Questions? +1 (202) 540-8337 Login
Trusted News Since 1995
A service for auto industry professionals · Saturday, April 21, 2018 · 443,239,938 Articles · 3+ Million Readers

Kandi Technologies Reports Full Year 2017 Financial Results

JINHUA, China, March 16, 2018 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ:KNDI), today announced its financial results for the full year ended December 31, 2017. 

/EIN News/ -- Full Year 2017 Highlights

  • Total revenues were $102.8 million in 2017, a decrease of 20.6% from total revenues of $129.5 million in 2016.
  •  EV parts sales decreased by 18.9% to $97.4 million in 2017, compared with EV parts sales of $120.1 million in 2016.
  •  Off-road vehicles sales decreased by 4.3% to $5.4 million in 2017, compared with off-road vehicles sales of $5.7 million in 2016.
  • Kandi Electric Vehicles Group Co., Ltd. (The “JV Company”) sold 11,437 EV products in 2017, compared to 10,148 EV products sold in 2016, an increase of 12.7%.
  • GAAP net loss in 2017 was $28.3 million, or $0.59 loss per fully diluted share, compared with GAAP net loss of $6.5 million, or $0.14 loss per fully diluted share in 2016. The primary reason for the GAAP net loss in 2017 was due to $27.6 million research & development (“R&D”) expenses in 2017 related to the development of K23 and other models; additionally, the JV Company incurred R&D expenses of $6.88 million (which posed $3.44 million impact on Kandi’s net loss).  Excluding the impact from the R&D expenses, under the Non-GAAP adjusted financial measure I, our net income1 for 2017 would be $2.72 million, or $0.06 earnings per fully diluted share.  
  • Non-GAAP adjusted financial measure II2, which excludes stock award expenses and changes in the fair value of financial derivatives, was net loss of $23.2 million in 2017, compared with non-GAAP adjusted net income of $4.6 million in 2016. Non-GAAP adjusted loss per share1 was approximately $0.48 per fully diluted share for the full year of 2017, compared with non-GAAP adjusted earnings per share of $0.10 per fully diluted share for the full year of 2016. Excluding the impact from the R&D expenses, under the adjusted Non-GAAP financial measure III3, our net income for 2017 was $7.9 million, or $0.17 earnings per fully diluted share.  
  • Working capital surplus was $53.7 million as of December 31, 2017. Cash, cash equivalents and restricted cash totaled $16.1 million as of December 31, 2017.

Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, “2017 was still a challenging year for Kandi. Our business had been heavily impacted from the confusion surrounding the reusable battery exchange model, however Kandi has been working diligently to overcome the difficult time and resolve the issues. We are confident to successfully execute our long-term business model in the renewable energy industry that is full of opportunities in the future, and hopping to be back in the major league among EV industry players.”

“Although, the EV unit sales in 2017 did not meet the expectations, the Company has had modest progress in the product R&D. To name a few, the pure electric SUV model K26 has been upgraded to be EX3, which will be exhibited at the upcoming launch event in March 26, where there will be more than 100 distributors and over 10 media representatives attending. Furthermore, Hainan facility’s model K23 production will commence in March 28. We believe these new products will strengthen our company’s competitiveness as well grow our market share. In my personal view, the loss in 2017 was temporary and strategic. What we have done in the past year will lay a strong foundation to prepare for the future development. Being the frontrunner in the pure EV industry, we are not only the pure EV products manufacturer but also an advocate of urban car-share with significant influence in the development of China’s urban travel ecosphere. Whether the business model or the market share, Kandi is packed with solid fundamentals exceling its peers. The management team is confident in our future growth.” Mr. Hu concluded.

Full Year 2017 Financial Results

Net Revenues and Gross Profit

    2017     2016   Y-o-Y% 
Net Revenues (US$mln)    $ 102.8   $ 129.5   -20.6 %
Gross Profit (US$mln) $ 14.3   $ 17.7   -19.1 %
Gross Margin   14.0 %   13.7 % -  
                 

Net revenues for the full year 2017 decreased 20.6% from 2016. The decrease in net revenues was mainly due to the decrease of sales volume. Gross margin for the full year 2017 increased to 14.0%, compared with 13.7% in 2016. The moderate increase of gross margin was due to increased gross margin attributable to off-road vehicles sales in the year 2017.

Operating Income (Loss)

    2017     2016   Y-o-Y% 
Operating Expenses (US$mln)    $ 40.4   $ 48.7   -17.1 %
Operating -(Loss) (US$mln) $ (26.1 ) $ (31.0 ) -15.9 %
Operating Margin   -25.4 %   -24.0 % -  
                 

Total operating expenses in 2017 were $40.4 million, compared with $48.7 million in 2016. The decrease in total operating expenses was due to decreased general and administrative expenses in 2017.

GAAP Net Loss

    2017     2016   Y-o-Y% 
GAAP Net Loss (US$mln) $ (28.3 ) $ (6.5 ) 335.4 %
Loss per Weighted Average Common Share    $ (0.59 ) $ (0.14 ) -  
Loss per Weighted Average Diluted Share $ (0.59 ) $ (0.14 ) -  
                 

Non-GAAP Financial Measures

We make reference to certain non-GAAP financial measures, i.e., adjusted net income. Management believes that such adjusted financial results are useful for investors in evaluating our operating performance because they present a meaningful measure of corporate performance. See the non-GAAP reconciliation table below. Any non-GAAP measures should not be considered as a substitute for, and should only be read in conjunction with, measures of financial performance prepared in accordance with the GAAP.

The following table summarizes our non-GAAP net income (loss):

 Non-GAAP financial measure I 2017  
GAAP Net Loss (US$mln) (28.35 )
R&D Expense(US$mln) 27.63  
Share of (loss)after tax of JV impacted by JV Company's R&D Expense(US$mln)    3.44  
Non-GAAP net Income(US$mln) 2.72  
     


Non-GAAP financial measure II    2017     2016   Y-o-Y% 
GAAP Net Loss (US$mln) $ (28.3 ) $ (6.5 ) 335.4 %
Stock award expenses(US$mln) $ 5.2   $ 15.0   -65.3 %
Change of the fair value of financial derivatives(US$mln)      -   $ (3.8 )  
Non-GAAP net (Loss) income (US$mln) $ (23.2 ) $ 4.6   -600.6 %
                 


 Non-GAAP financial measure III   2017  
GAAP Net Loss (US$mln)   (28.35 )
Stock award expenses(US$mln) $ 5.2  
Change of the fair value of financial derivatives(US$mln)   -  
R&D Expense(US$mln)   27.63  
Share of (loss)after tax of JV impacted by JV Company's R&D Expense(US$mln)      3.44  
Non-GAAP net Income(US$mln)   7.91  
       

Net loss in 2017 was $28.3 million, compared with net loss of $6.5 million in 2016. The increase in net loss was primarily attributable to $27.6 million related to the development of K23 and other models; additionally, the JV Company incurred R&D expenses of $6.88 million (which posed $3.44 million impact on Kandi’s net loss) .

JV Company Financial Results

In the full year 2017, the JV Company sold 11,437 EV products, a 12.7% increase from 2016. Total EV product sales comprised 7,416 units of Model K12, 3,939 units of Model K17 and 82 units of other models.

The condensed financial income statement of the JV Company for the full year 2017 is as set forth below:

    2017     2016   Y-o-Y% 
Net Revenues (US$mln)    $ 192.7   $ 179.3   7.5 %
Gross Profit (US$mln) $ 3.6   $ 19.3   -81.3 %
Gross Margin   1.9 %   10.8 % -  
Net Loss(US$mln) $ (22.7 ) $ (14.2 ) 60.4 %
% of Net revenues   -11.8 %   -7.9 % -  

Kandi’s investments in the JV Company are accounted for under the equity method of accounting, as Kandi has a 50% ownership interest in the JV Company. As a result, Kandi recorded 50% of the JV Company’s loss for $11.3 million for the full year 2017. After eliminating intra-entity profits and losses, Kandi’s share of the after tax loss of the JV Company was $11.6 million for the full year 2017.

Full Year 2017 Conference Call Details
The Company has scheduled a conference call and live webcast to discuss the financial results at 8:00 AM (U.S. Eastern Time) on March 16, 2017 (8:00 PM Beijing Time on March 16, 2017). Mr. Hu Xiaoming, the Company’s Chief Executive Officer and Mr. Mei Bing, the Company’s 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:

  • Toll-free dial-in number: +1-877-407-3982
  • International dial-in number: + 1-201-493-6780
  • Webcast and replay: http://public.viavid.com/index.php?id=128730

A live audio webcast of the call may 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. Kandi conducts its primary business operations through its wholly-owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. (“Kandi Vehicles”), and the partially and wholly-owned subsidiaries of Kandi Vehicles. 

More information can be viewed at the Company's corporate website at http://www.kandivehicle.com. The Company routinely posts important information on its website. 

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. 

Follow us on Twitter: @ Kandi_Group 
Company Contact: 

Ms. Kewa Luo 
Kandi Technologies Group, Inc. 
Phone: 1-212-551-3610 
Email: IR@kandigroup.com

- Tables Below -

 
KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
    December 31,
2017
    December 31,
2016
 
             
Current assets            
Cash and cash equivalents   $ 4,891,808     $ 12,235,921  
Restricted cash     11,218,688       12,957,377  
Short term investment     -       4,463,097  
Accounts receivable (net of allowance for doubtful accounts of $133,930 and $0 as of December 31, 2017 and December 31, 2016, respectively)     34,397,858       32,394,613  
Inventories (net of provision for slow moving inventory of $620,919 and $415,797 as of December 31, 2017 and December 31, 2016, respectively)     15,979,794       11,914,110  
Notes receivable from JV Company and related party     1,137,289       400,239  
Other receivables     2,650,668       66,064  
Prepayments and prepaid expense     6,536,839       4,317,855  
Due from employees     7,070       4,863  
Advances to suppliers     14,908,385       38,250,818  
Amount due from JV Company, net     146,422,440       136,536,159  
Amount due from related party     162,048       10,484,816  
TOTAL CURRENT ASSETS     238,312,887       264,025,932  
                 
LONG-TERM ASSETS                
Property, Plant and equipment, net     12,000,971       15,194,442  
Land use rights, net     12,666,047       11,775,720  
Construction in progress     53,083,925       27,054,181  
Deferred taxes assets     4,383,425       -  
Long Term Investment     1,460,034       1,367,723  
Investment in JV Company     70,681,013       77,453,014  
Goodwill     322,591       322,591  
Intangible assets     331,116       413,211  
Advances to suppliers     21,592,918       33,819,419  
Other long-term assets     7,590,734       8,271,952  
Amount due from JV Company, net     15,907,183       -  
TOTAL Long-Term Assets     200,019,957       175,672,253  
                 
TOTAL ASSETS   $ 438,332,844     $ 439,698,185  
                 
CURRENT LIABILITIES                
Accounts payables   $ 111,595,540     $ 115,870,051  
Other payables and accrued expenses     6,556,209       4,835,952  
Short-term loans     33,042,864       34,265,065  
Customer deposits     205,544       41,671  
Notes payable     28,075,945       14,797,325  
Income tax payable     2,902,699       1,364,235  
Due to employees     35,041       21,214  
Deferred taxes liabilities     -       118,643  
Deferred income     2,191,143       6,363,751  
Total Current Liabilities     184,604,985       177,677,907  
                 
LONG-TERM LIABILITIES                
Long term bank loans     30,737,547       28,794,172  
Deferred taxes liabilities     -       878,639  
Total Long-Term Liabilities     30,737,547       29,672,811  
                 
TOTAL LIABILITIES     215,342,532       207,350,718  
                 
STOCKHOLDER’S EQUITY                
Common stock, $0.001 par value; 100,000,000 shares authorized; 48,036,538 and 47,699,638 shares issued and outstanding at December 31,2017 and December 31,2016, respectively     48,037       47,700  
Additional paid-in capital     233,055,348       227,911,477  
Retained earnings (the restricted portion is $4,422,033 and $4,219,808 at December 31,2017 and December 31, 2016, respectively)     (3,802,310 )     24,545,163  
Accumulated other comprehensive loss     (6,310,763 )     (20,156,873 )
TOTAL STOCKHOLDERS’ EQUITY     222,990,312       232,347,467  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 438,332,844     $ 439,698,185  
                 


 
KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
 
    Year Ended  
    December
31, 2017
    December
31, 2016
    December
31, 2015
 
                   
REVENUES FROM UNRELATED PARTY, NET   $ 9,853,410     $ 47,870,589     $ 6,790,032  
REVENUES FROM JV COMPANY AND RELATED PARTY, NET     92,952,211       81,621,424       194,279,141  
                         
REVENUES, NET     102,805,621       129,492,013       201,069,173  
                         
COST OF GOODS SOLD     (88,461,432 )     (111,770,197 )     (172,649,955 )
                         
GROSS PROFIT     14,344,189       17,721,816       28,419,218  
                         
OPERATING EXPENSES:                        
Research and development     (27,628,085 )     (26,504,650 )     (3,482,511 )
Selling and marketing     (1,465,007 )     (1,567,707 )     (633,863 )
General and administrative     (11,333,336 )     (20,665,709 )     (28,255,267 )
Total Operating Expenses     (40,426,428 )     (48,738,066 )     (32,371,641 )
                         
LOSS FROM OPERATIONS     (26,082,239 )     (31,016,250 )     (3,952,423 )
                         
OTHER INCOME (EXPENSE):                        
Interest income     2,269,844       2,961,153       3,138,717  
Interest expense     (2,280,286 )     (1,831,667 )     (2,214,635 )
Change in fair value of financial instruments     -       3,823,590       8,519,295  
Government grants     5,913,554       25,913,540       1,645,032  
Share of (loss) income after tax of JV     (11,555,302 )     (7,307,510 )     11,841,855  
Other income, net     123,925       1,627,933       1,814,882  
Total other (expense) income, net     (5,528,265 )     25,187,039       24,745,146  
                         
(LOSS) INCOME BEFORE INCOME TAXES     (31,610,504 )     (5,829,211 )     20,792,723  
                         
INCOME TAX BENEFIT (EXPENSE)     3,263,030       (681,546 )     (6,127,228 )
                         
NET(LOSS) INCOME     (28,347,474 )     (6,510,757 )     14,665,495  
                         
OTHER COMPREHENSIVE INCOME (LOSS)                        
Foreign currency translation     13,846,110       (15,415,223 )     (9,631,753 )
                         
COMPREHENSIVE (LOSS) INCOME   $ (14,501,364 )   $ (21,925,980 )   $ 5,033,742  
                         
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC     47,943,830       47,447,665       46,744,718  
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED     47,943,830       47,447,665       46,925,554  
                         
NET (LOSS) INCOME PER SHARE, BASIC   $ (0.59 )   $ (0.14 )   $ 0.31  
NET (LOSS) INCOME PER SHARE, DILUTED   $ (0.59 )   $ (0.14 )   $ 0.31  
                         


 
KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW 
FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
 
    Year Ended  
    December 31,
2017
    December 31,
2016
    December 31,
2015
 
                   
CASH FLOWS FROM OPERATING ACTIVITIES:                  
Net (loss) income   $ (28,347,474 )   $ (6,510,757 )   $ 14,665,495  
Adjustments to reconcile net income to net cash provided by operating activities                        
Depreciation and amortization     4,777,992       4,863,277       5,788,780  
Assets Impairments     170,506       (40,142 )     194,366  
Allowance for doubtful accounts     128,972       -       -  
Deferred taxes     (5,448,015 )     3,651,362       1,446,345  
Change in fair value of financial instruments     -       (3,823,590 )     (8,519,295 )
Share of loss after tax of JV Company     11,555,302       7,307,510       (11,841,855 )
Reserve for fixed assets     451,503       -       -  
Stock Compensation cost     5,191,307       14,913,212       22,306,987  
                         
Changes in operating assets and liabilities, net of effects of acquisition:                        
(Increase) Decrease In:                        
Accounts receivable     (5,821,522 )     (40,962,889 )     (16,240,270 )
Notes receivable     -       1,383,605       1,708,223  
Notes receivable from JV Company and related party     8,068,968       -       -  
Inventories     (3,311,357 )     4,952,792       (3,497,460 )
Other receivables and other assets     (1,243,552 )     (43,650,395 )     (193,954 )
Due from employee     10,127       41,529       (7,596 )
Advances to supplier and Prepayments and prepaid expenses     23,107,334       (9,209,955 )     6,664,779  
Advances to suppliers-Long term     (5,941,692 )     -       -  
Amount due from JV Company     (53,622,842 )     (111,996,250 )     (127,667,063 )
Amount due from JV Company-Long term     (15,907,183 )     -       -  
Due from related party     10,622,123       28,715,113       (42,249,905 )
                         
Increase (Decrease) In:                        
Accounts payable     66,784,385       112,150,789       164,704,112  
Other payables and accrued liabilities     1,914,293       (3,790,859 )     5,300,095  
Notes payable     (13,297,993 )     (8,480,858 )     (15,398,471 )
Customer deposits     155,100       (48,312 )     (2,496,382 )
Income Tax payable     1,221,012       1,008,274       (1,039,187 )
Deferred income     (4,431,765 )     -          
Net cash used in operating activities   $ (3,214,471 )   $ (49,526,543 )   $ (6,372,256 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES:                        
Purchases of property, plant and equipment, net     (760,253 )     (275,801 )     (827,059 )
(Purchases)/Disposal of land use rights and other intangible assets     (416,361 )     (3,388 )     1,589,165  
(Purchases)/Disposal of construction in progress     (702,719 )     (6,001,664 )     1,128,443  
Issuance of notes receivable     -       -       (9,411,720 )
Repayment of notes receivable     -       10,335,807       6,410,154  
Long Term Investment     -       -       (1,522,411 )
Short Term Investment     4,587,971       (3,088,327 )     (1,679,051 )
Net cash provided by (used in) investing activities   $ 2,708,638     $ 966,627     $ (4,312,479 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES:                        
 Restricted cash     2,516,481       2,257,268       (4,006,346 )
 Proceeds from short-term bank loans     32,263,794       65,912,237       50,640,214  
 Repayments of short-term bank loans     (35,667,772 )     (35,815,325 )     (47,595,391 )
 Proceeds from notes payable     22,270,028       12,038,765       -  
 Repayment of notes payable     (28,680,591 )     -       -  
 Warrant exercise     -       434,666       -  
 Net cash (used in) provided by financing activities   $ (7,298,060 )   $ 44,827,611     $ (961,523 )
                         
NET DECREASE IN CASH AND CASH EQUIVALENTS     (7,803,893 )     (3,732,305 )     (11,646,257 )
Effect of exchange rate changes on cash     459,780       (770,333 )     2,005,356  
Cash and cash equivalents at beginning of year     12,235,921       16,738,559       26,379,460  
                         
CASH AND CASH EQUIVALENTS AT END OF PERIOD     4,891,808       12,235,921       16,738,559  
                         
SUPPLEMENTARY CASH FLOW INFORMATION                        
Income taxes paid     1,448,523       2,598,846       2,496,654  
Interest paid     1,625,240       1,671,372       2,188,223  
                         
SUPPLEMENTAL NON-CASH DISCLOSURES:                        
Construction in progress transferred back to prepayments     -       35,035,762       -  
Advances to suppliers-long term transferred to Construction in progress     18,848,586       -       -  
Purchase of construction in progress by accounts payable     3,756,605       4,191,246       -  
Advances to suppliers-long term adjusted for other payable     1,065,100       -       -  
Settlement of due from JV Company and related parties with notes receivable     53,565,297       43,707,157       99,147,703  
Settlement of accounts receivables with notes receivable from unrelated parties     5,868,902       15,052,339       23,292,896  
Assignment of notes receivable from unrelated parties to supplier to settle accounts payable     5,868,902       14,509,390       22,748,033  
Assignment of notes receivable from JV Company and related parties to supplier to settle accounts payable     44,812,574       44,846,561       96,359,704  
Settlement of accounts payable with notes payables     31,533,939       8,146,783       13,781,830  
Deferred tax change to other comprehensive income     78,967       -       -  
                         

__________________________________________________
1
Non-GAAP financial measure I, including the Non-GAAP net income and Non-GAAP EPS are defined as the financial measures excluding the R&D expenses. 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 read in conjunction with, measures of financial performance prepared in accordance with GAAP.

2Non-GAAP financial measures II, 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 read in conjunction with, measures of financial performance prepared in accordance with GAAP.

3Non-GAAP financial measures III, 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, the effects of the stock award expense and the effects of the R&D expenses.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 read in conjunction with, measures of financial performance prepared in accordance with GAAP.

Powered by EIN News