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Kandi Technologies Reports Third Quarter 2019 Financial Results
2019-11-12 9:09:00  (Page Views:218)
JINHUA, CHINA-- (November 12, 2019) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the third quarter of 2019.
 
Third Quarter Financial Highlights

·           Total revenues were $31.7 million for the third quarter of 2019, a decrease of 16.6% from total revenues of $38.0 million for the same period in 2018.
 
·           Electric Vehicle (“EV”) parts sales decreased by 19.4%, to $25.8 million for the third quarter of 2019, compared with EV parts sales of $32.1 million for the same period in 2018.
 
·           Revenues from sales of off-road vehicles decreased by 1.5%, to $5.8 million for the third quarter of 2019, compared with revenues from sales of off-road vehicles of $5.9 million for the same period in2018.
 
·           Gross profit decreased 15.5% to $5.3 million, compared to $6.2 million for the same period last year. Gross margin increased to 16.7% compared to 16.4% for the same period of 2018.
 
·           GAAP net income for the third quarter of 2019 was $12.1million, or earnings of $0.23 per fully diluted share compared with GAAP net loss of $6.5 million, or loss of $0.13 per fully diluted share for the same period in 2018.
 
·           Non-GAAP adjusted net income[1], which excludes stock award expenses and the change of the fair value of contingent consideration, was $12.1 million in the third quarter of 2019, compared with non-GAAP net loss of $4.9 million for the same period in 2018. Non-GAAP adjusted income per share1 was approximately $0.23 per fully diluted share for the third quarter of 2019, compared with Non-GAAP adjusted lossper share1 of $0.10 per fully diluted share for the same period in 2018.
 
·           Working capital was $80.4 million as of September 30, 2019. Cash, cash equivalents and restricted cash totaled $26.1 million as of September30, 2019.

Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, “Kandi’s financial performance in the first three quarters of 2019wereunsatisfying due to the negative impact stemming fromthe Affiliate Company’s[2] equity adjustment and the corresponding changes to its business operations. However, over the past six months, the Company’s efforts have led tonew opportunities for its future development. These efforts include reorganizing and working with other business partners tofacilitatethe online ride-sharing service allianceproject, which offers300,000 government-accredited vehicles within five years. The Company’s efforts also includeimproving the operation and production capacityof the Hainan facility, enhancingthe Company’s ability to supply the EV-part products,strengthening its relationship with DGL Group Inc. (USA) while simultaneouslydeveloping the business of the all-terrain vehicles. We are confident in the Company's ability to grow and prosper in 2020. In addition, Geely Technologies Group Co., Ltd. has conducted substantial work in connection with the improvement of the Affiliate Company and achieved significant results, details of which will be released by the Affiliate Company in December.”
 
Revenues and Gross Profit


  3Q19 3Q18 Y-o-Y%
Revenues (US$million) $31.7 $38.0 -16.6%
Gross Profit (US$million) $5.3 $6.2 -15.5%
Gross Margin 16.7% 16.4% -
  
Revenues for the third quarter of 2019 decreased by 16.6% compared to the same period of last year. The decrease in revenues was mainly due to the decrease in EV parts sales during this quarter. The decrease in EV parts sales was primarily due to the Affiliate Company’s temporary declining sales, which was caused by its product adjustments.The increase in the gross margin was mainly due to the increased selling price of the charging and exchanging equipment and the increased proportion of the high-margin battery processing business this year.
                    
Operating Income (Loss)

  3Q19 3Q18 Y-o-Y%
Operating Expenses (US$million) $5.0 $8.7 -42.7%
OperatingIncome (Loss)(US$million) $0.3 ($2.4) -113.1%
Operating Margin 1.0% -6.4% -
 
 
Total operating expenses in the third quarter of 2019 were $5.0 million, compared with $8.7 million in the same quarter of 2018. The decrease in total operating expenses was due to the decreased R&D expenses, which were $0.6 million in this quarter compared with $5.7 million in the same quarter last year.
 
The following table summarizes our non-GAAP net income for the three months ended September 30, 2019 and 2018:

  3Q19 3Q18 Y-o-Y%
NetIncome (Loss)(US$million) $12.1 ($6.5) -285.4%
EarningsLossper Weighted Average Common Share $0.23 ($0.13) -
EarningsLossper Weighted Average Diluted Share $0.23 ($0.13) -
Stock Award Expenses(US$million) $0.02 $0.03 -27.6 %
Change in the Fair Value of Contingent Consideration(US$million) ($0.06) $1.6 -103.7%
Non-GAAP NetIncome (Loss)(US$million) $12.1 ($5.0) -344.2%
 


Net income was $12.1million in the third quarterof 2019, compared with net loss of $6.5 million in the same quarter of 2018. The increase of net incomefor this quarter was primarily attributable to the gain from equity sale in the Affiliate Company and the decreased research and development expense.

Non-GAAP net income was $12.1 million in the third quarter of 2019, compared to Non-GAAP net loss of $5.0 million in the same quarter of 2018. The increase of net income (non-GAAP) was primarily attributable to the gain from equity sale in the Affiliate Company and the decreased research and development expense.

 
Third Quarter 2019 Conference Call Details

The Company has scheduled a conference call and live webcast to discuss its third quarter 2019 financial results at 8:00 A.M. Eastern Time (9:00 P.M. Beijing Time) on November 12, 2019. Mr. Hu Xiaoming, Chief Executive Officer of the Company, and Mr. Zhu Xiaoying, interim Chief Financial Officer of the Company, will deliver prepared remarks to be followed by a question and answer session.  
 
Dial-in details for the conference call are as follows:

 
A 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.


[1]Non-GAAP measures, including Non-GAAP net income and Non-GAAP EPS are defined as the financial measures excluding the change of fair value of contingent consideration and the effects of stock award expenses. We supply non-GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations. Any non-GAAP measure 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.

[2]Refers to Kandi Electric Vehicles Group Co., Ltd., formerly knownas the “JVCompany”.
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