Kandi Technologies Reports 2023 Financial Results

$123.6 million net revenue hits a three-year high, marking a return to profitability

JINHUA, China, March 14, 2024 (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, 2023.

Full Year 2023 Highlights

  • Total net revenues increased by 4.9% to $123.6 million, from $117.8 million in 2022.
  • As the primary driver of total revenue, off-road vehicles and associated parts sales increased by 51.5% to $107.0 million from $70.6 million in 2022.
  • Gross profit increased by 112% to $41.4 million, from $19.5 million in 2022.
  • Net income was $1.7 million, or $0.02 income per fully diluted share, compared to a net loss of $12.9 million, or $0.17 loss per fully diluted share for 2022.
  • The Company has a strong working capital position. Cash and equivalents, restricted cash, certificate of deposit and notes receivable totaled $252.1 million as of December 31, 2023.

Dr. Xueqin Dong, CEO of Kandi commented, “We concluded the challenging year of 2023, and it’s with great pride that we overcame the challenges in 2023 and made significant strides. In particular, the off-road EVs and related parts sector were the main driver of our record-high revenue over the past three years. In 2023, we developed and launched models such as the all-electric UTV and electric mini golf carts. We acquired Northern Group to expand our sales channels. Moreover, we further strengthened our partnership with Lowe’s, expanding to more than 10 super centers in 2024, thereby broadening our market coverage in North America. We’re proud to return to profitability in 2023, marking an important milestone in our development journey.”

Dr. Dong concluded, “As we move into 2024, we will increase our R&D investment and launch more competitive all-electric off-road vehicle products, demonstrating our confidence in the future development of the company and our commitment to delivering shareholder value. We are poised to capture the burgeoning demand for fuel-to-electric conversion in off-road vehicles. Building on this confidence, we expect significant growth in 2024, aiming to increase the value we offer to our customers and shareholders.”

Full Year 2023 Financial Results

Net Revenues and Gross Profit (in USD millions)

  2023     2022   Y-o-Y%
Net Revenues $123.6   $117.8   4.9%  
Gross Profit $41.4   $19.5   112%  
Gross Margin%   33.5%     16.6%    

In 2023, our net revenues rose to $123.6 million, an approximate 5% increase from 2022, driven by stronger sales of off-road vehicles, notably the gross profit of our new crossover golf carts sold in the U.S. surged 112% to $41.4 million, with gross margin doubling from 16.6% to 33.5%, reflecting a profitable shift in product mix towards higher-margin off-road vehicles.

Operating Loss (in USD millions)

  2023     2022   Y-o-Y%
Operating Expenses   ($54.4)     ($47.2)   15.3%  
Loss from Operations   ($13.1)     ($27.7)   -52.8%  
Operating Margin%   -10.6%     -23.5%    

Operating expenses climbed to $54.4 million from $47.2 million, driven by higher spending on sales and marketing for our higher volume of production exportation to U.S. The operational loss narrowed to $13.1 million, marking an improvement from 2022, primarily attributed to a higher concentration of sales from off-road vehicles with larger gross margin.

Net Income/Loss

    2023   2022   Y-o-Y%  
Net Income (Loss) 
(in USD millions)
$1.7   ($12.9)    
Net Income (Loss) per Share, Basic and Diluted $0.02   ($0.17)    

In 2023, our net income surged to $1.7 million, a remarkable turnaround from the $12.9 million loss in 2022, driven by sustained enhancements in gross profit, consistent with the trends observed in the first three quarters of 2023.

Full Year 2023 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 Friday, March 15, 2024. 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:

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  • Toll-free dial-in number: +1-877-407-3982
  • International dial-in number: + 1-201-493-6780
  • Webcast and replay: https://viavid.webcasts.com/starthere.jsp?ei=1661148&tp_key=bfab9839be

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 New Energy Vehicle Town, 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 and Northern Group, Inc. Zhejiang Kandi Technologies has established itself as one of China’s leading manufacturers of pure electric vehicle parts and off-road vehicles. The Company routinely posts important updates on its website at www.kandivehicle.com.

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
[email protected]

The Blueshirt Group
Mr. Gary Dvorchak, CFA
[email protected]

–Tables Below –

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
    December 31,
2023
    December 31,
2022
 
             
CURRENT ASSETS            
Cash and cash equivalents   $ 33,756,941     $ 84,063,717  
Restricted cash     59,873,127       66,976,554  
Certificate of deposit     33,947,212       81,191,191  
Accounts receivable (net of allowance for doubtful accounts of $2,886,223 and $2,285,386 as of December 31, 2023 and December 31, 2022, respectively)     18,951,745       38,150,876  
Inventories     61,551,268       40,475,366  
Notes receivable     124,473,111       434,461  
Other receivables     6,476,542       11,912,615  
Prepayments and prepaid expense     1,909,094       2,970,261  
Advances to suppliers     2,609,098       3,147,932  
TOTAL CURRENT ASSETS     343,548,138       329,322,973  
                 
NON-CURRENT ASSETS                
Property, plant and equipment, net     98,803,772       97,168,753  
Intangible assets, net     6,395,825       7,994,112  
Land use rights, net     2,754,442       2,909,950  
Construction in progress           199,837  
Deferred tax assets     814,610       1,432,527  
Long-term investment           144,984  
Goodwill     33,146,682       33,178,229  
Other long-term assets     9,993,130       10,630,911  
TOTAL NON-CURRENT ASSETS     151,908,461       153,659,303  
                 
TOTAL ASSETS   $ 495,456,599     $ 482,982,276  
                 
CURRENT LIABILITIES                
Accounts payable   $ 28,744,854     $ 35,321,262  
Other payables and accrued expenses     7,252,814       14,131,414  
Short-term loans     9,072,336       5,569,154  
Notes payable     24,071,461       19,123,476  
Income tax payable     2,130,083       1,270,617  
Other current liabilities     5,402,081       6,089,925  
TOTAL CURRENT LIABILITIES     76,673,629       81,505,848  
                 
NON-CURRENT LIABILITIES                
Long-term loans     8,389,163        
Deferred taxes liability     963,691       1,378,372  
Contingent consideration liability     2,693,000       1,803,000  
Other long-term liabilities     227,024       602,085  
TOTAL NON-CURRENT LIABILITIES     12,272,878       3,783,457  
                 
TOTAL LIABILITIES     88,946,507       85,289,305  
                 
STOCKHOLDER’S EQUITY                
Common stock, $0.001 par value; 100,000,000 shares authorized; 87,532,800 and 77,668,730 shares issued and 87,348,234 and 74,180,171 outstanding at December 31,2023 and December 31,2022, respectively     87,533       77,669  
Less: Treasury stock (184,566 shares with average price of $2.75 and 3,488,559 shares with average price of $2.81 at December 31, 2023 and December 31, 2022, respectively)     (507,013 )     (9,807,820 )
Additional paid-in capital     457,847,155       451,373,645  
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at December 31, 2023 and December 31, 2022, respectively)     (16,332,633 )     (16,339,765 )
Accumulated other comprehensive loss     (36,970,066 )     (28,333,239 )
TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY     404,124,976       396,970,490  
                 
Non-controlling interests     2,385,116       722,481  
TOTAL STOCKHOLDERS’ EQUITY     406,510,092       397,692,971  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 495,456,599     $ 482,982,276  
                 

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
 
    Years Ended  
    December
31, 2023
    December
31, 2022
 
             
REVENUES, NET   $ 123,599,232     $ 117,813,049  
                 
COST OF GOODS SOLD     (82,229,209 )     (98,295,323 )
                 
GROSS PROFIT     41,370,023       19,517,726  
                 
OPERATING EXPENSE:                
Research and development     (4,265,176 )     (6,029,608 )
Selling and marketing     (13,335,950 )     (5,501,475 )
General and administrative     (35,381,496 )     (32,325,889 )
Impairment of goodwill     (496,981 )     (642,665 )
Impairment of long-lived assets     (942,591 )     (2,697,521 )
TOTAL OPERATING EXPENSE     (54,422,194 )     (47,197,158 )
                 
LOSS FROM OPERATIONS     (13,052,171 )     (27,679,432 )
                 
OTHER INCOME (EXPENSE):                
Interest income     9,984,558       6,427,502  
Interest expense     (1,327,341 )     (707,488 )
Change in fair value of contingent consideration     1,803,000       4,196,995  
Government grants     2,017,551       1,639,328  
Other income, net     4,047,074       2,784,561  
TOTAL OTHER INCOME , NET     16,524,842       14,340,898  
                 
INCOME (LOSS) BEFORE INCOME TAXES     3,472,671       (13,338,534 )
                 
INCOME TAX (EXPENSE) BENEFIT     (1,802,904 )     487,510  
                 
NET INCOME (LOSS)     1,669,767       (12,851,024 )
                 
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTERESTS     1,662,635       (727,361 )
                 
NET INCOME (LOSS) ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS     7,132       (12,123,663 )
                 
OTHER COMPREHENSIVE LOSS                
Foreign currency translation adjustment     (8,636,827 )     (28,585,025 )
                 
COMPREHENSIVE LOSS   $ (6,967,060 )   $ (41,436,049 )
                 
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC     78,781,094       75,571,702  
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED     79,902,891       75,571,702  
                 
NET INCOME (LOSS) PER SHARE, BASIC   $ 0.02     $ (0.17 )
NET INCOME (LOSS) PER SHARE, DILUTED   $ 0.02     $ (0.17 )
                 

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
 
    Number of
Outstanding
Shares
    Common
Stock
    Treasury
Stock
    Additional
Paid-in
Capital
    Accumulated
Deficit
    Accumulated
Other
Comprehensive
Income
(Loss
    Non-
controlling
interests
    Total  
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  
Stock issuance and award     283,600       284             746,636                         746,920  
Stock based compensation                       1,231,566                         1,231,566  
Stock buyback                 (7,415,617 )     (84,018 )                       (7,499,635 )
Capital contribution from shareholder                                         1,449,842       1,449,842  
Net loss                             (12,123,663 )           (727,361 )     (12,851,024 )
Foreign currency translation                                   (28,585,025 )           (28,585,025 )
BALANCE AS OF
DECEMBER 31, 2022
    77,668,730     $ 77,669     $ (9,807,820 )   $ 451,373,645     $ (16,339,765 )   $ (28,333,239 )   $ 722,481     $ 397,692,971  
Stock issuance and award     11,685,968       11,686             9,357,192                         9,368,878  
Stock based compensation                       3,476,058                         3,476,058  
Stock buyback                 (507,013 )     (3,731 )                       (510,744 )
Cancellation of the Treasury Stock     (3,488,559 )     (3,489 )     9,807,820       (9,804,331 )                        
Stock option exercise     1,666,661       1,667             3,448,322                         3,449,989  
Net income                             7,132             1,662,635       1,669,767  
Foreign currency translation                                   (8,636,827 )           (8,636,827 )
BALANCE AS OF
DECEMBER 31, 2023
    87,532,800     $ 87,533     $ (507,013 )   $ 457,847,155     $ (16,332,633 )   $ (36,970,066 )   $ 2,385,116     $ 406,510,092  
                                                                 

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
 
    Years Ended  
    December
31, 2023
    December
31, 2022
 
             
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net income (loss)   $ 1,669,767     $ (12,851,024 )
Adjustments to reconcile net (loss) income to net cash provided by operating activities                
Depreciation and amortization     11,913,647       12,427,973  
Impairments     1,439,573       3,340,186  
Provision of allowance for doubtful accounts     656,330       (542,801 )
Deferred taxes     203,236       (461,045 )
Loss from long-term Investment     141,389        
Change in fair value of contingent consideration     (1,803,000 )     (4,196,995 )
Stock award and stock based compensation expense     11,059,801       1,926,376  
                 
Changes in operating assets and liabilities:                
                 
Accounts receivable     10,560,521       (20,965,140 )
Notes receivable     (123,992,862 )     4,726,570  
Inventories     (21,531,323 )     (9,145,298 )
Other receivables and other assets     5,165,337       (4,932,463 )
Advances to supplier and prepayments and prepaid expenses     1,491,762       16,275,678  
                 
Increase (Decrease) In:                
Accounts payable     38,603,301       62,592,477  
Other payables and accrued liabilities     (5,062,494 )     7,842,715  
Notes payable     (32,629,627 )     (24,533,127 )
Income tax payable     954,006       (25,171 )
Net cash (used in) provided by operating activities   $ (101,160,636 )   $ 31,478,911  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchases of property, plant and equipment, net     (13,172,512 )     (3,690,235 )
Payment for construction in progress     (75,185 )     (129,894 )
Certificate of deposit     45,244,390       (31,210,986 )
Acquisition of NGI     282,135        
Net cash provided by (used in) investing activities   $ 32,278,828     $ (35,031,115 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from short-term loans     23,420,534       30,765,776  
Repayments of short-term loans     (19,709,663 )     (28,357,211 )
Repayments of long-term loans     (46,426 )      
Proceeds from long-term loans     8,225,000        
Contribution from non-controlling shareholder           757,981  
Purchase of treasury stock     (510,745 )     (7,499,634 )
Proceeds from exercises stock options, stock awards and other financing     3,449,988        
Net cash provided by (used in) financing activities   $ 14,828,688     $ (4,333,088 )
                 
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH   $ (54,053,120 )   $ (7,885,292 )
Effect of exchange rate changes   $ (3,357,083 )   $ (9,750,444 )
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR   $ 151,040,271     $ 168,676,007  
                 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD   $ 93,630,068     $ 151,040,271  
-CASH AND CASH EQUIVALENTS AT END OF PERIOD     33,756,941       84,063,717  
-RESTRICTED CASH AT END OF PERIOD     59,873,127       66,976,554  
                 
SUPPLEMENTARY CASH FLOW INFORMATION                
Income taxes paid   $ 311,504     $ 350,002  
Interest paid   $ 965,025     $ 345,451  
                 
SUPPLEMENTAL NON-CASH DISCLOSURES:                
Contribution from non-controlling shareholder by inventories, fixed assets and intangible assets   $     $ 393,986  
Common stock issued for settlement of payables related to acquisitions (see Note 19)   $ 1,812,005     $