Kandi Technologies Reports Second Quarter 2020 Financial Results
08/10/2020
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Off-road vehicles sales increased 27.3% to $6.6 million
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Gross margin of 18.2% versus 17.4% year-ago
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Net income increased 155.4% to $4.1 million compared to net loss of $7.3 million
JINHUA, CHINA-- (August 10, 2020) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the second quarter of 2020.
Second Quarter Highlights
Second Quarter Highlights
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Total revenues were $19.4 million for the second quarter of 2020, a decrease of 19.5% from total revenues of $24.1 million for the same period in 2019.
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Electric Vehicle (“EV”) parts sales decreased by 34.1%, to $12.5 million for the second quarter of 2020, compared with EV parts sales of $19.0 million for the same period in 2019.
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Revenues from sales of off-road vehicles increased by 27.3%, to $6.6 million for the second quarter of 2020, compared with revenues from sales of off-road vehicles of $5.2 million for the same period in2019.
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Gross margin for the second quarter of 2020 was 18.2%, compared to 17.4% for the same period of 2019.
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Net income for the second quarter of 2020 was $4.1 million, or $0.08earnings per fully diluted share, compared with net loss of $7.3 million, or $0.14loss per fully diluted share for the same period in 2019.
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Working capital was $75.6 million as of June 30, 2020. Cash, cash equivalents and restricted cash totaled $6.7 million as of June 30, 2020.
Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, “Our second quarter results were satisfactory. After the pandemic in China was effectively contained, Kandi fully resumedproduction and actively pushed the business forward. The COVID-19 situation significantly decreased consumer demand, yet we contained the revenue decline, improved gross margin, and achieved $4.1 million in profit. We made meaningful progress in preparing for the online car-hailing business, the launch of which is planned for Hainan soon.Our first fully automatic intelligent battery swapping equipment was delivered to the rideshare operator in Hainan on August 2. Installation has been completed, and trial operations will commence. For the first time, battery swapping stationsareclassified as‘infrastructure construction’ based on the Government Work Report delivered by Premier Li Keqiang during the 2020 NPC. As such, we believe that our fully automatic smart replacement system will be favored by the market and drive sales of our electric vehicles.Furthermore, our affiliate company Fengsheng Automotive successively launched two exciting new pure electric SUVs and multi-purpose passenger vehicles and will continue to launch more pure electric vehicle models to meet the diversified travel needs of users.”
Mr. Hu discussed the U.S. opportunity: “While maintaining growth of off-road vehicles, our American wholly-owned subsidiary has also preparedto launch sales of pure EVs in the United States. A live virtual event will occur on August 18 to officially kick-off pre-sales, which will be a key milestone in the Company’s history. As a technology innovator, Kandi is committed to provide high quality products with great performance and affordable price.”
“As a pioneer in the electric vehicle industry and inventor of the ‘vehicle/battery separation’ swap model, Kandi is well-positioned to benefit from growing demand for EVs. The marketpotential of online car hailing in China is huge, and with government support for the battery swapping model, we are confident that Kandi will gain market share in China’s EV industry in the near future.” Mr. Hu concluded.
Net Revenues and Gross Profit
Mr. Hu discussed the U.S. opportunity: “While maintaining growth of off-road vehicles, our American wholly-owned subsidiary has also preparedto launch sales of pure EVs in the United States. A live virtual event will occur on August 18 to officially kick-off pre-sales, which will be a key milestone in the Company’s history. As a technology innovator, Kandi is committed to provide high quality products with great performance and affordable price.”
“As a pioneer in the electric vehicle industry and inventor of the ‘vehicle/battery separation’ swap model, Kandi is well-positioned to benefit from growing demand for EVs. The marketpotential of online car hailing in China is huge, and with government support for the battery swapping model, we are confident that Kandi will gain market share in China’s EV industry in the near future.” Mr. Hu concluded.
Net Revenues and Gross Profit
| 2Q20 | 2Q19 | Y-o-Y% | |
| Net Revenues (US$million) | $19.4 | $24.1 | -19.5% |
| Gross Profit (US$million) | $3.5 | $4.2 | -15.8% |
| Gross Margin | 18.2% | 17.4% | - |
Net revenues for the second quarter of 2020 decreased by 19.5% compared to the same period last year. The decrease in revenue was mainly due to lower sales of EV parts. Due to the outbreak of COVID-19 in China, the demand for EV parts from customers was significantly affected during the first half of 2020.
Income(Loss) from Operations
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Total operating incomein the second quarter of 2020 were $8.1 million, compared with $7.2 million of total operating expenses in the same quarter of 2019. The increase in total operating income was mainly due to the gain on disposal of long-live asset related to the real estate repurchase agreement of our Jinhua Facility’s relocationwhich was $13.9 incurred during the second quarter of 2020.
Net Income (Loss)
| 2Q20 | 2Q19 | Y-o-Y% | |
| Net Income (Loss)(US$million) | $4.1 | ($7.3) | -155.4% |
| Earnings (loss) per Weighted Average Common Share | $0.08 | ($0.14) | - |
| Earnings (loss) per Weighted Average Diluted Share | $0.08 | ($0.14) | - |
Net income was $4.1 million in the second quarter of 2020, compared with net loss of $7.3 million in the same quarter of 2019. The decrease in loss was primarily due to the gain on disposal of long-live assetwhich was related to the real estate repurchase agreement of our Jinhua Facility’s relocation.
Financial Condition
As of June 30, 2020, the Company had cash and cash equivalents of $3.5 million, restricted cash of $3.2 million, working capital of $75.6 million; compared to $5.5 million, $11.0 million, $63.7 million as of December 31, 2019.
As of June 30, 2020, our accounts receivable was $60.0 million, compared to $61.2 million as of December 31, 2019.
For the first half of 2020, cash used in operating activities was $34.3 million, as compared to cash used in operating activities of $33.1 million for the same period last year.
Second Quarter 2020 Conference Call Details
The Company will conduct a conference call and live webcast to discuss its second quarter 2020 financial results at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time) on August 10, 2019. Management will deliver prepared remarks to be followed by a question and answer session.
Dial-in details for the conference call are as follows:
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Toll-free dial-in number: +1-877-407-3982
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International dial-in number: + 1-201-493-6780
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Webcast and replay: http://public.viavid.com/index.php?id=1441129
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.
