Kandi Technologies Reports Full Year 2012 Financial Results and Achieved Significant Gains in EV Sales -Q4 Revenue Increases 131.2% YoY to $26.3 Million- -Full Year Revenue Increases 60.6% YoY to $64.5 Million- -Full Year Operating Income Increases 74.9% YoY to $5.3 Million- -EV sales rose 204.4% YoY to $19.0 Million- JINHUA, China, April 1, 2013 (GLOBE NEWSWIRE) --Kandi Technologies Group, Inc. (the 'Company' or 'Kandi') (Nasdaq:KNDI), a leading Chinese manufacturer and developer of pure electric vehicles (EVs) and all-terrain vehicles (ATVs), today announced its financial results for the fourth quarter and full year ending December 31, 2012. Full Year 2012 Highlights *Revenues grew 60.6% to $64.5 million from $40.2 million in 2011 *ATV sales increased 32.0% to 6.4 million *Go-kart sales increased 34.3% to 30.8 million *EV sales significantly increased 204.4% or $12.8 million to $19.0 million and the Company sold 3,915 units in the full year *Refitted car sales increased 70.5% to $3.2 million *Gross profit for the full year of 2012 increased 39.9% to $12.9 million compared to $9.2 million in 2011 *Income from operations grew 74.9% to $5.3 million from $3.0 million in 2011 *GAAP net income decreased 33.6% to $6.0 million from $9.1 million in 2011 due to a change in the fair value of financial derivatives, higher income tax, and an increase in general and administrative expenses, research and development expenses, and interest expenses in 2012 *Non-GAAP net income* increased 3.2% to $4.2 million from $4.0 million from the previous year *Cash, cash equivalents and restricted cash totaled $28.0 million at year end, a 213.2% increase from $8.9 million at the end of 2011 *Working capital surplus was $35.9 million at the end of December 31, 2012, an increase from a working capital surplus of $17.5 million as of December 31, 2011 Fourth Quarter 2012 Highlights *Revenues rose significantly: 131.2% to $26.3 million from $11.4 million in the same period last year *Gross profit increased 82.8% to $4.5 million compared to $2.5 million in the fourth quarter of 2011 *GAAP net income increased to $2.2 million from a net loss of $829,831 for the same period of last year "We are very pleased about the fourth quarter of 2012 and full year financial results. While our legacy business experienced solid growth, EV sales have achieved a significant growth in both unit sales and revenue contributions." Mr. Xiaoming Hu, Chief Executive Officer and Chairman of Kandi Technologies commented, "2012 was a breakout year for Kandi, we not only launched China's largest EV leasing program in Hangzhou, but also have negotiated new EV expansion plans in the Shandong and Hainan markets. Kandi is now even better prepared for the increasing EV demand from Chinese consumers and well positioned to benefit from further government initiatives to promote electric vehicles in China." "We remain confident about the future growth of our EV and legacy business. With our recent joint venture partnership with Geely Auto, we expect to become a more fully integrated provider of pure electric vehicles to escalate our market position," concluded by Mr. Hu. *Non-GAAP net income is defined as excluding the change of the fair value of financial derivatives, the effects of option related expenses, the stock award expense, the Convertible Note's interest expense, and the effect caused by amortization of discount on Convertible Notes. We supply non-GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations. KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 2012 2011 REVENUES, NET $64,513,670 $40,177,148 COST OF GOODS SOLD -51,620,280 -30,964,173 GROSS PROFIT 12,893,390 9,212,975 Research and development -2,877,283 -2,304,373 Selling and marketing -455,983 -414,255 General and administrative -4,250,832 -3,458,388 INCOME FROM CONTINUING OPERATIONS 5,309,292 3,035,959 Interest income 2,658,104 2,200,678 Interest (expense) -2,775,891 -1,945,260 Government grants 132,139 298,072 Investment income (expense) in trading security -- 9,653 Other, net 332,936 717,495 Change in fair value of financial instruments 1,986,063 5,401,929 Investment (loss) in associated companies -69,429 -52,696 INCOME (LOSS) BEFORE INCOME TAXES 7,573,214 9,665,830 INCOME TAX EXPENSE -1,523,735 -551,060 NET INCOME 6,049,479 9,114,770 OTHER COMPREHENSIVE INCOME Foreign currency translation 424,623 1,816,639 COMPREHENSIVE INCOME $6,474,102 $10,931,409 WEIGHTED AVERAGE SHARES OUTSTANDING BASIC 29,439,328 27,438,725 WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED 29,677,325 28,735,748 NET INCOME PER SHARE, BASIC $0.21 $0.33 NET INCOME PER SHARE, DILUTED $0.20 $0.32 See notes to consolidated financial statements KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 ASSETS December31, December31, 2012 2011 CURRENT ASSETS Cash and cash equivalents $12,135,096 $2,294,352 Restricted cash 15,835,364 6,634,989 Accounts receivable 33,557,534 12,932,776 Inventories (net of reserve for slow moving inventory of $56,248 and $72,487 as of December 31, 7,630,715 6,674,467 2012 and 2011 respectively Notes receivable 9,562,429 37,879,243 Other receivables 501,448 2,438,917 Prepayments and prepaid expenses 563,861 185,037 Due from employees 40,936 79,857 Advances to suppliers 4,769,825 852,638 Deposit for acquisition 24,397,967 -- Total Current Assets 108,995,175 69,972,276 LONG-TERM ASSETS Plant and equipment, net 35,725,740 20,981,893 Land use rights, net 14,337,691 10,992,769 Construction in progress -- 10,007,601 Deferred taxes 695 89,998 Investment in associated companies 161,507 229,213 Goodwill 322,591 -- Intangible assets 741,591 -- Total Long-Term Assets 51,289,815 42,301,474 TOTAL ASSETS $160,284,990 $112,273,750 LIABILITIES AND STOCKHOLDERS' EQUITY December 31, December 31, 2012 2011 CURRENT LIABILITIES Accounts payable $8,668,478 $5,061,069 Other payables and accrued expenses 3,092,045 3,137,983 Short-term bank loans 32,615,063 36,372,492 Customer deposits 292,389 1,025,357 Notes payable, net of discount of $0 and $71 as of 25,332,088 5,847,552 December 31, 2012 and 2011 respectively Income tax payable 680,253 153,730 Due to employees 7,132 9,455 Due to related party 841,251 841,251 Deferred taxes 55,166 56,362 Financial derivate - liability 1,513,013 213 Total Current Liabilities 73,096,878 52,505,464 LONG-TERM LIABILITIES Note payable, net of discount of $0 and $0 as of -- -- December 31, 2012 and 2011 respectively Bond payable 12,666,044 -- Financial derivatives - liability -- 3,919,411 Total Long-Term Liabilities 12,666,044 3,919,411 TOTAL LIABILITIES 85,762,922 56,424,875 STOCKHOLDERS' EQUITY Common stock, $0.001 par value; 100,000,000 shares authorized; 31,696,794 and 27,445,600 shares issued 31,697 27,446 and outstanding at December 31, 2012 and December 31, 2011, respectively Additional paid-in capital 43,728,218 31,533,378 Retained earnings (the restricted portion is $2,831,005 and $1,940,832 at December 31, 2012 and 25,259,809 19,210,330 December 31, 2011, respectively) Accumulated other comprehensive income 5,502,344 5,077,721 TOTAL STOCKHOLDERS' EQUITY 74,522,068 55,848,875 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $160,284,990 $112,273,750 See notes to consolidated financial statements KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 2012 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $6,049,479 $9,114,770 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,978,626 4,696,848 Asset impairments 465,199 -- Deferred taxes 92,521 207,327 Change in value of financial instruments -1,986,063 -5,401,929 Loss in investment (including investment in associated 69,429 52,696 company) Notes and warrant issuance payments -- -- Option cost 19,053 252,632 Changes in operating assets and liabilities, net of effects of acquisition: (Increase) Decrease In: Accounts receivable -20,513,099 4,647,184 Inventories -904,355 -550,024 Other receivables 1,955,055 -1,566,603 Due from employees 37,117 -45,096 Prepayments and prepaid expenses -4,285,489 -730,321 Marketable equity securities (trading) -- 307,098 Increase (Decrease) In: Accounts payable 3,566,354 -1,614,496 Other payables and accrued liabilities -50,333 2,326,656 Customer deposits -740,419 924,241 Income tax payable 525,030 21,087 Net cash (used in) provided by operating activities -10,721,895 12,642,070 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of plant and equipment -19,150,867 -646,143 Change of construction in progress 10,078,637 -9,839,388 Deposit for acquisition -24,383,529 -- Issuance of notes receivable -1,011,821 -22,992,866 Repayments of notes receivable 29,603,171 11,147,503 Cash acquired in acquisition 112,551 -- Net cash provided by (used in) investing activities -4,751,858 -22,330,894 Restricted cash -9,143,907 11,246,288 Proceeds from short-term bank loans 41,504,215 48,891,560 Repayments of short-term bank loans -45,539,128 -42,171,867 Proceeds from notes payable 40,491,531 35,562,160 Repayments of notes payable -21,063,559 -49,260,448 Proceeds from bond payable 12,658,548 -- Option exercise & other financing 1,258,231 65,544 Warrant exercise 1,672,739 -- Common stock issued, net of cost of capital 3,784,149 -- Net cash provided by financing activities 25,622,819 4,333,237 NET DECREASE IN CASH AND CASH EQUIVALENTS 10,149,066 -5,355,587 Effect of exchange rate changes on cash -308,322 -104,227 Cash and cash equivalents at beginning of year 2,294,352 7,754,166 CASH AND CASH EQUIVALENTS AT END OF YEAR $12,135,096 $2,294,352 SUPPLEMENTARY CASH FLOW INFORMATION Income taxes paid $998,706 $529,973 Interest paid $2,570,691 $2,509,808 Issuance of Common stock for acquisition $8,616,416 $-- About Kandi Technologies Group, Inc. Kandi Technologies Group, Inc. (Nasdaq:KNDI) is a manufacturer and exporter of a variety of vehicles in China, making it a world leader in the production of popular off-road vehicles (ORVs). It also ranks among the leading manufacturers in China of all-terrain vehicles (ATVs), specialized utility vehicles (UTVs), and a recently introduced second-generation high mileage, two-seat three-wheeled motorcycle. Another major company focus has been on the manufacture and sale of the COCO electric vehicle (EV), a highly economical, beautifully designed, all-electric super mini-car for neighborhood driving and commuting. The convertible and hardtop models of the COCO EV are available in the United States and other countries, while the Chinese government has approved the sale of Kandi EVs in China since 2010. More information can be viewed at its corporate website is http://www.kandivehicle.com/. Safe Harbor Statement This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements. CONTACT: Kandi Technologies Group, Inc. China: Email: IR@kandigroup.com Phone: 86-579-82239856 U.S.A.: Email: IR@kandigroup.com Phone: 1-212-551-3610
Kandi Technologies Reports Full Year 2012 Financial Results and Achieved Significant Gains in EV Sales
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