*EXPLANATION OF NON-GAAP RESULTS
In addition to disclosing financial results in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains non-GAAP financial measures that we believe are helpful in understanding and comparing our past financial performance and our future results. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Management believes the non-GAAP financial measures are appropriate for period to period comparisons in our budget, planning and evaluation processes, and to show the reader how our performance compares to other periods. Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects: Non-GAAP net income and losses, and related per share amounts as reported for Q1 2012 exclude the effects of all option related expenses, stock award expense, Convertible Note interest expense, effects caused by amortization of discounts, on Convertible Notes, and the change of the fair value of financial derivatives.
KANDI TECHNOLOGIES, CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS September 30, December 31, 2012 2011 ------------- ------------ (Unaudited) ------------- ------------CURRENT ASSETSCash and cash equivalents $ 1,546,006 $ 2,294,352Restricted cash 19,895,444 6,634,989Accounts receivable 26,921,141 12,932,776Inventories (net of reserve for slow moving inventory of $0 and $72,487 as of September 30, 2012 and December 31, 2011 respectively) 14,385,086 6,674,467Notes receivable 15,980,324 37,879,243Other receivables 1,056,257 2,438,917Prepayments and prepaid expenses 92,349 185,037Due from employees 57,624 79,857Advances to suppliers 4,105,847 852,638 ------------- ------------Total Current Assets 84,040,078 69,972,276 ------------- ------------LONG-TERM ASSETSPlant and equipment, net 18,124,202 20,981,893Land use rights, net 14,383,669 10,992,769Intangible assets 723,003 -Construction in progress 12,214,227 10,007,601Deferred taxes 35,025 89,998Investment in associated companies 184,701 229,213 ------------- ------------Goodwill 437,525 - ------------- ------------Total Long-Term Assets 46,102,352 42,301,474 ------------- ------------TOTAL ASSETS $ 130,142,430 $112,273,750 ============= ============ KANDI TECHNOLOGIES, CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' EQUITY September 30, December 31, 2012 2011 ------------- ------------ (Unaudited) ------------- ------------CURRENT LIABILITIESAccounts payable $ 10,968,071 $ 5,061,069Other payables and accrued expenses 1,182,349 3,137,983Short-term bank loans 34,970,003 36,372,492Customer deposits 131,557 1,025,357Notes payable, net of discount of $0 and $71 as of September 30, 2012 and December 31, 2011 respectively 9,630,565 5,847,552Income tax payable 181,766 153,730Due to employees 160,547 9,455Due to related party 841,251 841,251Deferred taxes 70,522 56,362 ------------- ------------Financial derivate - liability - 213 ------------- ------------ Total Current Liabilities 58,136,631 52,505,464 ------------- ------------LONG-TERM LIABILITIESFinancial derivatives - liability 2,621,557 3,919,411 Total Long-Term Liabilities 2,621,557 3,919,411 ------------- ------------TOTAL LIABILITIES 60,758,188 56,424,875 ------------- ------------STOCKHOLDERS' EQUITYCommon stock, $0.001 par value; 100,000,000 shares authorized; 29,941,134and 27,445,600 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively 29,941 27,446Additional paid-in capital 38,614,210 31,533,378Retained earnings (the restricted portion is $1,940,832 at September 30, 2012 and December 31, 2011) 23,093,029 19,210,330Accumulated other comprehensive income 7,647,062 5,077,721 ------------- ------------TOTAL STOCKHOLDERS' EQUITY 69,384,242 55,848,875 ------------- ------------TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 130,142,430 $112,273,750 ============= ============ KANDI TECHNOLOGIES, CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) Three Months Ended Nine Months Ended ------------------------- ------------------------- 30-Sep-12 30-Sep-11 30-Sep-12 30-Sep-11 ------------ ------------ ------------ ------------REVENUES, NET $ 12,765,694 $ 10,310,558 $ 38,182,211 $ 28,789,766COST OF GOODS SOLD -9,541,687 -7,984,828 -29,829,097 -22,060,888 ------------ ------------ ------------ ------------GROSS PROFIT 3,224,007 2,325,730 8,353,114 6,728,878Research and development -630,083 -608,463 -2,006,269 -1,695,003Selling and marketing -158,714 -85,239 -331,750 -234,854General and administrative -940,930 -1,067,021 -2,520,600 -2,568,417 ------------ ------------ ------------ ------------INCOME FROM CONTINUING OPERATIONS 1,494,280 565,007 3,494,495 2,230,604Interest income (expense), net -76,866 117,353 -133,806 95,549Change in fair value of financial instruments -882,731 -271,780 1,078,795 7,480,992Government grants 20,634 9,235 45,942 289,962Investment (loss) income -18,259 -12,905 -45,670 -20,181Other income, net 239,203 95,067 285,805 262,299 ------------ ------------ ------------ ------------INCOME (LOSS) BEFORE INCOME TAXES 776,261 501,977 4,725,561 10,339,225INCOME TAX EXPENSE -181,743 -117,119 -842,863 -394,624 ------------ ------------ ------------ ------------NET INCOME 594,518 384,858 3,882,698 9,944,601 ============ ============ ============ ============OTHER COMPREHENSIVE INCOMEForeign currency translation -260,114 377,991 2,569,341 1,524,411 ------------ ------------ ------------ ------------COMPREHENSIVE INCOME (LOSS) $ 334,404 $ 762,849 $ 6,452,039 11,469,012 ============ ============ ============ ============WEIGHTED AVERAGE SHARES OUTSTANDING BASIC 29,909,130 27,445,600 29,068,208 27,436,434WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED 31,464,257 28,617,870 30,413,267 28,740,204NET INCOME PER SHARE, BASIC $ 0.02 $ 0.01 $ 0.13 0.36NET INCOME PER SHARE, DILUTED $ 0.02 $ 0.01 $ 0.13 0.35 KANDI TECHNOLOGIES, CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended September 30 ------------------------------ 2012 2011 -------------- --------------CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss) $ 3,882,698 $ 9,944,601Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:Depreciation and amortization 3,694,917 3,501,765Deferred taxes 72,004 236,939Option and warrant expense 19,053 195,474Change of derivative instrument's fair value -1,297,854 -7,480,992Loss in investment in associated company 45,670 29,786Changes in operating assets and liabilities:(Increase) Decrease In:Accounts receivable -13,939,987 8,118,796Inventories -7,686,157 -2,554,537Other receivables and prepaid expenses 1,395,899 -880,750Due from employees 173,844 10,376Prepayments and prepaid expenses -3,158,733 -3,290,026 Marketable equity securities (trading) - 305,564Increase (Decrease) In:Accounts payable 5,888,514 -1,431,210Other payables and accrued liabilities -1,957,184 -156,970Customer deposits -899,693 -24,783Income tax payable 27,318 -14,090 -------------- --------------Net cash (used in) provided by operating activities $ -13,739,691 $ 6,509,943 -------------- --------------CASH FLOWS FROM INVESTING ACTIVITIES:Cash Acquired in Acquisition 112,551 - Purchases of plant and equipment -472,696 -240,954 Purchase of construction in progress -2,160,338 -6,019,101 Issuance of notes receivable -1,010,596 -2,751,302 Repayments of notes receivable 23,115,794 7,810,463 -------------- --------------Net cash provided by (used in) investing activities $ 19,584,715 $ -1,200,894 -------------- --------------CASH FLOWS FROM FINANCING ACTIVITIES:Restricted cash $ -13,241,885 $ -8,255,977Proceeds from short-term bank loans 31,023,311 25,607,093Repayments of short-term bank loans -32,603,714 -22,748,197Proceeds from notes payable 18,316,871 33,309,509Repayments of notes payable -14,558,408 -39,023,610Option exercise & other financing 116,903 65,544Common Stock Issued, net of Cost of Capital 3,741,790 -Warrant exercise 219,059 -------------- --------------Net cash provided by financing activities -6,986,073 -11,045,638 -------------- --------------NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS -1,141,049 -5,736,589 Effect of exchange rate changes on cash 392,703 -136,100 Cash and cash equivalents at beginning of period 2,294,352 7,754,166 -------------- --------------CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,546,006 $ 1,881,477 ============== ==============SUPPLEMENTARY CASH FLOW INFORMATION Income taxes paid $ 688,668 $ 408,714 Interest paid $ 2,062,306 $ 1,776,835Issuance of Common Stock for Acquisition $ 8,616,416 -
About Kandi Technologies, Corp.
Kandi Technologies, Corp. (KNDI) is a manufacturer and exporter of a variety of vehicles in China, making it a world leader in the production of popular off-road vehicles (ORVs). It also ranks among the leading manufacturers in China of all-terrain vehicles (ATVs), specialized utility vehicles (UTVs), and a recently introduced second-generation high mileage, two-seat three-wheeled motorcycle. Another major company focus has been on the manufacture and sale of the COCO electric vehicle (EV), a highly economical, beautifully designed, all-electric super mini-car for neighborhood driving and commuting. The convertible and hardtop models of the COCO EV are available in the United States and other countries, while the Chinese government has approved the sale of Kandi EVs in China since 2010. 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.
Company Contact:
Email: [email protected]
Phone: 86-579-82239856
U.S.A.
Email: [email protected]
Phone: 1-212-551-3610
