Jinhua, China - August 9, 2017 (Newsfile Corp.) (Investorideas.com Newswire) Kandi Technologies Group, Inc. (NASDAQ GS: KNDI) (the "Company," "we" or "Kandi"), today announced its financial results for the second quarter of 2017.
Second Quarter Highlights
Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, "2017 has been a challenging year for Kandi. The confusion surrounding the subsidy heavily impacted the Company's business last year and we have been trying to regain the momentum this year. The management team is working hard to explore better growth opportunities. Despite second-quarter losses, Kandi Vehicles' estimated value has exceeded RMB four billion, the management team will actively seek strategic investors based upon the estimated value to increase its competitive advantages. The efforts the Company has made will lay a solid foundation to achieve strong business results."
Net Revenues and Gross Profit
Net revenues for the second quarter of 2017 decreased by 50.5% compared to the same period last year. The decrease in net revenues was mainly due to a decrease in EV parts sales during this quarter. Selling prices of our products for the three months ended June 30, 2017, decreased on average from the same period last year. The decrease in revenues was primarily due to this decrease in sales volume.
Operating Income (Loss)
Total operating expenses in the second quarter of 2017 were $7.1 million, compared with $10.8 million in the same quarter of 2016. The decrease in total operating expenses was due to decreased SG&A expenses, which were $2.0 million in this quarter compared with $10.4 million in the same quarter last year.
GAAP Net (Loss) Income
Net loss was $11.6 million in the second quarter, compared with net income of $2.8 million in the same quarter of 2016. The negative change was primarily attributable to JV Company losses and significantly increased research and development expenses of approximately $5.1 million.
Non-GAAP net loss was $9.5 million in the second quarter of 2017, a 190.6% decrease compared to Non-GAAP net income of $10.5 million in the same quarter of 2016. The decrease was primarily attributable to the JV Company's net losses, and significantly increased research and development expenses made in an effort to prepare the Company for future business growth.
Kandi Electric Vehicles Group Co., Ltd. (the "JV Company") Financial Results
In the second quarter of 2017, the JV Company sold 365 units of EV products.
The condensed financial income statements of the JV Company in the first quarter are as set forth below:
Revenue for the JV Company was $18.7 million in the second quarter of 2017, a decrease of 83.3% compared to the same quarter of 2016. Net loss was $14.6 million, a 269.8% decrease compared to net income of $8.6 million in the same quarter of 2016.
Kandi's investments in the JV Company are accounted for using the equity method of accounting because Kandi has a 50% ownership interest in the JV Company. As a result, Kandi recorded 50% of the JV Company's losses of $7.3 million for this quarter. After eliminating intra-entity profits and losses, Kandi's share of the after-tax loss of the JV Company was $8.7 million for the second quarter of 2017.
Second Quarter 2017 Conference Call Details
The Company has scheduled a conference call and live webcast to discuss its second quarter 2017 financial results at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time) on August 9, 2017. Mr. Hu Xiaoming, Chief Executive Officer of the Company, and Mr. Mei Bing, Chief Financial Officer of the Company, will deliver prepared remarks to be followed by a question and answer session.
Dial-in details for the conference call are as follows:
A 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, Zhejiang Province, is engaged in the research and development, manufacturing and sales of various vehicle products. Kandi has established itself as one of China's leading manufacturers of pure electric vehicle ("EV") products (through its joint venture), EV parts and off-road vehicles. Kandi conducts its primary business operations through its wholly-owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. ("Kandi Vehicles"), and the partially and wholly-owned subsidiaries of Kandi Vehicles. More information can be viewed at 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 securities laws, the Company does not assume a duty to update these forward-looking statements.
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Ms. Kewa Luo
Kandi Technologies Group, Inc.
1 Non-GAAP measures, including Non-GAAP net income and Non-GAAP EPS are defined as the financial measures excluding the change of fair value of financial derivatives and the effects of stock award expenses. We supply non-GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations. Any non-GAAP measure should not be considered as a substitute for, and should only be read in conjunction with, measures of financial performance prepared in accordance with GAAP.
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