Kandi Technologies Reports Second Quarter 2019 Financial Results
08/09/2019
- Q2 total revenues increased 47.6% YoY to $24.1 million –
- Q2 sales of off-road vehicles increased 506.9% YoY to $5.2 million –
- Q2 gross margin increased to 17.4% compared to 12.6% –
JINHUA, CHINA-- (August 9, 2019) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the second quarter of 2019.
Second Quarter Highlights
· Total revenues were $24.1 million for the second quarter of 2019, an increase of 47.6% from total revenues of $16.4 million for the same period in 2018.
· Electric Vehicle (“EV”) parts sales increased by 22.4%, to $19.0 million for the second quarter of 2019, compared with EV parts sales of $15.5 million for the same period in 2018.
· Revenues from sales of off-road vehicles increased by 506.9%, to $5.2 million for the second quarter of 2019, compared with revenues from sales of off-road vehicles of $0.8 million for the same period in 2018.
· GAAP net loss for the second quarter of 2019 was $7.3 million, or $0.14 loss per fully diluted share, compared with GAAP net income of $1.4 million, or $0.03 earnings per fully diluted share for the same period in 2018.
· Non-GAAP adjusted net loss[1], which excludes employee stock compensation expenses and the change in fair value of contingent consideration, was $6.6 million in the second quarter of 2019, compared with Non-GAAP adjusted net income of $2.5 million for the same period in 2018. Non-GAAP adjusted loss per share1 was $0.12 per fully diluted share for the second quarter of 2019, compared with Non-GAAP adjusted earnings per share1 of $0.05 per fully diluted share for the same period in 2018.
· Working capital was $9.6 million as of June 30, 2019. Cash, cash equivalents and restricted cash totaled $5.2 million as of June 30, 2019.
Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, “The EV sales in the second quarter was still impacted by the Chinese government’s 2019 national subsidy policy adjustments and the JV Company’s pending restructuring, causing the loss of the JV Company, which resulted in Kandi’s overall loss. However, Kandi’s EV parts and off-road vehicle sales have achieved excellent growth during the second quarter, increasing 22.4% and 506.9%, respectively. The management team is expecting to complete the JV Company’s restructuring by the end of the third quarter. In addition, we believe that Kandi Electric Vehicles Jiangsu Co., Ltd.’s receipt of the “dual production licenses” as a qualified Pure Electric Vehicle Production Manufactureris a new breakthrough that may lead to tremendous opportunities in the government-accredited online ride hailing market for Kandi’s EVs. We believe that the JV Company will be able to achieve exciting future growth under Geely’s leadership.”
Net Revenues and Gross Profit
- Q2 sales of off-road vehicles increased 506.9% YoY to $5.2 million –
- Q2 gross margin increased to 17.4% compared to 12.6% –
JINHUA, CHINA-- (August 9, 2019) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the second quarter of 2019.
Second Quarter Highlights
· Total revenues were $24.1 million for the second quarter of 2019, an increase of 47.6% from total revenues of $16.4 million for the same period in 2018.
· Electric Vehicle (“EV”) parts sales increased by 22.4%, to $19.0 million for the second quarter of 2019, compared with EV parts sales of $15.5 million for the same period in 2018.
· Revenues from sales of off-road vehicles increased by 506.9%, to $5.2 million for the second quarter of 2019, compared with revenues from sales of off-road vehicles of $0.8 million for the same period in 2018.
· GAAP net loss for the second quarter of 2019 was $7.3 million, or $0.14 loss per fully diluted share, compared with GAAP net income of $1.4 million, or $0.03 earnings per fully diluted share for the same period in 2018.
· Non-GAAP adjusted net loss[1], which excludes employee stock compensation expenses and the change in fair value of contingent consideration, was $6.6 million in the second quarter of 2019, compared with Non-GAAP adjusted net income of $2.5 million for the same period in 2018. Non-GAAP adjusted loss per share1 was $0.12 per fully diluted share for the second quarter of 2019, compared with Non-GAAP adjusted earnings per share1 of $0.05 per fully diluted share for the same period in 2018.
· Working capital was $9.6 million as of June 30, 2019. Cash, cash equivalents and restricted cash totaled $5.2 million as of June 30, 2019.
Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, “The EV sales in the second quarter was still impacted by the Chinese government’s 2019 national subsidy policy adjustments and the JV Company’s pending restructuring, causing the loss of the JV Company, which resulted in Kandi’s overall loss. However, Kandi’s EV parts and off-road vehicle sales have achieved excellent growth during the second quarter, increasing 22.4% and 506.9%, respectively. The management team is expecting to complete the JV Company’s restructuring by the end of the third quarter. In addition, we believe that Kandi Electric Vehicles Jiangsu Co., Ltd.’s receipt of the “dual production licenses” as a qualified Pure Electric Vehicle Production Manufactureris a new breakthrough that may lead to tremendous opportunities in the government-accredited online ride hailing market for Kandi’s EVs. We believe that the JV Company will be able to achieve exciting future growth under Geely’s leadership.”
Net Revenues and Gross Profit
| 2Q19 | 2Q18 | Y-o-Y% | |
| Net Revenues (US$million) | $24.1 | $16.4 | 47.6% |
| Gross Profit (US$million) | $4.2 | $2.1 | 104.2% |
| Gross Margin | 17.4% | 12.6% | - |
Net revenues for the second quarter of 2019 increased by 47.6% compared to the same period last year. The increase in net revenues was mainly due to an increase in sales of both EV parts and off-road vehicles during this quarter.
Operating Loss
| 2Q19 | 2Q18 | Y-o-Y% | |
| Operating Expenses (US$million) | $7.2 | $4.7 | 51.2% |
| Operating Loss (US$million) | ($3.0) | ($2.7) | 10.4% |
| Operating Margin | -12.2% | -16.3% | - |
Total operating expenses in the second quarter of 2019 were $7.2 million, compared with $4.7 million in the same quarter of 2018. The increase in total operating expenses was due to increased selling and marketing, as well as general and administrative expenses, which were $0.9 million and $5.6 million in this quarter compared with $0.2 million and $3.9 million in the same quarter last year.
GAAP & Non-GAAP Net Income
| 2Q19 | 2Q18 | Y-o-Y% | |
| Net (Loss) Income (US$million) | ($7.3) | $1.4 | -632.4% |
| (loss) Earnings per Weighted Average Common Share | ($0.14) | $0.03 | - |
| (loss) Earnings per Weighted Average Diluted Share | ($0.14) | $0.03 | - |
| StockCompensation Expenses | $1.2 | $1.8 | -30.2% |
| Change in fair value of contingent consideration | ($0.5) | ($0.7) | -20.2% |
| Non-GAAP Net (Loss) Income | ($6.6) | $2.5 | -360.7% |
Net loss was $7.3 million in the second quarter of 2019, compared with net income of $1.4 million in the same quarter of 2018. The decrease was primarily attributable to the increased share of loss of the JV Company compared to the same period of last year, a result of adjustment of the national subsidy policy and the pending restructuring of the JV Company, as well as the increased operation cost of the Company since Hainan facility has been put into production.
Non-GAAP net loss was $6.6 million in the second quarter of 2019, a 360.7% decrease compared to Non-GAAP net income of $2.5 million in the same quarter of 2018. The decrease was primarily attributable to the increased share of loss of the JV Company compared to the same period of last year, a result of adjustment of the national subsidy policy and the pending restructuring of the JV Company, as well as the increased operation cost of the Company since Hainan facility has been put into production.
Kandi Electric Vehicles Group Co., Ltd. (the “JV Company”)Financial Results
The condensed financial income statements of the JV Company in the second quarter are as set forth below:
| 2Q19 | 2Q18 | Y-o-Y% | |
| Net Revenues (US$million) | $2.8 | $19.6 | -85.6% |
| Gross Loss (US$million) | ($2.6) | ($4.7) | -44.4% |
| Net (loss) Income | ($10.4) | $4.8 | -318.0% |
| % of Net revenue | -366.2% | 24.2% | - |
Revenue for the JV Company was $2.8 million in the second quarter of 2019, a decrease of 85.6% compared to the same quarter of 2018. Net loss was $10.4 million, a 318.0% decrease compared to net income of $4.8 million in the same quarter of 2018.
Kandi’s investments in the JV Company are accounted for using the equity method of accounting. Kandi recorded 43.47%* of the JV Company’s loss of $4.5 million for the second quarter. After eliminating intra-entity profits and losses, Kandi’s share of the after-tax loss of the JV Company was $4.5 million for the second quarter of 2019.
* In March 21, 2019, the JV Company converted a loan of RMB314 million (approximately $46.7 million) from Geely Group last year to equity in order to increase its cash flow. As a result, the registered capital of the JV Company became RMB 2.44 billion (approximately $363.2 million), of which the Company, through Kandi Vehicles (as defined below) owned 43.47% and Geely Technologies Group Co., Ltd. owned 56.53%, respectively,
Second Quarter 2019 Conference Call Details
The Company has scheduled a conference call and live webcast to discuss its second quarter 2019 financial results at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time) on August 9, 2019. Mr. Hu Xiaoming, Chief Executive Officer of the Company, and Ms. 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:
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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=135731
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.
