Kandi Technologies Announces Second Quarter And Six Months 2013 Financial Results

– 2nd quarter revenue increased 9.9% YoY to $12.2 Million – –  2nd quarter gross margin increased to 23.1% from 16.2% for the same period of 2012 –  2nd quarter Operating Income Increased 279.1 % YoY to $0.7 Million – –  EV sales increased 40.0% to $2.0 Million in 2nd quarter – Company's legacy business experienced solid gains in the 2nd quarter

JINHUA, China, Aug. 14, 2013 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the 'Company' or 'Kandi') (Nasdaq:KNDI), today announced its financial results for the second quarter and six months ended June 30, 2013.

Financial Highlights:
  • Revenue for the second quarter grew 9.9% to $12.2 million from $11.1 million last year and revenue in the first half grew 5.5% to $26.8 million from $25.4 as compared to the period the year before;
  • ATV unit sales grew significantly to 3546 units, up 81.5% from 1954 units in the same period last year, while go-kart unit sales jumped 112.4% in the second quarter to 8500 units up from 4001 units in last year's second quarter;
  • Gross margin for the second quarter increased to 23.1% from 16.2% compared to the second quarter of 2012. Gross margin for the first half increased to 23.0% compared to 20.2% for the first half of 2012;
  • Operating income rose 279.1% to $0.7 million compared with $0.2 million in the same period of last year;
  • Non-GAAP adjusted net income in the second quarter, excluding the stock award expense and the change in the fair value of warrants, was $73,785, a significant change from a net loss of $99,273 for the same period of 2012
  • On a GAAP basis, net loss for the second quarter was ($1.0 million), decreased from a net income of $0.9 million for the same period of last year due to the change in the fair value of warrants.  

Mr. Xiaoming Hu, Chairman and Chief Executive Officer of Kandi Technologies, commented, "We are very satisfied with solid quarterly financial results, our strong sales of ATV & Go-kart and gross margin improvement over the quarter. Kandi has achieved a great progress in various EV projects, such as the government approval for the first Kandi-Geely co-developed pure electric sedan 'JL7001BEV', and the construction of the first pure EV smart vertical parking and charging facility for the initial launch of Hangzhou public EV sharing system. The Company recently successfully delivered the first 100 Kandi-Geely Co-developed Pure EVs. Additionally, we completed China's First Full Scale Production and Assembly Line Specialized for Pure EV. These have provided the foundation for the deployment of more EVs in the second half of 2013."

"Given the challenging capital market environment, Kandi was proud to raise $26.4 million through a registered direct placement at the end of June. This will allow us to accelerate our market penetration in various EV projects and different regional markets. In light of our partnership with Geely Auto (Hong Kong Stock Exchange: 175) so far, we have built a strong cooperative team together to develop China's new growth trends for the pure EV sector. We remain optimistic about our business and growth this year. " Mr. Hu concluded.

KANDI TECHNOLOGIES, CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) 
(UNAUDITED)
         
         
  Three Months Ended Six Months Ended
   June 30, 2013 June 30, 2012 June 30, 2013 June 30, 2012
REVENUES, NET $12,157,827 $11,060,976 $26,820,348 $25,416,517
         
COST OF GOODS SOLD (9,350,206) (9,272,719) (20,640,696) (20,287,410)
         
GROSS PROFIT 2,807,621 1,788,257 6,179,652 5,129,107
Research and development (672,491) (620,090) (1,362,156) (1,376,186)
Selling and marketing (71,420) (79,201) (161,034) (173,036)
General and administrative (1,332,279) (896,050) (2,025,243) (1,579,670)
         
INCOME FROM CONTINUING OPERATIONS 731,431 192,916 2,631,219 2,000,215
Interest income (expense), net (617,601) (188,542) (1,287,810) (56,940)
Change in fair value of financial instruments  (1,082,735) 1,018,576 (92,339) 1,961,526
Government grants 49,807 25,308 49,807 25,308
Investment (loss) income (25,893) (14,010) (39,916) (27,411)
Other income, net 54,148 12,134 176,513 46,602
         
INCOME (LOSS) BEFORE INCOME TAXES (890,843) 1,046,382 1,437,474 3,949,300
         
INCOME TAX EXPENSE (153,457) (141,154) (244,901) (661,120)
         
NET INCOME (1,044,300) 905,228 1,192,573 3,288,180
         
OTHER COMPREHENSIVE INCOME      
Foreign currency translation 724,430 2,434,039 1,309,345 2,829,455
         
COMPREHENSIVE INCOME (LOSS) $(319,870) $3,339,267 $2,501,918 $6,117,635
         
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC 32,546,877 29,845,122 32,427,538 28,647,746
         
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED 32,546,877 31,166,260 32,676,702 29,990,967
          
NET (LOSS) INCOME PER SHARE, BASIC $(0.03) $0.03 $0.04 $0.11
          
NET (LOSS) INCOME PER SHARE, DILUTED $(0.03) $0.03 $0.04 $0.11
 
 
KANDI TECHNOLOGIES, CORP. 
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
     
ASSETS    
    June 30, December 31,
   2013 2012
  (Unaudited)  
CURRENT ASSETS    
Cash and cash equivalents $10,082,212 $12,135,096
R Restricted cash 11,316,337 15,835,364
Accounts receivable 25,089,825 33,557,534
Inventories (net of reserve for slow moving inventory of $0 and $56,248 as of June 30, 2013 and December 31, 2012 respectively) 17,705,983 7,630,715
Notes receivable 11,743,310 9,562,429
Other receivables 498,551 501,448
Prepayments and prepaid expenses 1,180,276 563,861
Due from employees 45,716 40,936
Advances to suppliers 31,638,766 4,769,825
Deferred tax 3,819 --
Deposit for acquisition 39,227,885 24,397,967
Total Current Assets 148,532,680 108,995,175
      
LONG-TERM ASSETS    
Plant and equipment, net 32,451,615 35,725,740
Land use rights, net 14,456,958 14,337,691
Construction in progress 53,657 --
Deferred taxes -- 695
Investment in Joint Venture Company 80,788,464  
Investment in associated companies 135,019 161,507
Goodwill 322,591 322,591
Intangible assets 700,543 741,591
Total Long-Term Assets 128,908,847 51,289,815
      
TOTAL ASSETS $277,441,527 $160,284,990
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
   June 30, December 31,
   2013 2012
  (Unaudited)  
CURRENT LIABILITIES    
Accounts payable $10,651,912 $8,668,478
Other payables and accrued expenses 3,628,659 3,092,045
Short-term bank loans 33,289,163 32,615,063
Customer deposits 49,065 292,389
Notes payable, net of discount of $0 and $0 as of June 30, 2013 and December 31, 2012 respectively 68,842,313 25,332,088
Income tax payable 348,140 680,253
Due to employees 19,716 7,132
Due to related party 4,881,198 841,251
deposit for disposal of subsidiary 60,599,205  
Deferred taxes -- 55,166
Financial derivative - liability 928,477 1,513,013
Total Current Liabilities 183,237,848 73,096,878
      
LONG-TERM LIABILITIES    
Bond payable 12,927,830 12,666,044
Deferred taxes 385,397 --
Total Long-Term Liabilities 13,313,227 12,666,044
     
TOTAL LIABILITIES 196,551,075 85,762,922
     
STOCKHOLDERS' EQUITY     
Common stock, $0.001 par value; 100,000,000 shares authorized; 32,592,440 and 31,696,794 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively 32,592 31,697
Additional paid-in capital 47,593,789 43,728,218
Retained earnings (the restricted portion is $2,831,005 and $2,831,005 at June 30, 2013 and December 31, 2012, respectively) 26,452,382 25,259,809
Accumulated other comprehensive income 6,811,689 5,502,344
TOTAL STOCKHOLDERS' EQUITY 80,890,452 74,522,068
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $277,441,527 $160,284,990
 
 
KANDI TECHNOLOGIES, CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
     
  Six Months Ended June 30
  2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income (loss) $1,192,573 $3,288,180
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:  
Depreciation and amortization 4,245,026 2,470,911
Deferred taxes 337,149 (24,219)
Option expense -- 19,053
Change of derivative instrument's fair value 92,339 (1,961,526)
Loss in investment in JV and associated company 39,916 27,411
     
Changes in operating assets and liabilities:    
(Increase) Decrease In:    
Accounts receivable 9,073,693 (11,844,213)
Inventories (9,822,727) (6,826,372)
Other receivables and prepaid expenses 13,044 1,701,831
Due from employees 8,421 185,624
Prepayments and prepaid expenses (27,114,014) 30,204
     
Increase (Decrease) In:    
Accounts payable  1,787,019 3,484,295
Other payables and accrued liabilities  475,451 (1,990,887)
Customer deposits (246,983) (988,344)
Due to related party 4,001,319 --
Income tax payable (342,863) (26,411)
Net cash (used in) provided by operating activities $(16,260,637) $(12,454,463)
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Cash acquired in acquisition -- 112,551
Purchases of plant and equipment (54,451) (452,393)
Purchase of construction in progress (53,144) (2,091,168)
Issuance of notes receivable (1,964,278) --
Repayments of notes receivable -- 23,123,103
Investment in Joint Venture Company (80,026,377) --
Deposit for disposal of subsidiary 60,019,783 --
Deposit for acquisition (14,188,677) --
Net cash provided by (used in) investing activities $(36,267,144) $20,692,093
     
     
  Six Months Ended June 30
  2013 2012
CASH FLOWS FROM FINANCING ACTIVITIES:    
Restricted cash $4,799,980 $(20,103,142)
Proceeds from short-term bank loans 22,407,385 14,749,822
Repayments of short-term bank loans (22,407,385) (14,781,440)
Proceeds from notes payable 68,184,073 15,160,857
Repayments of notes payable (25,608,441) (5,883,855)
Stock market financing -- --
Warrant exercise 3,848,134 --
Option exercise & other financing 38,100 67,403
Common stock issued for acquisition, net of Cost of Capital -- 3,740,423
Net cash provided by (used in) financing activities 51,261,846 (7,049,932)
     
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,265,935) 1,187,698
Effect of exchange rate changes on cash (786,949) 497,098
Cash and cash equivalents at beginning of period 12,135,096 2,294,352
CASH AND CASH EQUIVALENTS AT END OF PERIOD $10,082,212 $3,979,148
     
SUPPLEMENTARY CASH FLOW INFORMATION    
Income taxes paid $587,765 $687,530
Interest paid $1,964,649 $1,316,591
Issuance of Common Stock for Acquisition -- 8,616,416

About Kandi Technologies Group, Inc.

Kandi Technologies Group, Inc. (Nasdaq:KNDI), headquartered in Jinhua, Zhejiang Province, is engaged in the research and development, manufacturing and sales of various vehicles. Kandi has established itself as the one of the world's largest manufacturer of pure electric vehicles (EVs), Go-Kart vehicles, and tricycle and utility vehicles (UTVs), among others. More information can be viewed at its corporate website is http://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 securities laws, the Company does not assume a duty to update these forward-looking statements.
CONTACT: Kandi Technologies Group, Inc.                  China:         Email: IR@kandigroup.com         Phone: 86-579-82239856                  U.S.A.:         Email: IR@kandigroup.com         Phone: 1-212-551-3610