HONG KONG, Feb. 1, 2010 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today reported results for its third fiscal quarter ended December 31, 2009.
Net income for the 2010 fiscal third quarter was $256,000, or $0.07 per diluted share, compared with $110,000, or $0.03 per diluted share, a year earlier – primarily due to ongoing customer pricing increases and control of expenses. Net sales for the same three-month period were $5.94 million compared with $7.97 million a year ago.
Net income for the nine-month period of fiscal 2010 was $259,000, or $0.07 diluted share, compared with $497,000, or $0.13, per share a year earlier. Net sales for the same period were $15.8 million compared with $26.8 million a year earlier.
Gross profit for the nine-month period as a percentage of sales was 20.9 percent compared with 20.1 percent in the same period a year ago.
Selling, general and administrative expenses for the 2010 fiscal periods decreased from the fiscal 2009 periods by $501,000 for the fiscal third quarter and $1.16 million for the nine-month period.
“The decrease in net sales for the fiscal 2010 third quarter and nine months reflects the continued impact of worldwide economic conditions with business returning, but at a slower rate as anticipated. At the same time, the company’s balance sheet remained strong at December 31, 2009, with working capital of $9.4 million, a current ratio of 3.19:1, and book value per share of $3.04 per share,” said Roland Kohl, president and chief executive officer.
Kohl noted that the company substantially reduced its workforce as a preemptive measure and in anticipation of increasing the company’s utilization of more automation in its manufacturing process to provide some protection against escalating wages and related labor costs. He added that the company’s workforce at December 2009 was approximately 650 employees compared with approximately 1100 employees at December 2008, which contributed to gross margin improvement and profitability for the quarter.
He indicated that the company continues to focus on consolidating its four prior operating facilities in China, with the recent closing of its He Yuan factory and the pending closing of a second facility in Ping Hu.
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. It also manufactures finished products, such as LED lights, radio chimes and other electronic products. Highway Holdings is headquartered in Hong Kong and currently operates three manufacturing facilities 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) | ||||
|
Three Months Ended December 31, |
Nine Months Ended December 31, |
|||
| 2009 | 2008 | 2009 | 2008 | |
| Net sales | $5,941 | $7,969 | $15,775 | $26,823 |
| Cost of sales | 4,702 | 6,340 | 12,478 | 21,432 |
| Gross profit | 1,239 | 1,629 | 3,297 | 5,391 |
| Selling, general and administrative expenses | 933 | 1,434 | 3,330 | 4,492 |
| Operating income / (loss) | 306 | 195 | (33) | 899 |
| Non-operating items | ||||
| Interest expenses | (8) | (38) | (38) | (126) |
| Exchange gain (loss), net | (8) | (74) | 340 | (279) |
| Interest income | (17) | 9 | 6 | 29 |
| Other income | 10 | 38 | 22 | 57 |
| Total non-operating income (expenses) | (23) | (65) | 330 | (319) |
|
Net income before income tax and non-controlling Interest |
283 | 130 | 297 | 580 |
| Income taxes | 21 | 7 | 21 | 84 |
| Net Income before non-controlling interests | 262 | 123 | 276 | 496 |
|
Less: Net income attributable to non-controlling Interest |
(6) | (13) | (17) | 1 |
|
Net Income attributable to Highway Holdings Limited |
$256 | $110 | $259 | $497 |
| Net Income – basic and diluted | ||||
|
Net Income attributable to Highway Holdings Limited |
$0.07 | $0.03 | $0.07 | $0.13 |
| Weighted average number of shares | ||||
| Basic | 3,747 | 3,734 | 3,747 | 3,734 |
| Diluted | 3,776 | 3,734 | 3,776 | 3,734 |
| HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES | ||
| Consolidated Balance Sheet | ||
| (In thousands, except per share data) | ||
|
Dec 31 2009 |
March 31 2009 |
|
| Current assets: | ||
| Cash and cash equivalents | $5,525 | $5,809 |
| Restricted cash | 1,028 | 1,028 |
| Accounts receivable, net of doubtful accounts | 3,200 | 3,426 |
| Inventories | 3,541 | 4,010 |
| Prepaid expenses and other current assets | 404 | 672 |
| Total current assets | 13,698 | 14,945 |
| Property, plant and equipment, (net) | 2,326 | 2,840 |
| Investment in affiliates | 5 | 2 |
| Intangible assets, (net) | 0 | 24 |
| Total assets | $16,029 | $17,811 |
| Current liabilities: | ||
| Accounts payable | $2,249 | $2,166 |
| Short-term borrowing | 706 | 1,850 |
| Current portion of long-term debt | 267 | 259 |
| Accrual payroll and employee benefits | 442 | 373 |
| Other liabilities and accrued expenses | 629 | 1,257 |
| Total current liabilities | 4,293 | 5,905 |
| Long-term debt – net of current portion | 93 | 294 |
| Deferred income taxes | 163 | 163 |
| Total liabilities | 4,549 | 6,362 |
| Shareholders' equity: | ||
| Common shares, $0.01 par value | 37 | 37 |
| Additional paid-in capital | 11,224 | 11,224 |
| Retained earnings | 303 | 154 |
| Accumulated other comprehensive loss | (17) | (6) |
|
Treasury shares, at cost – 37,800 shares as of March 31, 2009; and December 31, 2009 respectively |
(53) | (53) |
| Total Highway Holdings Limited shareholders' equity | 11,494 | 11,356 |
| Non-controlling interest | (14) | 93 |
| Total shareholders' equity | 11,480 | 11,449 |
| Total liabilities and shareholders' equity | $16,029 | $17,811 |