Kandi Technologies Reports Full Year 2019 Financial Results
04/28/2020
Full Year Revenues of $135.7 m, up 20.7% yoy
Full Year Off-road Vehicles Sales of $22.7 m, up 70.5% yoy
Full Year Operating Income of $0.9 m, compared with operating loss of $1.6m in 2018
JINHUA, CHINA-- (April 28, 2020) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the full year ended December 31, 2019.
Full Year 2019 Highlights
Full Year Off-road Vehicles Sales of $22.7 m, up 70.5% yoy
Full Year Operating Income of $0.9 m, compared with operating loss of $1.6m in 2018
JINHUA, CHINA-- (April 28, 2020) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the full year ended December 31, 2019.
Full Year 2019 Highlights
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Total revenues were $135.7 million in 2019, an increase of 20.7% from total revenues of $112.4 million in 2018.
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EV parts sales increased by 11.7% to $110.7 million in 2019, compared with EV parts sales of $99.1 million in 2018.
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Off-road vehicles sales increased by 70.5% to $22.7 million in 2019, compared with off-road vehicles sales of $13.3 million in 2018.
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Grossmargin for the year ended December 31, 2019 was 18.7%, compared to 18.0% for the year ended December 31, 2018.
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Operating income in 2019 was $0.9 million, compared with an operating loss of $1.6million in 2018.
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Net loss in 2019 was $7.2 million, or $0.14 loss per fully diluted share, compared with a net lossof $5.7 million, or $0.11 loss per fully diluted sharein 2018.
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As of December 31, 2019, working capital was $63.7 million;cash, cash equivalents, and restricted cash totaled $16.5million.
Mr. Hu Xiaoming, Chairman and CEO of Kandi commented: “Despite challenging market conditions, we delivered solid revenue growth of20.7% year-over-year and improved gross margin to 18.7%.”
Hu continued, “During the year, we achieve two major strategic milestones that position us for strong growth in the years ahead. First, we completed the restructuring of the Affiliate Company, formerly defined as the JV Company by transferring 21.47% of its equity interests in the Affiliate Company to Geely for a total amount of RMB 516 million, or approximately $72.3 million. As a result of the completion of the equity transfer, Kandi’s 100% owned subsidiary Kandi Vehicles owns 22% of the Affiliate Company. The restructuring yielded us over $70 million, which will fund our other growth opportunities.”
“The second achievement was finalizing our transaction with Jinhua Economic and Technological Development Zone.Where Kandi’s Jinhua facility is located is required to be rebuilt into a central innovation District (CID) according to the Jinhua City Construction Plan, whichresulted in relocation of the Company’s Jinhua facility.After two years of negotiation, we signed a real estate repurchase agreement with Jinhua Economic and Technological Development Zone in the first quarter of 2020. The Jinhua local government agreed to pay RMB 525 million, or approximately $75.6 million to purchase the land and facility. In addition, within the next eight years, the Jinhua local government will offer subsidies of no less than RMB 500 million, or approximately $71.9 million, based on Kandi Vehicle’s financial contribution to the local department of finance.This deal will yield significant cash, both currently and in future years, while enabling us to transfer production to a new, more modern and efficient facility. This deal frees up our old land for other development, and so is a win-win both for us and the local authorities.”
Concerning the current environment, Hu stated, “Coming off such a strong finish to 2019, we looked forward to more success in 2020, but the COVID-19 crisis has put the global economy on pause. Our foremost concern is the health and safety of our employees, customers, and business partners. As the pandemic unfolded, we immediately took action, such as closing our facilities and going to remote work when possible. Now,the pandemic appears under control in China, and we fully resumed production in the beginning of March.”
“The Chinese government has supported the EV industry during these turbulent times. Most importantly, state subsidies and tax breaks for new energy vehicles have been extended until the end of 2022, two years longer than the original expiration at the end of this year. This extension will encourage a more-rapid resumption of demand, and gives the whole industry more time to fully recover. We applaud the wisdom of the authorities in taking this long-term view. As an EV leader in China, we believe Kandi will benefit from this more supportive policy environment.”
Mr. Hu concluded, “Even as we focus in the near-term on business recovery, we are planning for strong growth over the long-term. In particular, our focus this year will be to make real progress on our smaller-city EV online ride-share operatingplatformwith government-accredited ride-share vehicle service. Our partnership with Jinpeng is critical to this effort, and our collaboration is off to a good start. We look forward to building a compelling service that can drive high volume vehicles sales in the years ahead.”
Full Year 2019 Financial Results
Net Revenues and Gross Profit
| 2019 | 2018 | Y-o-Y% | |
| Net Revenues (US$mln) | $135.7 | $112.4 | 20.7% |
| Gross Profit (US$mln) | $25.4 | $20.2 | 25.6% |
| Gross Margin | 18.7% | 18.0% | - |
Net revenues for the full year 2019 increased 20.7% to $135.7 million from 2018. The increase in net revenues was mainly due to an increase in sales of EV parts and off-road vehicles. Gross margin for the full year 2019 expanded to 18.7%, compared with 18.0% in 2018.Theincrease in the gross margin was mainly due to higher selling pricesfor charging and exchange equipment, as well as an increased proportion of high-margin battery processing business.
Operating Income (Loss)
| 2019 | 2018 | Y-o-Y% | |
| Operating Expenses (US$mln) | $24.5 | $21.9 | 12.0% |
| Operating Income (Loss) (US$mln) | $0.9 | ($1.6) | -155.5% |
| Operating Margin | 0.7% | -1.5% | - |
Total operating expenses in 2019 were $24.5 million, compared with $21.9 million in 2018. The increase in operating expenses was due to highergeneral and administrative expenses.
Net Loss
| 2019 | 2018 | Y-o-Y% | |
| Net Loss (US$mln) | ($7.2) | ($5.7) | 26.2% |
| Loss per Weighted Average Common Share | ($0.14) | ($0.11) | - |
| Lossper Weighted Average Diluted Share | ($0.14) | ($0.11) | - |
Net loss in 2019 was $7.2 million, compared with a net lossof $5.7 million in 2018. The increase in net loss was primarily attributable to increased operation cost of Hainan facility.
Full Year 2019 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 Tuesday, April 28, 2020. 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:
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Toll-free dial-in number: +1-800-289-0438
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International dial-in number: + 1-323-794-2423
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Webcast and replay: http://public.viavid.com/index.php?id=139383
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.
