HONG KONG, July 28, 2014 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today reported results for its fiscal 2015 first quarter ended June 30, 2014, reflecting increased profitability and a continued strong balance sheet.
Net income for the fiscal first quarter increased sharply to $256,000, or $0.07 per diluted share, from $150,000, or $0.04 per diluted share, last year. Net sales for the same period were $5.6 million compared to $5.9 million a year earlier – reflecting the reduction of some low margin business.
"Results for the quarter further validate the success of the company's strategic initiatives implemented during the past three years. Despite anticipated reduced sales, net income increased substantially -- benefiting from continuous operational improvements and increased pricing to major customers," said Roland Kohl, chairman, president and chief executive officer.
Kohl added that he expects the company's increased utilization of the lower-cost Myanmar facility as an alternative solution for its higher-cost assembly manufacturing in China will enhance organic growth and generate new business opportunities. Although net sales decreased in the fiscal 2015 first quarter due to the loss of low margin sales, gross margin and gross profit increased compared with a year ago. Gross profit for the 2015 fiscal first quarter was $1.33 million compared with $1.25 million in the same period a year ago, with gross profit as a percentage of sales increasing to 23.7 percent from 21.3 percent a year ago.
Selling, general and administrative expense for the 2015 fiscal first quarter remained substantially unchanged compared with the fiscal first quarter last year, primarily due to expense management -- despite wage inflation in China and costs associated with the company's operation in Myanmar.
Kohl highlighted the company's solid financial position, with cash, cash equivalents and restricted cash of $6.9 million -- exceeding the combined short- and long-term liabilities by $3.2 million.
At June 30, 2014 the company had working capital of $10.9 million.
Total shareholders' equity at June 30, 2014 was $12.4 million compared with $12.1 million as of March 31, 2014 and the company's current ratio was 4.0:1 at June 30, 2014.
About Highway Holdings
Highway Holdings produces a wide variety of high-quality products for blue chip original equipment manufacturers -- from simple parts and components to sub-assemblies and finished products. Highway Holdings' administrative offices are located in Hong Kong and its manufacturing facilities are located in Shenzhen in the People's Republic of China.
Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements which involve risks and uncertainties, including but not limited to economic, competitive, governmental, political and technological factors affecting the company's revenues, operations, markets, products and prices, and other factors discussed in the company's various filings with the Securities and Exchange Commission, including without limitation, the company's annual reports on Form 20-F.
(Financial Tables Follow)
| HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES | ||
| Consolidated Statement of Income | ||
| (Dollars in thousands, except per share data) | ||
| (Unaudited) | ||
| Quarter Ended | ||
| June 30 | ||
| 2014 | 2013 | |
| Net sales | $5,601 | $5,872 |
| Cost of sales | 4,272 | 4,622 |
| Gross profit | 1,329 | 1,250 |
| Selling, general and administrative expenses | 1,036 | 1,025 |
| Operating income | 293 | 225 |
| Non-operating income (expense) : | ||
| Interest expense | -- | (1) |
| Exchange gain (loss), net | 2 | 3 |
| Interest income | 4 | 4 |
| Other income/expense | (3) | -- |
| Total non-operating income (expenses) | 3 | 6 |
| Net income before income tax and non-controlling interests | 296 | 231 |
| Income taxes | (41) | (81) |
| Net income | 255 | 150 |
| Gain attributable to non-controlling interests | 1 | -- |
| Net income attributable to Highway Holdings Limited | $256 | $150 |
| Shareholders | ||
| Net income per share – basic and diluted | $0.07 | $0.04 |
| Weighted average number of shares outstanding: | ||
|
Basic |
3,779 | 3,779 |
|
Diluted |
3,789 |
3,781 |
| HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES | ||
| Consolidated Balance Sheet | ||
| (In thousands, except per share data) | ||
| June 30 | March 31 | |
| 2014 | 2014 | |
| Current assets: | ||
| Cash and cash equivalents | $6,227 | $5,416 |
| Restricted cash | 643 | 643 |
| Accounts receivable, net of doubtful accounts | 3,223 | 3,157 |
| Inventories | 3,060 | 3,700 |
| Investment in associate | 26 | -- |
| Prepaid expenses and other current assets | 1,310 | 1,044 |
| Total current assets | 14,489 | 13,960 |
| Property, plant and equipment, net | 1,146 | 1,213 |
| Loan receivable and long-term deposits | 436 | 603 |
| Total assets | 16,071 | 15,776 |
| Current liabilities: | ||
| Accounts payable | 1,544 | 1,577 |
| Other liabilities and accrued expenses | 1,812 | 1,730 |
| Income tax payable | 274 | 279 |
| Total current liabilities | 3,630 | 3,586 |
| Deferred income taxes | 44 | 44 |
| Total liabilities | 3,674 | 3,630 |
| Shareholders' equity: | ||
| Common shares, $0.01 par value | 38 | 38 |
| Additional paid-in capital | 11,340 | 11,340 |
| Retained earnings | 1,027 | 770 |
| Accumulated other comprehensive income | 1 | 7 |
| Treasury shares, at cost – 5,049 shares as of March 31, 2014; and on June 30, 2014 | (14) | (14) |
| Non controlling interest | 5 | 5 |
| Total shareholders' equity | 12,397 | 12,146 |
| Total liabilities and shareholders' equity | 16,071 | 15,776 |