Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the full year ended December 31, 2021.

Full Year 2021 Highlights

• Total revenue was $91.5 million, compared to $76.9 million in 2020.

• EV parts sales were $25.3million, compared to $40.6 million in 2020.

• Off-road vehicles sales were $29.3 million, compared to $29.8 million in 2020.

• EV product sales increased by 116% to $1.5 million, compared to $0.7 million in 2020.

• Electric Scooters, Electric Self-Balancing Scooters and associated parts sales increased by 420.6% to $30.0 million, compared with $5.8 million in 2020.

• Gross margin was 17.8%, compared to 17.5% in 2020.

• Operating income was $1.34 million, compared to $0.8 million in 2020.

• Net income was $22.9 million, or $0.30 income per fully diluted share, compared to a net loss of $10.4 million, or $0.19 loss per fully diluted share in 2020.

• As of December 31, 2021, working capital was $278.4 million; cash, cash equivalents, restricted cash and certificate of deposit totaled $223.7 million.

Mr. Hu Xiaoming, Chairman and CEO of Kandi commented, “As a company, our primary focus initially was the design, development, manufacture, and sale of electric vehicle products and electric vehicle parts. Nevertheless, some Chinese pure electric vehicle manufacturers have attempted to capture market share at any cost, resulting in substantial losses in recent years. It has become increasingly obvious that the pure electric vehicle market in China has not yet reached a healthy development stage. We do not believe it is prudent to participate in such loss-making competition given our current financial resources. It has always been our belief that pure electric vehicles can only become widely popular once the battery swap model matures. With our advanced pure electric vehicle intelligent battery swapping equipment, pure electric vehicle manufacturing capacity and dozens of patented technologies for battery swap, we will continue to focus on improving car-hailing using EVs with battery swap capability. As soon as the electric vehicle market in China enters an orderly stage of development, we will consider re-entering the market.”

Hu continued, “We see huge demand building for electrified off-road vehicles. In 2022, we will apply EV technology to off-road vehicle products and launch a variety of pure electric utility terrain vehicles (“UTVs”), neighborhood EVs (“NEVs”), golf carts, and off-road crossover vehicles. We will make full use of our high-end technology, which is the culmination of years of development work in the EVs, to aggressively pursue the off-road vehicle market. Our goal is to become the  market leader in this field in China within three years.”

Regarding Company’s strategy, Hu commented, “The business transformation undertaken by the company in 2021 is already proving successful. Due to the strategic action, we took following the COVID-19 pandemic in 2020, our development has been reignited. We are concentrating our resources on markets with the best growth potential and a reasonable level of competition. Despite the challenges associated with this type of transformation, this is a step that Kandi must take to achieve sustainable growth.”

Hu concluded, “Looking forward, we are optimistic about the future of our company. Since we will be launching several pure electric off-road vehicles soon, we believe that our 100% electric off-road vehicle products that incorporate pure EV technology will be quite popular. Additionally, we look forward to the new opportunities brought about by China entering a healthy and orderly development stage for its pure electric vehicle market. In view of our outstanding technological innovation capabilities, solution integration capabilities and operational experience, we are in an excellent position to benefit from the development of the EV and electric off-road vehicle industries.”

Full Year 2021 Financial Results

Net Revenues and Gross Profit (in USD millions)

  2021     2020     Y-o-Y%  
Net Revenues   $ 91.5     $ 76.9       18.9 %
Gross Profit   $ 16.2     $ 13.5       20.5 %
Gross Margin%     17.8 %     17.5 %     -  

Net revenues of $91.5 million increased 18.9% from 2020. The increase was due mainly to explosive growth in the Electric Scooters, Electric Self-Balancing Scooters and associated parts segment. Since entering this market in 2020, Kandi has driven growth through sales to more customers, and high growth of customers’ end-product sales. Gross margin was stable at 17.8%, compared with 17.5% in 2020.

Operating Income/Loss (in USD millions)

  2021     2020     Y-o-Y%  
Operating Expenses   $ (14.9 )   $ (12.7 )     17.1 %
Income from Operations   $ 1.3     $ 0.8       77.1 %
Operating Margin%     1.5 %     1.0 %     -  

Total operating expenses were $14.9 million, compared with $12.7 million in 2020. The increase was due to higher R&D expense. Operating expenses were partially offset by the gain on disposal of long-lived assets recognized from the relocation of the Jinhua facility.  

Net Income/Loss (in USD millions)

  2021     2020     Y-o-Y%  
Net Income (Loss)   $ 22.9     $ (10.4 )     -320.0 %
Net Income (Loss) per Share, Basic and Diluted   $ 0.30     $ (0.19 )     -  

Net income was $22.9 million, comparing to a net loss of $10.4 million in 2020. The profitable result was attributable to the gain resulting from the relocation of the Jinhua headquarters.

Full Year 2021 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, March 15, 2022. 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://themediaframe.com/mediaframe/webcast.html?webcastid=8oRuq5Ul

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.

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 SUBSIDIARIESCONSOLIDATED BALANCE SHEETS  

    December 31, 2021     December 31, 2020  
Current assets                
Cash and cash equivalents   $ 129,223,443     $ 142,078,190  
Restricted cash     39,452,564       442,445  
Certificate of deposit     55,041,832       -  
Accounts receivable (net of allowance for doubtful accounts of $3,053,277 and $110,269 as of December 31, 2021 and December 31, 2020, respectively)     52,896,305       38,547,137  
Inventories     33,171,973       19,697,383  
Notes receivable     323,128       31,404,630  
Other receivables     8,901,109       1,875,245  
Prepayments and prepaid expense     17,657,326       13,708,149  
Advances to suppliers     5,940,456       36,733,182  
Amount due from the Affiliate Company     -       21,742,226  
Amount due from related party     -       886,989  
TOTAL CURRENT ASSETS     342,608,136       307,115,576  
                 
NON-CURRENT ASSETS                
Property, plant and equipment, net     111,577,411       65,402,680  
Intangible assets, net     13,249,079       3,232,753  
Land use rights, net     3,250,336       3,257,760  
Construction in progress     79,317       16,317,662  
Deferred tax assets     2,219,297       8,964,946  
Long-term investment     157,262       45,958  
Investment in the Affiliate Company     -       28,892,638  
Goodwill     36,027,425       29,712,383  
Other long-term assets     10,992,009       32,307,484  
TOTAL NON-CURRENT ASSETS     177,552,136       188,134,264  
                 
TOTAL ASSETS   $ 520,160,272     $ 495,249,840  
                 
CURRENT LIABILITIES                
Accounts payable   $ 36,677,802     $ 34,257,935  
Other payables and accrued expenses     9,676,973       7,218,395  
Short-term loans     950,000       -  
Notes payable     8,198,193       92,445  
Income tax payable     1,620,827       1,313,754  
Advance receipts     -       38,229,242  
Amount due to related party     -       500,000  
Other current liabilities     7,038,895       2,185,654  
TOTAL CURRENT LIABILITIES     64,162,690       83,797,425  
                 
NON-CURRENT LIABILITIES                
Long-term loans     2,210,589       -  
Deferred tax liability     2,460,141       3,483,171  
Contingent consideration liability     7,812,000       3,743,000  
Other long-term liabilities     314,525       459,580  
TOTAL NON-CURRENT LIABILITIES     12,797,255       7,685,751  
                 
TOTAL LIABILITIES     76,959,945       91,483,176  
                 
STOCKHOLDER’S EQUITY                
Common stock, $0.001 par value; 100,000,000 shares authorized; 77,385,130 and 77,298,499 shares issued and 76,705,381 and 75,377,555 outstanding at December 31,2021 and December 31,2020, respectively     77,385       75,377  
Less: Treasury stock (679,749 shares and 0 shares with average price of $3.52 at December 31,2021 and December 31,2020, respectively)     (2,392,203 )     -  
Additional paid-in capital     449,479,461       439,549,338  
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at December 31,2021 and December 31,2020, respectively)     (4,216,102 )     (27,079,900 )
Accumulated other comprehensive income (loss)     251,786       (8,778,151 )
TOTAL STOCKHOLDERS’ EQUITY     443,200,327       403,766,664  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 520,160,272     $ 495,249,840  

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS ANDCOMPREHENSIVE INCOME (LOSS)FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020  

    Years Ended  
    December 31, 2021     December 31, 2020  
REVENUES FROM UNRELATED PARTIES, NET   $ 91,484,792     $ 76,176,609  
REVENUES FROM THE AFFILIATE COMPANY AND RELATED PARTIES, NET     1,592       743,904  
                 
REVENUES, NET     91,486,384       76,920,513  
                 
COST OF GOODS SOLD     (75,238,522 )     (63,432,580 )
                 
GROSS PROFIT     16,247,862       13,487,933  
                 
OPERATING INCOME (EXPENSE):                
Research and development     (38,971,986 )     (7,246,312 )
Selling and marketing     (4,736,000 )     (6,619,355 )
General and administrative     (19,605,468 )     (13,042,103 )
Gain on disposal of long-lived assets     48,401,797       14,174,233  
TOTAL OPERATING EXPENSE     (14,911,657 )     (12,733,537 )
                 
INCOME FROM OPERATIONS     1,336,205       754,396  
                 
OTHER INCOME (EXPENSE):                
Interest income     4,208,751       2,190,678  
Interest expense     (407,620 )     (3,750,233 )
Change in fair value of contingent consideration     2,834,000       (565,000 )
Government grants     1,233,192       1,130,262  
Gain from sale of equity in the Affiliate Company     17,788,351       -  
Share of loss after tax of the Affiliate Company     (2,592,334 )     (17,252,662 )
Other income, net     4,809,743       2,051,226  
TOTAL OTHER INCOME (EXPENSE), NET     27,874,083       (16,195,729 )
                 
INCOME (LOSS) BEFORE INCOME TAXES     29,210,288       (15,441,333 )
                 
INCOME TAX (EXPENSE) BENEFIT     (6,346,490 )     5,047,169  
                 
NET INCOME (LOSS)     22,863,798       (10,394,164 )
                 
OTHER COMPREHENSIVE INCOME                
Foreign currency translation adjustment     9,029,937       13,945,430  
COMPREHENSIVE INCOME   $ 31,893,735     $ 3,551,266  
                 
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED     76,148,688       55,960,010  
                 
NET INCOME (LOSS) PER SHARE, BASIC AND DILUTED   $ 0.30     $ (0.19 )

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYFOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020  

    Number of Outstanding Shares     Common Stock     Treasury Stock     Additional Paid-in Capital     AccumulatedDeficit     Accumulated Other Comprehensive Income (Loss)     Total  
BALANCE AS OF DECEMBER 31, 2019     52,839,441     $ 52,839     $ (2,477,965 )   $ 259,691,370     $ (16,685,736 )   $ (22,723,581 )   $ 217,856,927  
                                                         
Stock issuance and award     1,771,317       1,771       -       4,058,052       -       -       4,059,823  
Cancellation of the Treasury Stock     (487,155 )     (487 )     2,477,965       (2,477,478 )     -       -       -  
Registered Direct Offering     18,253,952       18,254       -       151,904,993       -       -       151,923,247  
Warrants issuance     -       -       -               -       -       -  
Stock option exercise     3,000,000       3,000       -       29,157,000       -       -       29,160,000  
Net loss     -       -       -       -       (10,394,164 )     -       (10,394,164 )
Foreign currency translation     -       -       -       -               13,945,430       13,945,430  
Reduction in the Affiliate Company’s equity (net of tax effect of $491,400)     -       -       -       (2,784,599 )     -       -       (2,784,599 )
                                                         
BALANCE AS OF DECEMBER 31, 2020     75,377,555     $ 75,377     $ -     $ 439,549,338     $ (27,079,900 )   $ (8,778,151 )   $ 403,766,664  
                                                         
Stock issuance and award     2,007,575       2,008       -       7,178,928       -       -       7,180,936  
Stock buyback                     (2,392,203 )             -       -       (2,392,203 )
Commission in stock buyback                             (20,457 )                     (20,457 )
Net income     -       -       -       -       22,863,798       -       22,863,798  
Foreign currency translation     -       -       -       -               9,029,937       9,029,937  
Reversal of reduction in the Affiliate Company’s equity (net of tax effect of $491,400)     -       -       -       2,771,652       -       -       2,771,652  
                                                         
BALANCE AS OF DECEMBER 31, 2021     77,385,130     $ 77,385     $ (2,392,203 )   $ 449,479,461     $ (4,216,102 )   $ 251,786     $ 443,200,327  

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

    Years Ended  
    December 31, 2021     December 31, 2020  
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net income (loss)   $ 22,863,798     $ (10,394,164 )
Adjustments to reconcile net income to net cash provided by operating activities                
Depreciation and amortization     10,038,976       8,222,984  
Provision (reversal) of allowance for doubtful accounts     862,414       (152,809 )
Deferred taxes     4,073,315       (5,349,722 )
Share of loss after tax of the Affiliate Company     2,592,334       17,252,662  
Gain from equity sale in the Affiliate Company     (17,788,351 )     -  
Gain on disposal of long-lived assets     (48,401,797 )     (14,174,233 )
Change in fair value of contingent consideration     (2,834,000 )     565,000  
Stock based compensation expense     1,484,576       902,666  
                 
Changes in operating assets and liabilities:                
Accounts receivable     (2,542,692 )     19,247,519  
Inventories     (7,522,761 )     9,246,455  
Other receivables and other assets     (291,235 )     2,008,612  
Advances to supplier and prepayments and prepaid expenses     27,786,143       (36,330,634 )
Amount due from the Affiliate Company     -       4,237,103  
Due from related party     (500,000 )     (339,118 )
                 
Increase (Decrease) In:                
Accounts payable     2,176,638       (30,993,717 )
Other payables and accrued liabilities     10,513,511       (173,806 )
Notes payable     (2,423,514 )     (13,912,842 )
Income tax payable     154,334       (745,208 )
Net cash provided by (used in) operating activities   $ 241,689     $ (50,883,252 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchases of property, plant and equipment, net     (11,574,706 )     (7,483,743 )
Purchases of land use rights and other intangible assets     (2,356,626 )     (3,281,115 )
Acquisition of Jiangxi Huiyi     (7,117,310 )     -  
Payment for construction in progress     (5,210,642 )     (7,419,644 )
Proceeds from disposal of long-lived assets     23,306,007       52,579,492  
Loan to third party     31,783,439       (26,097,991 )
Certificate of deposit     (54,264,407 )     -  
Cash received from sales of equity in the Affiliate Company     47,752,678       42,897,929  
Long-term investment     (108,529 )     (43,478 )
Net cash provided by investing activities   $ 22,209,904     $ 51,151,450  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from short-term loans     950,000       24,642,399  
Repayments of short-term loans     -       (50,873,903 )
Repayments of long-term loans     -       (28,799,501 )
Proceeds from long-term loans     2,210,589       394,116  
Proceeds from issuance of common stock and warrants     -       151,923,247  
Purchase of treasury stock     (2,412,660 )     -  
Proceeds from exercises stock options, stock awards and other financing     -       29,160,000  
Net cash provided by financing activities   $ 747,929     $ 126,446,358  
                 
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH   $ 23,199,522     $ 126,714,556  
Effect of exchange rate changes   $ 2,955,850     $ (706,556 )
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR   $ 142,520,635     $ 16,512,635  
                 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD   $ 168,676,007     $ 142,520,635  
-CASH AND CASH EQUIVALENTS AT END OF PERIOD     129,223,443       142,078,190  
-RESTRICTED CASH AT END OF PERIOD     39,452,564       442,445  
                 
SUPPLEMENTARY CASH FLOW INFORMATION                
Income taxes paid   $ 2,074,668       1,046,127  
Interest paid   $ 35,001       653,507  
                 
SUPPLEMENTAL NON-CASH DISCLOSURES:                
Decrease in investment in the Affiliate Company due to change in its equity     -       3,099,193  
Reversal of decrease in investment in the Affiliate Company due to change in its equity (net of tax effect of $491,400)     2,824,115       -  
Purchase of construction in progress in accounts payable and other payable     -       7,945,414  
Common stock issued from settlement of payables related to acquisitions     5,762,000       3,166,427  
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