SOURCE: Kandi Technologies, Corp.

May 15, 2008 08:30 ET

Kandi Technologies, Corp. Says First Quarter Revenues Grew 76% Led by Sales of Go-Karts

Forecasts Estimated Full Year Sales of Super Mini Cars Will Add Substantially to Anticipated Growth of Core ATRV Business

First Quarter Net Income From Continuing Operations Advanced 27.5% on Further Improvement in Gross Profit Margins, as Company Ramped up Sales, Marketing and Production Capacity in Line With Continuing Rapid Growth

JINHUA, CHINA--(Marketwire - May 15, 2008) - Kandi Technologies, Corp. (NASDAQ: KNDI), one of China's leading designers, manufacturers and exporters of all terrain vehicles (ATVs), utility vehicles (UTVs) and its number one exporter of go-karts, today announced that sales in its first quarter ended March 31, 2008 grew 76% to $9,487,285 compared with $5,376,977 in the year ago period, while net income from continuing operations in the 2008 first quarter grew to $1,110,019, a 27.5% increase over the $870,278 reported in the first quarter of 2007. Net income in the first quarter of 2007 of $941,118 included $70,840 from a discontinued operation, while net income in the same period this year was $1,110,176.

Mr. Xiaoming Hu, CEO and Chairman of the Board of Kandi, commented, "The strong sales advance in the first quarter was led by the excellent reception for our exciting line of go-karts, where our focus has been on delivering more higher priced, higher performance vehicles rather than solely on unit growth. This actually is our focus across all of our ATRV product lines as we aim for continuing improvement in our gross profit margins, which reached 23% in the first quarter, up from 15.1% in the year ago period and 21.5% at the end of 2007."

The Company noted that during the quarter it increased spending on marketing, sales, R+D and administrative personnel, as well as on the expansion of its production facilities to meet the requirements of the rapid growth it is experiencing, and to prepare for the anticipated launch of its new super mini cars this summer. At the same time, while the cost of sales in the quarter grew approximately 66%, the Company saw a decline in these costs as a percentage of revenues, mainly reflecting its ongoing focus on cost controls. This decline, as well as the Company's ability to increase prices on some of its high-end products, were key contributing factors to the Company's improved gross profit margin, and, in turn, the increase achieved in net income.

With respect to net income per share figures in the quarter, the Company noted that under the required weighted average share formula that it has utilized since the completion of its reverse merger in June, 2007, its outstanding shares of 19,961,000 have been weighted accordingly throughout 2007, but, in 2008, are outstanding for the entire period. Consequently, EPS of $0.06 in the 2008 first quarter, based on comprehensive income of $1,156,616, is calculated on the basis of 19,961,000 basic and diluted shares. This compares with $0.09 per share in the first quarter of 2007, based on 12,000,000 basic and diluted shares outstanding.

Going Forward: Growing Contribution From Super Mini Car Sales

Mr. Hu commented, "We are beginning the year very well positioned to achieve steady growth in our ATRV business, and to see the start of a new hyper growth area with the launch of our super mini cars. In April, we announced the acquisition of additional manufacturing space to which all of our ATRV production will be transferred so that our expanded existing facilities can be utilized for the production of super mini cars. We continue to expect the acquisition will be completed by June 30, 2008, which will permit us to accommodate our growth plans and to initiate mass production of the super minis."

Updating its forecast for the year, the Company said that plans to launch its new super mini vehicles this summer are on track, and that the success of this effort is expected to have a substantial positive impact on the Company's results in 2008 and in subsequent years.

More specifically, the Company now anticipates that growth in its core ATRV business (ATVs, UTVs and go-karts) is anticipated to be between 10% and 20%, with an anticipated growing contribution from the Company's new line of utility vehicles (UTVs), mainly for agricultural uses, beginning in early summer.

Additionally, the Company anticipates that following their launch in July, full year sales of its low priced, high mileage off highway super mini cars will be between 5,000 and 10,000 vehicles, generating approximately $4,000 per vehicle to the Company.

The Company also said that based on its continuing focus on selling higher priced, higher end ATRV vehicles and the higher margins achievable on its super mini cars, it expects that full year margins will be higher than the 21.5% gross profit margin achieved in 2007.

About the Company

Kandi Technologies, Corp. ("Kandi" or the "Company") founded in 2003 and headquartered in Zhejiang Province, The Peoples Republic of China, (the PRC), achieved a listing on NASDAQ in March, 2008 with the symbol: KNDI. In its core All Terrain Recreational Vehicle (ATRV) businesses, the Company generated nearly $35 million in sales in 2007, coupled with a 370% increase in profits to just over $5 million. Kandi ranks as the number one manufacturer and exporter of go-karts in China. The Company's most recent focus in the ATRV category has been on specialized utility vehicles (UTVs), especially for agricultural purposes. This vehicle line is seeing strong growth, especially in the U.S., where Kandi sells approximately 70% of all its ATRV products, with the remainder exported to a variety of countries around the world. The most exciting new development at the Company is its plan to shortly launch in the U.S. its highly economical, beautifully designed off highway, super mini car for casual, neighborhood driving. Kandi believes that super minis will very rapidly become the Company's largest revenue and profit generators.

The Company's products can be viewed at 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.

The following table sets forth the amounts and percentage relationship to revenue of certain items in our condensed consolidated statements of income and comprehensive income:

                 For the             For the
                  Three               Three
                 Months              Months
                  Ended               Ended
                March 31,           March 31,
                  2008     % of       2007     $ of     Change in  Change
                 Amount   Revenue    Amount   Revenue    Amount     in %
               ---------- -------  ---------- -------  ---------- -------
REVENUES       $9,487,285   100.0% $5,376,977   100.0% $4,110,308    76.4%
COST OF GOODS
 SOLD           7,305,277    77.0%  4,403,741    81.9%  2,901,536    65.9%
GROSS PROFIT    2,182,008    23.0%    973,236    18.1%  1,208,772   124.2%
Selling and
 Marketing        215,776     2.3%     80,761     1.5%    135,015   167.2%
General and
 Administrative   279,120     2.9%    141,594     2.6%    137,526    97.1%
Research and
 Development       46,610     0.5%     11,978     0.2%     34,632   289.1%
INCOME FROM
 CONTINUING
 OPERATIONS     1,640,502    17.3%    738,903    13.7%    901,599   122.0%
Government
 Grants            23,381     0.2%          -     0.0%     23,381   100.0%
Interest
 Expense, Net    (615,540)   (6.5%)  (134,632)   (2.5%)  (480,908)  357.2%
Forfeiture of
 Customer
 Deposits               -     0.0%    265,789     4.9%   (265,789) (100.0%)
Other Income, Net  21,711     0.2%        218     0.0%     21,493 9,859.2%
INCOME FROM
 CONTINUING
 OPERATIONS
 BEFORE INCOME
 TAXES          1,070,054    11.3%    870,278    16.2%    199,776    23.0%
INCOME TAX
 BENEFIT           39,965     0.4%          -     0.0%     39,965   100.0%
NET INCOME FROM
 CONTINUING
 OPERATIONS     1,110,019    11.7%    870,278    16.2%    239,741    27.5%
INCOME FROM
 DISCONTINUED
 OPERATION            157     0.0%     70,840     1.3%    (70,683)  (99.8%)
NET INCOME     $1,110,176    11.7% $  941,118    17.5% $  169,058    18.0%

Contact Information

  • Contacts:

    Kandi Technologies, Corp.
    Xiaoming Hu
    CEO and Chairman of the Board
    (86-0579) 82239700

    US Investors

    Focus Asia Partners
    Robert Agriogianis
    Tel: 973-845-6642
    Fax: 973-845-6649

    Press
    Ken Donenfeld
    Tel: 212-425-5700
    Fax: 212-425-6951