News Column

Kandi Technologies Reports First Quarter 2014 Financial Results and Revenue for EV Sales More than Tripled

May 12, 2014

Newsfile Corp.

-Q1 Revenue Increased 174.0% YoY to $40.2 Million-

-EV Sales Rose 384.5% YoY to $8.4 Million-  

Jinhua, China--(Newsfile Corp. - May 12, 2014) - Kandi Technologies Group, Inc. (NASDAQ GS: KNDI) (the "Company" or "Kandi"), today reported its financial results for the first quarter ended March 31, 2014.

For the three months ended March 31, 2014:



Revenues grew 174.0% to $40.2 million from $14.7 million in the first quarter of 2013



Electric Vehicle ("EV") products revenues increased significantly by 384.5% to $8.4 million from $1.7 million in the first quarter of 2013



Revenue for EV Parts including battery packs was $25.0 million in the first quarter of 2014. The Company started this business in the first quarter of 2014.



All-terrain Vehicle ("ATV") sales grew slightly to $3.3 million from $2.5 million in the first quarter of 2013



Gross profit grew 44.1% to $4.9 million from $3.4 million in the first quarter of 2013



The income for the JV Company (Kandi Electric Vehicles Group Co., Ltd., a joint venture company established by the Company’s wholly owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. with Shanghai Maple Guorun Automobile Co., Ltd. ("Shanghai Maple"), a 99%-owned subsidiary of Geely Automobile Holdings Ltd.) was $1.7 million and the profit for Kandi was $0.8 million in the first quarter of 2014



GAAP net loss for the first quarter was $14.1 million compared to a net income of $2.2 million in the same period last year due to changes relating to the fair value of financial derivatives resulted from the relatively high stock price during the first quarter period, stock awards to management, and increases in our general & administrative expenses



Non-GAAP net income*, excluding the effects of the stock award expense and the change of the fair value of financial derivatives, was $1.6 million, an increase of 30.4% compared with $1.3 million in the first quarter of 2013



Cash, cash equivalents totaled $20.5 million for the first quarter, a 60.2% increase from $12.8 million at the end of 2013

*Non-GAAP net income in this context means the net income excluding option-related expenses, stock award expenses, and the effects caused by the change of fair value of financial derivatives. We furnish non-GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations.

Mr. Xiaoming Hu, Chairman and CEO of the Company commented, "During the first quarter, Kandi has once again experienced the significant growth in EV related business sales. We are satisfied with the financial results we have achieved in the slowest quarter of the year. The Public EV Sharing Project in Hangzhou is making modest progress and several other cities have approached us to discuss implementation of the project in their cities. We are very confident about the continuous high growth of our EV business. Through our partnership with Geely and our advanced production capabilities, we soon expect to become the leading fully integrated provider of pure EVs in China."

KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) ANDCOMPREHENSIVE

INCOME (LOSS)



 

 Three Months Ended 


 

 March 31, 2014    March 31, 201 


REVENUES, NET

$  40,171,304 $  14,662,521 


 

      


COST OF GOODS SOLD

  (35,310,895)  (11,290,490)


 

      


GROSS PROFIT

  4,860,409   3,372,031 


Research and development

  (1,172,257) (689,665)


Selling and marketing

 (71,257) (89,614)


General and administrative

  (6,470,766) (692,964)


 

      


(LOSS) INCOME FROM CONTINUING OPERATIONS

  (2,853,871)  1,899,788 


Interest (expense) income, net

 (471,180) (670,208)


Change in fair value of financial instruments

  (12,314,171) 990,395 


Government grants

 -  - 


Share of (loss) in associated companies

 (15,805) (14,023)


Share of profit after tax of JV

  1,728,356  - 


Other income, net

 59,580  122,365 


 

      


(LOSS) INCOME BEFORE INCOME TAXES

  (13,867,091)  2,328,317 


 

      


INCOME TAX EXPENSE

 (219,069) (91,444)


 

      


NET (LOSS) INCOME

  (14,086,160)  2,236,873 


 

      


OTHER COMPREHENSIVE INCOME

      


Foreign currency translation

  (1,211,116) 584,915 


 

      


 

      


COMPREHENSIVE INCOME (LOSS)

$  (15,297,276)$  2,821,788 


 

      


WEIGHTED AVERAGE SHARES OUTSTANDINGBASIC

  39,597,785   32,298,832 


 

      


WEIGHTED AVERAGE SHARES OUTSTANDINGDILUTED

  39,597,785   32,539,339 


 

      


NET (LOSS) INCOME PER SHARE, BASIC

$  (0.36)$  0.07 


 

      


NET (LOSS) INCOME PER SHARE, DILUTED

$  (0.36)$  0.07 


 

      


KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS



 

 March 31,  December 31, 


 

 2014  2013 


 

 (Unaudited)    


CURRENT ASSETS

      


Cash and cash equivalents

$  20,498,275 $  12,762,369 


Restricted cash

 -  1,636 


Accounts receivable

  22,674,057   31,370,862 


         Inventories (net of provision for slow moving inventory of $349,850 and $352,734 as of March 31, 2014 and December 31, 2013, respectively

  13,646,998   9,187,714 


Notes receivable

  35,078,977   13,794,094 


Other receivables

 705,771  556,904 


Prepayments and prepaid expenses

 461,395  505,513 


Due from employees

 42,759  34,272 


Advances to suppliers

  16,470,855   8,867,074 


Amount due from JV Company, net

  21,625,758   2,917,592 


Deferred tax

 252,684  13,706 


 

      


         Total Current Assets

  131,457,529   80,011,736 


 

      


LONG-TERM ASSETS

      


 

      


Plant and equipment, net

  27,945,044   29,333,516 


Land use rights, net

  14,246,146   14,453,191 


Construction in progress

 16,222  16,356 


Deferred taxes

 -  81,076 


Investment in associated company

 80,356  96,838 


Investment in JV Company

  80,399,179   79,331,930 


Goodwill

 322,591  322,591 


Intangible assets

 638,972  659,496 


         Total Long-Term Assets

  123,648,510   124,294,994 


 

      


TOTAL ASSETS

$  255,106,039 $  204,306,730 


 

      


KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS



 

 March 31,  December 31, 


 

 2014  2013 


 

 (Unaudited)    


CURRENT LIABILITIES

      


Accounts payable

$  44,089,700 $  22,843,143 


Other payables and accrued expenses

  3,332,258   2,422,613 


Short-term bank loans

  33,742,132   34,020,281 


Customer deposits

 135,398  44,404 


Notes payable

  14,599,961   16,683,023 


Income tax payable

 542,224   1,362,828 


Due to employees

 9,645  10,297 


Due to related party

 -  - 


Deferred taxes

 21,626  - 


Financial derivate - liability

  21,332,440   9,256,827 


             Total Current Liabilities

  117,805,384   86,643,416 


 

      


LONG-TERM LIABILITIES

      


Deferred tax

  1,194,424   1,009,477 


Bond payable

  12,977,743   13,084,724 


Financial derivatives - liability

  4,014,614   15,042,994 


             Total Long-Term Liabilities

  18,186,781   29,137,195 


 

      


         TOTAL LIABILITIES

  135,992,165   115,780,611 


 

      


 

      


STOCKHOLDERS' EQUITY

      


             Common stock, $0.001 par value; 100,000,000 shares authorized; 40,721,321 and 37,012,904 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively

 40,721  37,013 


Additional paid-in capital

  122,636,097   76,754,774 


Retained earnings (the restricted portion is $3,807,551 and $3,807,551 at March 31, 2014 and December 31, 2013, respectively)

  (9,967,074)  4,119,086 


Accumulated other comprehensive income

  6,404,130   7,615,246 


         TOTAL STOCKHOLDERS' EQUITY

  119,113,874   88,526,119 


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$  255,106,039 $  204,306,730 


 

      


KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



 

 Three Months Ended March 31 


 

 2014  2013 


CASH FLOWS FROM OPERATINGACTIVITIES:

    


  Net (loss) income

$  (14,086,160)$  2,236,873 


  Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

    


  Depreciation and amortization

  1,386,527   2,109,977 


  Deferred taxes

 44,801  (144,911)


  Change of derivative instrument's fair value

  12,314,171  (990,395)


  Loss in investment in associated company

 15,805  14,023 


  Share of (profit) after tax of JV

  (1,728,356) - 


 

      


Changes in operating assets and liabilities:

      


(Increase) Decrease In:

      


  Accounts receivable

  8,501,760   (4,440,829)


  Inventories

  (4,567,411)  (2,901,362)


  Other receivables and prepaid expenses

 (154,488) (88,166)


  Due from employees

 (9,402) (2,418)


  Prepayments and prepaid expenses

  (7,691,861)  2,717,021 


  Amount due from JV

  (18,868,380) - 


 

      


Increase (Decrease) In:

      


  Accounts payable

  21,589,347   1,990,665 


  Other payables and accrued liabilities

 930,528  (85,177)


  Customer deposits

 92,022  (268,344)


  Income tax payable

 (815,354) (425,109)


  Net cash (used in) provided by operating activities

$  (3,046,451)$  (278,152)


 

      


CASH FLOWS FROM INVESTINGACTIVITIES:

    


  Purchases of plant and equipment

 (119,476) (8,698)


  Issuance of notes receivable

  (21,553,430)  (1,940,690)


  Deposit for acquisition

 -   (14,103,172)


  Net cash provided by (used in) investing activities

$  (21,672,906) (16,052,560


 

      


About Kandi Technologies Group, Inc.

Kandi Technologies Group, Inc. (NASDAQ GS: KNDI), headquartered in Jinhua, Zhejiang Province, is engaged in the research and development, manufacturing and sales of various vehicles. Kandi has established itself as one of the world's largest manufacturers 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. Kandi routinely posts important information on its website.

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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