Kandi Technologies Group, Inc.: Kandi Technologies Reports Third Quarter 2023 Financial Results

- Product Transformation Initiative Driving Profit Growth

- Nine-month Net Income of $6.3 Million, Diluted EPS of $0.08

JINHUA, China, Nov. 08, 2023 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the "Company", "we" or "Kandi") (NASDAQ GS: KNDI), today announced its financial results for the third quarter of 2023.

Third Quarter and Nine Months 2023 Financial Highlights

Third quarter total revenues of $36.4 million increased by 8.2% year-over-year.

• Nine-month revenues of $95.2 million increased by 19.9% year-over-year.
  
• Net income for the nine months was $6.3 million, or $0.08 income per fully diluted share, compared to a net loss of $2.4 million, or $0.03 loss per fully diluted share for the same period of 2022.
  
• Cash and cash equivalents, restricted cash, and certificate of deposit totaled $244.5 million as of September 30, 2023.
  

Dr. Xueqin Dong, CEO of Kandi, commented, "We are pleased to see that, following a turnaround from losses to profits in the first half of 2023, the company was profitable in the quarter. Comparing to the first nine months of last year, key metrics grew significantly, with increased sales, higher net income, and a notable improvement in gross profit. This achievement highlights our ongoing commitment to delivering exceptional value to our customers. Our strategic adjustments in recent years paved the way for this positive performance in the all-electric off-road vehicle market. Recently, we showcased our new electric off-road vehicle products at the Mid-States Rendezvous and received positive feedback, which has further solidified our market presence across various channels."

Dr. Dong continued, "Looking ahead to 2024, our primary focus is to increase our market share in the North American market. Kandi's dedication to innovation and quality places us in a strong position to capitalize on the growing demand for fully electric off-road vehicles in the region, presenting significant market potential and opportunities for sustained growth. We are confident that our sales and production in 2024 will grow substantially compared to those of this year."

Financial Results for the Third Quarter and the First Nine Months of 2023

Net Revenues and Gross Profit (in USD millions)

Q3	2023	2022	Y-o-Y%
Net Revenues	$36.4	$33.7	+8.2%
Gross Profit	$10.9	$6.4	+71.4%
Gross Margin%	30.0%	18.9%	-

Nine Months Ending Sep 30	2023	2022	Y-o-Y%
Net Revenues	$95.2	$79.4	+19.9%
Gross Profit	$32.7	$11.5	+184.8%
Gross Margin%	34.3%	14.5%

During the first nine months of 2023, net revenues grew 19.9%, reaching $95.2 million, fueled by rapid market acceptance of our fully-electric off-road vehicles and related components. Furthermore, gross margin improved compared to the previous year, due to the better profitability of fully-electric off-road vehicles, particularly crossover golf carts.

Operating Income/Loss (in USD millions)

Q3	2023	2022	Y-o-Y%
Operating Expenses	($14.5)	($8.6)	+69.4%
Loss from Operations	($3.6)	($2.2)	+63.7%
Operating Margin%	(9.8%)	(6.5%)	-

Nine Months Ending Sep 30	2023	2022	Y-o-Y%
Operating Expenses	($38.7)	($25.7)	+51.0%
Loss from Operations	($6.1)	($14.2)	-57.3%
Operating Margin%	(6.4%)	(17.9%)

During the nine months, Operating expenses rose to $38.7 million from $25.7 million in the same period of 2022, reflecting investment in the off-road EV opportunity in the U.S. Growing expenditures in sales, marketing, and general administration are directly linked to expanding exports to the U.S. market.

Net Income/Loss (in USD millions)

Q3	2023	2022	Y-o-Y%
Net Income	$1.3	$1.1	+19.0%
Net Income per Share, Basic and Diluted	$0.02	$0.01	-

Nine Months Ending Sep 30	2023		2022			Y-o-Y%
Net Income (loss)	$6.3		($2.4)			NM
Net Income (loss) per Share, Basic and Diluted	$0.08		($0.03)

Net income of the first nine months reached $6.3 million, turning from a net loss in the same period in 2022, mainly due to higher gross profit from increased sales of high-margin off-road vehicles resulting from the product transformation strategy.

Third 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 (9:00 P.M. Beijing Time) on Wednesday, November 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: [phone]
• International dial-in number: + 1-201-493-6780
• Webcast and replay: https://viavid.webcasts.com/starthere.jsp?ei=1642510&tp_key=32e2677025
  

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
[phone]
[e-mail]

The Blueshirt Group
Mr. Gary Dvorchak, CFA
[e-mail]

- Tables Below -

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
		September 30, 2023				December 31, 2022
		(Unaudited)
CURRENT ASSETS
Cash and cash equivalents		$	72,900,121			$	84,063,717
Restricted cash			61,957,395				66,976,554
Certificate of deposit			109,676,181				81,191,191
Accounts receivable (net of allowance for doubtful accounts of $2,795,798 and $2,285,386 as of September 30, 2023 and December 31, 2022, respectively)			16,350,519				38,150,876
Inventories			57,860,989				40,475,366
Notes receivable			41,129				434,461
Other receivables			11,068,946				11,912,615
Prepayments and prepaid expense			1,689,174				2,970,261
Advances to suppliers			1,540,949				3,147,932
TOTAL CURRENT ASSETS			333,085,403				329,322,973
NON-CURRENT ASSETS
Property, plant and equipment, net			98,754,578				97,168,753
Intangible assets, net			5,561,878				7,994,112
Land use rights, net			2,690,181				2,909,950
Construction in progress			36,652				199,837
Deferred tax assets			1,427,290				1,432,527
Long-term investment			137,095				144,984
Goodwill			31,193,706				33,178,229
Other long-term assets			9,756,037				10,630,911
TOTAL NON-CURRENT ASSETS			149,557,417				153,659,303
TOTAL ASSETS		$	482,642,820			$	482,982,276
CURRENT LIABILITIES
Accounts payable		$	34,475,667			$	35,321,262
Other payables and accrued expenses			8,364,215				14,131,414
Short-term loans			9,065,350				5,569,154
Notes payable			22,129,999				19,123,476
Income tax payable			688,633				1,270,617
Other current liabilities			5,273,881				6,089,925
TOTAL CURRENT LIABILITIES			79,997,745				81,505,848
NON-CURRENT LIABILITIES
Long-term loans			8,225,000				-
Deferred taxes liability			1,172,820				1,378,372
Contingent consideration liability			-				1,803,000
Other long-term liabilities			410,182				602,085
TOTAL NON-CURRENT LIABILITIES			9,808,002				3,783,457
TOTAL LIABILITIES			89,805,747				85,289,305
STOCKHOLDER'S EQUITY
Common stock, $0.001 par value; 100,000,000 shares authorized; 84,997,369 and 77,668,730 shares issued and 84,997,369 and 74,180,171 outstanding at September 30,2023 and December 31,2022, respectively			84,997				77,669
Less: Treasury stock (null shares and 3,488,559 shares with average price of $2.81 at September 30, 2023 and December 31, 2022 )			-				(9,807,820	)
Additional paid-in capital			450,242,032				451,373,645
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at September 30, 2023 and December 31, 2022, respectively)			(11,771,861	)			(16,339,765	)
Accumulated other comprehensive loss			(48,131,857	)			(28,333,239	)
TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS' EQUITY			390,423,311				396,970,490
Non-controlling interests			2,413,762				722,481
TOTAL STOCKHOLDERS' EQUITY			392,837,073				397,692,971
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	482,642,820			$	482,982,276
See accompanying notes to unaudited condensed consolidated financial statements

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
		Three Months Ended								Nine Months Ended
		September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
REVENUES FROM UNRELATED PARTIES, NET		$	36,426,201			$	33,673,201			$	95,241,648			$	79,405,788
REVENUES FROM THE FORMER AFFILIATE COMPANY AND RELATED PARTIES, NET			-				-				-				-
REVENUES, NET			36,426,201				33,673,201				95,241,648				79,405,788
COST OF GOODS SOLD			(25,507,180	)			(27,304,038	)			(62,558,825	)			(67,930,595	)
GROSS PROFIT			10,919,021				6,369,163				32,682,823				11,475,193
OPERATING EXPENSE:
Research and development			(917,893	)			(1,433,649	)			(2,671,435	)			(3,828,078	)
Selling and marketing			(4,152,246	)			(1,440,995	)			(8,760,490	)			(3,807,222	)
General and administrative			(9,457,877	)			(5,686,233	)			(25,855,648	)			(18,016,843	)
Impairment of goodwill			7,539				-				(500,064	)			-
Impairment of long-lived assets			14,299				-				(948,438	)			-
TOTAL OPERATING EXPENSE			(14,506,178	)			(8,560,877	)			(38,736,075	)			(25,652,143	)
LOSS FROM OPERATIONS			(3,587,157	)			(2,191,714	)			(6,053,252	)			(14,176,950	)
OTHER INCOME (EXPENSE):
Interest income			1,927,494				2,138,130				5,982,400				4,739,208
Interest expense			(354,999	)			(177,417	)			(722,608	)			(463,994	)
Change in fair value of contingent consideration			-				434,995				1,803,000				2,733,995
Government grants			667,944				829,539				1,478,296				1,536,856
Other income, net			2,611,239				536,726				3,685,019				2,954,036
TOTAL OTHER INCOME, NET			4,851,678				3,761,973				12,226,107				11,500,101
INCOME (LOSS) BEFORE INCOME TAXES			1,264,521				1,570,259				6,172,855				(2,676,849	)
INCOME TAX BENEFIT (EXPENSE)			12,007				(497,211	)			86,330				255,232
NET INCOME (LOSS)			1,276,528				1,073,048				6,259,185				(2,421,617	)
LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS			407,626				694,029				1,691,281				752,691
NET INCOME (LOSS) ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS			868,902				379,019				4,567,904				(3,174,308	)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustment			(2,102,246	)			(20,932,870	)			(19,798,618	)			(39,889,289	)
COMPREHENSIVE LOSS		$	(825,718	)		$	(19,859,822	)		$	(13,539,433	)		$	(42,310,906	)
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC			79,174,343				75,741,399				75,931,247				75,962,899
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED			81,234,002				75,885,630				77,645,533				76,061,190
NET INCOME (LOSS) PER SHARE, BASIC		$	0.02			$	0.01			$	0.08			$	(0.03	)
NET INCOME (LOSS) PER SHARE, DILUTED		$	0.02			$	0.01			$	0.08			$	(0.03	)
See accompanying notes to unaudited condensed consolidated financial statements

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
		Number of Outstanding Shares				Common Stock				Treasury Stock				Additional Paid-in Capital				Accumulated Earning (Deficit)				Accumulated Other Comprehensive Income				Non-controlling interests				Total
Balance, 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			25,000				25				-				92,925				-				-				-				92,950
Stock buyback			-				-				(1,570,324	)			(13,236	)			-				-				-				(1,583,560	)
Capital contribution from shareholder			-				-				-				-				-				-				1,198,398				1,198,398
Net loss			-				-				-				-				(1,616,056	)			-				(2,957	)			(1,619,013	)
Foreign currency translation			-				-				-				-				-				1,009,811				-				1,009,811
Balance, March 31, 2022			77,410,130			$	77,410			$	(3,962,527	)		$	449,559,150			$	(5,832,158	)		$	1,261,597			$	1,195,441			$	442,298,913
Stock issuance and award			238,600				239				-				584,331				-				-				-				584,570
Stock buyback			-				-				(1,974,490	)			(22,578	)			-				-				-				(1,997,068	)
Net income (loss)			-				-				-				-				(1,937,271	)			-				61,619				(1,875,652	)
Foreign currency translation			-				-				-				-				-				(19,966,230	)			(63,460	)			(20,029,690	)
Balance, June 30, 2022			77,648,730			$	77,649			$	(5,937,017	)		$	450,120,903			$	(7,769,429	)		$	(18,704,633	)			1,193,600			$	418,981,073
Stock issuance and award			10,000				10				-				22,290				-				-				-				22,300
Stock based compensation															250,673																250,673
Stock buyback			-				-				(911,714	)			(12,872	)			-				-				-				(924,586	)
Capital contribution from shareholder			-				-				-				-				-				-				337,557				337,557
Net income (loss)			-				-				-				-				379,019				-				694,029				1,073,048
Foreign currency translation			-				-				-				-				-				(20,932,870	)			(66,006	)			(20,998,876	)
Balance, September 30, 2022			77,658,730			$	77,659			$	(6,848,731	)		$	450,380,994			$	(7,390,410	)		$	(39,637,503	)			2,159,180			$	398,741,189

		Number of Outstanding Shares				Common Stock				Treasury Stock				Additional Paid-in Capital				Accumulated Earning (Deficit)				Accumulated Other Comprehensive Income				Non-controlling interests				Total
Balance, 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
Stock issuance and award			10,000				10				-				22,290				-				-				-				22,300
Stock based compensation			-				-				-				980,893				-				-				-				980,893
Net income (loss)			-				-				-				-				(29,110	)			-				624,567				595,457
Foreign currency translation			-				-				-				-				-				1,582,687				-				1,582,687
Balance, March 31, 2023			77,678,730			$	77,679			$	(9,807,820	)		$	452,376,828			$	(16,368,875	)		$	(26,750,552	)		$	1,347,048			$	400,874,308
Stock issuance and award			820,000				820				-				2,706,780				-				-				-				2,707,600
Stock based compensation			-				-				-				980,893				-				-				-				980,893
Cancellation of the Treasury Stock			(3,488,559	)			(3,489	)			9,807,820				(9,804,331	)			-				-				-				-
Net income			-				-				-				-				3,728,112				-				659,088				4,387,200
Foreign currency translation			-				-				-				-				-				(19,279,059	)			-				(19,279,059	)
Balance, June 30, 2023			75,010,171			$	75,010			$	-			$	446,260,170			$	(12,640,763	)		$	(46,029,611	)		$	2,006,136			$	389,670,942
Stock issuance and award			9,987,198				9,987				-				2,974,599				-				-				-				2,984,586
Stock based compensation			-				-				-				1,007,263				-				-				-				1,007,263
Cancellation of the Treasury Stock																			-				-				-				-
Net income			-				-				-				-				868,902				-				407,626				1,276,528
Foreign currency translation			-				-				-				-				-				(2,102,246	)			-				(2,102,246	)
Balance, September 30, 2023			84,997,369			$	84,997			$	-			$	450,242,032			$	(11,771,861	)		$	(48,131,857	)		$	2,413,762			$	392,837,073
See accompanying notes to unaudited condensed consolidated financial statements.

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
		Nine Months Ended
		September 30, 2023				September 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	6,259,185			$	(2,421,617	)
Adjustments to reconcile net (loss) income to net cash provided by operating activities
Depreciation and amortization			8,952,016				9,512,970
Impairments			1,448,502				-
Provision of allowance for doubtful accounts			658,707				4,220
Deferred taxes			(200,316	)			(116,206	)
Change in fair value of contingent consideration			(1,803,000	)			(2,733,995	)
Stock award and stock based compensation expense			8,716,981				913,288
Changes in operating assets and liabilities:
Accounts receivable			11,846,717				(20,932,970	)
Notes receivable			744,574				1,927,621
Inventories			(18,498,142	)			(13,183,546	)
Other receivables and other assets			157,318				(10,264,805	)
Advances to supplier and prepayments and prepaid expenses			2,710,917				12,405,615
Increase (Decrease) In:
Accounts payable			34,021,872				46,796,615
Other payables and accrued liabilities			(4,480,660	)			4,951,022
Notes payable			(23,509,907	)			(13,574,849	)
Income tax payable			(367,848	)			(60,313	)
Net cash provided by operating activities		$	26,656,916			$	13,223,050
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net			(13,103,838	)			(1,674,445	)
Payment for construction in progress			(75,651	)			(278,777	)
(Loan to) Repayment from third party			-				(4,545,386	)
Certificate of deposit			(34,143,774	)			(22,726,928	)
Net cash used in investing activities		$	(47,323,263	)		$	(29,225,536	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term loans			12,153,286				20,642,224
Repayments of short-term loans			(8,398,565	)			(15,987,912	)
Proceeds from long-term loans			8,225,000				-
Contribution from non-controlling shareholder			-				772,716
Purchase of treasury stock			-				(4,505,213	)
Net cash provided by financing activities		$	11,979,721			$	921,815
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		$	(8,686,626	)		$	(15,080,671	)
Effect of exchange rate changes		$	(7,496,129	)		$	(13,710,508	)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR		$	151,040,271			$	168,676,007
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD		$	134,857,516			$	139,884,828
-CASH AND CASH EQUIVALENTS AT END OF PERIOD			72,900,121				99,029,118
-RESTRICTED CASH AT END OF PERIOD			61,957,395				40,855,710
SUPPLEMENTARY CASH FLOW INFORMATION
Income taxes paid		$	149,585			$	274,037
Interest paid		$	384,012			$	225,479
SUPPLEMENTAL NON-CASH DISCLOSURES:
Contribution from non-controlling shareholder by inventories, fixed assets and intangible assets		$	-			$	393,986
See accompanying notes to unaudited condensed consolidated financial statements