- Gross margin of 20.9% up versus 16.7% year-ago
JINHUA, CHINA-- (November9, 2020) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the third quarter of 2020.
During the third quarter, Kandi achieved:
• In September, established China Battery Exchange Technology Company, a wholly-owned subsidiary for its battery swapping services.
• On August 18, Kandi America held a successful virtual launch event to introduce its K23 and K27 EVs into the U.S. market.
• In August, delivered its fully automatic intelligent battery exchange system to the rideshare operator in Haikou City, Hainan.
• In July, the Affiliate Company Fengsheng Automotive launched sales of the Maple 30X, its first pure electric SUV.
• FengshengAutomative’s Maple 60V all-electric multi-purpose vehicle) was approved for purchase subsidies by China’s Ministry of Industry and Information Technology.
More recently, Kandi also announced:
• A strategic cooperation agreement with the Zhejiang State Grid Electric Vehicle Service Company in the area of battery exchange for pure electric vehicles.• The establishment of Zhejiang Ruiheng Technology Company, which intends to operate a ridesharing service across China.
• Initiated the IPO process for its wholly owned subsidiary, Zhejiang Kandi Smart Battery Swap Technology, to list on the Shanghai Stock Exchange STAR market.
• Kandi America, the U.S. subsidiary has received the required clearance from the United States Environmental Protection Agency (EPA) for its two electric vehicle models – the K23 and K27 – via Certificates of Conformity.
Financial Highlights
All figures refer to the third quarter of 2020 unless noted otherwise. All comparisons are with the third quarter of 2019, unless noted otherwise.• Total revenues were down 40.9% to $18.7 million.
• Electric Vehicle (“EV”) parts sales decreased by 67.4% to $8.4 million.
• Off-road vehicle sales increased by 51.6% to $8.9 million.
• Gross margin of 20.9% increased 42 basis points versus the year-ago period.
• Net loss was $1.5 million, or $0.03 per fully diluted share. This compares to netincome of $12.1 million, or $0.23 last year.
• As of September 30, 2020, working capital was $79.8 million. Cash, cash equivalents and restricted cash was $24.2 million.
Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, “As we approach year-end, we are proud of our progress despite the challenges posed by COVID-19 around the world. We were productive in the third quarter. Most importantly, after a lengthy process of preparation, the ‘300,000 government-accredited pure EV within 5 years rideshare’ program—of which Kandi was a co-founder-- has begun its trial with the gradual deliveryof 1,000 EVs to the city of Haikou in Hainan province and 2,500 EVs to the city of Shaoxing in Zhejiang province. All the EVs delivered for the program includeour battery swap feature. We believe that this programcan drive the production and sales of our EV parts and battery swap equipment, and we can thus restore growth in our pure EV business.”
Hu also discussed the plan to list Kandi’s Battery Swap Subsidiary on the Shanghai Stock Exchange’s STAR Board: “Based on feedback from three world-class advisors’ preliminary due diligence, we are confident about this proposed spin-off listing on the STAR market.By tapping China’s capital markets, listing on the STAR Board will accelerate the Company’s business growth and also enable Kandi to unlock and realize the value of this emerging business.”
Net Revenues and Gross Profit|
|
3Q20 |
3Q19 |
Y-o-Y% |
|
Net Revenues (US$million) |
$18.7 |
$31.7 |
-40.9% |
|
Gross Profit (US$million) |
$3.9 |
$5.3 |
-25.9% |
|
Gross Margin |
20.9% |
16.7% |
- |
Operating Loss
|
|
3Q20 |
3Q19 |
Y-o-Y% |
|
Operating Expenses (US$million) |
$6.3 |
$5.0 |
26.8% |
|
Operating (Loss)Income (US$million) |
($2.4) |
$0.3 |
-851.3% |
|
Operating Margin |
-12.7% |
1% |
- |
Net Income (Loss)
|
|
3Q20 |
3Q19 |
Y-o-Y% |
|
Net (Loss)Income(US$million) |
($1.5) |
$12.1 |
-112.1% |
|
(Loss)Earnings per Weighted Average Common Share |
($0.03) |
$0.23 |
- |
|
(Loss)Earnings per Weighted Average Diluted Share |
($0.03) |
$0.23 |
- |
Net loss was $1.5 million in the third quarter of 2020, compared with net income of $12.1 million in the same quarter of 2019. The decline was due to recognition in the third quarter of 2019 of a $20.6 million gain from the sale of equity in the Affiliate Company.
Financial Condition
As of September 30, 2020, the Company had cash and cash equivalents of $23.9 million, restricted cash of $0.25 million, and working capital of $79.8 million. This compares to $5.5 million, $11.0 million, $63.7 million as of December 31, 2019, respectively.As of September 30, 2020, accounts receivable were $38.4 million, compared to $61.2 million as of December 31, 2019.
For the first threequarters of 2020, cash used in operating activities was $13.4 million, as compared to cash used in operating activities of $14.6 million for the same period last year.
Third Quarter 2020 Conference Call Details
The Company will conduct a conference call and live webcast to discuss its third quarter 2020 financial results at 8:00 A.M. Eastern Time (9:00 P.M. Beijing Time) on November 9, 2020. Management 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=142327
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.
