SOURCE: Kandi Technologies, Corp

Kandi Technologies, Corp

August 16, 2010 08:00 ET

Kandi Technologies Achieves 80% Year Over Year Increase in Revenues and 425% Gain in Net Income in Its 2010 Second Quarter

JINHUA, CHINA--(Marketwire - August 16, 2010) -  Kandi Technologies, Corp. (NASDAQ: KNDI), a leading Chinese exporter of recreational vehicles, developer of the "COCO" all electric LSV, and a leader in Electric Vehicle (EV) development in China, announced today substantial year over year advances in revenues and net income for its second quarter and six months ended June 30, 2010.

In the 2010 second quarter:

  • Revenues reached $9,911,884, up 80.8% compared to $5,481,551 in the same period last year;
  • Net income grew 425.1% to $1,188,767 from $226,373 in last year's second quarter;
  • Non GAAP adjusted net income (excluding non-cash stock option compensation expense) was $1,359,349.

In the first six months of 2010:

  • Revenues grew 91.5% to $18,166,224
  • Net income advanced 383.5% from $(356,525) in the first half last year to $1,010,782;
  • Non GAAP adjusted net income (excluding non-cash stock option compensation expense) was $2,162,832.

Mr. Xiaoming Hu, Chairman and CEO of the Company, stated, "The second quarter of 2010 will stand out as one of the most exciting in Kandi's recent history as our businesses outperformed our expectations in many aspects. After years of effort, we received government approval to manufacture and sell our pure electric vehicles in China. Significant government announcements were made that clearly supported our comprehensive new business model to become one of leading pure EV producers and service providers in China. And, visible progress was made with local and regional government support in transforming Jinhua into a model EV city." 

Rebounding Sales For All Products

In the second quarter, while unit sales were only slightly higher than in the prior year period, revenues were up more strongly, reflecting a Company focus on exports of higher end vehicles.

Unit sales in the quarter of the Company's three-wheeled motorcycle more than doubled year over year, while sales of ATVs and utility vehicles (UTVs) were up only slightly in the period, but generated higher revenues.

The Company reported that the top contributor to the revenue gains in the period was its all electric COCO LSV, with sales of 1,005 units, primarily in the U.S., generating $4,131,674 in revenues. 

The second biggest contributor to gains in the quarter was go-karts, of which 2,785 units were sold generating $3,141,901. 

Through the first half of the year, sales of COCOs generated $5,810,682, which was the second biggest contributor to the top line after go-karts, where sales advanced strongly to 6,387 units and revenues roughly tripled from the same period last year to $6,906,990. Sales of the Company's ATVs, UTVs and three-wheeled motorcycles were $1,595,181, $2,301,704 and $1,551,647 respectively.

EVs in China: Major Developments

Among the milestone events and accomplishments during the first half and second quarter of 2010 were the following:

  • On April 13, 2010, Kandi announced that, in an effort to "jump-start" EV sales in Jinhua City, Zhejiang Province, it anticipated local government funded subsidies for up to 50% of the purchase price would be made available to the first 3,000 purchasers of Kandi's electric vehicles. It believes this reflects a strong government commitment to the success of the Alliance and the establishment of a "model EV city" in Jinhua.
  • On April 30, 2010, culminating years of effort by Kandi to develop an economical EV able to meet all government requirements, in public announcement No.98, China's Ministry of Industry and Information and Technology qualified the Kandi low speed vehicle (KD5020X) for China's energy conserving and new energy projects. The vehicle was placed on its list of vehicles in its 10th catalogue of recommended car types which meet requirements for sales to the public.
  • On June 21, 2010, the Company announced that following the milestone approval by the government of Kandi's first EV, another Kandi EV -- Model KD 5010XXYEV -- also was approved for sale in China. With its larger size and better performance, the Company believes this latest model has broad market appeal and will play a significant role in the Company's future development.

Subsequent Events

  • On July 12, 2010, Kandi announced that it expanded EV sales to Hangzhou, the capital city of Zhejiang Province, with an initial order from the Postal Service there for 60 all electric vehicles.
  • On July 16, 2010, the Company announced that construction of the first, large battery charging farm to support a planned network of battery changing stations was underway in Jinhua. The State Grid Corporation of China, China's largest electric power and transmission company, is funding the project and is responsible for construction, which is expected to be completed before the end of 2010.

"As reflected in second quarter results," Mr. Hu concluded, "while we are starting to lay a solid foundation for our future growth in the EV space, our management also intends to continuously expand sales in recreational vehicles. We see a further gradual improvement in this market over the remainder of the year and we hope that our legacy business can return to pre global financial crisis normal levels."

SEE TABLE BELOW

About Kandi Technologies, Corp.

Kandi Technologies, Corp. (NASDAQ: KNDI) ranks as one of the largest manufacturers and exporters of go-karts in China, making it a world leader in the production of this popular recreational vehicle. It also ranks among the leading manufacturers in China of all terrain vehicles (ATVs), and specialized utility vehicles (UTVs), especially for agricultural purposes. Recently, it introduced a second generation high mileage, two seater three-wheeled motorcycle. A major company focus also has been on the manufacture and sales of highly economical, beautifully designed, all electric super mini cars for neighborhood driving and commuting. Available in the U.S., convertible and hardtop models of the COCO travel up to 60 miles at speeds reaching 25mph on a six hour charge. In China, the government recently approved the sale there of Kandi EVs, including KD5010, which can travel at speeds up to 45mph. Kandi believes that battery powered, electric super minis and related services will become the Company's largest revenue and profit generator. The Company's products can be viewed at http://www.kandivehicle.com. Its corporate/ir website is http://www.chinakandi.com.

About The Alliance For Chinese Electric Vehicle Development and Commercialization ("the Alliance")

On January 4, 2010, Kandi announced it had forged an Alliance with major Chinese energy, IT and battery companies to help launch a new electronic vehicle (EV) era in China. The new business model of the Alliance addresses key hurdles to mass commercialization of EVs by reducing EV purchase costs, eliminating battery concerns and substantially increasing driving ranges. The new model envisions expansion on a city by city basis of its new model, key elements of which include: strong government cooperation, separating the sale of electric vehicles from the sale of batteries, construction of a comprehensive network of "battery stations" within each city for repair, replacement and charging of batteries, and also, utilizing Kandi vehicles and patented and patent pending EV technology for easy removal and replacement of batteries. The core members of the Alliance are: Kandi Technologies Corp., China Potevio/CNOOC New Energy and Power Ltd. (a joint venture between China National Offshore Oil Corporation and China Potevio Co.) and Tianneng Power International, Ltd. Jinhua City, where Kandi is based, has been chosen as the first model EV city by the Alliance.

Non-GAAP Financials

We provide non-GAAP information in this release for financial results which exclude non-cash stock option compensation expenses. It is our belief that providing this information enhances investor understanding of our operations, because the exclusion of such non-cash stock option expenses permits more transparent comparisons of Kandi's operations that management utilizes to evaluate their performance, in addition to the GAAP presentation of results. The non-GAAP information presented is supplemental and is not meant to substitute for GAAP financials. The non-GAAP financial information that the Company provides also may differ from the non-GAAP information provided by other companies.

Information Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the Securities and Exchange Commission.  

   
KANDI TECHNOLOGIES, CORP.  
AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND  
COMPREHENSIVE (LOSS) INCOME  
(UNAUDITED)  
   
    Three Months Ended     Six Months Ended  
    June 30, 2010     June 30, 2009     June 30, 2010     June 30, 2009  
REVENUES, NET   $ 9,911,884     $ 5,481,551     $ 18,166,224     $ 9,487,455  
COST OF GOODS SOLD     (7,559,235 )     (4,037,629 )     (13,963,654 )     (7,063,351 )
GROSS PROFIT     2,352,649       1,443,922       4,202,570       2,424,104  
Research and development     400,370       580,772       743,768       1,106,973  
Selling and distribution expenses     89,685       97,810       942,013       183,994  
General and administrative expenses     1,147,061       678,278       1,797,872       1,456,210  
INCOME (LOSS) FROM OPERATIONS     715,533       87,062       718,917       (323,073 )
Interest income (expense), net     541,224       (109,253 )     333,273       (418,557 )
Government grants     45,950       24,951       75,789       124,005  
Other income, net     10,801       245,971       57,859       302,185  
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES     1,313,508       248,731       1,185,838       (315,440 )
INCOME TAX (EXPENSE) BENEFIT     (124,741 )     (22,358 )     (175,056 )     (41,085 )
                                 
INCOME (LOSS) FROM CONTINUING OPERATIONS     1,188,767       226,373       1,010,782       (356,525 )
                                 
NET INCOME (LOSS)     1,188,767       226,373       1,010,782       (356,525 )
                                 
   
   
    Three Months Ended   Six Months Ended  
    June 30, 2010   June 30, 2009   June 30, 2010   June 30, 2009  
OTHER COMPREHENSIVE INCOME                          
Foreign currency translation     137,493     16,121     130,941     28,419  
COMPREHENSIVE INCOME (LOSS)     1,326,260     242,494     1,141,723     (328,106 )
                           
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC     20,866,109     19,961,000     20,424,671     19,961,000  
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED     24,677,264     21,126,517     22,004,992     19,961,000  
                           
NET INCOME (LOSS) PER SHARE FROM CONTINUING OPERATIONS, BASIC   $ 0.06   $ 0.01   $ 0.05   $ (0.02 )
NET INCOME (LOSS) PER SHARE FROM CONTINUING OPERATIONS, DILUTED   $ 0.05   $ 0.01   $ 0.05   $ (0.02 )
                           
NET INCOME (LOSS) PER SHARE, BASIC   $ 0.06   $ 0.01   $ 0.05   $ (0.02 )
NET INCOME (LOSS) PER SHARE, DILUTED   $ 0.05   $ 0.01   $ 0.05   $ (0.02 )
                           

Contact Information

  • Contacts:
    Kandi Technologies, Corp.
    Hu Xiaoming
    Chairman and CEO
    86-579 - 82239856

    US Investors:

    Ken Donenfeld
    donfgroup@aol.com
    kdonenfeld@dgiir.com
    Tel: 212-425-5700
    Fax- 646-381-9727