Kandi Technologies Reports Third Quarter 2013 Financial Results

-Third quarter revenue increased 34.3% YoY to $17.15 Million -Third quarter gross profit increased 27.6% YoY to $4.11 Million -ATV and Go-Kart sales increased significantly in the third quarter

JINHUA, China, Nov. 14, 2013 (GLOBE NEWSWIRE) --- Kandi Technologies, Corp. (the 'Company' or 'Kandi') (Nasdaq:KNDI), today announced its unaudited financial results for the third quarter and nine months ended September 30, 2013.

Financial Highlights:
  • Revenue for the third quarter was $17.15 million, an increase of 34.3% year-over-year from $12.77 million last year
  • In the third quarter, ATV sales significantly grew 101.8% to $3.50 million, Go-Kart sales grew 52.4% to $9.91 million, and EV sales grew 2.5% to $2.85 million as compared to the same period of 2012
  • The Company sold 494 electronic vehicles in Q3, compared to 471 last year
  • Gross profit for the third quarter was $4.11 million, an increase of 27.6% year-over-year from $3.22 million last year
  • Gross margin was 24.0%, compared to 25.3% in the third quarter of 2012
  • GAAP net loss in the third quarter was ($7.69 million) due to a significant increase in the fair value of financial derivatives compared to net income of $0.59 million in the same period last year
  • Net cash flow provided by operating activities was $20.93 million for the nine months ended September 30, 2013 compared to net cash flow used in operating activities of ($13.74) for the same period in 2012

Mr. Xiaoming Hu, Chairman and Chief Executive Officer of Kandi Technologies, commented, "We had a very busy and productive third quarter and were excited about Kandi's several achievements. At the end of July, the Public EV Sharing System in Hangzhou was launched. The first pure EV smart vertical parking and charging facility started its operation and we delivered the first 100 pure EVs for the trial operation of the system. Due to the attack of a typhoon in the Hangzhou area, the system is a bit behind schedule, and as of today, there are two parking/charging facilities completed and in use. There are 30 locations already chosen for building the facilities, of which 18 locations have begun construction. Additionally, Kandi established the new wholly owned subsidiary in Changxing and completed its ownership transfer to the JV Company."

"Given that the long awaited government subsidy policy for EVs is finally in place, we expect that sales of EVs will surge in the next few quarters, especially as the Public EV Sharing Project has progressed well. The trial operation of the Project has been going smoothly and the customers' feedbacks are positive. We remain optimistic about this business model of EV sharing for public transportation and believe it will greatly improve the efficiency of urban transportation and help ease major urban issues in China. We look forward to expanding this concept of public EV sharing into new regions in the near future." concluded by Mr. Hu.

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
         
(UNAUDITED)
         
  Three Months Ended Nine Months Ended
   September 30, 2013 September 30, 2012 September 30, 2013 September 30, 2012
REVENUES, NET $17,145,512 $12,765,694 $43,975,463 $38,182,211
         
COST OF GOODS SOLD (13,032,352) (9,541,687) (33,673,048) (29,829,097)
         
GROSS PROFIT 4,113,160 3,224,007 10,302,415 8,353,114
Research and development (500,864) (630,083) (1,863,020) (2,006,269)
Selling and marketing (102,380) (158,714) (263,414) (331,750)
General and administrative (2,893,935) (940,930) (4,826,622) (2,520,600)
         
INCOME FROM CONTINUING OPERATIONS 615,981 1,494,280 3,349,359 3,494,495
Interest income (expense), net (1,184,282) (76,866) (2,472,377) (133,806)
Change in fair value of financial instruments  (6,864,624) (882,731) (6,956,963) 1,078,795
Government grants 11,077 20,634 60,884 45,942
Investment (loss) income (125,428) (18,259) (165,344) (45,670)
Other income, net 40,647 239,203 217,160 285,805
         
INCOME (LOSS) FROM CONTINUING OPERATION BEFORE INCOME TAXES (7,506,629) 776,261 (5,967,281) 4,725,561
         
INCOME TAX EXPENSE (257,222) (181,743) (502,123) (842,863)
         
INCOME FROM CONTINUING OPERATIONS (7,763,851) 594,518 (6,469,404) 3,882,698
         
DISCONTINUED OPERATION        
         
Loss from discontinued operation (350,320) -- (452,194) --
Gain from disposition of discontinued operation 425,129 -- 425,129 --
NET INCOME (LOSS) FROM DISCONTINUED OPERATION 74,809 -- (27,065) --
         
NET (LOSS) INCOME (7,689,042) 594,518 (6,496,469) 3,882,698
         
OTHER COMPREHENSIVE INCOME        
Foreign currency translation 322,798 (260,114) 1,632,143 2,569,341
         
COMPREHENSIVE (LOSS) INCOME $(7,366,244) $334,404 $(4,864,326) $6,452,039
         
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC 37,020,321 29,909,130 33,965,100 29,068,208
         
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED 37,020,321 31,464,257 33,965,100 30,413,267
          
NET (LOSS) INCOME PER SHARE, BASIC $(0.21) $0.02 $(0.19) $0.13
          
NET (LOSS) INCOME PER SHARE, DILUTED $(0.21) $0.02 $(0.19) $0.13
 
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
     
ASSETS
     
   September 30, 2013 December 31, 2012
  (Unaudited)  
CURRENT ASSETS     
Cash and cash equivalents  $12,448,344 $12,135,096
R Restricted cash  11,384,036 15,835,364
Accounts receivable  17,601,020 33,557,534
Inventories (net of reserve for slow moving inventory of $0 and $56,248 as of September 30, 2013 and December 31, 2012 respectively)  22,850,641 7,630,715
Notes receivable  11,499,348 9,562,429
Other receivables  1,329,421 501,448
Prepayments and prepaid expenses  654,844 563,861
Due from employees  41,217 40,936
Advances to suppliers 11,558,433 4,769,825
Deferred tax -- --
Deposit for acquisition -- 24,397,967
Total Current Assets 89,367,304 108,995,175
      
LONG-TERM ASSETS    
     
Plant and equipment, net 30,842,372 35,725,740
Land use rights, net 14,454,381 14,337,691
Construction in progress -- --
Deferred taxes -- 695
Investment in Joint Venture Company 81,160,925 --
Investment in associated companies 119,987 161,507
Goodwill 322,591 322,591
Intangible assets 680,019 741,591
Total Long-Term Assets 127,580,275 51,289,815
      
TOTAL ASSETS $216,947,579 $160,284,990
 
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
     
LIABILITIES AND STOCKHOLDERS' EQUITY
     
     
      
   September 30, 2013 December 31, 2012
  (Unaudited)  
CURRENT LIABILITIES    
Accounts payable $8,753,990 $8,668,478
Other payables and accrued expenses 2,191,165 3,092,045
Short-term bank loans 34,301,135 32,615,063
Customer deposits 693,363 292,389
Notes payable, net of discount of $0 and $0 as of September 30, 2013 and December 31, 2012 respectively 27,962,740 25,332,088
Deposit for disposal of subsidiary 13,005,170  
Income tax payable 473,835 680,253
Due to employees 11,754 7,132
Due to related party 841,251 841,251
Due to JV company 20,268,557 --
Deferred taxes 35,656 55,166
Financial derivative - liability 4,856,540 1,513,013
Total Current Liabilities 113,395,156 73,096,878
     
LONG-TERM LIABILITIES    
Bond payable -- 12,666,044
Financial derivative - liability 9,995,465 --
Deferred tax 683,752 --
Total Long-Term Liabilities 10,679,217 12,666,044
     
TOTAL LIABILITIES 124,074,373 85,762,922
       
STOCKHOLDERS' EQUITY     
Common stock, $0.001 par value; 100,000,000 shares authorized; 36,978,476 and 31,696,794 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively 36,978 31,697
Additional paid-in capital 66,938,401 43,728,218
Retained earnings (the restricted portion is $2,831,005 and $2,831,005 at September 30, 2013 and December 31, 2012, respectively) 18,763,340 25,259,809
Accumulated other comprehensive income 7,134,487 5,502,344
TOTAL STOCKHOLDERS' EQUITY 92,873,206 74,522,068
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $216,947,579 $160,284,990
 
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
     
     
  Nine Months Ended September 30
  2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net (loss) income  $(6,496,469) $3,882,698
Net (loss) from discontinued operation (27,065) --
Net (loss) income from continuing operation (6,469,404) 3,882,698
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:    
Depreciation and amortization 6,144,086 3,694,917
Deferred taxes 677,912 72,004
Option expense -- 19,053
Change of derivative instrument's fair value 6,956,963 (1,297,854)
Loss in investment in JV and associated company 165,344 45,670
     
Changes in operating assets and liabilities:    
(Increase) Decrease In:    
Accounts receivable 16,665,031 (13,939,987)
Inventories (14,846,384) (7,686,157)
Other receivables and prepaid expenses (805,480) 1,395,899
Due from employees 5,187 173,844
Prepayments and prepaid expenses (6,661,365) (3,158,733)
     
Increase (Decrease) In:    
Accounts payable  (144,929) 5,888,514
Other payables and accrued liabilities  (963,422) (1,957,184)
Customer deposits 388,714 (899,693)
Due to related party -- --
Due to JV company 20,040,119 --
Income tax payable (222,100) 27,318
Net cash (used in) provided by operating activities $20,930,272 $(13,739,691)
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Cash acquired in acquisition -- 112,551
 Purchases of plant and equipment (44,250) (472,696)
 Purchase of construction in progress -- (2,160,338)
 Issuance of notes receivable (1,972,619) (1,010,596)
 Repayments of notes receivable 310,674 23,115,794
 Investment in Joint Venture Company (80,366,213) --
 Disposal of subsidiary 64,292,970  
 Deposit for disposal of subsidiary 12,858,594 --
Assets acquisition, net of deposit  (39,524,103) --
Net cash provided by (used in) investing activities $(44,444,947) $19,584,715

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.                  Ms. Kewa Luo         Phone: 1-212-551-3610         Email: IR@kandigroup.com

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