SOURCE: Kandi Technologies, Corp.

Kandi Technologies, Corp.

November 14, 2011 18:25 ET

Kandi Technologies Announces Third Quarter and Nine Month 2011 Financial Results

Company Achieved Significant Gains in GAAP Net Income in Both Periods and Remains Confident of Future Growth

JINHUA, CHINA--(Marketwire - Nov 14, 2011) - Kandi Technologies, Corp. (the 'Company' or 'Kandi') (NASDAQ: KNDI), a leading Chinese manufacturer and developer of pure electric vehicles (EVs) and off-road vehicles, today announced its financial results for the third quarter and nine months ended September 30, 2011. Results in both periods clearly reflect the Company's improved financial condition and growth in most key product categories.

Financial Highlights:

  • Third quarter revenues of $10.31 million compared with $10.48 million in the same period last year and grew slightly to $28.79 million in the first nine months of 2011 compared with $28.64 million in the prior year period
  • Gross margins increased 0.3% in the 2011 third quarter and reached 23.4% at the end of nine months, up from 22.8% in the prior year
  • GAAP net income in the third quarter was $0.38 million, or $0.01 per diluted share, compared to a net loss of $1.72 million, or ($0.08) per diluted share, in the same period last year
  • Through the first nine months of 2011 net income as reported jumped to $9.94 million, or $0.35 per share, compared to a prior year loss of $0.71 million in the same period
  • Non-GAAP adjusted net income in the third quarter of 2011, excluding effects from convertible notes, stock awards and the change of the fair value of derivatives was $0.72 million, compared with $1,40 million in the 2010 period, on the same basis, Non-GAAP adjusted net income through the first nine months of 2011 was $2.69 million, or 12.0% lower than adjusted net income for the same period in 2010 excluding the same effects
  • A working capital surplus of $18.94 million was achieved at quarter-end, improved from a reported working capital surplus of $3.04 million as of September 30, 2010
  • Cash, cash equivalents and restricted cash totaled $28.24 million at quarter-end, which equates to $0.98 per fully diluted share, a 12.3% increase from $25.15 million at the end of 2010

Mr. Xiaoming Hu, Chairman and Chief Executive Officer of Kandi Technologies, commented, "Despite the decreased sales in some key products, we think we have made great progress in improving our cost management and market expansion. Compared to the same period last year, we achieved modest growth in our EV sales. Since the end of the quarter, on October 12, 2011, the government subsidies for 3,000 Kandi Pure Energy Vehicles were successfully initiated in Jinhua City, in Zhejiang Province, and sales have been very positive. In addition, Kandi Pure Energy Vehicles will soon begin to be sold in Hangzhou City where the government goal is the sale of 20,000 vehicles. We will continue to work closely with the regional government, and effectively expand the sales distribution and network of our EVs in order to further penetrate existing markets. Additionally, we anticipate Kandi Pure Energy Vehicles will be introduced to many mid-large cities throughout China in the near future, which will provide us a strong base for future EV sales in China."

Outlook
"We are confident about the future growth of our EVs and becoming the leader in this market, and that we will be able to meet both domestic and international growing demand for our variety of products," Mr. Hu stated. "In this regard," he added, "we remain optimistic about the growth of our all-terrain vehicles (ATVs) in China. While our existing business and operations remain strong, we will continue to improve our manufacturing capabilities, promote strong alliances, expand capacity, strengthen and accelerate product development, and enhance our management capability in order to realize future fast growth and reach a higher performance level," concluded Mr. Hu.

About Kandi Technologies, Corp.
Kandi Technologies, Corp. (NASDAQ: 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. The Company's products can be viewed at http://www.kandivehicle.com and its IR website is http://www.kanditechnology.com.

Information Regarding Forward-Looking Statements
The foregoing press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These include statements about the Company's expectations, beliefs, intentions or strategies for the future, which the Company indicates by words or phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe," "our company believes," "management believes" and similar language. These forward-looking statements are based on the Company's current expectations and are subject to certain risks, uncertainties and assumptions. The Company's actual results may differ materially from results anticipated in these forward-looking statements. The Company bases its forward-looking statements on information currently available, and it assumes no obligation to update them. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements.

Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

KANDI TECHNOLOGIES, CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30,
2011
September 30,
2010
September 30,
2011
September 30,
2010
REVENUES, NET $ 10,310,558 $ 10,478,224 $ 28,789,766
$
28,637,863
COST OF GOODS SOLD (7,984,828 ) (8,140,771 ) (22,060,888 ) (22,098,905 )
2,325,730 2,337,453 6,728,878 6,538,958
GROSS PROFIT
Research and development (608,463 ) (459,935 ) (1,695,003 ) (1,203,270 )
Selling and distribution expenses (85,239 ) (58,121 ) (234,854 ) (1,000,187 )
General and administrative expenses (1,067,021 ) (516,929 ) (2,568,417 ) (2,315,088 )
INCOME (LOSS) FROM OPERATIONS 565,007 1,302,468 2,230,604 2,020,413

Interest income (expense), net
117,353 (572,032 ) 95,549 (2,015,516 )
Change in fair value of financial instruments (271,780 ) (2,578,693 ) 7,480,992 (802,884 )
Government grants 9,235 191,934 289,962 266,911
Investment (loss) income (12,905 ) - (20,181 )
Other income, net 95,067 33,249 262,299 91,088
INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES 501,977 (1,623,074 ) 10,339,225 (439,988 )

INCOME TAX (EXPENSE) BENEFIT
(117,119 ) (94,282 ) (394,624 ) (269,338 )

NET INCOME (LOSS)
384,858 (1,717,356 ) 9,944,601 (709,326 )

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