-Q2 EV parts sales increased 168.3% year-over-year to $46.6 million
- Q2 JV Company sold 4,446 EV products, an 8.1% increase year-over-year
JINHUA, China, Aug. 10, 2015 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the "Company" or "Kandi") (NASDAQ: KNDI), today announced its financial results for the quarter ended June 30, 2015.
Second Quarter 2015 Highlights
Total revenues grew 45.5% to $48.0 million for the second quarter of 2015 from $33.0 million for the second quarter of 2014;
Electric Vehicle ("EV") parts sales increased 168.3% to $46.6 million for the second quarter of 2015 compared to $17.4 million in the same period of 2014;
Kandi Electric Vehicles Group Co., Ltd. (the "JV Company"), sold 4,446 EV products, including 3,803 EV products to the Micro Public Transportation (MPT) program and 643 EV products to the direct sales program, an 8.1% increase compared to the same period last year;
GAAP net income for the second quarter of 2015 was $5.4 million, or approximately $0.12 per fully diluted share, compared to $11.2 million, or approximately $0.27 per diluted share in the second quarter of 2014. The decrease was mainly due to changes in stock-based compensation expenses and financial derivatives during the period;
Non-GAAP adjusted net income1, which excludes stock award expenses and changes in the fair value of financial derivatives, was $4.9 million, or approximately $0.10 per fully diluted share, a 52.1% increase from $3.2 million in the same quarter of 2014;
Working capital surplus was $48.5 million as of June 30, 2015;
Cash, cash equivalents and restricted cash totaled $32.5 million as of June 30, 2015.
"We are delighted to achieve excellent growth in EV parts and EV sales," Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented. "During the second quarter, we continued to focus on delivering strong operational results and pursuing one of our primary goals of improving environmental conditions, easing traffic congestion and energy crisis, and alleviating parking scarcity. By partnering with leading international telecom provider ZTE Corporation and Alibaba (China) Co., Ltd., a subsidiary of world's largest E-commerce company Alibaba Group Holding, Ltd, we aim to enhance the penetration of our Micro Public Transportation program. The successful launch of our direct sales initiative this quarter and the new Kandi Cyclone (K17), which is available for sale in the third quarter, will enhance our strong revenue growth and profitability. We are confident in achieving our full year sales target, while continuing to expand our unique MPT program to additional cities."
"Our strong financial results in the second quarter were in line with our expectations," added Mr. Wang Cheng, Chief Financial Officer of the Company. "By early July of this year, the JV Company had received the remaining subsidies from the central government for 2014 and expects to obtain the 2015 subsidies in the coming months, which will contribute to the Company's third quarter cash flow."
Second Quarter 2015 Financial Results:
Net Revenues and Gross Profit
2Q15
1Q15
2Q14
Q-o-Q%
Y-o-Y%
Net Revenues (US$mln)
$47.96
$43.78
$32.96
9.6%
45.5%
Gross Profit (US$mln)
$6.49
$6.37
$7.22
1.9%
-10.1%
Gross Margin
13.5%
14.6%
21.9%
--
--
Net revenues increased 9.6% sequentially from the first quarter of 2015 due to the sales growth of EV cars from the JV Company. Gross margin declined 1.1% sequentially as a result of a slight decrease in battery sales prices to the JV Company. Gross margin decreased 8.4% year-over-year due to the sales of high margin EV products in the same quarter last year, which were completely transferred to the JV Company this year per the Joint Venture Agreement.
Operating Income (Loss)
2Q15
1Q15
2Q14
Q-o-Q%
Y-o-Y%
Operating Expenses (US$mln)
$4.49
$4.47
$4.58
0.6%
-1.9%
Operating Income (Loss) (US$mln)
$2.00
$1.91
$2.64
4.9%
-24.3%
Operating Margin
4.2%
4.4%
8.0%
--
--
Total operating expenses slightly increased 0.6% quarter-over-quarter, due to the $1.4 million increase in stock compensation expenses and general expense savings in the second quarter.
GAAP Net Income
2Q15
1Q15
2Q14
Q-o-Q%
Y-o-Y%
Net Income (Loss) (US$mln)
$5.43
$6.13
$11.16
-11.5%
-51.4%
Earnings per Weighted Average Common Share
$0.12
$0.13
$0.27
--
--
Earnings per Weighted Average Diluted Share
$0.12
$0.13
$0.27
--
--
Non-GAAP Net Income
2Q15
1Q15
2Q14
Q-o-Q%
Y-o-Y%
GAAP net income (loss) from continuing operations
$5.43
$6.13
$11.16
-11.5%
-51.4%
Stock award expenses
$3.48
$2.05
$1.01
69.9%
245.2%
Gain(Loss) of the fair value of financial derivatives
$4.00
$4.75
$8.94
-15.7%
-55.2%
Non-GAAP net income (loss) from continuing operations
$4.90
$3.43
$3.22
42.9%
52.1%
Net income decreased 11.5% sequentially compared to the first quarter of 2015, which included $0.75 million additional gains from financial derivatives. Net income decreased 51.4% compared to the second quarter of 2014, which included $4.9 million additional gains from financial derivatives and $2.5 million less stock compensation expenses.
JV Company Financial Results
In the second quarter, the JV Company sold 4,446 EV products, including 3,803 EV products to the Micro Public Transportation program and 643 EV products to the direct sales program, an 8.1% increase compared to the same period last year.
The condensed financial income statement is as below:
2Q15
1Q15
2Q14
Q-o-Q%
Y-o-Y%
Net Revenues (US$mln)
$68.95
$30.56
$45.14
125.6%
52.8%
Gross Profit (US$mln)
$10.65
$7.98
$2.64
33.5%
303.8%
Gross Margin
15.4%
26.1%
5.8%
--
--
Net Income
$1.59
$0.80
$0.73
97.4%
117.5%
% of Net revenue
2.3%
2.6%
1.6%
--
--
Gross margin in the second quarter of 2015 was 15.4%, compared with gross margin of 26.1% in the first quarter of 2015 and 5.8% in the second quarter of 2014. The sequential decrease is the result of a one-time adjustment in sales prices, which will remain stable for the remainder of the year. The year-over-year gross margin improvement is due to stability in production and cost reductions.
Outlook
For the third quarter 2015, Kandi expects net revenues to be in the range of $49.0 million to $51.0 million with gross margin in the range of 13.5% to 14.5%.
The Company also expects the JV Company to deliver 5,500 to 6,500 EV products in the third quarter and a total of 20,000-25,000 EV products in the full year of 2015.
Second Quarter 2015 Conference Call Details
The Company has scheduled a conference call and live webcast to discuss the financial results at 8:00 AM (U.S. EDT) on August 10, 2015 (8:00 PM Beijing time on August 10, 2015). Mr. Hu Xiaoming, Chief Executive Officer and Mr. Wang Cheng (Henry), Chief Financial Officer, will deliver prepared remarks, 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 website at http://ir.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, Zhejiang Province, is engaged in the research and development, manufacturing and sales of various vehicle products. Kandi has established itself as one of China's leading manufacturers of pure electric vehicle ("EV") products (through its joint venture), EV parts and off-road vehicles. More information can be viewed at the Company's corporate website at http://www.kandivehicle.com.
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 securities laws, the Company does not assume a duty to update these forward-looking statements.
1 Non-GAAP measures, including the Non-GAAP net income and Non-GAAP EPS are defined as the financial measures excluding the change of the fair value of financial derivatives and the effects of the stock award expense. We supply non-GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations. Any non-GAAP measures should not be considered as a substitute for, and should only be re ad in conjunction with, measures of financial performance prepared in accordance with GAAP.
- Tables to follow -
KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
Three Months Ended
Six Months Ended
June 30,
2015
June 30,
2014
June 30,
2015
June 30,
2014
REVENUES, NET
$ 47,963,460
$ 32,960,055
$ 91,744,546
$ 73,131,359
COST OF GOODS SOLD
41,471,997
25,738,967
78,882,350
61,049,862
GROSS PROFIT
6,491,463
7,221,088
12,862,196
12,081,497
OPERATING EXPENSES:
Research and development
571,621
971,673
1,142,641
2,143,930
Selling and marketing
75,516
435,894
189,411
507,151
General and administrative
3,845,013
3,173,178
7,625,661
9,643,944
Total Operating Expenses
4,492,150
4,580,745
8,957,713
12,295,025
INCOME FROM OPERATIONS
1,999,313
2,640,343
3,904,483
(213,528)
OTHER INCOME(EXPENSE):
Interest income
722,843
748,843
1,313,323
1,232,136
Interest (expense)
(597,320)
(963,838)
(1,195,911)
(1,918,311)
Change in fair value of financial instruments
4,003,044
8,941,569
8,753,344
(3,372,602)
Government grants
92,863
153,700
92,863
153,700
Share of (loss) in associated companies
--
(77,187)
--
(92,992)
Share of profit after tax of JV
251,167
(9,526)
720,523
1,718,830
Other income, net
82,207
60,247
106,054
119,827
Total other income(expense), net
4,554,804
8,853,808
9,790,196
(2,159,412)
INCOME(LOSS) BEFORE INCOME TAXES
6,554,117
11,494,151
13,694,679
(2,372,940)
INCOME TAX EXPENSE
(1,128,615)
(337,066)
(2,137,524)
(556,135)
NET INCOME (LOSS)
5,425,502
11,157,085
11,557,155
(2,929,075)
OTHER COMPREHENSIVE INCOME
Foreign currency translation
448,032
(717,476)
941,243
(1,928,592)
COMPREHENSIVE INCOME(LOSS)
$ 5,873,534
$ 10,439,609
$ 12,498,398
$ (4,857,667)
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC
46,759,651
41,142,346
46,523,584
40,364,986
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED
46,896,809
41,254,507
46,800,156
40,364,986
NET INCOME(LOSS) PER SHARE, BASIC
$ 0.12
$ 0.27
$ 0.25
$ (0.07)
NET INCOME(LOSS) PER SHARE, DILUTED
$ 0.12
$ 0.27
$ 0.25
$ (0.07)
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, 2015
December 31, 2014
Current assets
Cash on cash equivalents
$ 9,463,991
$ 26,379,460
Restricted cash
23,006,135
13,000,731
Accounts receivable
29,898,905
15,736,805
Inventories (net of provision for slow moving inventory of 316,856 and 315,584 as of June 30, 2015 and December 31, 2014, respectively)
27,607,154
15,403,840
Notes receivable
10,541,927
9,060,441
Other receivables
311,086
238,567
Prepayments and prepaid expense
364,284
120,761
Due from employees
38,856
34,475
Advances to suppliers
6,829,462
6,901,505
Amount due from JV Company, net
101,958,555
51,450,612
Deferred taxes assets
--
--
TOTAL CURRENT ASSETS
210,020,355
138,327,197
LONG-TERM ASSETS
Plant and equipment, net
23,889,831
26,215,356
Land use rights, net
15,516,697
15,649,152
Construction in progress
58,785,276
58,510,051
Deferred taxes assets
--
--
Investment in associated company
--
--
Investment in JV Company
84,366,460
83,309,095
Goodwill
322,591
322,591
Intangible assets
536,353
577,401
Other long term assets
163,164
162,509
TOTAL Long-Term Assets
183,580,372
184,746,155
TOTAL ASSETS
$ 393,600,727
$ 323,073,352
CURRENT LIABILITIES
Accounts payables
$ 100,772,098
$ 45,772,481
Other payables and accrued expenses
3,377,791
5,101,740
Short-term loans
38,833,051
35,589,502
Customer deposits
2,748,050
2,630,723
Notes payable
9,953,009
5,702,121
Income tax payable
2,350,173
1,835,685
Due to employees
10,829
15,787
Deferred taxes liabilities
569,499
230,864
Financial derivate - liability
2,894,695
2,245,610
Deferred income
58,162
--
Total Current Liabilities
161,567,357
99,124,513
LONG-TERM LIABILITIES
Deferred taxes liabilities
1,772,278
2,266,725
Bond payable
--
--
Financial derivate - liability
694,846
10,097,275
Total Long-Term Liabilities
2,467,124
12,364,000
TOTAL LIABILITIES
164,034,481
111,488,513
STOCKHOLDER'S EQUITY
Common stock, $0.001 par value; 100,000,000 shares authorized; 46,954,855 and 46,274,855 shares issued and outstanding at June 30,2015 and December 31,2014, respectively
46,955
46,275
Additional paid-in capital
195,740,366
190,258,037
Retained earnings (the restricted portion is $4,172,324 and $4,172,324 at June 30,2015 and December 31,2014, respectively)
27,947,579
16,390,424
Accumulated other comprehensive income(loss)
5,831,346
4,890,103
TOTAL STOCKHOLDERS' EQUITY
229,566,246
211,584,839
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 393,600,727
$ 323,073,352
KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30, 2015
June 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income(loss)
$ 11,557,155
$ (2,929,075)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization
2,955,663
2,764,984
Assets Impairments
--
--
Deferred taxes
(153,916)
924,449
Change in fair value of financial instruments
(8,753,344)
3,372,602
Loss (income) in investment in associated companies
--
96,364
Share of profit after tax of JV Company
(720,523)
(1,718,830)
Decrease in reserve for fixed assets
--
--
Stock Compensation cost
5,482,808
--
Changes in operating assets and liabilities, net of effects of acquisition:
(Increase) Decrease In:
Accounts receivable
(14,077,317)
11,955,855
Inventories
(12,122,839)
(8,544,033)
Other receivables
(58,055)
(231,945)
Due from employee
(9,250)
(2,390)
Prepayments and prepaid expenses
(143,163)
(44,194,377)
Amount due from JV Company
(50,224,378)
(31,680,191)
Increase (Decrease) In:
Accounts payable
54,732,723
31,083,370
Other payables and accrued liabilities
(1,716,848)
2,344,763
Customer deposits
106,563
107,199
Income Tax payable
506,321
(533,133)
Due to related party
--
--
Net cash (used in ) provided by operating activities
$ (12,638,400)
$ (37,184,388)
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchases)/Disposal of plant and equipment, net
(291,895)
(308,838)
Purchases of land use rights
--
(1,669,648)
Purchases of construction in progress
(39,361)
(23,046)
Deposit for acquisition
--
--
Asset acquisition, net of deposit
--
--
Issuance of notes receivable
(5,588,283)
(21,468,326)
Repayment of notes receivable
4,145,502
26,020,234
Investment in JV Company
--
--
Cash acquired in acquisition
--
--
Net cash provided by (used in) investing activities
$ (1,774,037)
$ 2,550,376
CASH FLOWS FROM FINANCING ACTIVITIES:
Restricted cash
(9,937,929)
1,628
Proceeds from short-term bank loans
19,061,273
16,764,023
Repayments of short-term bank loans
(15,965,853)
(16,764,023)
Proceeds from notes payable
9,937,929
13,020,600
Repayment of notes payable
(5,716,427)
(16,601,265)
Fund raising through issuing common stock and warrants
--
--
Option exercise，stock awards & other financing
--
4,405,697
Warrant exercise
--
22,447,914
Common stock issued for acquisition, net of cost of capital
--
11,067,734
Net cash (used in) provided by financing activities
$ (2,621,007)
$ 34,342,308
NET INCREASE IN CASH AND CASH EQUIVALENTS
(17,033,444)
(291,704)
Effect of exchange rate changes on cash
117,975
(1,183,045)
Cash and cash equivalents at beginning of year
26,379,460
12,762,369
CASH AND CASH EQUIVALENTS AT END OF PERIOD
9,463,991
11,287,620
SUPPLEMENTARY CASH FLOW INFORMATION
Income taxes paid
1,310,173
1,145,600
Interest paid
1,192,526
1,170,556
CONTACT: Company Contact:
Ms. Kewa Luo
Kandi Technologies Group, Inc.
Phone: 1-212-551-3610
Email: [email protected]
IR Contact:
The Piacente Group
Phone: 1-212-481-2050
Email: [email protected]
