- Q2 GAAP net income of $1.4 million compared to net loss of $11.6 million in the same period last year –
- Q2 JV Company sold 1,802 EV products, a 393.7% increase yoy
JINHUA, CHINA-- (August 9, 2018) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the second quarter of 2018.
Second Quarter Highlights
• Total revenues were $16.4 million for the second quarter of 2018, a decrease of 40.1% from total revenues of $27.3 million for the same period in 2017.
• Electric Vehicle (“EV”) parts sales decreased by 40.8%, to $15.5 million for the second quarter of 2018, compared with EV parts sales of $26.2 million for the same period in 2017.
• Revenues from sales of off-road vehicles decreased by 24.3%, to $0.8 million for the second quarter of 2018, compared with revenues from sales of off-road vehicles of $1.1 million for the same period in 2017.
• Kandi Electric Vehicles Group Co., Ltd. (the "JV Company") sold 1,802 EV products, for the second quarter of 2018 compared to 365 EV products sold in the same period last year.
• GAAP net income for the second quarter of 2018 was $1.4 million, or $0.03 per fully diluted share, compared with GAAP net loss of $11.6 million, or loss of $0.24 per fully diluted share for the same period in 2017.
• Non-GAAP adjusted net income[footnoteRef:1], which excludes stock compensation expenses and the change in fair value of contingent consideration, was $2.5 million in the second quarter of 2018, compared with Non-GAAP adjusted net loss of $9.5 million for the same period in 2017. Non-GAAP adjusted earnings per share1 was $0.05 per fully diluted share for the second quarter of 2018, compared with Non-GAAP adjusted loss per share1 of $0.20 per fully diluted share for the same period in 2017.
• Working capital deficit was $8.6 million as of June 30, 2018. Cash, cash equivalents and restricted cash totaled $9.5 million as of June 30, 2018.
Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, “due to the 2018 government subsidy policy adjustments in product structure requirements, the JV Company discontinued the manufacturing and selling of its EV products with a driving range of less than 200km and shifted its focus to the development of new EV models with a driving range exceeding 300km. Currently, our new 300km EV models K23，K27，and K28 (EX3) received the approval from the Ministry of Industry and Information Technology of the People’s Republic of China. The JV Company has resumed its normal production and sales. With restored production and a recovery of sales, we believe that Kandi's growth will return to the previous predicted track. Despite recent weak stock performance, the management team is dedicated to improving Kandi’s market competitiveness and regaining our leading position in the EV industry.”
Net Revenues and Gross Profit
Net revenues for the second quarter of 2018 decreased by 40.1% compared to the same period last year. The decrease in net revenues was mainly due to the decrease in EV parts sales during this quarter. The selling prices of our products for the three months ended June 30, 2018 did not change materially on average from the same period last year. The decrease in revenue was primarily due to the decrease of sales volume.
Operating Income (Loss)
Total operating expenses in the second quarter of 2018 were $4.7 million, compared with $7.1 million in the same quarter of 2017. The decrease in total operating expenses was due to decreased R&D expenses, which were $0.6 million in this quarter compared with $5.1 million in the same quarter last year.
GAAP & Non-GAAP Net Income
Net income was $1.4 million in the second quarter of 2018, compared with net loss of $11.6 million in the same quarter of 2017. The increase was primarily attributable to the profits from the JV Company and decreased R&D expenses in the second quarter as compared to the same period of last year.
Non-GAAP net income was $2.5 million in the second quarter of 2018, a 126.5% increase compared to Non-GAAP net loss of $9.5 million in the same quarter of 2017. The increase was primarily attributable to the profits from the JV Company and decreased R&D expenses in the second quarter as compared to the same period of last year.
Kandi Electric Vehicles Group Co., Ltd. (the “JV Company”) Financial Results
In the second quarter of 2018, the JV Company sold 1,802 units of EV products.
The condensed financial income statements of the JV Company in the second quarter are as set forth below:
Revenue for the JV Company was $19.6 million in the second quarter of 2018, an increase of 5.3% compared to the same quarter of 2017. Net income was $4.8 million, a 132.6% increase compared to net loss of $14.6 million in the same quarter of 2017.
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 profit of $2.4 million for this quarter. After eliminating intra-entity profits and losses, Kandi’s share of the after-tax income of the JV Company was $2.4 million for the second quarter of 2018.
Second Quarter 2018 Conference Call Details
The Company has scheduled a conference call and live webcast to discuss its second quarter 2018 financial results at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time) on August 9, 2018. 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: +1-866-548-4713
• International dial-in number: + 1-323-794-2093
• Webcast and replay: http://public.viavid.com/index.php?id=130907
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.
