SOURCE: Kandi Technologies, Corp

November 14, 2008 08:07 ET

Kandi Technologies Reports 16% Gain in Third Quarter Net Income on 5% Increase in Revenues, and a 25% Increase in Third Quarter EPS to $0.05 Per Share; Revenues Through the Nine Months Were Up 22% and Net Income Grew 21% to $4.5 Million

Investor Conference Call Scheduled for Thursday, November 20, 2008 @ 4:30pm EST

JINHUA, CHINA--(Marketwire - November 14, 2008) - Kandi Technologies, Corp. (NASDAQ: KNDI), one of China's leading designers, manufacturers and exporters of all terrain vehicles (ATVs), utility vehicles (UTVs) and go-karts, which also has launched in the U.S. its COCO super mini car and a new three-wheeled motorcycle, today announced third quarter and nine month results.

A continuing focus on bottom line results, coupled with a good initial response to recent product introductions, helped the Company achieve a 16.4% increase in 2008 third quarter net income to $1,014,545, compared with the same period last year, on revenues in the period up 5.1% to $9,261,033. Earnings per share (EPS) excluding gains in comprehensive income of $1,066,315 grew 25% to $0.05 in the quarter, compared with EPS of $0.04 in the third quarter of 2007, on 19,961,000 shares outstanding in both periods.

For the nine months ended September 30, 2008, the Company reported revenues of $30,767,280, which were 21.6% higher than revenues of $25,293,958 in the comparable period last year. Net income through the first nine months of 2008 was up 20.6% to $4,495,065 compared with $3,727,193 in the same period in 2007. Comprehensive income through the first nine months of 2008 was $4,899,497, compared with $3,893,854 in the first nine months of 2007. Net income per share (EPS) in the first nine months of 2008 was $0.23, on 19,961,000 shares outstanding, compared with $0.25 per share in the same period last year on 14,653,667 shares outstanding. The reason for the difference in shares outstanding is that under the required weighted average share formula the Company has utilized since the completion of its reverse merger in June, 2007, its outstanding shares have been weighted accordingly throughout 2007, but in 2008, are outstanding for the entire period.

Bottom Line Focus

The Company reported that sales of go-karts in the third quarter remained steady, but as in all product lines, the Company focused less on sales volume than on producing better quality, higher end vehicles with slightly higher price tags. Among the most promising vehicles in this regard are the new, higher powered UTVs the Company introduced in the quarter. The Company also reported a good initial reception for its "TT" three-wheeled motorcycle, which is a safe, fun and economic alternative to autos.

The Company also reported that gross profits in the third quarter increased 53.6% over the same period last year, a reflection of successful execution of the Company's strategy to focus on the bottom line as opposed to sales volume. Through the first nine months of 2008, gross profit of $7,669,094 was 49.3% higher than in the same period last year.

Outlook

Mr. Hu Xiaoming, Kandi's Chairman and CEO, commented, "In this difficult economic period, we are pleased with our reported results. However, we as well as most others were unable to predict the rapid downturn in the US and world economic picture, and so it has been necessary to revise our near term outlook. In particular, we do not expect COCO sales to advance as rapidly as earlier predictions. Instead, we look for a slow ramp up in COCO sales through year-end to well below our original estimate of 5,000 to 10,000 vehicle sales. We believe that COCO sales will see a pickup when we introduce an exciting electric version of the car, currently anticipated to occur at the end of this year."

"Going forward," Mr. Hu said, "we are cautiously optimistic about results in 2009, as we are very well positioned in each product category with sensible, economic vehicles that nevertheless are designed to look and feel very special to purchasers. We also expect to continue to add other new appealing models in each product category that will attract consumer attention even in a more difficult economic environment. Further, we are confident that, if financing is required to meet our growth goals, it is available to us."

Conference Call Invitation

The Company will host a conference call to discuss its third quarter results for the period ended September 30, 2008 on Thursday, November 20, 2008 at 4:30pm EST.

Interested participants should call 1-800-762-8779 when calling within the United States or 1-480-629-9031 when calling internationally. Please ask for the Kandi Technologies, Corp. Earnings Conference Call, Pass Code 3943631. There will be a playback available until 11/27/2008.To listen to the playback, please call 1-800-406-7325 when calling within the United States or 1-303-590-3030 when calling internationally. Use the Pass Code 3943631 for the replay.

This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link http://viavid.net/dce.aspx?sid=00005A10 or at ViaVid's website at www.viavid.net. The webcast can be accessed through 11/20/09.

About the Company

In its core All Terrain Recreational Vehicle (ATRV) businesses, Kandi Technologies, Corp. (NASDAQ: KNDI) generated nearly $35 million in sales in 2007, coupled with a 370% increase in profits to just over $5 million. 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 increasingly popular recreational vehicle. It also ranks among the leading manufacturers in China of all terrain vehicles (ATVs) producing more than 30,000 ATV units last year. A more recent Company 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 North America, where Kandi sells approximately 70% of its products, all of which are exported. The Company also has recently launched its innovative three-wheeler motorcycle, the TT, and, its highly economical, beautifully designed, super mini car -- the COCO -- for casual, neighborhood driving. Kandi believes that super minis will become the Company's largest revenue and profit generator.

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.

               Three                 Three
               Months                Months
               Ended                 Ended                        Increase/
              September    % of     September    % of  Increase/ (Decrease)
               30, 2008  Revenue    30, 2007  Revenue  (Decrease)     in %
             -----------  ------  -----------  ------  ---------  --------
REVENUES     $ 9,261,033   100.0% $ 8,808,836   100.0% $ 452,197       5.1%
COST OF
 GOODS SOLD    6,966,103    75.2%   7,315,162    83.0%  (349,059)   (4.8%)
GROSS PROFIT   2,294,930    24.8%   1,493,674    17.0%   801,256      53.6%
Selling and
 Marketing       229,795     2.5%     179,386     2.0%    50,409      28.1%
General and
 Administra-
 tive            324,672     3.5%     228,603     2.6%    96,069      42.0%
Research and
 Development     230,023     2.5%      12,033     0.1%   217,990    1811.6%
INCOME FROM
 CONTINUING
 OPERATIONS    1,510,440    16.3%   1,073,652    12.2%   436,788      40.7%
Government
 Grants           17,484     0.2%           -     0.0%    17,484       100%
Interest
 Expense,
 Net            (547,511) (5.9%)     (373,467) (4.2%)   (174,044)     46.6%
Forfeiture
 of Customer
 Deposits              -     0.0%     233,585     2.7%  (233,585)  (100.0%)
Other, Net        26,551     0.3%         548     0.0%    26,003    4745.1%
INCOME FROM
 CONTINUING
 OPERATIONS
 BEFORE
 INCOME
 TAXES         1,006,964    10.9%     934,318    10.6%    72,646       7.8%
INCOME TAX
 BENEFIT/
 EXPENSE           7,581     0.1%           -     0.0%     7,581       100%
NET INCOME
 FROM
 CONTINUING
 OPERATIONS    1,014,545    11.0%     934,318    10.6%    80,227       8.6%
INCOME FROM
 DISCONTINUED
 OPERATION             -     0.0%     (62,820)   (0.7%)     62,820
(100.0%)
NET INCOME   $ 1,014,545    11.0% $   871,498     9.9% $ 143,047      16.4%



                        Kandi Technologies, Corp.

               Nine                  Nine
               Months                Months
               Ended                 Ended                        Increase/
              September    % of     September    % of  Increase/ (Decrease)
               30, 2008  Revenue    30, 2007  Revenue  (Decrease)    in %
             -----------  ------  ----------- ------  ---------- --------

REVENUES     $ 30,767,280  100.0% $25,293,958  100.0% $5,473,322     21.6%
COST OF
 GOODS SOLD    23,098,186   75.1%  20,158,923   79.7%  2,939,263     14.6%
GROSS PROFIT    7,669,094   24.9%   5,135,035   20.3%  2,534,059     49.3%
Selling and
 Marketing        632,132    2.1%     366,879    1.5%    265,253     72.3%
General and
 Administra-
 tive           1,019,385    3.3%     536,731    2.1%    482,654     89.9%
Research and
 Development      487,755    1.6%      64,888    0.3%    422,867    651.7%
INCOME FROM
 CONTINUING
 OPERATIONS     5,529,822   18.0%   4,166,537   16.5%  1,363,285     32.7%
Government
 Grants            57,533    0.2%           -    0.0%     57,532      100%
Interest
 Expense,
 Net           (1,540,631)  (5.0)%   (666,704)  (2.6)%  (873,927)  (131.1)%
Forfeiture
 of Customer
 Deposits               -    0.0%     500,304    2.0%   (500,304)  (100.0)%
Other , Net        39,599    0.1%     (69,672)  (0.3)%   109,271    156.8%
INCOME FROM
 CONTINUING
 OPERATIONS
 BEFORE
 INCOME TAX     4,086,323   13.3%   3,930,465   15.5%    155,858      4.0%
INCOME TAX
 BENEFIT/
 EXPENSE             81,042    0.3%         -    0.0%     81,042      100%
NET INCOME
 FROM
 CONTINUING
 OPERATIONS     4,167,365   13.5%   3,930,465   15.5%    236,900      6.0%
INCOME FROM
 DISCONTINUED
 OPERATION        327,700    1.1%    (203,272)  (0.8)%   530,972    261.2%
NET INCOME   $  4,495,065   14.6% $  3,727,193  14.7% $   76,872     20.6%

Contact Information

  • Contact:
    Kandi Technologies, Corp.
    Hu Xiaoming
    President and CEO
    (86-0579) 82239700

    US Investors

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

    Press

    Ken Donenfeld
    donfgroup@aol.com
    Tel: 212-425-5700
    Fax: 212-425-6951