GlobeNewswire Inc | Mar 30, 2021 07:00AM EDT

March 30, 2021

- Full year revenue of $76.9 million- Electric Scooters, Electric Self-Balancing Scooters and associated parts sales was $5.8 m, up 160.5% yoy- Full year operating income of $0.8 million, stable with 2019- Year-end working capital surplus of $223 million

JINHUA, CHINA, March 30, 2021 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the Company, we or Kandi) (NASDAQ GS: KNDI), today announced its financial results for the full year ended December 31, 2020.

Full Year 2020 Highlights

-- Total revenue was $76.9 million, compared to $135.7 million in 2019.

-- EV parts sales were $40.6 million, compared to $110.7 million in 2019.

-- Off-road vehicles sales increased by 31.1% to $29.8 million, compared to $22.7 million in 2019.

-- EV product sales were $0.7 million, compared to $0.1 million in 2019.

-- Electric Scooters, Electric Self-Balancing Scooters and associated parts sales increased by 160.5% to $5.8 million, compared with $2.2 million in 2019.

-- Gross margin was 17.5%, compared to 18.7% in 2019.

-- Operating income was $0.8 million, compared to $0.9 million in 2019.

-- Net loss was $10.4 million, or $0.19 loss per fully diluted share, compared to a net loss of $7.2 million, or $0.14 loss per fully diluted share in 2019.

-- As of December 31, 2020, working capital was $223.3 million; cash, cash equivalents, and restricted cash totaled $142.5 million.

-- Two registered direct offerings were completed with $160 million raised in November 2020.

Mr. Hu Xiaoming, Chairman and CEO of Kandi commented: The lock downs and closures of stores and facilities around the world, caused by the spread of COVID-19, challenged every corner of the economy in 2020. Although our operations in China fully resumed in early March of 2020, sales of EV parts, one of our primary revenue sources, were severely impacted by several waves of the pandemic. On the positive side, this challenge resulted in relentless effort and commitment from our management and employees to explore other market opportunities that leverage our expertise. We decided to pursue product innovation in Electric Scooters and Electric Self-Balancing Scooters, which have a global market of tens of millions of units sold each year. We pursued these opportunities by expanding production of intelligent transportation products that exploit our advantages in electric motors and battery packs. This resulted in revenue from Electric Scooters, Electric Self-Balancing Scooters and associated parts increasing by 160.5% in 2020, offsetting a 63.3% decline in revenue from EV parts.

Hu continued, During 2020 we achieved three major strategic milestones despite unfavorable market conditions.

First, we smoothly executed the real estate repurchase agreement with Jinhua Economic and Technological Development Zone, a key element of our Jinhua facility relocation. The local government agreed to pay us approximately RMB525 million, or $80 million, in three installments. We received the first two installments, totaling RMB 363 million, or $55 million. The final payment of RMB 162 million, or $25 million, will be received when we demolish all the current factory buildings on this land and move to our new facility. We are nearing the end of the relocation process and have almost completed the move into our new factory.

Our second milestone was the successful trial of the 300,000 government-accredited ride-sharing vehicles within 5 years program initiated by us. Zhejiang Ruiheng Technology Co., Ltd plans to deliver over 3,000 government compliant EVs in 2021, and gradual delivery is underway. All those EVs feature our battery swapping technology, which is recognized by the central government as one of the three approved charging methods in China. Driven by the tailwinds of Chinese Government policy regarding battery exchange, in 2020 we moved forward in many ways. For example, we signed an agreement with the Zhejiang State Grid Electric Vehicle Service Company in October 2020 to strategically incorporate battery exchange into pure EVs. We believe this program can drive the production and sales of our EV parts and battery swap equipment, and therefore drive the growth in our pure EV business.

Regarding the U.S. market, Hu commented, In August 2020 we successfully held a virtual launch event to introduce our K23 and K27 EV models into the U.S. market, achieving our third milestone of the year. We have obtained clearance from the United States Environmental Protection Agency (EPA) for both models, so our focus now is working on some modifications to meet all Federal Motor Vehicle Safety Standards (FMVSS) requirements. We are also working on feature improvements to accommodate U.S. consumer tastes.

Hu concluded, Looking forward, we have multiple growth opportunities. We are dedicated to building our business in the U.S., and we are pursuing third and fourth-tier city government-accredited EV online ride-share service businesses. With capital from the real estate repurchase agreement and the $160 million direct placement, we are confident that we can fund the R&D necessary to develop sports cars, battery swapping technology, and the ride-sharing program. Furthermore, our recent exit from the Fengsheng affiliation through the transfer of the remaining equity interest eliminates the non-compete restrictions, thus enabling us to pursue the EV market more aggressively in China. We believe the years ahead hold a multitude of opportunities that can restart our growth.

Full Year 2020 Financial Results

Net Revenues and Gross Profit

2020 2019 Y-o-Y%Net Revenues (US$mln) $76.9 $135.7 -43.3%Gross Profit (US$mln) $13.5 $25.4 -47.0%Gross Margin 17.5% 18.7% -

Net revenues of $76.9 million decreased 43.3% from 2019. The decrease was due primarily to reduced sales of EV parts, a result of production interruptions caused by the COVID-19 pandemic and the overall demand of EV parts from customers was significantly affected during 2020. Gross margin was 17.5%, compared with 18.7% in 2019. The decrease was due to less high-margin battery processing compared to 2019.

Operating Income (Loss)

2020 2019 Y-o-Y%Operating Expenses (US$mln) $12.7 $24.5 -48.1%Operating Income (US$mln) $0.75 $0.91 -17.1%Operating Margin 1.0% 0.7% -

Total operating expenses were $12.7 million, compared with $24.5 million in 2019. The decrease was due to lower general and administrative expenses, largely due to cost-cutting programs and tighter budget control. We also booked a $14.2 million gain on disposal of long-lived assets, which was related to the real estate repurchase agreement. In June 2020, 73,333 square meters of land use rights were transferred to the local government, and the related gain was recognized.

Net Loss

2020 2019 Y-o-Y%Net Loss (US$mln) ($10.4) ($7.2) 44.6%Loss per Weighted Average Common Share ($0.19) ($0.14) -Loss per Weighted Average Diluted Share ($0.19) ($0.14) -

Net loss was $10.4 million, compared with a net loss of $7.2 million in 2019. The greater net loss was primarily attributable to the absence of gains on the sales of equity that were present in 2019.

Full Year 2020 Conference Call Details

The Company has scheduled a conference call and live webcast to discuss its financial results at8:00 A.M.Eastern Time (8:00 P.M. Beijing Time) onTuesday, March 30, 2021. 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: http://public.viavid.com/index.php?id=144093

The live audio webcast of the call can also be accessed by visitingKandi'sInvestor 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.

About Kandi Technologies Group, Inc.

Kandi Technologies Group, Inc. (KNDI), headquartered in Jinhua Economic Development Zone, Zhejiang Province, is engaged in the research, development, manufacturing, and sales of various vehicular products. Kandi conducts its primary business operations through its wholly-owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. ("Kandi Vehicles") and its subsidiaries including Zhejiang Kandi Smart Battery Swap Technology Co., Ltd, and SC Autosports, LLC (d/b/a Kandi America), the wholly-owned subsidiary of Kandi in the United States. Kandi Vehicles has established itself as one of China's leading manufacturers of pure electric vehicle parts and off-road vehicles.

More information about KNDI is available on the Company's corporate website at http://www.kandivehicle.com. The Company routinely posts important information on its website.

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 applicable securities laws, the Company does not assume a duty to update these forward-looking statements.

Follow us on Twitter: @ Kandi_Group

Contacts:

Kandi Technologies Group, Inc.Ms. Kewa Luo+1 (212) 551-3610IR@kandigroup.com

The Blueshirt GroupMr. Gary Dvorchak, CFAgary@blueshirtgroup.com

- Tables Below -

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS

December31, December31, 2020 2019Current assets Cash and cash equivalents $ 142,078,190 $ 5,490,557 Restricted cash 442,445 11,022,078 Accounts receivable (net of allowance fordoubtful accounts of $110,269 and $254,665 38,547,137 61,181,849 as of December 31, 2020 and December 31,2019, respectively)Inventories 19,697,383 27,736,566 Notes receivable 31,404,630 42,487,225 Other receivables 1,875,245 5,023,327 Prepayments and prepaid expense 13,708,149 10,615,063 Advances to suppliers 36,733,182 685,008 Amount due from the Affiliate Company 21,742,226 31,330,763 Amount due from related party 886,989 - TOTAL CURRENT ASSETS 307,115,576 195,572,436 NON-CURRENT ASSETS Property, plant and equipment, net 65,402,680 74,407,858 Intangible assets, net 3,232,753 3,654,772 Land use rights, net 3,257,760 11,272,815 Construction in progress 16,317,662 71,247 Deferred taxes assets 8,964,946 726,182 Long term investment 45,958 - Investment in the Affiliate Company 28,892,638 47,228,614 Goodwill 29,712,383 28,270,400 Other long term assets 32,307,484 10,014,072 TOTAL NON-CURRENT ASSETS 188,134,264 175,645,960 TOTAL ASSETS $ 495,249,840 $ 371,218,396 CURRENT LIABILITIES Accounts payable $ 34,257,935 $ 72,093,940 Other payables and accrued expenses 7,218,395 6,078,041 Short-term loans - 25,980,364 Notes payable 92,445 10,765,344 Income tax payable 1,313,754 1,796,601 Advance receipts 38,229,242 - Long term loans - current portion - 13,779,641 Amount due to related party 500,000 - Other current liabilities 2,185,654 1,379,808 TOTAL CURRENT LIABILITIES 83,797,425 131,873,739 NON-CURRENT LIABILITIES Long term loans - 14,353,792 Deferred taxes liability 3,483,171 1,362,786 Contingent consideration liability 3,743,000 5,197,000 Other long-term liabilities 459,580 574,152 TOTAL NON-CURRENT LIABILITIES 7,685,751 21,487,730 TOTAL LIABILITIES 91,483,176 153,361,469 STOCKHOLDER?S EQUITY Common stock, $0.001 par value; 100,000,000shares authorized; 77,298,499 and56,263,102 shares issued and 75,377,555 and 75,377 52,839 52,839,441 outstanding at December 31,2020and December 31,2019, respectivelyLess: Treasury stock (nil and 487,155shares with average price of $5.09 at - (2,477,965 )December 31,2020 and December 31,2019,respectively)Additional paid-in capital 439,549,338 259,691,370 Accumulated deficit (the restricted portionis $4,422,033 and $4,422,033 at December (27,079,900 ) (16,685,736 )31,2020 and December 31,2019, respectively)Accumulated other comprehensive loss (8,778,151 ) (22,723,581 )TOTAL STOCKHOLDERS? EQUITY 403,766,664 217,856,927 TOTAL LIABILITIES AND STOCKHOLDERS? EQUITY $ 495,249,840 $ 371,218,396

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS ANDCOMPREHENSIVE INCOME (LOSS)FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

Years Ended December31, December31, 2020 2019REVENUES FROM UNRELATED PARTIES, NET $ 76,176,609 $ 119,879,895 REVENUES FROM THE AFFILIATE COMPANY 743,904 15,861,441 AND RELATED PARTIES, NET REVENUES, NET 76,920,513 135,741,336 COST OF GOODS SOLD (63,432,580 ) (110,310,427 ) GROSS PROFIT 13,487,933 25,430,909 OPERATING EXPENSES: Research and development (7,246,312 ) (6,207,747 )Selling and marketing (6,619,355 ) (4,070,001 )General and administrative (13,042,103 ) (14,243,625 )Gain on disposal of long-lived 14,174,233 - assetsTOTAL OPERATING EXPENSES (12,733,537 ) (24,521,373 ) INCOME FROM OPERATIONS 754,396 909,536 OTHER INCOME (EXPENSE): Interest income 2,190,678 791,888 Interest expense (3,750,233 ) (4,822,734 )Change in fair value of contingent (565,000 ) (1,107,427 )considerationGovernment grants 1,130,262 792,628 Gain from equity dilution in the - 4,263,764 Affiliate CompanyGain from sale of equity in the - 20,438,986 Affiliate CompanyShare of loss after tax of the (17,252,662 ) (30,716,938 )Affiliate CompanyOther income, net 2,051,226 1,569,311 TOTAL OTHER EXPENSE, NET (16,195,729 ) (8,790,522 ) LOSS BEFORE INCOME TAXES (15,441,333 ) (7,880,986 ) INCOME TAX BENEFIT 5,047,169 692,259 NET LOSS (10,394,164 ) (7,188,727 ) OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation 13,945,430 (2,802,323 )adjustment COMPREHENSIVE INCOME (LOSS) $ 3,551,266 $ (9,991,050 ) WEIGHTED AVERAGE SHARES OUTSTANDING 55,960,010 52,337,308 BASIC AND DILUTED NET LOSS PER SHARE, BASIC AND $ (0.19 ) $ (0.14 )DILUTED



KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITYFOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

Number of Additional Accumulated Outstanding Common Treasury Paid-in Accumulated Other Total Shares Stock Stock Capital Deficit Comprehensive IncomeBALANCE ATDECEMBER 31, 51,484,444 $ 51,484 $ - $ 254,989,657 $ (9,497,009 ) $ (19,921,258 ) $ 225,622,874 2018 Stockissuance and 1,354,997 1,355 - 4,716,328 - - 4,717,683 award Stock - - (2,477,965 ) - - - (2,477,965 )buyback Commissionin stock - - - (14,615 ) - - (14,615 )buyback Net loss - - - - (7,188,727 ) - (7,188,727 ) Foreigncurrency - - - - - (2,802,323 ) (2,802,323 )translation BALANCE ATDECEMBER 31, 52,839,441 $ 52,839 $ (2,477,965 ) $ 259,691,370 $ (16,685,736 ) $ (22,723,581 ) $ 217,856,927 2019 Stockissuance and 1,771,317 1,771 - 4,058,052 - - 4,059,823 award Cancellationof the (487,155 ) (487 ) 2,477,965 (2,477,478 ) - - - TreasuryStock RegisteredDirect 18,253,952 18,254 - 151,904,993 - - 151,923,247 Offering Stock option 3,000,000 3,000 - 29,157,000 - - 29,160,000 exercise Net loss - - - - (10,394,164 ) - (10,394,164 ) Foreigncurrency - - - - 13,945,430 13,945,430 translation Reduction intheAffiliateCompany?s - - - (2,784,599 ) - - (2,784,599 )equity (netoff taxeffect of$491,400) BALANCE ATDECEMBER 31, 75,377,555 $ 75,377 $ - $ 439,549,338 $ (27,079,900 ) $ (8,778,151 ) $ 403,766,664 2020

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

Years Ended December31, December31, 2020 2019CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (10,394,164 ) $ (7,188,727 )Adjustments to reconcile net incometo net cash provided by operating activitiesDepreciation and amortization 8,222,984 8,202,869 Impairments - 398,790 (Reversal) provision of allowance for (152,809 ) 137,387 doubtful accountsDeferred taxes (5,349,722 ) (1,066,536 )Share of loss after tax of the 17,252,662 30,716,938 Affiliate CompanyGain from equity dilution in the - (4,263,764 )Affiliate CompanyGain from equity sale in the - (20,438,986 )Affiliate CompanyGain on disposal of long-live assets (14,174,233 ) - Change in fair value of contingent 565,000 1,107,427 considerationStock based compensation expense 902,666 1,360,258 Changes in operating assets and liabilities:Accounts receivable 19,247,519 (40,123,966 )Notes receivable - 246,120 Notes receivable from the Affiliate - 434,329 Company and related partyInventories 9,246,455 (6,458,104 )Other receivables and other assets 2,008,612 (8,208,931 )Advances to supplier and prepayments (36,330,634 ) 4,379,925 and prepaid expensesAmount due from the Affiliate Company 4,237,103 8,803,542 Due from related party (339,118 ) - Increase (Decrease) In: Accounts payable (30,993,717 ) 10,440,338 Other payables and accrued (173,806 ) 5,998,106 liabilitiesNotes payable (13,912,842 ) (12,743,628 )Income tax payable (745,208 ) (1,619,659 )Net cash used in operating activities $ (50,883,252 ) $ (29,886,272 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and (7,483,743 ) (526,336 )equipment, netPurchases of land use rights and (3,281,115 ) - other intangible assetsPayment for construction in progress (7,419,644 ) (71,862 )Proceeds from disposal of long-lived 52,579,492 - assetsLoan to third party (26,097,991 ) - Cash received from sales of equity in 42,897,929 31,850,822 the Affiliate CompanyLong Term Investment (43,478 ) - Net cash provided by investing $ 51,151,450 $ 31,252,624 activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from short-term loans 24,642,399 34,746,352 Repayments of short-term loans (50,873,903 ) (38,944,869 )Repayments of long-term loans (28,799,501 ) (289,553 )Proceeds from long-term loans 394,116 - Fund raising through issuing common 151,923,247 - stock and warrantsStock buyback with commission - (2,492,579 )Option exercise, stock awards & other 29,160,000 - financingNet cash provided by (used in) $ 126,446,358 $ (6,980,649 )financing activities NET INCREASE (DECREASE) IN CASH AND $ 126,714,556 $ (5,614,297 )CASH EQUIVALENTS AND RESTRICTED CASHEffect of exchange rate changes $ (706,556 ) $ (226,139 )CASH AND CASH EQUIVALENTS AND $ 16,512,635 $ 22,353,071 RESTRICTED CASH AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AND $ 142,520,635 $ 16,512,635 RESTRICTED CASH AT END OF PERIOD-CASH AND CASH EQUIVALENTS AT END OF 142,078,190 5,490,557 PERIOD-RESTRICTED CASH AT END OF PERIOD 442,445 11,022,078 SUPPLEMENTARY CASH FLOW INFORMATION Income taxes paid $ 1,046,127 1,994,526 Interest paid $ 653,507 1,738,656 SUPPLEMENTAL NON-CASH DISCLOSURES: Decrease in investment in theAffiliate Company due to change in $ 3,099,193 - its equityNotes receivable from unrelated $ - 42,853,834 parties for equity transfer paymentPurchase of construction in progress 7,945,414 - in accounts payable and other payableCommon stock issued from settlementof payables to KSBS Shareholders and $ 3,166,427 3,357,425 former members of SC Autosports