Strategic product transformation has borne fruitful outcomes, leading to a remarkable turnaround to profitability
JINHUA, China, Aug. 08, 2023 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company”, “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the second quarter of 2023.
Second Quarter Highlights
- Total revenues of $36.0 million increased by 72.5% year-over-year.
- Gross profit of $13.7 million and gross margin of 38.2%, compared to gross profit of $2.7 million and gross margin of 13.0% in the same period of 2022.
- Net income was $4.4 million, or $0.06 income per fully diluted share, compared to a net loss of $1.9 million, or $0.02 loss per fully diluted share for the same period of 2022.
- Cash and equivalents, restricted cash, and certificate of deposit totaled $232.5 million as of June 30, 2023.
Dr. Xueqin Dong, CEO of Kandi commented, “The Company's efforts invested in product transformation over the past few years have finally borne fruit this year, leading to a successful turnaround from losses to profits. Net income reached $4.4 million, demonstrating a significant recovery from the challenges we faced in the prior years. The continued growth of gross profit reflects our commitment to drive our product mix toward higher-profit and more rapidly growing categories. The success of our all-electric off-road vehicles is the driving force behind our sales recovery and return to profitability. We see immense potential in the US off-road vehicle market, and we are dedicated to expanding our product offerings to meet the evolving demands of our customers.”
Q2 2023 Financial Results
Net Revenues and Gross Profit (in USD millions)
| Q2 2023 | Q2 2022 | Y-o-Y% | |
| Net Revenues | $36.0 | $20.8 | +72.5% |
| Gross Profit | $13.7 | $2.7 | +405.2% |
| Gross Margin% | 38.2% | 13.0% | - |
Net revenues of $36.0 million increased by 72.5% from the same period of 2022. Kandi’s focus on innovation, production, and commercialization of electric off-road vehicles -- particularly crossover golf carts, go karts, and all-terrain vehicles or ATVs -- boosted sales of off-road vehicles and associated parts to achieve its largest proportion ever of quarterly sales. Gross margin grew versus the year-earlier period because of the greater profitability of off-road vehicles, with crossover golf carts being a significant contributor to this increase.
Operating Income/Loss (in USD millions)
| Q2 2023 | Q2 2022 | Y-o-Y% | |
| Operating Expenses | ($14.0) | ($9.0) | +55.1% |
| Loss from Operations | ($0.2) | ($6.3) | -96.4% |
| Operating Margin% | -0.6% | -30.1% | - |
Operating expenses rose to $14.0 million from $9.0 million in the same period of 2022. While operating expenses were up, significantly higher gross profits resulted in improvement in operating income. The rise in operating expenses can be attributed mainly to increased sales and marketing expenses associated with increasing number of electric off-road vehicles exported to the U.S. market, and higher general and administration expenses due to increased stock-based compensation.
Net Income/Loss (in USD millions)
| Q2 2023 | Q2 2022 | Y-o-Y% | |||
| Net Income (Loss) | $4.4 | ($1.9) | -333.9% | ||
| Net Income (Loss) per Share, Basic and Diluted | $0.06 | ($0.02) | - | ||
Net income was $4.4 million, a noteworthy improvement compared to a net loss of $1.9 million during the same period in 2022. The primary factor for the swing to profit was the better gross margins.
Second Quarter 2023 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 Tuesday, Aug 8, 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:
- Toll-free dial-in number: +1-877-407-3982
- International dial-in number: + 1-201-493-6780
- Webcast and replay: https://viavid.webcasts.com/starthere.jsp?ei=1627967&tp_key=83400af773
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, Financial), 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
[email protected]
The Blueshirt Group
Mr. Gary Dvorchak, CFA
[email protected]
- Tables Below -
| KANDI TECHNOLOGIES GROUP, INC. | |||||||
| AND SUBSIDIARIES | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| June 30, 2023 | December 31, 2022 | ||||||
| (Unaudited) | |||||||
| CURRENT ASSETS | |||||||
| Cash and cash equivalents | $ | 69,406,103 | $ | 84,063,717 | |||
| Restricted cash | 54,238,569 | 66,976,554 | |||||
| Certificate of deposit | 108,902,429 | 81,191,191 | |||||
| Accounts receivable (net of allowance for doubtful accounts of $2,679,598 and $2,285,386 as of June 30, 2023 and December 31, 2022, respectively) | 23,137,337 | 38,150,876 | |||||
| Inventories | 57,107,433 | 40,475,366 | |||||
| Notes receivable | 256,276 | 434,461 | |||||
| Other receivables | 9,813,439 | 11,912,615 | |||||
| Prepayments and prepaid expense | 3,159,764 | 2,970,261 | |||||
| Advances to suppliers | 2,073,612 | 3,147,932 | |||||
| TOTAL CURRENT ASSETS | 328,094,962 | 329,322,973 | |||||
| NON-CURRENT ASSETS | |||||||
| Property, plant and equipment, net | 89,909,721 | 97,168,753 | |||||
| Intangible assets, net | 5,927,783 | 7,994,112 | |||||
| Land use rights, net | 2,725,604 | 2,909,950 | |||||
| Construction in progress | 36,854 | 199,837 | |||||
| Deferred tax assets | 1,427,290 | 1,432,527 | |||||
| Long-term investment | 137,851 | 144,984 | |||||
| Goodwill | 31,335,036 | 33,178,229 | |||||
| Other long-term assets | 9,911,534 | 10,630,911 | |||||
| TOTAL NON-CURRENT ASSETS | 141,411,673 | 153,659,303 | |||||
| TOTAL ASSETS | $ | 469,506,635 | $ | 482,982,276 | |||
| CURRENT LIABILITIES | |||||||
| Accounts payable | $ | 36,693,759 | $ | 35,321,262 | |||
| Other payables and accrued expenses | 11,736,250 | 14,131,414 | |||||
| Short-term loans | 6,967,612 | 5,569,154 | |||||
| Notes payable | 16,310,719 | 19,123,476 | |||||
| Income tax payable | 1,011,755 | 1,270,617 | |||||
| Other current liabilities | 5,476,994 | 6,089,925 | |||||
| TOTAL CURRENT LIABILITIES | 78,197,089 | 81,505,848 | |||||
| NON-CURRENT LIABILITIES | |||||||
| Deferred taxes liability | 1,172,820 | 1,378,372 | |||||
| Contingent consideration liability | – | 1,803,000 | |||||
| Other long-term liabilities | 465,784 | 602,085 | |||||
| TOTAL NON-CURRENT LIABILITIES | 1,638,604 | 3,783,457 | |||||
| TOTAL LIABILITIES | 79,835,693 | 85,289,305 | |||||
| STOCKHOLDER’S EQUITY | |||||||
| Common stock, $0.001 par value; 100,000,000 shares authorized; 75,010,171 and 77,668,730 shares issued and 75,010,171 and 74,180,171 outstanding at June 30,2023 and December 31,2022, respectively | 75,010 | 77,669 | |||||
| Less: Treasury stock (null shares and 3,488,559 shares with average price of $2.81 at June 30, 2023 and December 31, 2022 ) | – | (9,807,820 | ) | ||||
| Additional paid-in capital | 446,260,170 | 451,373,645 | |||||
| Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at June 30, 2023 and December 31, 2022, respectively) | (12,640,763 | ) | (16,339,765 | ) | |||
| Accumulated other comprehensive loss | (46,029,611 | ) | (28,333,239 | ) | |||
| TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY | 387,664,806 | 396,970,490 | |||||
| Non-controlling interests | 2,006,136 | 722,481 | |||||
| TOTAL STOCKHOLDERS’ EQUITY | 389,670,942 | 397,692,971 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 469,506,635 | $ | 482,982,276 | |||
| KANDI TECHNOLOGIES GROUP, INC. | |||||||||||||||
| AND SUBSIDIARIES | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND | |||||||||||||||
| COMPREHENSIVE INCOME (LOSS) | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | ||||||||||||
| REVENUES FROM UNRELATED PARTIES, NET | $ | 35,953,339 | $ | 20,841,183 | $ | 58,815,447 | $ | 45,732,587 | |||||||
| REVENUES FROM THE FORMER AFFILIATE COMPANY AND RELATED PARTIES, NET | – | – | – | – | |||||||||||
| REVENUES, NET | 35,953,339 | 20,841,183 | 58,815,447 | 45,732,587 | |||||||||||
| COST OF GOODS SOLD | (22,218,767 | ) | (18,122,316 | ) | (37,051,645 | ) | (40,626,557 | ) | |||||||
| GROSS PROFIT | 13,734,572 | 2,718,867 | 21,763,802 | 5,106,030 | |||||||||||
| OPERATING EXPENSE: | |||||||||||||||
| Research and development | (874,562 | ) | (1,253,843 | ) | (1,753,542 | ) | (2,394,429 | ) | |||||||
| Selling and marketing | (2,780,515 | ) | (1,172,528 | ) | (4,608,244 | ) | (2,366,227 | ) | |||||||
| General and administrative | (8,838,319 | ) | (6,574,079 | ) | (16,397,771 | ) | (12,330,610 | ) | |||||||
| Impairment of goodwill | (507,603 | ) | – | (507,603 | ) | – | |||||||||
| Impairment of long-lived assets | (962,737 | ) | – | (962,737 | ) | – | |||||||||
| TOTAL OPERATING EXPENSE | (13,963,736 | ) | (9,000,450 | ) | (24,229,897 | ) | (17,091,266 | ) | |||||||
| LOSS FROM OPERATIONS | (229,164 | ) | (6,281,583 | ) | (2,466,095 | ) | (11,985,236 | ) | |||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||
| Interest income | 1,954,563 | 1,378,774 | 4,054,906 | 2,601,078 | |||||||||||
| Interest expense | (194,239 | ) | (138,433 | ) | (367,609 | ) | (286,577 | ||||||||
