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Kandi Technologies Reports 2022 Financial Results

15 March 2023
  • Revamped strategy leads to highest revenue in 3 years
  • Optimistic outlook due to strong balance sheet and diversified business model

JINHUA, China, March 15, 2023 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company”, “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the full year ended December 31, 2022.

Full Year 2022 Highlights

  • Total revenues increased by 28.8% to $117.8 million, from $91.5 million in 2021.
  • Off-road vehicles and associated parts sales increased by 140.7% to $70.6 million, compared to $29.3 million in 2021.
  • EV products sales increased to $7.9 million from $1.5 million in 2021.
  • EV parts sales were $9.0 million, compared to $25.3 million in 2021.
  • Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $4.6 million, compared with $30.0 million in 2021.
  • Lithium-ion cells increased to $24.0 million from $4.5 million in 2021.
  • Net loss was $12.9 million, or $0.17 loss per fully diluted share, compared to a net income of $22.9 million, or $0.30 income per fully diluted share for 2021.The decrease in 2022 was due to the absence of gains from disposal of long-lived assets and equity sales that totaled $66.2 million in 2021.
  • Working capital totaled $247.8 million as of December 31, 2022.
  • Cash and equivalents, restricted cash, and certificate of deposit totaled $232.2 million as of December 31, 2022.

Dr. Xueqin Dong, Chief Executive Officer of Kandi commented, “Over the past year, the management of Kandi has made concerted efforts to adapt to changing market conditions and adjust our development strategies accordingly. As a result, we have effectively avoided the risks of potential losses in the market for electric vehicles. Additionally, we have successfully leveraged the technology of our all-electric vehicles to expand into the off-road vehicle sector, which has yielded significant results. This dedication and innovation paid off, as our total revenue reached a three-year high in 2022. We remain committed to this positive momentum and aim to introduce new and competitive products to meet evolving customer demands.”

Dr. Dong concluded, “Our achievements are the result of our focus on developing highly competitive products, as well as the strong support of our strategic partners and the trust of our customers. We are grateful for the support and trust of our valued customers and partners, and we will work hard to meet their evolving needs. With a robust balance sheet and a diversified business model, we are confident about the future and remain committed to maintaining positive momentum in our development.”

Full Year 2022 Financial Results

Net Revenues and Gross Profit (in USD millions)

 2022  2021 Y-o-Y%
Net Revenues$117.8 $91.5 28.8% 
Gross Profit$19.5 $16.2 20.1% 
Gross Margin% 16.6%  17.8% - 

Net revenues of $117.8 million increased by 28.8% from 2021. The 141% surge in sales of off-road vehicles and associated parts contributed to total revenue and gross profit. The slight dip in gross margin versus 2021 was attributable to a mix of product portfolio shifting to lower margin products such as lithium-ion cells.

Operating Income/Loss (in USD millions)

 2022  2021 Y-o-Y%
Operating Expenses ($47.2)  ($14.9) 216.5% 
(Loss) income from Operations ($27.7) $1.34 -2,171.5% 
Operating Margin% -23.5%  1.5% - 

Operating expenses were $47.2 million, compared with operating expense of $14.9 million for 2021. In 2021, the operating expenses figure was reduced by the gains from the disposal of assets from the Jinhua facility.

Net Income/Loss (in USD millions)

 2022  2021Y-o-Y%
Net (Loss) Income  ($12.9) $22.9(156.2%) 
Net (Loss) Income per Share, Basic and Diluted ($0.17) $0.30- 

Net loss was $12.9 million, compared to a net income of $22.9 million for 2021. The shift from profitability to loss was primarily caused by the recognition of gains resulting from the relocation of the Jinhua facility in 2021.

Full Year 2022 Conference Call Details

The Company has scheduled a conference call and live webcast to discuss its financial results at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time) on Wednesday, March 15, 2023. Management will deliver prepared remarks to be followed by a question-and-answer session.

The dial-in details for the conference call are as follows:

The live audio webcast of the call can also be accessed by visiting Kandi's Investor Relations page on the Company's website at http://www.kandivehicle.com. An archive of the webcast will be available on the Company's website following the live call.

About Kandi Technologies Group, Inc.

Kandi Technologies Group, Inc. (KNDI), headquartered in Jinhua Economic Development Zone, Zhejiang Province, is engaged in the research, development, manufacturing, and sales of various vehicular products. Kandi conducts its primary business operations through its wholly-owned subsidiary, Zhejiang Kandi Technologies Group Co., Ltd. (“Zhejiang Kandi Technologies”), formerly, Zhejiang Kandi Vehicles Co., Ltd. and its subsidiaries including Zhejiang Kandi Smart Battery Swap Technology Co., Ltd, and SC Autosports, LLC (d/b/a Kandi America), the wholly-owned subsidiary of Kandi in the United States, and its wholly-owned subsidiary, Kandi America Investment, LLC. Zhejiang Kandi Technologies has established itself as one of China's leading manufacturers of pure electric vehicle parts and off-road vehicles.

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 applicable securities laws, the Company does not assume a duty to update these forward-looking statements.

Follow us on Twitter: @ Kandi_Group

Contacts:

Kandi Technologies Group, Inc.
Ms. Kewa Luo
+1 (212) 551-3610
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The Blueshirt Group
Mr. Gary Dvorchak, CFA
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- Tables Below -

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

  December 31,
2022
(UNAUDITED)
  December 31,
2021
 
       
CURRENT ASSETS      
Cash and cash equivalents $84,063,717  $129,223,443 
Restricted cash  66,976,554   39,452,564 
Certificate of deposit  81,191,191   55,041,832 
Accounts receivable (net of allowance for doubtful accounts of $2,285,386 and $3,053,277 as of December 31, 2022 and December 31, 2021, respectively)  38,150,876   52,896,305 
Inventories  40,475,366   33,171,973 
Notes receivable  434,461   323,128 
Other receivables  11,912,615   8,901,109 
Prepayments and prepaid expense  2,970,261   17,657,326 
Advances to suppliers  3,147,932   5,940,456 
TOTAL CURRENT ASSETS  329,322,973   342,608,136 
         
NON-CURRENT ASSETS        
Property, plant and equipment, net  97,168,753   111,577,411 
Intangible assets, net  7,994,112   13,249,079 
Land use rights, net  2,909,950   3,250,336 
Construction in progress  199,837   79,317 
Deferred tax assets  1,432,527   2,219,297 
Long-term investment  144,984   157,262 
Goodwill  33,178,229   36,027,425 
Other long-term assets  10,630,911   10,992,009 
TOTAL NON-CURRENT ASSETS  153,659,303   177,552,136 
         
TOTAL ASSETS $482,982,276  $520,160,272 
         
CURRENT LIABILITIES        
Accounts payable $35,321,262  $36,677,802 
Other payables and accrued expenses  14,131,414   9,676,973 
Short-term loans  5,569,154   950,000 
Notes payable  19,123,476   8,198,193 
Income tax payable  1,270,617   1,620,827 
Other current liabilities  6,089,925   7,038,895 
TOTAL CURRENT LIABILITIES  81,505,848   64,162,690 
         
NON-CURRENT LIABILITIES        
Long-term loans  -   2,210,589 
Deferred taxes liability  1,378,372   2,460,141 
Contingent consideration liability  1,803,000   7,812,000 
Other long-term liabilities  602,085   314,525 
TOTAL NON-CURRENT LIABILITIES  3,783,457   12,797,255 
         
TOTAL LIABILITIES  85,289,305   76,959,945 
         
STOCKHOLDER’S EQUITY        
Common stock, $0.001 par value; 100,000,000 shares authorized; 77,668,730 and 77,385,130 shares issued and 74,180,171 and 76,705,381 outstanding at December 31,2022 and December 31,2021, respectively  77,669   77,385 
Less: Treasury stock (3,488,559 shares with average price of $2.81 and 679,749 shares with average price of $3.52 at December 31,2022 and December 31,2021, respectively )  (9,807,820)  (2,392,203)
Additional paid-in capital  451,373,645   449,479,461 
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at December 31, 2022 and December 31, 2021, respectively)  (16,339,765)  (4,216,102)
Accumulated other comprehensive loss  (28,333,239)  251,786 
TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY  396,970,490   443,200,327 
         
Non-controlling interests  722,481   - 
TOTAL STOCKHOLDERS’ EQUITY  397,692,971   443,200,327 
         
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $482,982,276  $520,160,272 
         

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

  Years Ended 
  December 31,
2022
(UNAUDITED)
  December 31,
2021
 
REVENUES FROM UNRELATED PARTIES, NET $117,813,049  $91,484,792 
REVENUES FROM THE FORMER AFFILIATE COMPANY AND RELATED PARTIES, NET  -   1,592 
REVENUES, NET  117,813,049   91,486,384 
COST OF GOODS SOLD  (98,295,323)  (75,238,522)
GROSS PROFIT  19,517,726   16,247,862 
OPERATING INCOME (EXPENSE):        
Research and development  (6,029,608)  (38,971,986)
Selling and marketing  (5,501,475)  (4,736,000)
General and administrative  (32,325,889)  (19,605,468)
Impairment of goodwill  (642,665)  - 
Impairment of long-lived assets  (2,697,521)  - 
Gain on disposal of long-lived assets  -   48,401,797 
TOTAL OPERATING EXPENSE  (47,197,158)  (14,911,657)
(LOSS) INCOME FROM OPERATIONS  (27,679,432)  1,336,205 
OTHER INCOME (EXPENSE):        
Interest income  6,427,502   4,208,751 
Interest expense  (707,488)  (407,620)
Change in fair value of contingent consideration  4,196,995   2,834,000 
Government grants  1,639,328   1,233,192 
Gain from sale of equity in the Former Affiliate Company  -   17,788,351 
Share of loss after tax of the Former Affiliate Company  -   (2,592,334)
Other income, net  2,784,561   4,809,743 
TOTAL OTHER INCOME , NET  14,340,898   27,874,083 
(LOSS) INCOME BEFORE INCOME TAXES  (13,338,534)  29,210,288 
INCOME TAX BENEFIT (EXPENSE)  487,510   (6,346,490)
NET (LOSS) INCOME  (12,851,024)  22,863,798 
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTERESTS  (727,361)  - 
NET (LOSS) INCOME ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS  (12,123,663)  22,863,798 
OTHER COMPREHENSIVE (LOSS) INCOME        
Foreign currency translation adjustment  (28,585,025)  9,029,937 
COMPREHENSIVE (LOSS) INCOME $(41,436,049) $31,893,735 
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED  75,571,702   76,148,688 
NET (LOSS) INCOME PER SHARE, BASIC AND DILUTED $(0.17) $0.30 
         

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
(UNAUDITED)

  Number of
Outstanding
Shares
  Common
Stock
  Treasury
Stock
  Additional
Paid-in
Capital
  Accumulated
Deficit
  Accumulated
Other
Comprehensive
Income
Loss
  Non-controlling
interests
  Total 
BALANCE AS OF DECEMBER 31, 2020  75,377,555  $75,377  $-  $439,549,338  $(27,079,900) $(8,778,151) $-  $403,766,664 
Stock issuance and award  2,007,575   2,008   -   7,178,928   -   -   -   7,180,936 
Stock buyback  -   -   (2,392,203)  -   -   -   -   (2,392,203)
Commission in stock buyback  -   -   -   (20,457)  -   -   -   (20,457)
Net income  -   -   -   -   22,863,798   -   -   22,863,798 
Foreign currency translation  -   -   -   -       9,029,937   -   9,029,937 
Reversal of reduction in the Affiliate Company’s equity (net of tax effect of $491,400)  -   -   -   2,771,652   -   -   -   2,771,652 
BALANCE AS OF DECEMBER 31, 2021  77,385,130  $77,385  $(2,392,203) $449,479,461  $(4,216,102) $251,786  $-  $443,200,327 
                                 
Stock issuance and award  283,600   284   -   746,636   -   -   -   746,920 
Stock based compensation  -   -   -   1,231,566   -   -   -   1,231,566 
Stock buyback  -   -   (7,415,617)  (84,018)  -   -   -   (7,499,635)
Capital contribution from shareholder  -   -   -   -   -   -   1,449,842   1,449,842 
Net loss  -   -   -   -   (12,123,663)  -   (727,361)  (12,851,024)
Foreign currency translation  -   -   -   -   -   (28,585,025)  -   (28,585,025)
BALANCE AS OF DECEMBER 31, 2022  77,668,730  $77,669  $(9,807,820) $451,373,645  $(16,339,765) $(28,333,239) $722,481  $397,692,971 
                                 

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

  Years Ended 
  December 31,
2022
(UNAUDITED)
  December 31,
2021
 
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net (loss) income $(12,851,024) $22,863,798 
Adjustments to reconcile net (loss) income to net cash provided by operating activities        
Depreciation and amortization  12,427,973   10,038,976 
Impairments  3,340,186   - 
Provision (reversal) of allowance for doubtful accounts  (542,801)  862,414 
Deferred taxes  (461,045)  4,073,315 
Share of loss after tax of the Former Affiliate Company  -   2,592,334 
Gain from equity sale in the Former Affiliate Company  -   (17,788,351)
Gain on disposal of long-lived assets  -   (48,401,797)
Change in fair value of contingent consideration  (4,196,995)  (2,834,000)
Stock award and stock based compensation expense  1,926,376   1,484,576 
Changes in operating assets and liabilities:        
Accounts receivable  (20,965,140)  (2,542,692)
Notes receivable  4,726,570   - 
Inventories  (9,145,298)  (7,522,761)
Other receivables and other assets  (4,932,463)  (291,235)
Advances to supplier and prepayments and prepaid expenses  16,275,678   27,786,143 
Due from related party  -   (500,000)
Increase (Decrease) In:        
Accounts payable  62,592,477   2,176,638 
Other payables and accrued liabilities  7,842,715   10,513,511 
Notes payable  (24,533,127)  (2,423,514)
Income tax payable  (25,171)  154,334 
Net cash provided by operating activities $31,478,911  $241,689 
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchases of property, plant and equipment, net  (3,690,235)  (11,574,706)
Purchases of land use rights and other intangible assets  -   (2,356,626)
Acquisition of Jiangxi Huiyi  -   (7,117,310)
Payment for construction in progress  (129,894)  (5,210,642)
Proceeds from disposal of long-lived assets  -   23,306,007 
(Loan to) Repayment from third party  -   31,783,439 
Certificate of deposit  (31,210,986)  (54,264,407)
Proceeds from sales of equity in the Former Affiliate Company  -   47,752,678 
Long-term Investment  -   (108,529)
Net cash (used in) provided by investing activities $(35,031,115) $22,209,904 
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from short-term loans  30,765,776   950,000 
Repayments of short-term loans  (28,357,211)  - 
Proceeds from long-term loans  -   2,210,589 
Contribution from non-controlling shareholder  757,981   - 
Purchase of treasury stock  (7,499,634)  (2,412,660)
Net cash (used in) provided by financing activities $(4,333,088) $747,929 
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH $(7,885,292) $23,199,522 
Effect of exchange rate changes $(9,750,444) $2,955,850 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR $168,676,007  $142,520,635 
         
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD $151,040,271  $168,676,007 
-CASH AND CASH EQUIVALENTS AT END OF PERIOD  84,063,717   129,223,443 
-RESTRICTED CASH AT END OF PERIOD  66,976,554   39,452,564 
SUPPLEMENTARY CASH FLOW INFORMATION        
Income taxes paid $350,002  $2,074,668 
Interest paid $345,451  $35,001 
SUPPLEMENTAL NON-CASH DISCLOSURES:        
Reversal of decrease in investment in the Former Affiliate Company due to change in its equity (net of tax effect of $491,400) $-  $2,824,115 
Contribution from non-controlling shareholder by inventories, fixed assets and intangible assets $393,986  $- 
Common stock issued for settlement of payables related to acquisitions (see Note 18) $-  $5,762,000 

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