HONG KONG, Aug. 3, 2015 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today reported results for its fiscal 2016 first quarter ended June 30, 2015 -- reflecting increased sales, profitability and balance sheet strength.
Net income for the fiscal 2016 first quarter climbed 18 percent to $302,000, or $0.08 per diluted share, from $256,000, or $0.07 per diluted share, last year. Net sales for the same period increased to $5.9 million from $5.6 million a year earlier.
"Results for the quarter further validate the continued success of the company's strategic initiatives implemented during the past two years. Despite an anticipated reduction in sales due to the phase out of low margin business during last year, we achieved strong sales contributions from our remaining higher margin business, which more than compensated for the lost sales. By phasing out very low margin business, we were able to satisfy the increased demand for additional production capacity from our higher margin customers. The additional demand and the improved pricing allowed us to pay higher wages and thereby retain and hire more workers, despite the extremely tight labor market in Shenzhen, China. Furthermore, our customers are utilizing this opportunity to increase their business with us," said Roland Kohl, chairman, president and chief executive officer.
Gross profit for the 2016 fiscal first quarter was $1.44 million compared with $1.33 million in the same period a year ago, with gross profit as a percentage of sales increasing to 24.4 percent from 23.7 percent a year ago.
Selling, general and administrative expense for the 2016 fiscal first quarter only increased slightly compared with the fiscal first quarter last year, despite wage inflation in China and costs associated with the company's ongoing investment in its operation in Myanmar. The company's increase in operating income was partially offset by the $34,000 currency exchange loss that resulted from the increased strength of the U.S. dollar.
Kohl highlighted the company's solid financial position, with cash and cash equivalents of $9.3 million -- exceeding the combined short- and long-term liabilities by $5.1 million. At June 30, 2015 the company had working capital of $11.3 million – representing a $482,000 improvement compared with the same period a year ago.
Total shareholders' equity at June 30, 2015 was $12.5 million compared with $12.2 million as of March 31, 2015 and the company's current ratio was 3.7:1 at June 30, 2015.
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 and Myanmar.
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 | ||
| 2015 | 2014 | |
| Net sales | $5,899 | $5,601 |
| Cost of sales | 4,457 | 4,272 |
| Gross profit | 1,442 | 1,329 |
| Selling, general and administrative expenses | 1,090 | 1,036 |
| Operating income | 352 | 293 |
| Non-operating income( expense) : | ||
| Interest expense | - | - |
| Exchange gain (loss), net | (34) | 2 |
| Interest income | 4 | 4 |
| Other income (expense) | 1 | (3) |
| Total non-operating income (expenses) | (29) | 3 |
| Net income before income tax and non-controlling interests | 323 | 296 |
| Income taxes | (17) | (41) |
| Net income | 306 | 255 |
| Gain attributable to non-controlling interests | (4) | 1 |
| Net income attributable to Highway Holdings Limited | $302 | $256 |
| Shareholders | ||
| Net income per share – basic and diluted | $0.08 | $0.07 |
| Weighted average number of shares outstanding: | ||
|
Basic |
3,787 | 3,779 |
|
Diluted |
3,787 |
3,789 |
| HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES | ||
| Consolidated Balance Sheet | ||
| (In thousands, except per share data) | ||
| June 30 | March 31 | |
| 2015 | 2015 | |
| Current assets: | ||
| Cash and cash equivalents | $9,321 | $9,727 |
| Accounts receivable, net of doubtful accounts | 3,211 | 2,943 |
| Inventories | 2,080 | 2,081 |
| Prepaid expenses and other current assets | 939 | 987 |
| Total current assets | 15,551 | 15,738 |
| Property, plant and equipment, net | 1,080 | 1,094 |
| Goodwill | 77 | 77 |
| Long-term deposits | 78 | 78 |
| Total assets | 16,786 | 16,987 |
| Current liabilities: | ||
| Accounts payable | $1,039 | $1,579 |
| Other liabilities and accrued expenses | 2,813 | 2,429 |
| Income tax payable | 333 | 334 |
| Dividend payable | 25 | 380 |
| Total current liabilities | 4,210 | 4,722 |
| Deferred income taxes | 32 | 32 |
| Total liabilities | 4,242 | 4,754 |
| Shareholders' equity: | ||
| Common shares, $0.01 par value | 38 | 38 |
| Additional paid-in capital | 11,370 | 11,370 |
| Retained earnings | 1,084 | 782 |
| Accumulated other comprehensive income | 6 | 8 |
| Treasury shares, at cost – 5,049 shares as of June 30, 2015; and on March 31, 2015 | (14) | (14) |
| Non-controlling interest | 60 | 49 |
| Total shareholders' equity | 12,544 | 12,233 |
| Total liabilities and shareholders' equity | $16,786 | $16,987 |