Kandi Technologies Group, Inc. (the “Company”, “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the second quarter of 2023.

Second Quarter Highlights

  • Total revenues of $36.0 million increased by 72.5% year-over-year.
  • Gross profit of $13.7 million and gross margin of 38.2%, compared to gross profit of $2.7 million and gross margin of 13.0% in the same period of 2022.
  • Net income was $4.4 million, or $0.06 income per fully diluted share, compared to a net loss of $1.9 million, or $0.02 loss per fully diluted share for the same period of 2022.
  • Cash and equivalents, restricted cash, and certificate of deposit totaled $232.5 million as of June 30, 2023.

Dr. Xueqin Dong, CEO of Kandi commented, “The Company's efforts invested in product transformation over the past few years have finally borne fruit this year, leading to a successful turnaround from losses to profits. Net income reached $4.4 million, demonstrating a significant recovery from the challenges we faced in the prior years. The continued growth of gross profit reflects our commitment to drive our product mix toward higher-profit and more rapidly growing categories. The success of our all-electric off-road vehicles is the driving force behind our sales recovery and return to profitability. We see immense potential in the US off-road vehicle market, and we are dedicated to expanding our product offerings to meet the evolving demands of our customers.”

Q2 2023 Financial Results

Net Revenues and Gross Profit (in USD millions)

  Q2 2023 Q2 2022 Y-o-Y%
Net Revenues $36.0 $20.8 +72.5%
Gross Profit $13.7 $2.7 +405.2%
Gross Margin% 38.2% 13.0% -

Net revenues of $36.0 million increased by 72.5% from the same period of 2022. Kandi’s focus on innovation, production, and commercialization of electric off-road vehicles -- particularly crossover golf carts, go karts, and all-terrain vehicles or ATVs -- boosted sales of off-road vehicles and associated parts to achieve its largest proportion ever of quarterly sales. Gross margin grew versus the year-earlier period because of the greater profitability of off-road vehicles, with crossover golf carts being a significant contributor to this increase.

Operating Income/Loss (in USD millions)

  Q2 2023 Q2 2022 Y-o-Y%
Operating Expenses ($14.0) ($9.0) +55.1%
Loss from Operations ($0.2) ($6.3) -96.4%
Operating Margin% -0.6% -30.1% -

Operating expenses rose to $14.0 million from $9.0 million in the same period of 2022. While operating expenses were up, significantly higher gross profits resulted in improvement in operating income. The rise in operating expenses can be attributed mainly to increased sales and marketing expenses associated with increasing number of electric off-road vehicles exported to the U.S. market, and higher general and administration expenses due to increased stock-based compensation.

Net Income/Loss (in USD millions)

  Q2 2023 Q2 2022 Y-o-Y%
Net Income (Loss) $4.4 ($1.9) -333.9%
Net Income (Loss) per Share, Basic and Diluted $0.06 ($0.02) -

Net income was $4.4 million, a noteworthy improvement compared to a net loss of $1.9 million during the same period in 2022. The primary factor for the swing to profit was the better gross margins.

Second 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 Tuesday, Aug 8, 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: +1-877-407-3982
  • International dial-in number: + 1-201-493-6780
  • Webcast and replay: https://viavid.webcasts.com/starthere.jsp?ei=1627967&tp_key=83400af773

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) 551-3610IR@kandigroup.com

The Blueshirt GroupMr. Gary Dvorchak, CFAgary@blueshirtgroup.com

- Tables Below -

 
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
  June 30,2023     December 31, 2022  
  (Unaudited)        
CURRENT ASSETS          
Cash and cash equivalents $ 69,406,103     $ 84,063,717  
Restricted cash   54,238,569       66,976,554  
Certificate of deposit   108,902,429       81,191,191  
Accounts receivable (net of allowance for doubtful accounts of $2,679,598 and $2,285,386 as of June 30, 2023 and December 31, 2022, respectively)   23,137,337       38,150,876  
Inventories   57,107,433       40,475,366  
Notes receivable   256,276       434,461  
Other receivables   9,813,439       11,912,615  
Prepayments and prepaid expense   3,159,764       2,970,261  
Advances to suppliers   2,073,612       3,147,932  
TOTAL CURRENT ASSETS   328,094,962       329,322,973  
               
NON-CURRENT ASSETS              
Property, plant and equipment, net   89,909,721       97,168,753  
Intangible assets, net   5,927,783       7,994,112  
Land use rights, net   2,725,604       2,909,950  
Construction in progress   36,854       199,837  
Deferred tax assets   1,427,290       1,432,527  
Long-term investment   137,851       144,984  
Goodwill   31,335,036       33,178,229  
Other long-term assets   9,911,534       10,630,911  
TOTAL NON-CURRENT ASSETS   141,411,673       153,659,303  
               
TOTAL ASSETS $ 469,506,635     $ 482,982,276  
               
CURRENT LIABILITIES              
Accounts payable $ 36,693,759     $ 35,321,262  
Other payables and accrued expenses   11,736,250       14,131,414  
Short-term loans   6,967,612       5,569,154  
Notes payable   16,310,719       19,123,476  
Income tax payable   1,011,755       1,270,617  
Other current liabilities   5,476,994       6,089,925  
TOTAL CURRENT LIABILITIES   78,197,089       81,505,848  
               
NON-CURRENT LIABILITIES              
Deferred taxes liability   1,172,820       1,378,372  
Contingent consideration liability         1,803,000  
Other long-term liabilities   465,784       602,085  
TOTAL NON-CURRENT LIABILITIES   1,638,604       3,783,457  
               
TOTAL LIABILITIES   79,835,693       85,289,305  
               
STOCKHOLDER’S EQUITY              
Common stock, $0.001 par value; 100,000,000 shares authorized; 75,010,171 and 77,668,730 shares issued and 75,010,171 and 74,180,171 outstanding at June 30,2023 and December 31,2022, respectively   75,010       77,669  
Less: Treasury stock (null shares and 3,488,559 shares with average price of $2.81 at June 30, 2023 and December 31, 2022 )         (9,807,820 )
Additional paid-in capital   446,260,170       451,373,645  
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at June 30, 2023 and December 31, 2022, respectively)   (12,640,763 )     (16,339,765 )
Accumulated other comprehensive loss   (46,029,611 )     (28,333,239 )
TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY   387,664,806       396,970,490  
               
Non-controlling interests   2,006,136       722,481  
TOTAL STOCKHOLDERS’ EQUITY   389,670,942       397,692,971  
               
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 469,506,635     $ 482,982,276  
               

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
 
  Three Months Ended     Six Months Ended  
  June 30, 2023     June 30, 2022     June 30,2023     June 30,2022  
                       
REVENUES FROM UNRELATED PARTIES, NET $ 35,953,339     $ 20,841,183     $ 58,815,447     $ 45,732,587  
REVENUES FROM THE FORMER AFFILIATE COMPANY AND RELATED PARTIES, NET                      
                               
REVENUES, NET   35,953,339       20,841,183       58,815,447       45,732,587  
                               
COST OF GOODS SOLD   (22,218,767 )     (18,122,316 )     (37,051,645 )     (40,626,557 )
                               
GROSS PROFIT   13,734,572       2,718,867       21,763,802       5,106,030  
                               
OPERATING EXPENSE:                              
Research and development   (874,562 )     (1,253,843 )     (1,753,542 )     (2,394,429 )
Selling and marketing   (2,780,515 )     (1,172,528 )     (4,608,244 )     (2,366,227 )
General and administrative   (8,838,319 )     (6,574,079 )     (16,397,771 )     (12,330,610 )
Impairment of goodwill   (507,603 )           (507,603 )      
Impairment of long-lived assets   (962,737 )           (962,737 )      
TOTAL OPERATING EXPENSE   (13,963,736 )     (9,000,450 )     (24,229,897 )     (17,091,266 )
                               
LOSS FROM OPERATIONS   (229,164 )     (6,281,583 )     (2,466,095 )     (11,985,236 )
                               
OTHER INCOME (EXPENSE):                              
Interest income   1,954,563       1,378,774       4,054,906       2,601,078  
Interest expense   (194,239 )     (138,433 )     (367,609 )     (286,577 )
Change in fair value of contingent consideration   2,164,000       (391,000 )     1,803,000       2,299,000  
Government grants   189,948       463,219       810,352       707,317  
Other income, net   807,315       2,373,528       1,073,780       2,417,310  
TOTAL OTHER INCOME, NET   4,921,587       3,686,088       7,374,429       7,738,128  
                               
INCOME (LOSS) BEFORE INCOME TAXES   4,692,423       (2,595,495 )     4,908,334       (4,247,108 )
                               
INCOME TAX (EXPENSE) BENEFIT   (305,223 )     719,843       74,323       752,443  
                               
NET INCOME (LOSS)   4,387,200       (1,875,652 )     4,982,657       (3,494,665 )
                               
LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS   659,088       61,619       1,283,655       58,662  
                               
NET INCOME (LOSS) ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS   3,728,112       (1,937,271 )     3,699,002       (3,553,327 )
                               
OTHER COMPREHENSIVE LOSS                              
Foreign currency translation adjustment   (19,279,059 )     (19,966,230 )     (17,696,372 )     (18,956,419 )
                               
COMPREHENSIVE LOSS $ (14,891,859 )   $ (21,841,882 )   $ (12,713,715 )   $ (22,451,084 )
                               
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC   74,378,083       75,863,479       74,282,823       76,075,484  
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED   76,315,953       75,863,479       75,786,201       76,075,484  
                               
NET INCOME (LOSS) PER SHARE, BASIC $ 0.06     $ (0.02 )   $ 0.07     $ (0.05 )
NET INCOME (LOSS) PER SHARE, DILUTED $ 0.06     $ (0.02 )   $ 0.07     $ (0.05 )
                               
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
 
  Number ofOutstandingShares     CommonStock     TreasuryStock     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  
Stock issuance and award   238,600       239             584,331                         584,570  
Stock buyback               (1,974,490 )     (22,578 )                       (1,997,068 )
Net income (loss)                           (1,937,271 )           61,619       (1,875,652 )
Foreign currency translation                                 (19,966,230 )     (63,460 )     (20,029,690 )
                                                               
Balance, June 30, 2022   77,648,730     $ 77,649     $ (5,937,017 )   $ 450,120,903     $ (7,769,429 )   $ (18,704,633 )     1,193,600     $ 418,981,073  
  Number ofOutstanding Shares     CommonStock     TreasuryStock     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  
Stock issuance and award   820,000       820             2,706,780                         2,707,600  
Stock based compensation                     980,893                         980,893  
Cancellation of the Treasury Stock   (3,488,559 )     (3,489 )     9,807,820       (9,804,331 )                        
Net income                           3,728,112             659,088       4,387,200  
Foreign currency translation                                 (19,279,059 )           (19,279,059 )
                                                               
Balance, June 30, 2023   75,010,171     $ 75,010     $     $ 446,260,170     $ (12,640,763 )   $ (46,029,611 )   $ 2,006,136     $ 389,670,942  
                                                               

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
  Six Months Ended  
  June 30, 2023     June 30, 2022  
           
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net income (loss) $ 4,982,657     $ (3,494,665 )
Adjustments to reconcile net (loss) income to net cash provided by operating activities              
Depreciation and amortization   6,044,494       6,447,548  
Impairments   1,470,340        
Provision of allowance for doubtful accounts   530,759       4,301  
Deferred taxes   (200,316 )     (116,206 )
Change in fair value of contingent consideration   (1,803,000 )     (2,299,000 )
Stock award and stock based compensation expense   4,724,507       639,690  
               
Changes in operating assets and liabilities:              
               
Accounts receivable   6,424,500       (9,108,858 )
Notes receivable   588,417       1,925,896  
Inventories   (17,938,859 )     (9,949,597 )
Other receivables and other assets   1,302,745       (2,806,192 )
Advances to supplier and prepayments and prepaid expenses   680,110       13,475,591  
               
Increase (Decrease) In:              
Accounts payable   20,729,603       32,751,997  
Other payables and accrued liabilities   (1,071,220 )     4,198,349  
Notes payable   (15,133,991 )     (7,788,622 )
Income tax payable   (70,636 )     (777,068 )
Net cash provided by operating activities $ 11,260,110     $ 23,103,164  
               
CASH FLOWS FROM INVESTING ACTIVITIES:              
Purchases of property, plant and equipment, net   (1,360,492 )     (1,491,918 )
Payment for construction in progress   (76,792 )     (308,304 )
Certificate of deposit   (33,214,435 )     (21,617,615 )
Net cash used in investing activities $ (34,651,719 )   $ (23,417,837 )
               
CASH FLOWS FROM FINANCING ACTIVITIES:              
Proceeds from short-term loans   7,928,212       5,070,582  
Repayments of short-term loans   (6,398,565 )     (4,570,582 )
Contribution from non-controlling shareholder         787,499  
Purchase of treasury stock         (3,580,628 )
Net cash provided by (used in) financing activities $ 1,529,647     $ (2,293,129 )
               
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH $ (21,861,962 )   $ (2,607,802 )
Effect of exchange rate changes $ (5,533,637 )   $ (6,734,387 )
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 $ 123,644,672     $ 159,333,818  
-CASH AND CASH EQUIVALENTS AT END OF PERIOD   69,406,103       87,098,779  
-RESTRICTED CASH AT END OF PERIOD   54,238,569       72,235,039  
               
SUPPLEMENTARY CASH FLOW INFORMATION              
Income taxes paid $ 76,016     $ 140,831  
Interest paid $ 198,793     $ 102,722  
               
SUPPLEMENTAL NON-CASH DISCLOSURES:              
Contribution from non-controlling shareholder by inventories, fixed assets and intangible assets $     $ 393,986  
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