Kandi Technologies Reports Third Quarter 2023 Financial Results

– Product Transformation Initiative Driving Profit Growth

– Nine-month Net Income of $6.3 Million, Diluted EPS of $0.08

JINHUA, China, Nov. 08, 2023 (GLOBE NEWSWIRE) — Kandi Technologies Group, Inc. (the “Company”, “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the third quarter of 2023.

Third Quarter and Nine Months 2023 Financial Highlights

Third quarter total revenues of $36.4 million increased by 8.2% year-over-year.

  • Nine-month revenues of $95.2 million increased by 19.9% year-over-year.
  • Net income for the nine months was $6.3 million, or $0.08 income per fully diluted share, compared to a net loss of $2.4 million, or $0.03 loss per fully diluted share for the same period of 2022.
  • Cash and cash equivalents, restricted cash, and certificate of deposit totaled $244.5 million as of September 30, 2023.

Dr. Xueqin Dong, CEO of Kandi, commented, “We are pleased to see that, following a turnaround from losses to profits in the first half of 2023, the company was profitable in the quarter. Comparing to the first nine months of last year, key metrics grew significantly, with increased sales, higher net income, and a notable improvement in gross profit. This achievement highlights our ongoing commitment to delivering exceptional value to our customers. Our strategic adjustments in recent years paved the way for this positive performance in the all-electric off-road vehicle market. Recently, we showcased our new electric off-road vehicle products at the Mid-States Rendezvous and received positive feedback, which has further solidified our market presence across various channels.”

Dr. Dong continued, “Looking ahead to 2024, our primary focus is to increase our market share in the North American market. Kandi’s dedication to innovation and quality places us in a strong position to capitalize on the growing demand for fully electric off-road vehicles in the region, presenting significant market potential and opportunities for sustained growth. We are confident that our sales and production in 2024 will grow substantially compared to those of this year.”

Financial Results for the Third Quarter and the First Nine Months of 2023

Net Revenues and Gross Profit (in USD millions)

Q3 2023 2022 Y-o-Y%
Net Revenues $36.4 $33.7 +8.2%
Gross Profit $10.9 $6.4 +71.4%
Gross Margin% 30.0% 18.9%

Nine Months Ending Sep 30 2023 2022 Y-o-Y%
Net Revenues $95.2 $79.4 +19.9%
Gross Profit $32.7 $11.5 +184.8%
Gross Margin% 34.3% 14.5%  

During the first nine months of 2023, net revenues grew 19.9%, reaching $95.2 million, fueled by rapid market acceptance of our fully-electric off-road vehicles and related components. Furthermore, gross margin improved compared to the previous year, due to the better profitability of fully-electric off-road vehicles, particularly crossover golf carts.

Operating Income/Loss (in USD millions)

Q3 2023 2022 Y-o-Y%
Operating Expenses ($14.5) ($8.6) +69.4%
Loss from Operations ($3.6) ($2.2) +63.7%
Operating Margin% (9.8%) (6.5%)

Nine Months Ending Sep 30 2023 2022 Y-o-Y%
Operating Expenses ($38.7) ($25.7) +51.0%
Loss from Operations ($6.1) ($14.2) -57.3%
Operating Margin% (6.4%) (17.9%)  

During the nine months, Operating expenses rose to $38.7 million from $25.7 million in the same period of 2022, reflecting investment in the off-road EV opportunity in the U.S. Growing expenditures in sales, marketing, and general administration are directly linked to expanding exports to the U.S. market.

Net Income/Loss (in USD millions)

Q3 2023 2022 Y-o-Y%
Net Income $1.3 $1.1 +19.0%
Net Income per Share, Basic and Diluted $0.02 $0.01

Nine Months Ending Sep 30 2023 2022 Y-o-Y%
Net Income (loss) $6.3 ($2.4) NM
Net Income (loss) per Share, Basic and Diluted $0.08 ($0.03)  

Net income of the first nine months reached $6.3 million, turning from a net loss in the same period in 2022, mainly due to higher gross profit from increased sales of high-margin off-road vehicles resulting from the product transformation strategy.

Third Quarter 2023 Conference Call Details

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The Company has scheduled a conference call and live webcast to discuss its financial results at 8:00 A.M. Eastern Time (9:00 P.M. Beijing Time) on Wednesday, November 8, 2023. 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://viavid.webcasts.com/starthere.jsp?ei=1642510&tp_key=32e2677025

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
[email protected]

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

– Tables Below –

             
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
             
    September 30,
2023
    December 31,
2022
 
    (Unaudited)        
CURRENT ASSETS            
Cash and cash equivalents   $ 72,900,121     $ 84,063,717  
Restricted cash     61,957,395       66,976,554  
Certificate of deposit     109,676,181       81,191,191  
Accounts receivable (net of allowance for doubtful accounts of $2,795,798 and $2,285,386 as of September 30, 2023 and December 31, 2022, respectively)     16,350,519       38,150,876  
Inventories     57,860,989       40,475,366  
Notes receivable     41,129       434,461  
Other receivables     11,068,946       11,912,615  
Prepayments and prepaid expense     1,689,174       2,970,261  
Advances to suppliers     1,540,949       3,147,932  
TOTAL CURRENT ASSETS     333,085,403       329,322,973  
                 
NON-CURRENT ASSETS                
Property, plant and equipment, net     98,754,578       97,168,753  
Intangible assets, net     5,561,878       7,994,112  
Land use rights, net     2,690,181       2,909,950  
Construction in progress     36,652       199,837  
Deferred tax assets     1,427,290       1,432,527  
Long-term investment     137,095       144,984  
Goodwill     31,193,706       33,178,229  
Other long-term assets     9,756,037       10,630,911  
TOTAL NON-CURRENT ASSETS     149,557,417       153,659,303  
                 
TOTAL ASSETS   $ 482,642,820     $ 482,982,276  
                 
CURRENT LIABILITIES                
Accounts payable   $ 34,475,667     $ 35,321,262  
Other payables and accrued expenses     8,364,215       14,131,414  
Short-term loans     9,065,350       5,569,154  
Notes payable     22,129,999       19,123,476  
Income tax payable     688,633       1,270,617  
Other current liabilities     5,273,881       6,089,925  
TOTAL CURRENT LIABILITIES     79,997,745       81,505,848  
                 
NON-CURRENT LIABILITIES                
Long-term loans     8,225,000        
Deferred taxes liability     1,172,820       1,378,372  
Contingent consideration liability           1,803,000  
Other long-term liabilities     410,182       602,085  
TOTAL NON-CURRENT LIABILITIES     9,808,002       3,783,457  
                 
TOTAL LIABILITIES     89,805,747       85,289,305  
                 
STOCKHOLDER’S EQUITY                
Common stock, $0.001 par value; 100,000,000 shares authorized; 84,997,369 and 77,668,730 shares issued and 84,997,369 and 74,180,171 outstanding at September 30,2023 and December 31,2022, respectively     84,997       77,669  
Less: Treasury stock (null shares and 3,488,559 shares with average price of $2.81 at September 30, 2023 and December 31, 2022 )           (9,807,820 )
Additional paid-in capital     450,242,032       451,373,645  
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at September 30, 2023 and December 31, 2022, respectively)     (11,771,861 )     (16,339,765 )
Accumulated other comprehensive loss     (48,131,857 )     (28,333,239 )
TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY     390,423,311       396,970,490  
                 
Non-controlling interests     2,413,762       722,481  
TOTAL STOCKHOLDERS’ EQUITY     392,837,073       397,692,971  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 482,642,820     $ 482,982,276  
                 
See accompanying notes to unaudited condensed consolidated financial statements

             
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
             
    Three Months Ended     Nine Months Ended  
    September 30,
2023
    September 30,
2022
    September 30,
2023
    September 30,
2022
 
                         
REVENUES FROM UNRELATED PARTIES, NET   $ 36,426,201     $ 33,673,201     $ 95,241,648     $ 79,405,788  
REVENUES FROM THE FORMER AFFILIATE COMPANY AND RELATED PARTIES, NET                        
                                 
REVENUES, NET     36,426,201       33,673,201       95,241,648       79,405,788  
                                 
COST OF GOODS SOLD     (25,507,180 )     (27,304,038 )     (62,558,825 )     (67,930,595 )
                                 
GROSS PROFIT     10,919,021       6,369,163       32,682,823       11,475,193  
                                 
OPERATING EXPENSE:                                
Research and development     (917,893 )     (1,433,649 )     (2,671,435 )     (3,828,078 )
Selling and marketing     (4,152,246 )     (1,440,995 )     (8,760,490 )     (3,807,222 )
General and administrative     (9,457,877 )     (5,686,233 )     (25,855,648 )     (18,016,843 )
Impairment of goodwill     7,539             (500,064 )      
Impairment of long-lived assets     14,299             (948,438 )      
TOTAL OPERATING EXPENSE     (14,506,178 )     (8,560,877 )     (38,736,075 )     (25,652,143 )
LOSS FROM OPERATIONS     (3,587,157 )     (2,191,714 )     (6,053,252 )     (14,176,950 )
OTHER INCOME (EXPENSE):                                
Interest income     1,927,494       2,138,130       5,982,400       4,739,208  
Interest expense     (354,999 )     (177,417 )     (722,608 )     (463,994 )
Change in fair value of contingent consideration           434,995       1,803,000       2,733,995  
Government grants     667,944       829,539       1,478,296       1,536,856  
Other income, net     2,611,239       536,726       3,685,019       2,954,036  
TOTAL OTHER INCOME , NET     4,851,678       3,761,973       12,226,107       11,500,101  
INCOME (LOSS) BEFORE INCOME TAXES     1,264,521       1,570,259       6,172,855       (2,676,849 )
INCOME TAX BENEFIT (EXPENSE)     12,007       (497,211 )     86,330       255,232  
NET INCOME (LOSS)     1,276,528       1,073,048       6,259,185       (2,421,617 )
LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS     407,626       694,029       1,691,281       752,691  
NET INCOME (LOSS) ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS     868,902       379,019       4,567,904       (3,174,308 )
OTHER COMPREHENSIVE LOSS                                
Foreign currency translation adjustment     (2,102,246 )     (20,932,870 )     (19,798,618 )     (39,889,289 )
COMPREHENSIVE LOSS   $ (825,718 )   $ (19,859,822 )   $ (13,539,433 )   $ (42,310,906 )
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC     79,174,343       75,741,399       75,931,247       75,962,899  
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED     81,234,002       75,885,630       77,645,533       76,061,190  
NET INCOME (LOSS) PER SHARE, BASIC   $ 0.02     $ 0.01     $ 0.08     $ (0.03 )
NET INCOME (LOSS) PER SHARE, DILUTED   $ 0.02     $ 0.01     $ 0.08     $ (0.03 )
                                 
See accompanying notes to unaudited condensed consolidated financial statements

                                                 
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
Earning
(Deficit)
    Accumulated
Other
Comprehensive
Income
    Non-controlling
interests
    Total  
Balance, 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     25,000       25             92,925                         92,950  
Stock buyback                 (1,570,324 )     (13,236 )                       (1,583,560 )
Capital contribution from shareholder                                         1,198,398       1,198,398  
Net loss                             (1,616,056 )           (2,957 )     (1,619,013 )
Foreign currency translation                                   1,009,811             1,009,811  
                                                                 
Balance, March 31, 2022     77,410,130     $ 77,410     $ (3,962,527 )   $ 449,559,150     $ (5,832,158 )   $ 1,261,597     $ 1,195,441     $ 442,298,913  
Stock issuance and award     238,600       239             584,331                         584,570  
Stock buyback                 (1,974,490 )     (22,578 )                       (1,997,068 )
Net income (loss)                             (1,937,271 )           61,619       (1,875,652 )
Foreign currency translation                                   (19,966,230 )     (63,460 )     (20,029,690 )
                                                                 
Balance, June 30, 2022     77,648,730     $ 77,649     $ (5,937,017 )   $ 450,120,903     $ (7,769,429 )   $ (18,704,633 )     1,193,600     $ 418,981,073  
Stock issuance and award     10,000       10             22,290                         22,300  
Stock based compensation                             250,673                               250,673  
Stock buyback                 (911,714 )     (12,872 )                       (924,586 )
Capital contribution from shareholder                                         337,557       337,557  
Net income (loss)                             379,019             694,029       1,073,048  
Foreign currency translation                                   (20,932,870 )     (66,006 )     (20,998,876 )
                                                                 
Balance, September 30, 2022     77,658,730     $ 77,659     $ (6,848,731 )   $ 450,380,994     $ (7,390,410 )   $ (39,637,503 )     2,159,180     $ 398,741,189  

    Number
of
Outstanding
Shares
    Common
Stock
    Treasury
Stock
    Additional
Paid-in
Capital
    Accumulated
Earning
(Deficit)
    Accumulated
Other
Comprehensive
Income
    Non-controlling
interests
    Total  
Balance, 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     10,000       10             22,290                         22,300  
Stock based compensation                       980,893                         980,893  
Net income (loss)                             (29,110 )           624,567       595,457  
Foreign currency translation                                   1,582,687             1,582,687  
                                                                 
Balance, March 31, 2023     77,678,730     $ 77,679     $ (9,807,820 )   $ 452,376,828     $ (16,368,875 )   $ (26,750,552 )   $ 1,347,048     $ 400,874,308  
Stock issuance and award     820,000       820             2,706,780                         2,707,600  
Stock based compensation                       980,893                         980,893  
Cancellation of the Treasury Stock     (3,488,559 )     (3,489 )     9,807,820       (9,804,331 )                        
Net income                             3,728,112             659,088       4,387,200  
Foreign currency translation                                   (19,279,059 )           (19,279,059 )
                                                                 
Balance, June 30, 2023     75,010,171     $ 75,010     $     $ 446,260,170     $ (12,640,763 )   $ (46,029,611 )   $ 2,006,136     $ 389,670,942  
Stock issuance and award     9,987,198       9,987             2,974,599                         2,984,586  
Stock based compensation                       1,007,263                         1,007,263  
Cancellation of the Treasury Stock                                                        
Net income                             868,902             407,626       1,276,528  
Foreign currency translation                                   (2,102,246 )           (2,102,246 )
                                                                 
Balance, September 30, 2023     84,997,369     $ 84,997     $     $ 450,242,032     $ (11,771,861 )   $ (48,131,857 )   $ 2,413,762     $ 392,837,073  
                                                                 
See accompanying notes to unaudited condensed consolidated financial statements.

       
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
       
    Nine Months Ended  
    September 30, 2023     September 30, 2022  
             
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net income (loss)   $ 6,259,185     $ (2,421,617 )
Adjustments to reconcile net (loss) income to net cash provided by operating activities                
Depreciation and amortization     8,952,016       9,512,970  
Impairments     1,448,502        
Provision of allowance for doubtful accounts     658,707       4,220  
Deferred taxes     (200,316 )     (116,206 )
Change in fair value of contingent consideration     (1,803,000 )     (2,733,995 )
Stock award and stock based compensation expense     8,716,981       913,288  
                 
Changes in operating assets and liabilities:                
                 
Accounts receivable     11,846,717       (20,932,970 )
Notes receivable     744,574       1,927,621  
Inventories     (18,498,142 )     (13,183,546 )
Other receivables and other assets     157,318       (10,264,805 )
Advances to supplier and prepayments and prepaid expenses     2,710,917       12,405,615  
                 
Increase (Decrease) In:                
Accounts payable     34,021,872       46,796,615  
Other payables and accrued liabilities     (4,480,660 )     4,951,022  
Notes payable     (23,509,907 )     (13,574,849 )
Income tax payable     (367,848 )     (60,313 )
Net cash provided by operating activities   $ 26,656,916     $ 13,223,050  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchases of property, plant and equipment, net     (13,103,838 )     (1,674,445 )
Payment for construction in progress     (75,651 )     (278,777 )
(Loan to) Repayment from third party           (4,545,386 )
Certificate of deposit     (34,143,774 )     (22,726,928 )
Net cash used in investing activities   $ (47,323,263 )   $ (29,225,536 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from short-term loans     12,153,286       20,642,224  
Repayments of short-term loans     (8,398,565 )     (15,987,912 )
Proceeds from long-term loans     8,225,000        
Contribution from non-controlling shareholder           772,716  
Purchase of treasury stock           (4,505,213 )
Net cash provided by financing activities   $ 11,979,721     $ 921,815  
                 
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH   $ (8,686,626 )   $ (15,080,671 )
Effect of exchange rate changes   $ (7,496,129 )   $ (13,710,508 )
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   $ 134,857,516     $ 139,884,828  
-CASH AND CASH EQUIVALENTS AT END OF PERIOD     72,900,121       99,029,118  
-RESTRICTED CASH AT END OF PERIOD     61,957,395       40,855,710  
                 
SUPPLEMENTARY CASH FLOW INFORMATION                
Income taxes paid   $ 149,585     $ 274,037  
Interest paid   $ 384,012     $ 225,479  
                 
SUPPLEMENTAL NON-CASH DISCLOSURES:                
Contribution from non-controlling shareholder by inventories, fixed assets and intangible assets   $     $ 393,986  
                 
See accompanying notes to unaudited condensed consolidated financial statements