SOURCE: Kandi Technologies, Corp

Kandi Technologies, Corp

November 16, 2009 08:47 ET

Kandi Technologies, Corp. Reports 2009 Third Quarter Revenues Increased 76% Over Second Quarter Sales This Year And Were 4% Higher Than Year Ago Results; Sees Impact of Global Recession Easing

JINHUA, CHINA--(Marketwire - November 16, 2009) - Kandi Technologies, Corp. (NASDAQ: KNDI)

--  Reports Second Consecutive Quarterly Profit Was Lower Than Last Year
    Due To Higher R&D and Senior Management Option Expense
--  Maintains Focus on Sales in China of COCO Electric Car and Other New
    Products
--  Optimistic About U.S. Auto Sales If Tax Incentives Are Maintained
    


Kandi Technologies, Corp., an established China-based leader in the design and manufacture of all terrain recreational vehicles and developer of the Kandi "COCO," a battery powered two-seater low-speed vehicle for casual driving, today reported 2009 third quarter and nine month results. The Company said that while its global recession impacted results through the first nine months of 2009 were well below results in the same period in 2008, sharply higher sales in this year's third quarter as compared with the second quarter of the year -- which also were slightly higher than year ago results -- clearly point to an easing of the impact of the worldwide recession on the Company.

"While this is good news for us," stated Mr. Xiaoming Hu, Chairman and CEO of the Company, "we are continuing to shift our focus to increased sales in China where the recovery is moving ahead faster and we continue to foresee a substantial market opportunity for our newest products, especially our all electric COCO super mini cars."

The Company reported that revenues in its third quarter ended September 30, 2009 were $9,626,593, up 4% over revenues of $9,261,033 in the same period last year, and $4,145,042 or 76% higher than revenues of $5,481,551 in this year's second quarter ended June 30, 2009.

The Company said it saw good increases compared with results earlier in the year in unit sales of its core Go-kart products, but a smaller sales advance in recreational ATVs. It noted that higher priced products which experienced sales growth in the quarter including its UTVs for agricultural use, its TT three wheeled motorcycle and its all electric COCO convertible, were key contributors to the gains achieved.

In the 2009 third quarter, for the second quarter in a row, the Company also reported a small profit that nevertheless was lower than net income of $1,014,545 reported in the third quarter last year. The Company said that reported net income of $576,150 in the 2009 third quarter reflected a substantial (+187%) increase in R&D costs over the same period in 2008 which the Company incurred as it continues to ramp up plans for sales in China of its new diesel powered pick up for farmers and to introduce its all electric COCO.

Additionally, in the third quarter of 2009, the Company recorded compensation cost of $315,176 for stock options for ten senior executives and managerial level employees. This was based on a February, 2009 issuance of options to purchase 2.6 million shares of common stock, the expense for which is being amortized over a two year period. In the first nine months of 2009 this compensation expense was $840, 468.

Through the first nine months of 2009, revenues of $19,114,049 compared with $30,767,280, in the same period last year. Net income in the first nine months of 2009 of $219,625, compared with net income in the same period of 2008 of $4,495,065.

COCO Progress

Through the first nine months of 2009 ending September 30, the Company reported U.S. sales of 1,141 of its all electric COCO super mini auto which it expects will become its most important revenue and profit generating product, primarily based on anticipated sales in the U.S. and China.

The Company said that while disappointed with the continued delay in the start up of consumer sales in China, it remains optimistic that the required governmental decision with respect to the amount applicable to the COCO of its announced grants to consumers purchasing "new energy" vehicles is forthcoming. During the third quarter another significant step toward initiating sales was announced however in July, namely, Letters of Intent with the China Postal Services in Jinhua City and Hangzhou which the Company said it believed would pave the way for the sale of its low-cost, battery operated COCO to these and other postal services fleets throughout China. Last week, the Company announced that it had consummated its first sale of 30 cars to the Jinhua City Postal Service pursuant to the LOI, and thus has launched its COCO sales in China.

In October, the Company also announced that it received notice that, in the U.S., the COCO had received official recognition from the U.S. Department of the Treasury as a qualified Plug-in Electric Vehicle. This makes COCO purchasers eligible for a $4,435 tax credit through the end of 2009, which the Company believes will be extended going forward. Additionally, the Oklahoma Tax Commission announced that the COCO was eligible for a state tax credit of 50% of the purchase cost, which the Company also believes will be extended into 2010.

Providing an update on these events, Mr. Hu stated, "While we cannot make estimates at this time on the specific effects of these tax credit announcements with respect to US sales going forward, I can say that thus far they have provided a substantial late year order boost. If the credits are renewed in 2010, and if Oklahoma is joined by other states, this obviously will expand our sales opportunity in 2010."

The Company said that during the quarter it also continued to focus on developing other new products, in particular, products it will market in China. In July it announced that testing was under way for a diesel powered Farmer Pick-up aimed specifically at the agricultural sector in China that it expects to launch before year end.

SEE ATTACHED TABLES

About the Company

In 2008, Kandi Technologies, Corp. (NASDAQ: KNDI) generated nearly $41 million in sales and profits of about $5 million, principally from its core All Terrain Recreational Vehicle (ATRV) businesses. The Company 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 a highly economical, beautifully designed, all electric super mini car -- the COCO -- for neighborhood driving and commuting. Kandi believes that battery powered, electric super minis will become the Company's largest revenue and profit generator. While nearly all Kandi products have been exported, including more than 65% to the U.S., the Company is intensifying efforts to shift 50% of its sales to China where markets have continued to be strong.

The Company's products can be viewed at http://www.kandivehicle.com. Its corporate/ir website is http://www.chinakandi.com.

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 Income (Loss) and Comprehensive Income (Loss) (Unaudited)

                        Three Months Ended          Nine Months Ended
                    --------------------------  --------------------------
                      September     September     September     September
                      30, 2009      30, 2008      30, 2009      30, 2008
                    ------------  ------------  ------------  ------------

REVENUES, NET       $  9,626,593  $  9,261,033  $ 19,114,049  $ 30,767,280

COST OF GOODS SOLD    (7,266,052)   (6,966,103)  (14,329,404)  (23,098,186)
                    ------------  ------------  ------------  ------------

GROSS PROFIT           2,360,541     2,294,930     4,784,645     7,669,094
                    ------------  ------------  ------------  ------------
Research and
 development             660,108       230,023     1,767,081       487,755
Selling and
 distribution
 expenses                 79,310       229,795       263,304       632,132
General and
 administrative
 expenses                195,036       324,672     1,125,954     1,019,385
Stock based
 compensation
 expense                 315,176             -       840,468             -
                    ------------  ------------  ------------  ------------
INCOME (LOSS) FROM
 OPERATIONS            1,110,911     1,510,440       787,838     5,529,822

Interest expense,
 net                    (442,315)     (547,511)     (860,872)   (1,540,631)
Government grants          3,312        17,484       127,317        57,533
Other income, net          9,800        26,551       311,984        39,599
                    ------------  ------------  ------------  ------------
INCOME (LOSS) FROM
 OPERATIONS BEFORE
 INCOME TAXES            681,708     1,006,964       366,267     4,086,323

INCOME TAX
 (EXPENSE) BENEFIT      (105,558)        7,581      (146,642)       81,042
                    ------------  ------------  ------------  ------------

INCOME (LOSS) FROM
 CONTINUING
 OPERATIONS              576,150     1,014,545       219,625     4,167,365
                    ------------  ------------  ------------  ------------


DISCONTINUED
 OPERATION
Loss from
 discontinued
 operation                     -             -             -       (33,396)
Gain from
 disposition of
 discontinued
 operation                     -             -             -       361,096
                    ------------  ------------  ------------  ------------
NET GAIN FROM
 DISCONTINUED
 OPERATION                     -             -             -       327,700
                    ------------  ------------  ------------  ------------

NET INCOME (LOSS)        576,150     1,014,545       219,625     4,495,065


                              Three Months Ended      Nine Months Ended
                            ----------------------  -----------------------
                            September   September   September   September
                             30, 2009    30, 2008    30, 2009    30, 2008
                            ----------  ----------- ----------- -----------
OTHER COMPREHENSIVE (LOSS)
 INCOME
Foreign currency
 translation                    (2,070)      51,770      26,349     404,432
                            ----------  ----------- ----------- -----------
COMPREHENSIVE (LOSS) INCOME    574,080    1,066,315     245,974   4,899,497
                            ==========  =========== =========== ===========

WEIGHTED AVERAGE SHARES
 OUTSTANDING BASIC          19,961,000   19,961,000  19,961,000  19,961,000
                            ----------  ----------- ----------- -----------
WEIGHTED AVERAGE SHARES
 OUTSTANDING DILUTED        21,155,595   19,961,000  20,856,082  19,961,000
                            ==========  =========== =========== ===========

NET INCOME PER SHARE FROM
 CONTINUING OPERATIONS,
 BASIC                      $     0.03  $      0.05 $      0.01 $      0.21
                            ----------  ----------- ----------- -----------
NET INCOME PER SHARE FROM
 CONTINUING OPERATIONS,
 DILUTED                    $     0.03  $      0.05 $      0.01 $      0.21
                            ==========  =========== =========== ===========

NET INCOME PER SHARE FROM
 DISCONTINUED OPERATIONS,
 BASIC AND DILUTED          $        -  $         - $         - $      0.02
                            ==========  =========== =========== ===========


NET INCOME PER SHARE, BASIC $     0.03  $      0.05 $      0.01 $      0.23
                            ----------  ----------- ----------- -----------
NET INCOME PER SHARE,
 DILUTED                    $     0.03  $      0.05 $      0.01 $      0.23
                            ==========  =========== =========== ===========

Contact Information

  • Contacts:
    Kandi Technologies, Corp.
    Hu Xiaoming
    President and CEO
    86-579 - 83906856

    US Investors
    Focus Asia Partners
    Robert Agriogianis
    Tel: 973-845-6642

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