946

Long term investment

154,921

45,958

Investment in the Affiliate Company

-

28,892,638

Goodwill

29,970,415

29,712,383

Other long term assets

18,012,160

32,307,484

TOTAL NON-CURRENT ASSETS

149,877,939

188,134,264

TOTAL ASSETS

$

503,862,260

$

495,249,840

CURRENT LIABILITIES

Accounts payable

$

31,373,506

$

34,257,935

Other payables and accrued expenses

8,930,573

7,218,395

Short-term loans

250,000

-

Notes payable

232,382

92,445

Income tax payable

11,280,164

1,313,754

Advance receipts

-

38,229,242

Amount due to related party

500,000

500,000

Other current liabilities

4,067,928

2,185,654

TOTAL CURRENT LIABILITIES

56,634,553

83,797,425

NON-CURRENT LIABILITIES

Deferred taxes liability

602,435

3,483,171

Contingent consideration liability

-

3,743,000

Other long-term liabilities

464,763

459,580

TOTAL NON-CURRENT LIABILITIES

1,067,198

7,685,751

TOTAL LIABILITIES

57,701,751

91,483,176

STOCKHOLDER’S EQUITY

Common stock, $0.001 par value; 100,000,000 shares authorized; 77,547,099 and 77,298,499 shares issued and 75,626,155 and 75,377,555 outstanding at June 30,2021 and December 31,2020, respectively

75,626

75,377

Additional paid-in capital

443,717,378

439,549,338

Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at June 30,2021 and December 31,2020, respectively)

7,446,854

(27,079,900

)

Accumulated other comprehensive loss

(5,079,349

)

(8,778,151

)

TOTAL STOCKHOLDERS’ EQUITY

446,160,509

403,766,664

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

503,862,260

$

495,249,840

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

Three Months Ended

Six Months Ended

June 30,
2021

June 30,
2020

June 30,
2021

June 30,
2020

REVENUES FROM UNRELATED PARTIES, NET

$

29,875,835

$

19,436,120

$

45,852,002

$

25,808,544

REVENUES FROM THE AFFILIATE COMPANY AND RELATED PARTIES, NET

-

956

1,587

956

REVENUES, NET

29,875,835

19,437,076

45,853,589

25,809,500

COST OF GOODS SOLD

(23,778,053

)

(15,900,298

)

(35,401,456

)

(21,105,463

)

GROSS PROFIT

6,097,782

3,536,778

10,452,133

4,704,037

OPERATING INCOME (EXPENSE):

Research and development

(3,564,905

)

(1,149,901

)

(25,189,502

)

(1,790,141

)

Selling and marketing

(1,057,517

)

(763,666

)

(2,204,383

)

(1,641,972

)

General and administrative

(5,359,572

)

(3,907,191

)

(9,789,695

)

(6,973,926

)

Gain on disposal of long-lived assets

48,253,667

13,907,574

48,253,667

13,907,574

TOTAL OPERATING INCOME

38,271,673

8,086,816

11,070,087

3,501,535

INCOME FROM OPERATIONS

44,369,455

11,623,594

21,522,220

8,205,572

OTHER INCOME (EXPENSE):

Interest income

974,105

221,792

1,502,697

560,736

Interest expense

(78,069

)

(1,123,056

)

(204,417

)

(2,105,990

)

Change in fair value of contingent consideration

(357,000

)

(929,000

)

-

2,863,000

Government grants

114,402

86,799

349,195

97,898

Gain from sale of equity in the Affiliate Company

33,651

-

17,733,911

-

Share of loss after tax of the Affiliate Company

(4,904

)

(2,978,529

)

(2,584,401

)

(4,081,299

)

Other income, net

3,827,089

1,043,335

4,325,990

1,062,985

TOTAL OTHER INCOME (EXPENSE), NET

4,509,274

(3,678,659

)

21,122,975

(1,602,670

)

INCOME BEFORE INCOME TAXES

48,878,729

7,944,935

42,645,195

6,602,902

INCOME TAX EXPENSE

(7,949,255

)

(3,889,889

)

(8,118,441

)

(4,122,502

)

NET INCOME

40,929,474

4,055,046

34,526,754

2,480,400

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation adjustment

4,874,815

477,734

3,698,802

(3,045,331

)

COMPREHENSIVE INCOME (LOSS)

$

45,804,289

$

4,532,780

$

38,225,556

$

(564,931

)

WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED

75,510,788

53,369,602

75,447,633

52,862,043

NET INCOME PER SHARE, BASIC AND DILUTED

$

0.54

$

0.08

$

0.46

$

0.05

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

Stock issuance and award

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

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

Stock issuance and award

238,600

239

1,374,098

1,374,337

Net income

40,929,474

40,929,474

Foreign currency translation

4,874,815

4,874,815

Balance, June 30, 2021

75,626,155

$

75,626

$

-

$

443,717,378

$

7,446,854

$

(5,079,349

)

$

446,160,509

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

Six Months Ended

June 30,
2021

June 30,
2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

34,526,754

$

2,480,400

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

Depreciation and amortization

4,443,218

4,022,676

Impairments

-

(148,054

)

Deferred taxes

(11,970

)

2,089,505

Share of loss after tax of the Affiliate Company

2,584,401

4,081,299

Gain from equity sale in the Affiliate Company

(17,733,911

)

-

Gain on disposal of long-live assets

(48,253,667

)

(13,907,574

)

Change in fair value of contingent consideration

-

(2,863,000

)

Stock based compensation expense

1,429,456

847,546

Changes in operating assets and liabilities:

Accounts receivable

2,054,930

(1,431,388

)

Inventories

(3,328,120

)

(743,483

)

Other receivables and other assets

(14,040,619

)

(11,248,701

)

Advances to supplier and prepayments and prepaid expenses

20,596,182

(12,586,777

)

Amount due from the Affiliate Company

-

4,129,516

Increase (Decrease) In:

Accounts payable

(1,044,040

)

(282,560

)

Other payables and accrued liabilities

(463,016

)

736,715

Notes payable

(93,273

)

(10,664,922

)

Income tax payable

7,671,740

1,161,312

Net cash used in operating activities

$

(11,661,935

)

$

(34,327,490

)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment, net

(6,565,755

)

(59,670

)

Payment for construction in progress

(1,869,028

)

-

Proceeds from disposal of long-lived assets

23,234,680

34,696,547

Repayments of loan to third party

31,686,168

-

Certificate of deposit

(54,098,335

)

-

Cash received from sales of equity in the Affiliate Company

23,803,268

15,641,886

Long Term Investment

(108,197

)

-

Net cash provided by investing activities

$

16,082,801

$

50,278,763

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term loans

250,000

24,031,625

Repayments of short-term loans

-

(49,769,638

)

Repayments of long-term loans

-

(284,398

)

Proceeds from long-term loans

-

394,116

Net cash provided by (used in) financing activities

$

250,000

$

(25,628,295

)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

$

4,670,866

$

(9,677,022

)

Effect of exchange rate changes

$

997,982

$

(157,062

)

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

$

148,189,483

$

6,678,551

-CASH AND CASH EQUIVALENTS AT END OF PERIOD

132,071,957

3,457,498

-RESTRICTED CASH AT END OF PERIOD

16,117,526

3,221,053

SUPPLEMENTARY CASH FLOW INFORMATION

Income taxes paid

$

373,433

870,082

Interest paid

$

-

641,213

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)

$

2,813,968

-

Increase of other receivable for equity transfer payment of the Affiliate Company

$

23,803,268

-