Strategic product transformation has borne fruitful outcomes, leading to a remarkable turnaround to profitability

JINHUA, China, Aug. 07, 2023 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company”, “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the second quarter of 2023.

Second Quarter Highlights

• Total revenues of $36.0 million increased by 72.5% year-over-year.

• Gross profit of $13.7 million and gross margin of 38.2%, compared to gross profit of $2.7 million and gross margin of 13.0% in the same period of 2022.

• Net income was $4.4 million, or $0.06 income per fully diluted share, compared to a net loss of $1.9 million, or $0.02 loss per fully diluted share for the same period of 2022.

• Cash and equivalents, restricted cash, and certificate of deposit totaled $232.5 million as of June 30, 2023.

Dr. Xueqin Dong, CEO of Kandi commented, “The Ccompany's efforts invested in product transformation over the past few years have finally borne fruit this year, leading to a successful turnaround from losses to profits. Net income reached $4.4 million, demonstratshowcasing a significant recovery from the challenges we faced in the prior years. The continued growth of gross profit reflects our commitment to drive our product mix toward higher-profit and more rapidly growing categories. The success of our all-electric off-road vehicles is the driving force behind our sales recovery and return to profitability. We see immense potential in the US off-road vehicle market, and we are dedicated to expanding our product offerings to meet the evolving demands of our customers.”

Q2 2023 Financial Results

Net Revenues and Gross Profit (in USD millions)

	Q2 2023	Q2 2022	Y-o-Y%
Net Revenues	$36.0	$20.8	+72.5%
Gross Profit	$13.7	$2.7	+405.2%
Gross Margin%	38.2%	13.0%	-

Net revenues of $36.0 million increased by 72.5% from the same period of 2022. Kandi’s focus on innovation, production, and commercialization of electric off-road vehicles -- particularly crossover golf carts, go karts, and all-terrain vehicles or ATVs -- boostedenabled sales of off-road vehicles and associated parts to achieve its largest proportion ever of quarterly sales. Gross margin grew versus the year-earlier period because of the greater profitability of off-road vehicles, with crossover golf carts being a significant contributor to this increase.

Operating Income/Loss (in USD millions)

	Q2 2023	Q2 2022	Y-o-Y%
Operating Expenses	($14.0)	($9.0)	+55.1%
Loss from Operations	($0.2)	($6.3)	-96.4%
Operating Margin%	-0.6%	-30.1%	-

Operating expenses rose to $14.0 million from $9.0 million in the same period of 2022. While operating expenses were up, significantly higher gross profits resulted in improvement in operating income. The rise in operating expenses can be attributed mainly to increased sales and marketing expenses associated with increasing number of electric off-road vehicles rising exporteds to the U.S. market, and higher general and administration expenses due to increased stock-based compensation.

Net Income/Loss (in USD millions)

	Q2 2023	Q2 2022	Y-o-Y%
Net Income (Loss)	$4.4	($1.9)	-333.9%
Net Income (Loss) per Share, Basic and Diluted	$0.06	($0.02)	-

Net income was $4.4 million, a noteworthy improvement compared to a net loss of $1.9 million during the same period in 2022. The primary factor for the swing to profit was the better gross margins.

Second Quarter 2023 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, Aug 8, 2023. 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:

• Toll-free dial-in number: +1-877-407-3982

• International dial-in number: + 1-201-493-6780

• Webcast and replay: https://viavid.webcasts.com/starthere.jsp?ei=1627967&tp_key=83400af773

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.