GlobeNewswire Inc | Aug 9, 2021 07:00AM EDT

August 09, 2021

--Revenue of approx. $30 million, +54% y/y---Net Income of approx. $41 million ($0.54 per fully diluted share), +900% y/y---Working Capital of approx. $300 million, cash1totaled $202.4 million --

JINHUA, CHINA, Aug. 09, 2021 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the Company, we or Kandi) (NASDAQ GS: KNDI), today announced financial results for the second quarter of 2021.

Second Quarter Highlights

-- Total revenues increased by 53.7% to $29.9 million, from $19.4 million in the same period of 2020. -- EV parts sales were $6.7 million, compared to $12.5 million in the same period of 2020. -- Off-road vehicles sales were $5.5 million, compared to $6.6 million in the same period of 2020. -- Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $16.5 million, compared to $0.4 million in the same period of 2020, This growth represents a successful strategic initiative to sell intelligent transportation products after the COVID-19 outbreak seriously impacted the EV market in 2020. -- Battery exchange equipment and battery exchange service sales were $0.6 million. As a new business, there was no such revenue in the same period of 2020. -- Gross margin was 20.4%, compared to 18.2% for the same period of 2020. -- Net income was $40.9 million, or $0.54 per fully diluted share primarily due to a gain on the disposal of a long-live asset recognized as part of our Jinhua facility relocation that was completed in the second quarter. This compares to a net income of $4.1 million, or $0.08 per fully diluted share for the same period of 2020. -- As of June 30, 2021, working capital was $297.3 million. Cash, cash equivalents, restricted cash, and certificate of deposit totaled $202.4 million.



1 Includes cash, cash equivalents, restricted cash, and certificate of deposit.

Mr. Hu Xiaoming, Chairman and CEO of Kandi commented: We are excited to see both strong revenue growth and profitability. Last year, as the Covid-19 pandemic impacted our EV business, we undertook a strategic initiative to find new markets for our industry-leading technology. This pivot to new markets is proved successful, as you can see by our strong growth in intelligent mobility sector and associated parts. Furthermore, we are with our operating cash flow as robust because we received final payments for the Jinhua Facility relocation. The vacated old factory property met the inspection authorities stipulated conditions, it was returned to the government, and we received the agreed payments. With this cash inflow, our balance sheet is even stronger for pursuing the multiple growth opportunities we see ahead of us.

Elaborating on Kandis commitment to R&D, Hu elaborated, As we noted last quarter, there are significant growth opportunities in affordable short-distance EVs for the China market, and in UTVs for the U.S. market. In May, we unveiled the K32 premium UTV, which is produced at our factory in Hainan, China. The K32 features pure electric four-wheel-drive propulsion and a fully enclosed cockpit with air conditioning. We intend to sell the K32 in the U.S. by the end of this year.

Turning to acquisitions, Hu commented, Last month, we announced the acquisition of Jiangxi Huiyi, which pushes us further into the battery cell business. Jiangxi Huiyi is a leading battery cell producer with intelligent production lines that each day can manufacture approximately 250,000 units of 18650 lithium-ion rechargeable cells. Today, the cells are implemented in various consumer applications. Equipped with this technology, Kandi will now focus on EV battery packs as well as other appropriate consumer products.

Q22021 Financial Results

Net Revenues and Gross Profit (in USD millions)

?? 2Q21 2Q20 Y/Y% Net Revenue $ 29.9 $ 19.4 53.7 %Gross Profit $ 6.1 $ 3.5 72.4 %Gross Margin 20.4 % 18.2 % -

Net revenues of $29.9 million increased 53.7% from the second quarter of 2020. The increase in revenue was primarily due to the growth in sales of Electric Scooters, Electric Self-Balancing Scooters and associated parts. This segment had a higher gross margin than other segments, resulting in 20.4% gross margin in the second quarter of 2021, higher than 18.2% for the same period of 2020.

Operating Income/Loss(in USD millions)

?? 2Q21 2Q20 Y/Y% Operating Income $ 38.3 $ 8.1 373.3 %Income from Operations $ 44.4 $ 11.6 281.7 %Operating Margin 148.5 % 59.8 % -

Operating income was $38.3 million, compared with $8.1 million in the second quarter of 2020. The increase was primarily attributable to the gain on disposal of a long-lived asset related to the Jinhua facility relocation.

Net Income (in USD millions)

?? 2Q21 2Q20 Y/Y% Net Income $ 40.9 $ 4.1 909.3 %Net Income per Weighted Average Common Share $ 0.54 $ 0.08 - Net Income per Weighted Average Diluted Share $ 0.54 $ 0.08 -

Net income was $40.9 million, compared with a net income of $4.1 million in the same period of 2020.The greater income was primarily attributable to the gain on disposal of a long-lived asset recognized in the second quarter of 2021.

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) onMonday, August 9, 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=146195

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 Technologies Group Co., Ltd. (Zhejiang Kandi Technologies), formerly, Zhejiang Kandi Vehicles Co., Ltd.) 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, and its wholly-owned subsidiary, Kandi America Investment, LLC. Zhejiang Kandi Technologies has established itself as one of China's leading manufacturers of pure electric vehicle parts and off-road vehicles.

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 SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December31, 2021 2020 (UNAUDITED) Current assets Cash and cash equivalents $ 132,071,957 $ 142,078,190 Restricted cash 16,117,526 442,445 Certificate of deposit 54,222,374 - Accounts receivable (net of allowance fordoubtful accounts of $111,512 and $110,269 48,713,854 38,547,137 as of June 30, 2021 and December 31, 2020,respectively)Inventories 23,232,234 19,697,383 Notes receivable 8,985,422 31,404,630 Other receivables 40,574,115 1,875,245 Prepayments and prepaid expense 16,791,928 13,708,149 Advances to suppliers 13,274,911 36,733,182 Amount due from the Affiliate Company - 21,742,226 Amount due from related party - 886,989 TOTAL CURRENT ASSETS 353,984,321 307,115,576 NON-CURRENT ASSETS Property, plant and equipment, net 81,579,358 65,402,680 Intangible assets, net 2,936,697 3,232,753 Land use rights, net 3,248,223 3,257,760 Construction in progress 6,123,956 16,317,662 Deferred taxes assets 7,852,209 8,964,946 Long term investment 154,921 45,958 Investment in the Affiliate Company - 28,892,638 Goodwill 29,970,415 29,712,383 Other long term assets 18,012,160 32,307,484 TOTAL NON-CURRENT ASSETS 149,877,939 188,134,264 TOTAL ASSETS $ 503,862,260 $ 495,249,840 CURRENT LIABILITIES Accounts payable $ 31,373,506 $ 34,257,935 Other payables and accrued expenses 8,930,573 7,218,395 Short-term loans 250,000 - Notes payable 232,382 92,445 Income tax payable 11,280,164 1,313,754 Advance receipts - 38,229,242 Amount due to related party 500,000 500,000 Other current liabilities 4,067,928 2,185,654 TOTAL CURRENT LIABILITIES 56,634,553 83,797,425 NON-CURRENT LIABILITIES Deferred taxes liability 602,435 3,483,171 Contingent consideration liability - 3,743,000 Other long-term liabilities 464,763 459,580 TOTAL NON-CURRENT LIABILITIES 1,067,198 7,685,751 TOTAL LIABILITIES 57,701,751 91,483,176 STOCKHOLDER?S EQUITY Common stock, $0.001 par value; 100,000,000shares authorized; 77,547,099 and77,298,499 shares issued and 75,626,155 and 75,626 75,377 75,377,555 outstanding at June 30,2021 andDecember 31,2020, respectivelyAdditional paid-in capital 443,717,378 439,549,338 Accumulated deficit (the restricted portionis $4,422,033 and $4,422,033 at June 7,446,854 (27,079,900 )30,2021 and December 31,2020, respectively)Accumulated other comprehensive loss (5,079,349 ) (8,778,151 )TOTAL STOCKHOLDERS? EQUITY 446,160,509 403,766,664 TOTAL LIABILITIES AND STOCKHOLDERS? EQUITY $ 503,862,260 $ 495,249,840



KANDI TECHNOLOGIES GROUP, INC.AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ANDCOMPREHENSIVE INCOME (LOSS)(UNAUDITED)

Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2021 2020 2021 2020 REVENUES FROMUNRELATED $ 29,875,835 $ 19,436,120 $ 45,852,002 $ 25,808,544 PARTIES, NETREVENUES FROMTHE AFFILIATECOMPANY AND - 956 1,587 956 RELATEDPARTIES, NET REVENUES, NET 29,875,835 19,437,076 45,853,589 25,809,500 COST OF GOODS (23,778,053 ) (15,900,298 ) (35,401,456 ) (21,105,463 )SOLD GROSS PROFIT 6,097,782 3,536,778 10,452,133 4,704,037 OPERATINGINCOME (EXPENSE):Research and (3,564,905 ) (1,149,901 ) (25,189,502 ) (1,790,141 )developmentSelling and (1,057,517 ) (763,666 ) (2,204,383 ) (1,641,972 )marketingGeneral and (5,359,572 ) (3,907,191 ) (9,789,695 ) (6,973,926 )administrativeGain ondisposal of 48,253,667 13,907,574 48,253,667 13,907,574 long-livedassetsTOTALOPERATING 38,271,673 8,086,816 11,070,087 3,501,535 INCOME INCOME FROM 44,369,455 11,623,594 21,522,220 8,205,572 OPERATIONS OTHER INCOME (EXPENSE):Interest 974,105 221,792 1,502,697 560,736 incomeInterest (78,069 ) (1,123,056 ) (204,417 ) (2,105,990 )expenseChange in fairvalue of (357,000 ) (929,000 ) - 2,863,000 contingentconsiderationGovernment 114,402 86,799 349,195 97,898 grantsGain from saleof equity in 33,651 - 17,733,911 - the AffiliateCompanyShare of lossafter tax of (4,904 ) (2,978,529 ) (2,584,401 ) (4,081,299 )the AffiliateCompanyOther income, 3,827,089 1,043,335 4,325,990 1,062,985 netTOTAL OTHERINCOME 4,509,274 (3,678,659 ) 21,122,975 (1,602,670 )(EXPENSE), NET INCOME BEFORE 48,878,729 7,944,935 42,645,195 6,602,902 INCOME TAXES INCOME TAX (7,949,255 ) (3,889,889 ) (8,118,441 ) (4,122,502 )EXPENSE NET INCOME 40,929,474 4,055,046 34,526,754 2,480,400 OTHERCOMPREHENSIVE INCOME (LOSS)Foreigncurrency 4,874,815 477,734 3,698,802 (3,045,331 )translationadjustment COMPREHENSIVE $ 45,804,289 $ 4,532,780 $ 38,225,556 $ (564,931 )INCOME (LOSS) WEIGHTEDAVERAGE SHARESOUTSTANDING 75,510,788 53,369,602 75,447,633 52,862,043 BASIC ANDDILUTED NET INCOME PERSHARE, BASIC $ 0.54 $ 0.08 $ 0.46 $ 0.05 AND DILUTED



KANDI TECHNOLOGIES GROUP, INC.AND SUBSIDIARIESCONDENSEDCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY(UNAUDITED)

Number of Additional Accumulated Outstanding Common Treasury Paid-in Accumulated Other Total Shares Stock Stock Capital Deficit Comprehensive LossBalance, 52,839,441 $ 52,839 $ (2,477,965 ) $ 259,691,370 $ (16,685,736 ) $ (22,723,581 ) $ 217,856,927 December31,2019Stock issuance 10,000 10 - 22,290 - - 22,300 and awardNet loss - - - - (1,574,646 ) - (1,574,646 )Foreign currency - - - - - (3,523,065 ) (3,523,065 )translation Balance, March 52,849,441 $ 52,849 $ (2,477,965 ) $ 259,713,660 $ (18,260,382 ) $ (26,246,646 ) $ 212,781,516 31, 2020Stock issuance 1,502,717 1,503 3,164,925 3,166,428 and awardNet income 4,055,043 4,055,043 Foreign currency 477,734 477,734 translation Balance, June 30, 54,352,158 $ 54,352 $ (2,477,965 ) $ 262,878,585 $ (14,205,339 ) $ (25,768,912 ) $ 220,480,721 2020 Number of Additional Accumulated Accumulated Outstanding Common Treasury Paid-in Earning Other Total Shares Stock Stock Capital (Deficit) Comprehensive IncomeBalance, 75,377,555 $ 75,377 $ - $ 439,549,338 $ (27,079,900 ) $ (8,778,151 ) $ 403,766,664 December31,2020Stock issuance 10,000 10 - 22,290 - - 22,300 and awardNet loss - - - - (6,402,720 ) - (6,402,720 )Foreign currency - - - - - (1,176,013 ) (1,176,013 )translationReversal ofreduction in theAffiliateCompany?s equity - - - 2,771,652 - - 2,771,652 (net off taxeffect of$491,400) Balance, March 75,387,555 $ 75,387 $ - $ 442,343,280 $ (33,482,620 ) $ (9,954,164 ) $ 398,981,883 31, 2021Stock issuance 238,600 239 1,374,098 1,374,337 and awardNet income 40,929,474 40,929,474 Foreign currency 4,874,815 4,874,815 translation Balance, June 30, 75,626,155 $ 75,626 $ - $ 443,717,378 $ 7,446,854 $ (5,079,349 ) $ 446,160,509 2021



KANDI TECHNOLOGIES GROUP, INC.AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)

Six Months Ended June 30, June 30, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 34,526,754 $ 2,480,400 Adjustments to reconcile net incometo net cash provided by operating activitiesDepreciation and amortization 4,443,218 4,022,676 Impairments - (148,054 )Deferred taxes (11,970 ) 2,089,505 Share of loss after tax of the 2,584,401 4,081,299 Affiliate CompanyGain from equity sale in the (17,733,911 ) - Affiliate CompanyGain on disposal of long-live assets (48,253,667 ) (13,907,574 )Change in fair value of contingent - (2,863,000 )considerationStock based compensation expense 1,429,456 847,546 Changes in operating assets and liabilities: Accounts receivable 2,054,930 (1,431,388 )Inventories (3,328,120 ) (743,483 )Other receivables and other assets (14,040,619 ) (11,248,701 )Advances to supplier and prepayments 20,596,182 (12,586,777 )and prepaid expensesAmount due from the Affiliate Company - 4,129,516 Increase (Decrease) In: Accounts payable (1,044,040 ) (282,560 )Other payables and accrued (463,016 ) 736,715 liabilitiesNotes payable (93,273 ) (10,664,922 )Income tax payable 7,671,740 1,161,312 Net cash used in operating activities $ (11,661,935 ) $ (34,327,490 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and (6,565,755 ) (59,670 )equipment, netPayment for construction in progress (1,869,028 ) - Proceeds from disposal of long-lived 23,234,680 34,696,547 assetsRepayments of loan to third party 31,686,168 - Certificate of deposit (54,098,335 ) - Cash received from sales of equity in 23,803,268 15,641,886 the Affiliate CompanyLong Term Investment (108,197 ) - Net cash provided by investing $ 16,082,801 $ 50,278,763 activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from short-term loans 250,000 24,031,625 Repayments of short-term loans - (49,769,638 )Repayments of long-term loans - (284,398 )Proceeds from long-term loans - 394,116 Net cash provided by (used in) $ 250,000 $ (25,628,295 )financing activities NET INCREASE (DECREASE) IN CASH AND $ 4,670,866 $ (9,677,022 )CASH EQUIVALENTS AND RESTRICTED CASHEffect of exchange rate changes $ 997,982 $ (157,062 )CASH AND CASH EQUIVALENTS AND $ 142,520,635 $ 16,512,635 RESTRICTED CASH AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AND $ 148,189,483 $ 6,678,551 RESTRICTED CASH AT END OF PERIOD-CASH AND CASH EQUIVALENTS AT END OF 132,071,957 3,457,498 PERIOD-RESTRICTED CASH AT END OF PERIOD 16,117,526 3,221,053 SUPPLEMENTARY CASH FLOW INFORMATION Income taxes paid $ 373,433 870,082 Interest paid $ - 641,213 SUPPLEMENTAL NON-CASH DISCLOSURES: Reversal of decrease in investment inthe Affiliate Company due to change $ 2,813,968 - in its equity (net off tax effect of$491,400)Increase of other receivable forequity transfer payment of the $ 23,803,268 - Affiliate Company