JINHUA, CHINA-- (August 9, 2017) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the second quarter of 2017.
Second Quarter Highlights
·Total revenues were $27.3 million for the second quarter of 2017, a decrease of 50.5% from total revenues of $55.2 million for the same period in 2016.
·Electric Vehicle (“EV”) parts sales decreased by 51.3%, to $26.2 million for the second quarter of 2017, compared with EV parts sales of $53.8 million for the same period in 2016.
·Revenues from sales of off-road vehicles decreased by 19.5%, to $1.1 million for the second quarter of 2017, compared with revenues from sales of off-road vehicles of $1.4 million for the same period in 2016.
·GAAP net loss for the second quarter of 2017 was $11.6 million, or a loss of $0.24 per fully diluted share, compared with GAAP net income of $2.8 million, or income of $0.06 per fully diluted share for the same period in 2016. This decrease is largely due to JV Company losses and significantly increased research and development expenses of $5.1 million for this quarter.
·Non-GAAP adjusted net loss, which excludes stock award expenses, was $9.5 million in the second quarter of 2017, compared with non-GAAP net income of $10.5 million for the same period in 2016. Non-GAAP adjusted loss per share1 was approximately $0.20 per fully diluted share for the second quarter of 2017, compared with Non-GAAP adjusted earnings per share1 of $0.22 per fully diluted share for the same period in 2016.
·Working capital surplus was $56.8 million as of June 30, 2017. Cash, cash equivalents and restricted cash totaled $30.1 million as of June 30, 2017.
Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, “2017 has been a challenging year for Kandi. The confusion surrounding the subsidy heavily impacted the Company’s business last year and we have been trying to regain the momentum this year. The management team is working hard to explore better growth opportunities. Despite second-quarter losses, Kandi Vehicles’estimated value has exceeded RMB four billion, the management team will actively seek strategic investors based upon the estimated value to increase its competitive advantages. The efforts the Company has made will lay a solid foundation continued to put forth its best efforts to achieve strong business results.”
Net Revenues and Gross Profit
Net revenues for the second quarter of 2017 decreased by 50.5% compared to the same period last year. The decrease in net revenues was mainly due to a decrease in EV parts sales during this quarter. Selling prices of our products for the three months ended June 30, 2017, decreased on average from the same period last year. The decrease in revenues was primarily due to this decrease in sales volume.
Operating Income (Loss)
Total operating expenses in the second quarter of 2017 were $7.1 million, compared with $10.8 million in the same quarter of 2016. The decrease in total operating expenses was due to decreased SG&A expenses, which were $2.0 million in this quarter compared with $10.4 million in the same quarter last year.
GAAP Net (Loss) Income
Net loss was $11.6 million in the second quarter, compared with net income of $2.8 million in the same quarter of 2016. The negative change was primarily attributable to JV Company losses and significantly increased research and development expenses of approximately $5.1 million.
Non-GAAP net loss was $9.5 million in the second quarter of 2017, a 190.6% decrease compared to Non-GAAP net income of $10.5 million in the same quarter of 2016. The decrease was primarily attributable to the JV Company’s net losses, and significantly increased research and development expenses made in an effort to prepare the Company for future business growth.
Kandi Electric Vehicles Group Co., Ltd. (the “JV Company”) Financial Results
In the second quarter of 2017, the JV Company sold 365 units of EV products.
The condensed financial income statements of the JV Company in the first quarter are as set forth below:
Revenue for the JV Company was $18.7 million in the second quarter of 2017, a decrease of 83.3% compared to the same quarter of 2016. Net loss was $14.6 million, a 269.8% decrease compared tonet income of $8.6 million in the same quarter of 2016.
Kandi’s investments in the JV Company are accounted for using the equity method of accounting because Kandi has a 50% ownership interest in the JV Company. As a result, Kandi recorded 50% of the JV Company’s losses of $7.3 million for this quarter. After eliminating intra-entity profits and losses, Kandi’s share of the after-tax loss of the JV Company was $8.7 million for the second quarter of 2017.
Second Quarter 2017 Conference Call Details
The Company has scheduled a conference call and live webcast to discuss its second quarter 2017 financial results at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time) on August 9, 2017. Mr. Hu Xiaoming, Chief Executive Officer of the Company, and Mr. Mei Bing, 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:
·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=125842
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.