Kandi Technologies Reports Record Full Year 2014 Financial Results
March 16 2015 - 9:00AM
– Full year 2014 revenue increased 80% YoY to $170.2 Million
–
– Full year 2014 EV parts sales jumped 6653% YoY to $116.4
Million –
– Full year GAAP net income increased 158% YoY to $12.3 Million
–
– Full year EPS of $0.29 compared to 2013 EPS of ($0.61) –
Kandi Technologies Group, Inc. (Nasdaq:KNDI) (the
"Company" or "Kandi"), today announced its financial results for
the full year ending December 31, 2014.
Full Year 2014 Highlights
- Total revenues grew 80.1% to $170.2 million from $94.5 million
in 2013;
- Electric Vehicle ("EV") Parts sales increased significantly by
6,653.4% to $116.4 million compared to $1.7 million in the previous
year;
- Full year sales for our joint venture company, Kandi Electric
Vehicles Group Co., Ltd. (the "JV Company"),* were $215.5 million,
with net income of $7.5 million. Based on Kandi's 50% equity
ownership in the JV Company, Kandi recorded $4.5 million in net
income (after tax and intra-entity elimination) in 2014;
- The JV Company sold 10,935 EV products during the full year of
2014, with 3,656 EVs sold in the fourth quarter;
- GAAP net income in 2014 was $12.3 million, or approximately
$0.29 per fully diluted share, a 158.0% increase compared to a net
loss of $21.1 million, or approximately ($0.61) in 2013;
- Non-GAAP adjusted net income**, which excludes stock award
expense and change in the fair value of financial derivatives, was
$14.2 million, or approximately $0.33 per fully diluted share, a
174.8% increase from $5.2 million for 2013;
- Working capital surplus was $39.2 million as of December 31,
2014, compared to a working capital deficit of $6.6 million as of
December 31, 2013;
- Cash, cash equivalents and restricted cash totaled $39.3
million as of December 31, 2014 compared to $12.8 million as of
December 31, 2013;
*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 Guorun"), a 99%-owned
subsidiary of Geely Automobile Holdings Ltd. ("Geely Auto")
**Non-GAAP measures, including the
Non-GAAP net income and Non-GAAP EPS are defined as the financial
measures excluding the change of the fair value of financial
derivatives and the effects of the stock award expense. We supply
non-GAAP information because we believe it allows our investors to
obtain a clearer understanding of our operations. Any non-GAAP
measures should not be considered as a substitute for, and should
only be read in conjunction with, measures of financial performance
prepared in accordance with GAAP.
Mr. Xiaoming Hu, Chairman and Chief Executive Officer of Kandi
Technologies commented, "Our robust financial results were driven
by the growing market demand for electric vehicles. In 2014, we
invested a tremendous amount of time and resources on building our
EV business. Kandi's electric vehicle model has been highly
appraised by China's Science and Technology Minister and other
senior government officials. At the end of 2014, Micro Public
Transportation (MPT), an EV Sharing Program we have been
advocating, has expanded to nine Chinese cities with 14,398 pure
EVs delivered since the beginning of its trial operation in the
second half of 2013."
"Looking ahead, we are extremely excited about Kandi's business
prospects for continued growth. Given the government's strong
commitment towards policies that encourage the adoption of electric
vehicles nationwide, including the national and local government
subsidies, the electric vehicle tax breaks, along with the
prevailing favorable market conditions in China, we are confident
in our ability to execute our strategy to further grow market
shares in China. Recently, the management team of our joint venture
company has decided to expand its EV sales effort directly to the
end customers, which, together with JV's existing fleet sales
model, will be a key catalyst that boost consumer demand for our
electric vehicles. We look forward to enhancing our overall product
and service, while leveraging the JV Company's flexible business
model and its leading position in both EV sharing and EV sales
businesses, and finally making Kandi a leader in the EV market in
China," Mr. Hu concluded.
KANDI TECHNOLOGIES
GROUP, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF INCOME AND COMPREHENSIVE INCOME |
FOR THE YEARS ENDED
DECEMBER 31, 2014, 2013 AND 2012 |
|
|
2014 |
2013 |
2012 |
REVENUES, NET |
$ 170,229,006 |
$ 94,536,045 |
$ 64,513,670 |
|
|
|
|
COST OF GOODS SOLD |
(146,825,073) |
(72,793,517) |
(51,620,280) |
|
|
|
|
GROSS PROFIT |
23,403,933 |
21,742,528 |
12,893,390 |
|
|
|
|
OPERATING EXPENSES: |
|
|
|
Research and development |
(2,755,637) |
(3,728,730) |
(2,877,283) |
Selling and marketing |
(1,345,588) |
(399,504) |
(455,983) |
General and administrative |
(14,058,548) |
(16,056,107) |
(4,250,832) |
Total operating expenses |
(18,159,773) |
(20,184,341) |
(7,584,098) |
|
|
|
|
INCOME FROM OPERATIONS |
5,244,160 |
1,558,187 |
5,309,292 |
|
|
|
|
OTHER INCOME (EXPENSE): |
|
|
|
Interest income |
1,701,121 |
1,516,477 |
2,658,104 |
Interest (expense) |
(3,480,646) |
(4,395,353) |
(2,775,891) |
Change in fair value of financial
instruments |
6,531,308 |
(16,647,283) |
1,986,063 |
Government grants |
288,498 |
228,396 |
132,139 |
Share of (loss) in associated
companies |
(54,308) |
(69,056) |
(69,429) |
Share of profit (loss) after tax of
JV |
4,490,266 |
(2,414,354) |
-- |
Other income (expense), net |
(34,649) |
676,257 |
332,936 |
Total other income (expense),
net |
9,441,590 |
(21,104,916) |
2,263,922 |
|
|
|
|
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES |
14,685,750 |
(19,546,729) |
7,573,214 |
|
|
|
|
PROVISION FOR INCOME
TAXES |
(2,414,412) |
(1,593,994) |
(1,523,735) |
|
|
|
|
NET INCOME (LOSS) |
12,271,338 |
(21,140,723) |
6,049,479 |
|
|
|
|
OTHER COMPREHENSIVE
INCOME |
|
|
|
|
|
|
|
Foreign currency translation |
(2,725,143) |
2,112,902 |
424,623 |
|
|
|
|
COMPREHENSIVE INCOME
(LOSS) |
$ 9,546,195 |
$ (19,027,821) |
$ 6,474,102 |
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC |
42,583,495 |
34,707,973 |
29,439,328 |
WEIGHTED AVERAGE SHARES OUTSTANDING
DILUTED |
42,715,818 |
34,707,973 |
29,677,325 |
|
|
|
|
NET INCOME (LOSS) PER SHARE,
BASIC |
$ 0.29 |
$ (0.61) |
$ 0.21 |
NET INCOME (LOSS) PER SHARE,
DILUTED |
$ 0.29 |
$ (0.61) |
$ 0.20 |
|
|
|
|
KANDI TECHNOLOGIES
GROUP, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE
SHEETS |
|
ASSETS |
|
|
|
December 31, |
December 31, |
|
2014 |
2013 |
CURRENT ASSETS |
|
|
Cash and cash equivalents |
$ 26,379,460 |
$ 12,762,369 |
Restricted cash |
13,000,731 |
1,636 |
Accounts receivable |
15,736,805 |
31,370,862 |
Inventories (net of provision for slow moving
inventory of $315,584 and $352,734 as of December 31, 2014 and 2013
respectively) |
15,403,840 |
9,187,714 |
Notes receivable |
9,060,441 |
13,794,094 |
Other receivables |
238,567 |
556,904 |
Prepayments and prepaid expenses |
120,761 |
505,513 |
Due from employees |
34,475 |
34,272 |
Advances to suppliers |
6,901,505 |
8,867,074 |
Amount due from JV Company, net |
51,450,612 |
2,917,592 |
Deferred tax |
-- |
13,706 |
Total Current Assets |
138,327,197 |
80,011,736 |
|
|
|
LONG-TERM ASSETS |
|
|
Plant and equipment, net |
26,215,356 |
29,333,516 |
Land use rights, net |
15,649,152 |
14,453,191 |
Construction in progress |
58,510,051 |
16,356 |
Deferred taxes |
-- |
81,076 |
Investment in associated company |
-- |
96,838 |
Investment in JV Company |
83,309,095 |
79,331,930 |
Goodwill |
322,591 |
322,591 |
Intangible assets |
577,401 |
659,496 |
Other long-term assets |
162,509 |
-- |
Total Long-Term Assets |
184,746,155 |
124,294,994 |
TOTAL ASSETS |
$ 323,073,352 |
$ 204,306,730 |
|
|
|
KANDI TECHNOLOGIES
GROUP, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE
SHEETS |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
December 31, |
December 31, |
|
2014 |
2013 |
CURRENT LIABILITIES |
|
|
Accounts payable |
$ 45,772,481 |
$ 22,843,143 |
Other payables and accrued
expenses |
5,101,740 |
2,422,613 |
Short-term bank loans |
35,589,502 |
34,020,281 |
Customer deposits |
2,630,723 |
44,404 |
Notes payable |
5,702,121 |
16,683,023 |
Income tax payable |
1,835,685 |
1,362,828 |
Due to employees |
15,787 |
10,297 |
Deferred taxes |
230,864 |
-- |
Financial derivate - liability |
2,245,610 |
9,256,827 |
Total Current Liabilities |
99,124,513 |
86,643,416 |
|
|
|
LONG-TERM LIABILITIES |
|
|
Deferred tax |
2,266,725 |
1,009,477 |
Bond payable |
-- |
13,084,724 |
Financial derivatives - liability |
10,097,275 |
15,042,994 |
Total Long-Term Liabilities |
12,364,000 |
29,137,195 |
TOTAL LIABILITIES |
111,488,513 |
115,780,611 |
|
|
|
STOCKHOLDERS' EQUITY |
|
|
Common stock, $0.001 par value; 100,000,000
shares authorized; 46,274,855 and 37,012,904 shares issued and
outstanding at December 31, 2014 and 2013, respectively |
46,275 |
37,013 |
Additional paid-in capital |
190,258,037 |
76,754,774 |
Retained earnings (the restricted portion is
$4,172,324 and $3,807,551 at December 31, 2014 and 2013,
respectively) |
16,390,424 |
4,119,086 |
Accumulated other comprehensive
income |
4,890,103 |
7,615,246 |
TOTAL STOCKHOLDERS' EQUITY |
211,584,839 |
88,526,119 |
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY |
$ 323,073,352 |
$ 204,306,730 |
|
|
|
KANDI TECHNOLOGIES
GROUP, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF CASH FLOW |
FOR THE YEARS ENDED
DECEMBER 31, 2014, 2013 AND 2012 |
|
|
2014 |
2013 |
2012 |
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
Net income (loss) |
$ 12,271,338 |
$ (21,140,723) |
$ 6,049,479 |
Adjustments to reconcile net income to net
cash provided by operating activities: |
|
|
|
Depreciation and amortization |
5,571,465 |
7,708,923 |
4,978,626 |
Assets impairments |
-- |
355,876 |
465,199 |
Deferred taxes |
1,579,855 |
876,255 |
92,521 |
Change in value of financial
instruments |
(6,531,308) |
16,647,283 |
(1,986,063) |
Loss in investment in associated
company |
54,308 |
69,056 |
69,429 |
Share of profit after tax of JV |
(4,490,266) |
2,414,354 |
-- |
Decrease in reserve for fixed
assets |
(302,023) |
-- |
-- |
Option cost |
-- |
-- |
19,053 |
|
|
|
|
Changes in operating assets and
liabilities, net of effects of
acquisition: |
|
|
|
(Increase) Decrease In: |
|
|
|
Accounts receivable |
15,445,962 |
3,251,168 |
(20,513,099) |
Inventories |
(6,280,502) |
(1,287,045) |
(904,355) |
Other receivables |
315,071 |
(38,491) |
1,955,055 |
Due from employees |
5,139 |
10,797 |
37,117 |
Prepayments and prepaid expenses |
(5,360,637) |
(3,810,447) |
(4,285,489) |
Amount due from JV |
(48,593,522) |
(2,877,972) |
-- |
|
|
|
|
Increase (Decrease) In: |
|
|
|
Accounts payable |
23,095,825 |
13,699,528 |
3,566,354 |
Other payables and accrued
liabilities |
2,694,689 |
(746,838) |
(50,333) |
Customer deposits |
2,588,830 |
(254,151) |
(740,419) |
Income tax payable |
482,020 |
651,124 |
525,030 |
Due to related party |
-- |
(841,251) |
-- |
Net cash (used in) provided by operating
activities |
(7,453,756) |
14,687,446 |
(10,721,895) |
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
(Purchases)/Disposal of plant and equipment,
net |
(2,101,355) |
(158,830) |
(9,072,230) |
Purchases of land use rights |
(1,668,534) |
-- |
-- |
Purchases of construction in
progress |
(50,891,170) |
(16,134) |
-- |
Deposit for acquisition |
-- |
-- |
(24,383,529) |
Asset acquisition, net of deposit |
-- |
(39,673,000) |
-- |
Disposal of subsidiary |
(96,299) |
64,535,177 |
-- |
Issuance of notes receivable |
(24,705,489) |
(4,174,247) |
(1,011,821) |
Repayments of notes receivable |
29,354,592 |
311,844 |
29,603,171 |
Investment in JV |
-- |
(80,668,972) |
-- |
Cash acquired in acquisition |
-- |
-- |
112,551 |
Net cash (used in) investing
activities |
(50,108,255) |
(59,844,162) |
(4,751,858) |
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
Restricted cash |
(13,010,291) |
16,135,044 |
(9,143,907) |
Proceeds from short-term bank
loans |
48,306,743 |
52,918,845 |
41,504,215 |
Repayments of short-term bank
loans |
(46,517,604) |
(52,596,170) |
(45,539,128) |
Proceeds from notes payable |
18,718,944 |
83,251,992 |
40,491,531 |
Repayments of notes payable |
(29,602,112) |
(92,609,593) |
(21,063,559) |
Proceeds from bond payable |
-- |
12,907,035 |
12,658,548 |
Repayments of bond payable |
(13,011,917) |
(12,907,035) |
-- |
Fund raising through issuing common stock
and warrants |
78,358,991 |
26,387,498 |
-- |
Option exercise, stock award & other
financing |
8,431,247 |
9,659,103 |
1,258,231 |
Warrant exercise |
21,101,039 |
3,171,259 |
1,672,739 |
Common stock issued for acquisition, net
of cost of capital |
-- |
-- |
3,784,149 |
Net cash provided by financing
activities |
72,775,040 |
46,317,978 |
25,622,819 |
|
|
|
|
NET INCREASE IN CASH AND CASH
EQUIVALENTS |
15,213,029 |
1,161,262 |
10,149,066 |
Effect of exchange rate changes on
cash |
(1,595,938) |
(533,989) |
(308,322) |
Cash and cash equivalents at beginning of
year |
12,762,369 |
12,135,096 |
2,294,352 |
CASH AND CASH EQUIVALENTS AT END OF
YEAR |
$ 26,379,460 |
$ 12,762,369 |
$ 12,135,096 |
|
|
|
|
SUPPLEMENTARY CASH FLOW
INFORMATION |
|
|
|
Income taxes paid |
$ 1,932,392 |
$ 942,870 |
$ 998,706 |
Interest paid |
$ 3,475,893 |
$ 3,565,496 |
$ 2,570,691 |
Issuance of Common stock for
acquisition |
$ -- |
$ -- |
$ 8,616,416 |
|
|
|
|
SUPPLEMENTAL NON-CASH
DISCLOSURES: |
|
|
|
Prepayments transferred to construction
in progress |
$ 7,652,959 |
$ -- |
$ -- |
Construction in progress transferred to
plant and equipment |
$ -- |
$ -- |
$ 10,078,637 |
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 vehicle products.
Kandi has established itself as the one of the China's leading
manufacturers of pure electric vehicle ("EV") products, EV parts
and off road vehicles. More information can be viewed at its
corporate website is http://www.kandivehicle.com. The Company
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: IR Contact:
Kandi Technologies Group, Inc.
Ms. Kewa Luo
Phone: 1-212-551-3610
Email: IR@kandigroup.com
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