Kandi Technologies Reports First Quarter 2023 Financial Results
- Successful Pivot to Fully Electric Off-road Vehicles Continued to Boost Revenue
- High Gross Margin Driven by Fully Electric Crossover Golf Carts
JINHUA, CHINA, May 10, 2023 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company”, “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the first quarter of 2023.
First Quarter Highlights
- Total revenues of $22.9 million compared to $24.9 million in the same period of 2022.
- Off-road vehicles and associated parts sales increased by 94.0% to $20.8 million, compared to $10.7 million in the same period of 2022.
- EV products and parts sales totaled $0.03 million, compared with $4.0 million total for the first quarter of 2022, attributed to the Company's shift in focus towards production of off-road vehicles with higher demand and better margins.
- Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $0.1 million, compared with $2.1 million in the same period of 2022.
- Battery exchange equipment and battery exchange service sales were $0.10 million, compared with $0.03 million in the same period of 2022.
- Lithium-ion cells sales of $1.8 million compared to $8.0 million in the same period of 2022.
- Net income was $0.6 million, or $0.01 income per fully diluted share, compared to a net loss of $1.6 million, or $0.02 loss per fully diluted share for the same period of 2022.
- Working capital totaled $253.1 million as of March 31, 2023.
- Cash and equivalents, restricted cash, and certificate of deposit totaled $238.6 million as of March 31, 2023.
Dr. Xueqin Dong, CEO of Kandi commented, “We are pleased to report that sales of our off-road vehicles have significantly contributed to our overall revenue and gross margin. Our all-electric crossover golf cart has been successfully launched and well received by customers, enabling our company to maintain a strong growth momentum in the rapidly expanding market for all-electric off-road vehicles. As the trend towards electrification of off-road fuel vehicles continues globally, we will continue to introduce a variety of fully electric off-road vehicles. We are confident that we will achieve sustained growth in this field.”
Dr. Dong continued, “Our successful transition in the fully electric off-road vehicles demonstrates our commitment to innovation and development. We are confident in our continued focus on this market, which will not only bring significant financial benefits but also meaningful benefits in terms of environmental sustainability and social responsibility.”
Q1 2023 Financial Results
Net Revenues and Gross Profit (in USD millions)
| Q1 2023 | Q1 2022 | Y-o-Y% | |
| Net Revenues | $22.9 | $24.9 | -8.2% |
| Gross Profit | $8.0 | $2.4 | 236.4% |
| Gross Margin% | 35.1% | 9.6% | - |
Net revenues of $22.9 million decreased by 8.2% from the same period of 2022. This decrease was primarily due to a reduction in sales of EV parts and products, as the Company saw a lower demand for EV and shifted its focus towards off-road vehicles and associated parts with surging demand. However, the year-over-year gross margins were higher, attributed to the higher-margin features of off-road vehicles particularly crossover golf carts.
Operating Income/Loss (in USD millions)
| Q1 2023 | Q1 2022 | Y-o-Y% | ||||||
| Operating Expenses | ($10.3) | ($8.1) | 26.9% | |||||
| Loss from Operations | ($2.2) | ($5.7) | -60.8% | |||||
| Operating Margin% | -9.8% | -22.9% | - | |||||
Operating expenses amounted to $10.3 million, compared to $8.1 million during the corresponding period in 2022. The rise in operating expenses can be attributed to higher sales and marketing expenses, which is mainly due to increased commission offered for the sales of off-road vehicles, as well as higher shipping and related expenses due to larger exports to the US market. Additionally, the increase in OpEx was also driven by higher general and administrative expenses resulting from an increase in hires and increased storage fees due to a rise in inventories kept in the US.
Net Income/Loss (in USD millions)
| Q1 2023 | Q1 2022 | Y-o-Y% | |||||
| Net Income (Loss) | $0.6 | ($1.6) | 136.8% | ||||
| Net Income (Loss) per Share, Basic and Diluted | $0.01 | ($0.02) | - | ||||
Net income was $0.6 million, compared with a net loss of $1.6 million for the same period of 2022. The primary factor contributing to the rise in net income was the increase in gross profit, driven by a greater proportion of sales from off-road vehicles with larger gross margins.
First Quarter 2023 Conference Call Details
The Company has scheduled a conference call and live webcast to discuss its financial results at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time) on Wednesday, May 10, 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: +1-844-826-3035
- International dial-in number: + 1-412-317-5195
- Webcast and replay:
https://viavid.webcasts.com/starthere.jsp?ei=1614390&tp_key=71bb235f2c
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
IR@kandigroup.com
The Blueshirt Group
Mr. Gary Dvorchak, CFA
gary@blueshirtgroup.com
- Tables Below -
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, 2023 | December 31, 2022 | ||||||
| (Unaudited) | |||||||
| CURRENT ASSETS | |||||||
| Cash and cash equivalents | $ | 75,133,544 | $ | 84,063,717 | |||
| Restricted cash | 62,949,702 | 66,976,554 | |||||
| Certificate of deposit | 100,484,949 | 81,191,191 | |||||
| Accounts receivable (net of allowance for doubtful accounts of $2,295,570 and $2,285,386 as of March 31, 2023 and December 31, 2022, respectively) | 28,275,773 | 38,150,876 | |||||
| Inventories | 47,303,083 | 40,475,366 | |||||
| Notes receivable | 291,202 | 434,461 | |||||
| Other receivables | 8,940,359 | 11,912,615 | |||||
| Prepayments and prepaid expense | 3,227,740 | 2,970,261 | |||||
| Advances to suppliers | 1,049,800 | 3,147,932 | |||||
| TOTAL CURRENT ASSETS | 327,656,152 | 329,322,973 | |||||
| NON-CURRENT ASSETS | |||||||
| Property, plant and equipment, net | 95,606,862 | 97,168,753 | |||||
| Intangible assets, net | 7,631,452 | 7,994,112 | |||||
| Land use rights, net | 2,901,166 | 2,909,950 | |||||
| Construction in progress | 232,485 | 199,837 | |||||
| Deferred tax assets | 1,432,527 | 1,432,527 | |||||
| Long-term investment | 145,630 | 144,984 | |||||
| Goodwill | 33,301,291 | 33,178,229 | |||||
| Other long-term assets | 10,568,944 | 10,630,911 | |||||
| TOTAL NON-CURRENT ASSETS | 151,820,357 | 153,659,303 | |||||
| TOTAL ASSETS | $ | 479,476,509 | $ | 482,982,276 | |||
| CURRENT LIABILITIES | |||||||
| Accounts payable | $ | 31,681,798 | $ | 35,321,262 | |||
| Other payables and accrued expenses | 11,696,505 | 14,131,414 | |||||
| Short-term loans | 4,210,589 | 5,569,154 | |||||
| Notes payable | 20,047,569 | 19,123,476 | |||||
| Income tax payable | 850,729 | 1,270,617 | |||||
| Other current liabilities | 6,024,221 | 6,089,925 | |||||
| TOTAL CURRENT LIABILITIES | 74,511,411 | 81,505,848 | |||||
| NON-CURRENT LIABILITIES | |||||||
| Deferred taxes liability | 1,378,372 | 1,378,372 | |||||
| Contingent consideration liability | 2,164,000 | 1,803,000 | |||||
| Other long-term liabilities | 548,418 | 602,085 | |||||
| TOTAL NON-CURRENT LIABILITIES | 4,090,790 | 3,783,457 | |||||
| TOTAL LIABILITIES | 78,602,201 | 85,289,305 | |||||
| STOCKHOLDER’S EQUITY | |||||||
| Common stock, $0.001 par value; 100,000,000 shares authorized; 77,678,730 and 77,668,730 shares issued and 74,190,171 and 74,180,171 outstanding at March 31,2023 and December 31,2022, respectively | 77,679 | 77,669 | |||||
| Less: Treasury stock (3,488,559 shares with average price of $2.81 at both March 31,2023 and December 31,2022 ) | (9,807,820 | ) | (9,807,820 | ) | |||
| Additional paid-in capital | 452,376,828 | 451,373,645 | |||||
| Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at March 31, 2023 and December 31, 2022, respectively) | (16,368,875 | ) | (16,339,765 | ) | |||
| Accumulated other comprehensive loss | (26,750,552 | ) | (28,333,239 | ) | |||
| TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY | 399,527,260 | 396,970,490 | |||||
| Non-controlling interests | 1,347,048 | 722,481 | |||||
| TOTAL STOCKHOLDERS’ EQUITY | 400,874,308 | 397,692,971 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 479,476,509 | $ | 482,982,276 | |||
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
| Three Months Ended | |||||||
| March 31, 2023 | March 31, 2022 | ||||||
| REVENUES FROM UNRELATED PARTIES, NET | $ | 22,862,108 | $ | 24,891,404 | |||
| REVENUES FROM THE FORMER AFFILIATE COMPANY AND RELATED PARTIES, NET | - | - | |||||
| REVENUES, NET | 22,862,108 | 24,891,404 | |||||
| COST OF GOODS SOLD | (14,832,878 | ) | (22,504,241 | ) | |||
| GROSS PROFIT | 8,029,230 | 2,387,163 | |||||
| OPERATING INCOME (EXPENSE): | |||||||
| Research and development | (878,980 | ) | (1,140,586 | ) | |||
| Selling and marketing | (1,827,729 | ) | (1,193,699 | ) | |||
| General and administrative | (7,559,452 | ) | (5,756,531 | ) | |||
| TOTAL OPERATING EXPENSE | (10,266,161 | ) | (8,090,816 | ) | |||
| LOSS FROM OPERATIONS | (2,236,931 | ) | (5,703,653 | ) | |||
| OTHER INCOME (EXPENSE): | |||||||
| Interest income | 2,100,343 | 1,222,304 | |||||
| Interest expense | (173,370 | ) | (148,144 | ) | |||
| Change in fair value of contingent consideration | (361,000 | ) | 2,690,000 | ||||
| Government grants | 620,404 | 244,098 | |||||
| Other income, net | 266,465 | 43,782 | |||||
| TOTAL OTHER INCOME, NET | 2,452,842 | 4,052,040 | |||||
| INCOME (LOSS) BEFORE INCOME TAXES | 215,911 | (1,651,613 | ) | ||||
| INCOME TAX BENEFIT | 379,546 | 32,600 | |||||
| NET INCOME (LOSS) | 595,457 | (1,619,013 | ) | ||||
| LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | 624,567 | 2,957 | |||||
| NET LOSS ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS | (29,110 | ) | (1,616,056 | ) | |||
| OTHER COMPREHENSIVE INCOME | |||||||
| Foreign currency translation adjustment | 1,582,687 | 1,009,811 | |||||
| COMPREHENSIVE INCOME (LOSS) | $ | 2,178,144 | $ | (609,202 | ) | ||
| WEIGHTED AVERAGE SHARES OUTSTANDING BASIC | 74,186,504 | 76,289,846 | |||||
| WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED | 75,095,595 | 76,289,846 | |||||
| NET INCOME (LOSS) PER SHARE, BASIC | $ | 0.01 | $ | (0.02 | ) | ||
| NET INCOME (LOSS) PER SHARE, DILUTED | $ | 0.01 | $ | (0.02 | ) | ||
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 | ||||||||||||||
| 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 | |||||||||||||
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Three Months Ended | |||||||
| March 31, 2023 | March 31, 2022 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net income (loss) | $ | 595,457 | $ | (1,619,013 | ) | ||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities | |||||||
| Depreciation and amortization | 3,051,089 | 3,294,499 | |||||
| Provision (reversal) of allowance for doubtful accounts | - | 4,389 | |||||
| Change in fair value of contingent consideration | 361,000 | (2,690,000 | ) | ||||
| Stock award and stock based compensation expense | 1,003,818 | 22,925 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | 6,275,418 | 5,197,268 | |||||
| Notes receivable | 358,114 | 1,965,596 | |||||
| Inventories | (6,750,531 | ) | 2,498,914 | ||||
| Other receivables and other assets | 3,108,680 | (790,486 | ) | ||||
| Advances to supplier and prepayments and prepaid expenses | 1,865,040 | 1,425,684 | |||||
| Increase (Decrease) In: | |||||||
| Accounts payable | 6,097,620 | 3,088,095 | |||||
| Other payables and accrued liabilities | (2,752,663 | ) | (1,688,414 | ) | |||
| Notes payable | (5,413,459 | ) | (4,401,457 | ) | |||
| Income tax payable | (437,385 | ) | (119,559 | ) | |||
| Net cash provided by operating activities | $ | 7,362,198 | $ | 6,188,441 | |||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Purchases of property, plant and equipment, net | (562,717 | ) | (709,881 | ) | |||
| Payment for construction in progress | (72,188 | ) | (246,971 | ) | |||
| Certificate of deposit | (19,001,959 | ) | (15,759,448 | ) | |||
| Net cash used in investing activities | $ | (19,636,864 | ) | $ | (16,716,300 | ) | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Proceeds from short-term loans | 5,040,000 | 500,000 | |||||
| Repayments of short-term loans | (6,398,565 | ) | - | ||||
| Contribution from non-controlling shareholder | - | 803,732 | |||||
| Purchase of treasury stock | - | (1,583,561 | ) | ||||
| Net cash used in by financing activities | $ | (1,358,565 | ) | $ | (279,829 | ) | |
| NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | $ | (13,633,231 | ) | $ | (10,807,688 | ) | |
| Effect of exchange rate changes | $ | 676,206 | $ | 352,415 | |||
| 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 | $ | 138,083,246 | $ | 158,220,734 | |||
| -CASH AND CASH EQUIVALENTS AT END OF PERIOD | 75,133,544 | 99,997,938 | |||||
| -RESTRICTED CASH AT END OF PERIOD | 62,949,702 | 58,222,796 | |||||
| SUPPLEMENTARY CASH FLOW INFORMATION | |||||||
| Income taxes paid | $ | 17,433 | $ | 5,496 | |||
| Interest paid | $ | 99,960 | $ | 37,116 | |||
| SUPPLEMENTAL NON-CASH DISCLOSURES: | |||||||
| Contribution from non-controlling shareholder by inventories, fixed assets and intangible assets | $ | - | $ | 393,986 | |||
