Kandi Technologies Reports Second Quarter 2019 Financial Results
• Q2 total revenues increased 47.6% YoY to $24.1 million –
• Q2 sales of off-road vehicles increased 506.9% YoY to $5.2 million –
• Q2 gross margin increased to 17.4% compared to 12.6% –
JINHUA, China, Aug. 09, 2019 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the second quarter of 2019.
Second Quarter Highlights
- Total revenues were $24.1 million for the second quarter of 2019, an increase of 47.6% from total revenues of $16.4 million for the same period in 2018.
- Electric Vehicle (“EV”) parts sales increased by 22.4%, to $19.0 million for the second quarter of 2019, compared with EV parts sales of $15.5 million for the same period in 2018.
- Revenues from sales of off-road vehicles increased by 506.9%, to $5.2 million for the second quarter of 2019, compared with revenues from sales of off-road vehicles of $0.8 million for the same period in 2018.
- GAAP net loss for the second quarter of 2019 was $7.3 million, or $0.14 loss per fully diluted share, compared with GAAP net income of $1.4 million, or $ 0.03 earnings per fully diluted share for the same period in 2018.
- Non-GAAP adjusted net loss1, which excludes employee stock compensation expenses and the change in fair value of contingent consideration, was $6.6 million in the second quarter of 2019, compared with Non-GAAP adjusted net income of $2.5 million for the same period in 2018. Non-GAAP adjusted loss per share1 was $0.12 per fully diluted share for the second quarter of 2019, compared with Non-GAAP adjusted earnings per share1 of $0.05 per fully diluted share for the same period in 2018.
- Working capital was $9.6 million as of June 30, 2019. Cash, cash equivalents and restricted cash totaled $5.2 million as of June 30, 2019.
Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, commented, “The EV sales in the second quarter was still impacted by the Chinese government’s 2019 national subsidy policy adjustments and the JV Company’s pending restructuring, causing the loss of the JV Company, which resulted in Kandi’s overall loss. However, Kandi’s EV parts and off-road vehicle sales have achieved excellent growth during the second quarter, increasing 22.4% and 506.9%, respectively. The management team is expecting to complete the JV Company’s restructuring by the end of the third quarter. In addition, we believe that Kandi Electric Vehicles Jiangsu Co., Ltd.’s receipt of the “dual production licenses” as a qualified Pure Electric Vehicle Production Manufacturer is a new breakthrough that may lead to tremendous opportunities in the government-accredited online ride hailing market for Kandi’s EVs. We believe that the JV Company will be able to achieve exciting future growth under Geely’s leadership.”
Net Revenues and Gross Profit
| 2Q19 | 2Q18 | Y-o-Y% | ||||||
| Net Revenues (US$million) | $24.1 | $16.4 | 47.6 | % | ||||
| Gross Profit (US$million) | $4.2 | $2.1 | 104.2 | % | ||||
| Gross Margin | 17.4 | % | 12.6 | % | - | |||
Net revenues for the second quarter of 2019 increased by 47.6% compared to the same period last year. The increase in net revenues was mainly due to an increase in sales of both EV parts and off-road vehicles during this quarter.
Operating Loss
| 2Q19 | 2Q18 | Y-o-Y% | ||||||
| Operating Expenses (US$million) | $7.2 | $4.7 | 51.2 | % | ||||
| Operating Loss (US$million) | ($3.0 | ) | ($2.7 | ) | 10.4 | % | ||
| Operating Margin | -12.2 | % | -16.3 | % | - | |||
Total operating expenses in the second quarter of 2019 were $7.2 million, compared with $4.7 million in the same quarter of 2018. The increase in total operating expenses was due to increased selling and marketing, as well as general and administrative expenses, which were $0.9 million and $5.6 million in this quarter compared with $0.2 million and $3.9 million in the same quarter last year.
GAAP & Non-GAAP Net Income
| 2Q19 | 2Q18 | Y-o-Y% | ||||||
| Net (Loss) Income (US$million) | ($7.3 | ) | $1.4 | - 632.4 | % | |||
| (loss) Earnings per Weighted Average Common Share | ($0.14 | ) | $0.03 | - | ||||
| (loss) Earnings per Weighted Average Diluted Share | ($0.14 | ) | $0.03 | - | ||||
| Stock Compensation Expenses | $1.2 | $1.8 | -30.2 | % | ||||
| Change in fair value of contingent consideration | ($0.5 | ) | ($0.7 | ) | -20.2 | % | ||
| Non-GAAP Net (Loss) Income | ($6.6 | ) | $2.5 | -360.7 | % | |||
Net loss was $7.3 million in the second quarter of 2019, compared with net income of $1.4 million in the same quarter of 2018. The decrease was primarily attributable to the increased share of loss of the JV Company compared to the same period of last year, a result of adjustment of the national subsidy policy and the pending restructuring of the JV Company, as well as the increased operation cost of the Company since Hainan facility has been put into production.
Non-GAAP net loss was $6.6 million in the second quarter of 2019, a 360.7% decrease compared to Non-GAAP net income of $2.5 million in the same quarter of 2018. The decrease was primarily attributable to the increased share of loss of the JV Company compared to the same period of last year, a result of adjustment of the national subsidy policy and the pending restructuring of the JV Company, as well as the increased operation cost of the Company since Hainan facility has been put into production.
Kandi Electric Vehicles Group Co., Ltd. (the “JV Company”) Financial Results
The condensed financial income statements of the JV Company in the second quarter are as set forth below:
| 2Q19 | 2Q18 | Y-o-Y% | ||||||
| Net Revenues (US$million) | $2.8 | $19.6 | -85.6 | % | ||||
| Gross Loss (US$million) | ($2.6 | ) | ($4.7 | ) | -44.4 | % | ||
| Net (loss) Income | ($10.4 | ) | $4.8 | -318.0 | % | |||
| % of Net revenue | -366.2 | % | 24.2 | % | - | |||
Revenue for the JV Company was $2.8 million in the second quarter of 2019, a decrease of 85.6% compared to the same quarter of 2018. Net loss was $10.4 million, a 318.0% decrease compared to net income of $4.8 million in the same quarter of 2018.
Kandi’s investments in the JV Company are accounted for using the equity method of accounting. Kandi recorded 43.47%* of the JV Company’s loss of $4.5 million for the second quarter. After eliminating intra-entity profits and losses, Kandi’s share of the after-tax loss of the JV Company was $4.5 million for the second quarter of 2019.
* In March 21, 2019, the JV Company converted a loan of RMB314 million (approximately $46.7 million) from Geely Group last year to equity in order to increase its cash flow. As a result, the registered capital of the JV Company became RMB 2.44 billion (approximately $363.2 million), of which the Company, through Kandi Vehicles (as defined below) owned 43.47% and Geely Technologies Group Co., Ltd. owned 56.53%, respectively,
Second Quarter 2019 Conference Call Details
The Company has scheduled a conference call and live webcast to discuss its second quarter 2019 financial results at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time) on August 9, 2019. Mr. Hu Xiaoming, Chief Executive Officer of the Company, and Ms. Zhu Xiaoying, interim 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:
- Toll-free dial-in number: +1-800-289-0438
- International dial-in number: + 1-323-794-2423
- Webcast and replay: http://public.viavid.com/index.php?id=135731
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 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, SC Autosports, LLC, the wholly-owned subsidiary of Kandi in the United States and Kandi Electric Vehicles Group Co., Ltd. (the “JV Company”). Kandi Vehicles has established itself as one of China's leading manufacturers of pure electric vehicle parts and off-road vehicles.
In 2013, Kandi Vehicles and Geely Group, China's leading automaker, jointly invested in the establishment of the JV Company in order to develop, manufacture and sell pure electric vehicle ("EV") products. As of June, 2019, Geely Group (including its affiliate) holds 56.53%, and Kandi Vehicles holds 43.47% in the JV Company, pending the closing of a transfer of 21.47% of the equity interests in the JV Company from Kandi Vehicles to Geely Group’s affiliate, which will result in Kandi Vehicles holding a 22% equity interest after the closing. The JV Company has established itself as one of the driving forces in the development and the manufacturing of pure EV products in China.
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
Company Contact:
Ms. Kewa Luo
Kandi Technologies Group, Inc.
Phone: 1-212-551-3610
Email: [email protected]
- Tables Below -
| KANDI TECHNOLOGIES GROUP, INC. | ||||||||
| AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEET | ||||||||
| (UNAUDITED) | ||||||||
| June 30, 2019 |
December 31, 2018 |
|||||||
| (UNAUDITED) | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 3,608,933 | $ | 15,662,201 | ||||
| Restricted cash | 1,573,992 | 6,690,870 | ||||||
| Accounts receivable (net of allowance for doubtful accounts of $135,557 and $120,010 as of June 30, 2019 and December 31, 2018, respectively) |
41,926,724 | 34,274,728 | ||||||
| Inventories (net of provision for slow moving inventory of $901,110 and $840,701 as of June 30, 2019 and December 31, 2018, respectively) |
28,980,722 | 21,997,868 | ||||||
| Notes receivable | - | 72,712 | ||||||
| Notes receivable from the JV Company and related party | 1,456,537 | 3,861,032 | ||||||
| Other receivables | 7,936,107 | 1,264,323 | ||||||
| Prepayments and prepaid expense | 10,290,832 | 11,136,408 | ||||||
| Due from employees | 4,208 | 1,001 | ||||||
| Advances to suppliers | 4,874,600 | 4,705,183 | ||||||
| Amount due from the JV Company, net | 60,945,283 | 67,683,462 | ||||||
| Right - of - use asset | 75,205 | - | ||||||
| TOTAL CURRENT ASSETS | 161,673,143 | 167,349,788 | ||||||
| LONG-TERM ASSETS | ||||||||
| Property, plant and equipment, net | 78,839,301 | 82,045,923 | ||||||
| Land use rights, net | 11,603,594 | 11,749,728 | ||||||
| Deferred taxes assets | - | 8,204 | ||||||
| Investment in the JV Company | 119,144,892 | 128,929,893 | ||||||
| Goodwill | 28,586,379 | 28,552,215 | ||||||
| Intangible assets | 4,020,363 | 4,328,127 | ||||||
| Other long term assets | 5,286,205 | 5,865,386 | ||||||
| TOTAL Long-Term Assets | 247,480,734 | 261,479,476 | ||||||
| TOTAL ASSETS | $ | 409,153,877 | $ | 428,829,264 | ||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 77,907,803 | $ | 112,309,683 | ||||
| Other payables and accrued expenses | 5,233,787 | 4,251,487 | ||||||
| Short-term loans | 32,189,466 | 30,539,236 | ||||||
| Customer deposits | 141,678 | 94,408 | ||||||
| Notes payable | 20,258,972 | 12,787,619 | ||||||
| Income tax payable | 330,772 | 3,471,366 | ||||||
| Due to employees | 8,464 | 28,473 | ||||||
| Deferred income | 1,320,147 | 1,340,605 | ||||||
| Lease liability | 76,348 | - | ||||||
| Advance receipts | 14,565,369 | - | ||||||
| Total Current Liabilities | 152,032,806 | 164,822,877 | ||||||
| LONG-TERM LIABILITIES | ||||||||
| Long term bank loans | 28,693,778 | 28,794,136 | ||||||
| Deferred taxes liability | 2,776,327 | 1,711,343 | ||||||
| Contingent liability | 6,619,000 | 7,256,000 | ||||||
| Other long-term liability | - | 622,034 | ||||||
| Total Long-Term Liabilities | 38,089,105 | 38,383,513 | ||||||
| TOTAL LIABILITIES | 190,121,911 | 203,206,390 | ||||||
| STOCKHOLDER’S EQUITY | ||||||||
| Common stock, $0.001 par value; 100,000,000 shares authorized; 56,243,102 and 55,992,002 shares issued and 52,819,441 and 51,484,444 outstanding at June 30, 2019 and December 31, 2018, respectively |
52,819 | 51,484 | ||||||
| Additional paid-in capital | 259,636,605 | 254,989,657 | ||||||
| Retained earnings (the restricted portion is $4,422,033 and $4,422,033 at June 30, 2019 and December 31, 2018, respectively) |
(21,224,639 | ) | (9,497,009 | ) | ||||
| Accumulated other comprehensive loss | (19,432,819 | ) | (19,921,258 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | 219,031,966 | 225,622,874 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 409,153,877 | $ | 428,829,264 | ||||
| KANDI TECHNOLOGIES GROUP, INC. | |||||||||||||||||
| AND SUBSIDIARIES | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND | |||||||||||||||||
| COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||
| (UNAUDITED) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, 2019 |
June 30, 2018 |
June 30, 2019 |
June 30, 2018 |
||||||||||||||
| REVENUES FROM UNRELATED PARTY, NET | $ | 20,056,696 | $ | 11,618,855 | $ | 36,391,659 | $ | 17,351,318 | |||||||||
| REVENUES FROM THE JV COMPANY AND RELATED PARTY, NET |
4,089,534 | 4,740,751 | 5,823,031 | 7,344,195 | |||||||||||||
| REVENUES, NET | 24,146,230 | 16,359,606 | 42,214,690 | 24,695,513 | |||||||||||||
| COST OF GOODS SOLD | (19,944,076 | ) | (14,301,594 | ) | (34,876,099 | ) | (21,291,550 | ) | |||||||||
| GROSS PROFIT | 4,202,154 | 2,058,012 | 7,338,591 | 3,403,963 | |||||||||||||
| OPERATING EXPENSES: | |||||||||||||||||
| Research and development | (632,590 | ) | (642,889 | ) | (1,170,023 | ) | (1,400,187 | ) | |||||||||
| Selling and marketing | (899,478 | ) | (228,173 | ) | (1,517,481 | ) | (976,398 | ) | |||||||||
| General and administrative | (5,623,798 | ) | (3,861,263 | ) | (7,663,326 | ) | (3,463,092 | ) | |||||||||
| Total Operating Expenses | (7,155,866 | ) | (4,732,325 | ) | (10,350,830 | ) | (5,839,677 | ) | |||||||||
| LOSS FROM OPERATIONS | (2,953,712 | ) | (2,674,313 | ) | (3,012,239 | ) | (2,435,714 | ) | |||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||||
| Interest income | 97,814 | 456,784 | 350,218 | 1,399,777 | |||||||||||||
| Interest expense | (429,355 | ) | (471,616 | ) | (868,538 | ) | (1,022,033 | ) | |||||||||
| Change in fair value of contingent consideration | 548,000 | 686,833 | 637,000 | 3,367,012 | |||||||||||||
| Government grants | 175,319 | 15,558 | 223,043 | 110,813 | |||||||||||||
| Gain from equity dilution in JV | (24,131 | ) | - | 4,341,259 | - | ||||||||||||
| Share of (loss) income after tax of the JV Company | (4,500,201 | ) | 2,372,696 | (14,449,359 | ) | 3,167,751 | |||||||||||
| Other income, net | (174,597 | ) | 627,582 | 299,793 | 650,559 | ||||||||||||
| Total other (expense) income, net | (4,307,151 | ) | 3,687,837 | (9,466,584 | ) | 7,673,879 | |||||||||||
| (LOSS) INCOME BEFORE INCOME TAXES | (7,260,863 | ) | 1,013,524 | (12,478,823 | ) | 5,238,165 | |||||||||||
| INCOME TAX (EXPENSE) BENEFIT | (57,295 | ) | 361,001 | 751,193 | (135,645 | ) | |||||||||||
| NET (LOSS) INCOME | (7,318,158 | ) | 1,374,525 | (11,727,630 | ) | 5,102,520 | |||||||||||
| OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||
| Foreign currency translation | (4,915,589 | ) | (12,587,622 | ) | 488,439 | (5,122,382 | ) | ||||||||||
| COMPREHENSIVE LOSS | (12,233,747 | ) | $ | (11,213,097 | ) | $ | (11,239,191 | ) | $ | (19,862 | ) | ||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING BASIC | 52,806,331 | 51,140,542 | 52,189,237 | 50,893,356 | |||||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED |
52,806,331 | 51,140,542 | 52,189,237 | 50,893,356 | |||||||||||||
| NET (LOSS) INCOME PER SHARE, BASIC | $ | (0.14 | ) | $ | 0.03 | $ | (0.22 | ) | $ | 0.10 | |||||||
| NET (LOSS) INCOME PER SHARE, DILUTED | $ | (0.14 | ) | $ | 0.03 | $ | (0.22 | ) | $ | 0.10 | |||||||
| KANDI TECHNOLOGIES GROUP, INC. | ||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY | ||||||||||||||||
| (UNAUDITED) | ||||||||||||||||
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Total shareholder’s equity, beginning balance | $ | $ | $ | $ | ||||||||||||
| Common Stock: | ||||||||||||||||
| Beginning balance | 52,581 | 51,009 | 51,484 | 48,037 | ||||||||||||
| Stock issuance and award | 238 | 289 | 1,335 | 3,261 | ||||||||||||
| Ending balance | 52,819 | 51,298 | 52,819 | 51,298 | ||||||||||||
| Additional Paid-in Capital: | ||||||||||||||||
| Beginning balance | 258,377,036 | 252,154,904 | 254,989,657 | 233,055,348 | ||||||||||||
| Stock issuance and award | 1,259,569 | 2,038,476 | 4,646,948 | 21,138,032 | ||||||||||||
| Ending balance | 259,636,605 | 254,193,380 | 259,636,605 | 254,193,380 | ||||||||||||
| Retained Earnings: | ||||||||||||||||
| Beginning balance | (13,906,481 | ) | (74,315 | ) | (9,497,009 | ) | (3,802,310 | ) | ||||||||
| Net (loss) income | (7,318,158 | ) | 1,374,525 | (11,727,630 | ) | 5,102,520 | ||||||||||
| Ending balance | (21,224,639 | ) | 1,300,210 | (21,224,639 | ) | 1,300,210 | ||||||||||
| Accumulated Other Comprehensive Income: | ||||||||||||||||
| Beginning balance | (14,517,230 | ) | 1,154,477 | (19,921,258 | ) | (6,310,763 | ) | |||||||||
| Foreign currency translation | (4,915,589 | ) | (12,587,622 | ) | 488,439 | (5,122,382 | ) | |||||||||
| Ending balance | (19,432,819 | ) | (11,433,145 | ) | (19,432,819 | ) | (11,433,145 | ) | ||||||||
| Total shareholder’s equity, ending balance | $ | 219,031,966 | $ | 244,111,743 | $ | 219,031,966 | $ | 244,111,743 | ||||||||
| KANDI TECHNOLOGIES GROUP, INC. | ||||||||
| AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (UNAUDITED) | ||||||||
| Six Months Ended | ||||||||
| June 30, 2019 |
June 30, 2018 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net (loss) income | $ | (11,727,630 | ) | $ | 5,102,520 | |||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
| Depreciation and amortization | 4,376,097 | 1,791,762 | ||||||
| Assets impairments | 59,799 | 341,261 | ||||||
| Allowance for doubtful accounts | 15,543 | (7,257 | ) | |||||
| Deferred taxes | 51,275 | - | ||||||
| Share of (loss) income after tax of the JV Company | 14,449,359 | (3,167,751 | ) | |||||
| Gain from equity dilution in JV | (4,341,259 | ) | - | |||||
| Reserve for fixed assets | - | (54,799 | ) | |||||
| Change in fair value of contingent consideration | (637,000 | ) | (3,367,012 | ) | ||||
| Stock compensation cost | 1,314,408 | 222,259 | ||||||
| Changes in operating assets and liabilities, net of effects of acquisition: | ||||||||
| (Increase) Decrease In: | ||||||||
| Accounts receivable | (16,560,338 | ) | (36,123,904 | ) | ||||
| Deferred taxes assets | - | (53,330 | ) | |||||
| Notes receivable | 250,593 | 502,623.00 | ||||||
| Notes receivable from the JV Company and related party | 442,223 | 2,060,755 | ||||||
| Inventories | (7,093,904 | ) | 5,020,163 | |||||
| Other receivables and other assets | (6,234,801 | ) | 927,544 | |||||
| Due from employee | (23,540 | ) | (22,355 | ) | ||||
| Advances to supplier and prepayments and prepaid expenses | 708,825 | (2,626,098 | ) | |||||
| Amount due from the JV Company | (4,128,506 | ) | (39,263,079 | ) | ||||
| Amount due from JV Company-Longterm | - | 15,907,183 | ||||||
| Due from related party | - | 165,614 | ||||||
| Increase (Decrease) In: | ||||||||
| Accounts payable | 387,505 | 41,319,755 | ||||||
| Other payables and accrued liabilities | 7,844,434 | 25,636,794 | ||||||
| Notes payable | (10,161,233 | ) | (11,936,770 | ) | ||||
| Customer deposits | 46,806 | 75,010 | ||||||
| Income tax payable | (2,134,722 | ) | (1,837,147 | ) | ||||
| Deferred income | (22,838 | ) | (779,240 | ) | ||||
| Net cash used in operating activities | $ | (33,118,904 | ) | $ | (165,499 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of property, plant and equipment, net | (512,707 | ) | (122,407 | ) | ||||
| Purchases of land use rights and other intangible assets | - | (107,917 | ) | |||||
| Acquisition of Jinhua An Kao (net of cash received) | - | (3,694,275 | ) | |||||
| Purchases of construction in progress | - | (48,042 | ) | |||||
| Reimbursement of capitalize interests for construction in progress | - | 1,860,287 | ||||||
| Long Term Investment | - | 1,492,162 | ||||||
| Advance receipts of equity transfer | 14,740,783 | - | ||||||
| Net cash used in investing activities | $ | 14,228,076 | $ | (620,192 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from short-term bank loans | 17,541,532 | 14,764,553 | ||||||
| Repayments of short-term bank loans | (15,920,046 | ) | (14,764,553 | ) | ||||
| Repayments of long-term bank loans | (147,408 | ) | (157,070 | ) | ||||
| Proceeds from notes payable | - | 34,702,510 | ||||||
| Repayment of notes payable | - | (40,349,566 | ) | |||||
| Net cash provided by (used in) financing activities | $ | 1,474,078 | $ | (5,804,126 | ) | |||
| NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
(17,416,750 | ) | (6,589,817 | ) | ||||
| Effect of exchange rate changes on cash | 246,604 | (30,020 | ) | |||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR |
22,353,071 | 16,110,496 | ||||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD |
5,182,925 | 9,490,659 | ||||||
| -CASH AND CASH EQUIVALENTS AT END OF PERIOD | 3,608,933 | 1,612,459 | ||||||
| -RESTRICTED CASH AT END OF PERIOD | 1,573,992 | 7,878,200 | ||||||
| SUPPLEMENTARY CASH FLOW INFORMATION | ||||||||
| Income taxes paid | 1,199,807 | 1,815,156 | ||||||
| Interest paid | 868,538 | 848,232 | ||||||
| SUPPLEMENTAL NON-CASH DISCLOSURES: | ||||||||
| Long term and short term Advances to suppliers transferred to Construction in progress | - | 28,158,299 | ||||||
| Settlement of due from the JV Company and related parties with notes receivable from related parties | 11,055,587 | 36,310,747 | ||||||
| Settlement of accounts receivables with notes receivable from unrelated parties | 8,859,211 | 39,932,517 | ||||||
| Assignment of notes receivable from unrelated parties to supplier to settle accounts payable | 8,682,321 | 12,570,974 | ||||||
| Assignment of notes receivable from the JV Company and related parties to supplier to settle accounts payable | 5,623,609 | 35,176,703 | ||||||
| Assignment of notes receivable from the JV Company and related parties to supplier to settle other payable | 7,429,355 | - | ||||||
| Settlement of accounts payable with notes payables | 20,502,956 | 19,480,843 | ||||||
| Acquisition of Jinhua An Kao by stock | - | 20,718,859 | ||||||
| Replacement of notes payables with accounts payable | 2,800,749 | 10,994,880 | ||||||
| Amount due from the JV Company converted to investment in the JV Company | - | 85,602,991 | ||||||
| Reversal of construction in progress and accounts payable | - | 8,299,226 | ||||||
| Reclassification of overpaid accounts payable to advances to suppliers | - | 3,703,808 | ||||||
1Non-GAAP measures, including Non-GAAP net income and Non-GAAP EPS are defined as the financial measures excluding the change in fair value of contingent consideration and the effects of stock compensation 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.