SOURCE: Kandi Technologies, Corp.

Kandi Technologies, Corp.

August 14, 2012 13:19 ET

Kandi Technologies Announces Second Quarter and Six Months 2012 Financial Results

1st Half 2012 Revenue Increases 37.5% YoY to $25.42 Million; 1st Half 2012 Operating Income Increases 20.1% YoY to $2.00 Million; Company Gained Significant Increase in ATV and Go-Kart Sales

JINHUA, CHINA--(Marketwire - Aug 14, 2012) - Kandi Technologies, Corp. (the 'Company' or 'Kandi') (NASDAQ: KNDI), a leading Chinese manufacturer and developer of pure electric vehicles (EVs) and all-terrain vehicles (ATVs), today announced its financial results for the second quarter and six months ended June 30, 2012.

Financial Highlights:

  • Revenue for the six months ended June 30, 2012 grew 37.5% to $25.42 million from $18.48 last year as compared to the six months last year. ATV sales grew 71.6% to $2.96 million and go-kart sales grew approximately 41.1% to $15.73 million as compared to the six months last year;
  • Revenue for the second quarter grew 9.1% to $11.06 million from $10.14 last year as compared to the second quarter last year. ATV sales grew 209.0% to $0.96 million as compared to the second quarter last year;
  • Gross profit for the first half of 2012 increased 16.5% to $5,129,107 compared to $4,403,148 at the same period of last year, as a result of increased revenue;
  • ATV unit sales grew to 7,078 units in the first half of 2012, up 165.6% from 2,665 units a year ago, while go-kart unit sales increased 49.0% year over year to 16,982 units up from 11,394 units of the first half of last year;
  • Operating income rose 20.1% to $2.00 million compared with $1.67 million in the same period of last year;
  • GAAP net income for the first half was $3.29 million, or $0.11 per diluted share, compared to a net income of $9.56 million, or $0.33 per diluted share, in the same period last year;
  • A working capital surplus of $23.37 million was achieved at the end of the second quarter, slightly increase from a reported working capital surplus of $23.01 million as of June 30, 2010;
  • Cash, cash equivalents and restricted cash totaled $30.78 million at the end of the second quarter, a 244.68% increase from $8.93 million at the end of 2011.

Mr. Xiaoming Hu, Chairman and Chief Executive Officer of Kandi Technologies, commented, "We are delighted that we solidly grew our revenue. The sales of ATV and go-kart will continue with the high growth. The EV sales have begun to boost as the strong government support and our brand and technologies of pure EV started to be introduced in Jinhua, Hangzhou and other potential cities throughout China."

EV Milestones

During the second and recent quarter, the Company continued to achieve new milestones in its developing pure EV business, including:

  • On August 11th, 2012, the Hangzhou pure EV rental program started its trial process to the local residents. Hangzhou Electric Vehicle Industry Development Ltd. Co. began to accept individuals' registration and reservation for the pure EV rental program. The Kandi EVs that are provided in this program are well received by the residents in Hangzhou, and about a thousand people have registered just in one day on August 12th, 2012. Kandi EVs will continue to be deployed in Hangzhou market if the trial goes successfully. 
  • On August 10th, 2012, Kandi signed a cooperation framework agreement with Zhejiang Guoxin Vehicle Leasing Co., Ltd in Hangzhou to promote the public transportation project of self-driving EV rentals in Hangzhou.
  • On August 10th, 2012, Kandi participated in the 2012 China International Green Vehicle Industry Expo in Hangzhou, and showcased for the first time the "smart" charging stations vertical parking system for EVs, with functions of charging and exchanging batteries, jointly developed by the Company and Zhejiang Leimeng Machinery and Equipment Co., Ltd.
  • On July 13th, 2012, the Company signed a framework agreement with the government of Weifang Binhai Economic Development Zone in Wei Fang City of Shandong Province, under which Kandi intends to invest and establish a project company that will have a capacity to produce key components and parts for 100,000 electrical vehicles annually.
  • On May 13th, 2012, Kandi attended a seminar in Beijing along with top Chinese government officials, and other environmental and transportation experts to review a nine-month long feasibility study of Kandi's innovative plan for a comprehensive Pure EV rental system for reducing traffic, parking and pollution problems in cities throughout China.
  • On April 23rd, 2012, the Chairman and CEO of Kandi, Mr. Xiaoming Hu transferred his personally owned intellectual property rights relating to eleven key pure electric vehicle (EV) patents to Kandi.

"We are very excited by the growing momentum for the EV demand and continue to see strong growth from ATV and go-kart sales. We will continue to work diligently with the regional government and industry partners to expand our EV sales distribution and network. With cooperative letters of intent we have signed recently, we are confident about the future growth of our EVs and becoming the leader in this market," Mr. Hu concluded.

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.

   
KANDI TECHNOLOGIES, CORP.  
AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND  
COMPREHENSIVE INCOME (LOSS)  
(UNAUDITED)  
   
    Three Months Ended     Six Months Ended  
    June 30, 2012     June 30, 2011     June 30, 2012     June 30, 2011  
REVENUES, NET   $ 11,060,976     $ 10,137,702     $ 25,416,517     $ 18,479,208  
                                 
COST OF GOODS SOLD     (9,272,719 )     (7,795,987 )     (20,287,410 )     (14,076,060 )
                                 
GROSS PROFIT     1,788,257       2,341,715       5,129,107       4,403,148  
Research and development     (620,090 )     (574,588 )     (1,376,186 )     (1,086,540 )
Selling and marketing     (79,201 )     (92,679 )     (173,036 )     (149,615 )
General and administrative     (896,050 )     (827,529 )     (1,579,670 )     (1,501,396 )
                                 
INCOME FROM CONTINUING OPERATIONS     192,916       846,919       2,000,215       1,665,597  
Interest income (expense), net     (188,542 )     275,466       (56,940 )     (21,804 )
Change in fair value of financial instruments     1,018,576       2,367,594       1,961,526       7,752,772  
Government grants     25,308       273,139       25,308       280,727  
Investment (loss) income     (14,010 )     (8,490 )     (27,411 )     (7,276 )
Other income, net     12,134       53,526       46,602       167,232  
                                 
INCOME (LOSS) BEFORE INCOME TAXES     1,046,382       3,808,154       3,949,300       9,837,248  
                                 
INCOME TAX EXPENSE     (141,154 )     (186,811 )     (661,120 )     (277,505 )
                                 
NET INCOME     905,228       3,621,343       3,288,180       9,559,743  
                                 
OTHER COMPREHENSIVE INCOME                                
Foreign currency translation     2,434,039       827,820       2,829,455       1,146,420  
                                 
                                 
COMPREHENSIVE INCOME (LOSS)   $ 3,339,267     $ 4,449,163     $ 6,117,635     $ 10,706,163  
                                 
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC     29,845,122       27,440,878       28,647,746       27,431,851  
                                 
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED     31,166,260       28,578,592       29,990,967       28,786,145  
                                 
NET INCOME PER SHARE, BASIC   $ 0.03     $ 0.13     $ 0.11     $ 0.35  
                                 
NET INCOME PER SHARE, DILUTED   $ 0.03     $ 0.13     $ 0.11     $ 0.33  
 
 
KANDI TECHNOLOGIES, CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
    June 30,   December 31,
    2012   2011
    (Unaudited)    
CURRENT LIABILITIES            
Accounts payable   $ 8,584,600   $ 5,061,069
Other payables and accrued expenses     1,150,306     3,137,983
Short-term bank loans     36,599,839     36,372,492
Customer deposits     43,407     1,025,357
Notes payable, net of discount of $0 and $71 as of June 30, 2012 and December 31, 2011 respectively     15,174,771     5,847,552
Income tax payable     128,390     153,730
Due to employees     168,567     9,455
Due to related party     841,251     841,251
Deferred taxes           56,362
Financial derivate - liability     -     213
    Total Current Liabilities     62,691,131     52,505,464
             
LONG-TERM LIABILITIES            
Financial derivatives - liability     1,957,885     3,919,411
    Total Long-Term Liabilities     1,957,885     3,919,411
             
  TOTAL LIABILITIES     64,649,016     56,424,875
             
STOCKHOLDERS' EQUITY            
Common stock, $0.001 par value; 100,000,000 shares authorized; 29,845,122 and 27,445,600 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively     29,845     27,446
Additional paid-in capital     38,345,747     31,533,378
Retained earnings (the restricted portion is $1,940,832 at June 30, 2012 and December 31, 2011)     22,498,511     19,210,330
Accumulated other comprehensive income     7,907,176     5,077,721
  TOTAL STOCKHOLDERS' EQUITY     68,781,279     55,848,875
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 133,430,295   $ 112,273,750
   
   
KANDI TECHNOLOGIES, CORP.  
AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(UNAUDITED)  
             
    Six Months Ended June 30  
    2012     2011  
CASH FLOWS FROM OPERATING ACTIVITIES:                
  Net income (loss)   $ 3,288,180     $ 9,559,743  
  Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:                
  Depreciation and amortization     2,470,911       2,317,662  
  Deferred taxes     (24,219 )     58,459  
  Option and warrant expense     19,053       138,315  
  Change of derivative instrument's fair value     (1,961,526 )     (7,752,771 )
  Loss in investment in associated company     27,411       16,819  
                 
Changes in operating assets and liabilities:                
(Increase) Decrease In:                
  Accounts receivable     (11,844,213 )     7,991,676  
  Inventories     (6,826,372 )     (5,214,768 )
  Other receivables and prepaid expenses     1,701,831       (773,085 )
  Due from employees     185,624       20,490  
  Prepayments and prepaid expenses     30,204       (9,321,749 )
  Marketable equity securities (trading)     -       303,596  
                 
Increase (Decrease) In:                
  Accounts payable     3,484,295       (1,413,790 )
  Other payables and accrued liabilities     (1,990,887 )     (134,299 )
  Customer deposits     (988,344 )     (10,616 )
  Income tax payable     (26,411 )     57,387  
  Net cash (used in) provided by operating activities   $ (12,454,463 )   $ (4,156,931 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Cash Acquired in Acquisition     112,551       -  
  Purchases of plant and equipment     (452,393 )     (201,490 )
  Purchase of construction in progress     (2,091,168 )     (93,652 )
  Issuance of notes receivable     -       (2,733,584 )
  Repayments of notes receivable     23,123,103       7,260,308  
    Net cash provided by (used in) investing activities   $ 20,692,093     $ 4,231,582  
                 
                 
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
  Restricted cash   $ (20,103,142 )   $ (8,857,647 )
  Proceeds from short-term bank loans     14,749,822       14,507,848  
  Repayments of short-term bank loans     (14,781,440 )     (14,507,848 )
  Proceeds from notes payable     15,160,857       29,473,839  
  Repayments of notes payable     (5,883,855 )     (19,224,884 )
  Option exercise & other financing     67,403       60,069  
  Common Stock Issued, net of Cost of Capital     3,740,423       -  
  Net cash provided by financing activities     (7,049,932 )     1,451,377  
                 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     1,187,698       1,526,028  
  Effect of exchange rate changes on cash     497,098       92,029  
  Cash and cash equivalents at beginning of period     2,294,352       7,754,166  
CASH AND CASH EQUIVALENTS AT END OF PERIOD   $ 3,979,148     $ 9,372,223  
                 
SUPPLEMENTARY CASH FLOW INFORMATION                
  Income taxes paid   $ 687,530     $ 220,119  
  Interest paid   $ 1,316,591     $ 1,232,993  
  Issuance of Common Stock for Acquisition   $ 8,616,416       -  

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