Kandi Technologies Reports 2022 Financial Results
- 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 | 2021 | Y-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:
- 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=1604055&tp_key=72820e6b1d
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
IR@kandigroup.com
The Blueshirt Group
Mr. Gary Dvorchak, CFA
gary@blueshirtgroup.com
– 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 | ||||
