HONG KONG, Aug. 6, 2012 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today reported results for its fiscal 2013 first quarter ended June 30, 2012, finishing the period with a strong balance sheet and a more efficient operating structure.
Net sales for the fiscal first quarter were $5.27 million compared with $6.46 million a year earlier. Net income for the same period was $129,000, or $0.03 per diluted share, compared with $381,000, or $0.10 per diluted share, last year -- reflecting reduced sales volume and the impact of unfavorable currency exchange rates which resulted in a currency exchange loss of $75,000 compared with an exchange gain of $100,000 a year earlier.
"Net sales for the fiscal first quarter were mainly impacted by continued weakness of the global economy and the relocation of mobile phone case manufacturing business to Mexico by one of our customers, as previously reported," said Roland Kohl chairman, president and chief executive officer of Highway Holdings.
Kohl indicated that the sales impact due to the relocation of the low-margin mobile phone business resulted in an approximately $750,000 decrease in sales in this year's fiscal quarter compared with the same quarter a year ago.
He noted the company has made significant progress in terms of operational restructuring initiatives, with particular success in streamlining its manufacturing process. "We anticipate these actions will enable us to better serve our OEM customers, while enhancing the company's competitive position, profitability and future growth potential," Kohl said.
Gross profit as a percentage of sales for the 2013 fiscal first quarter was 21.6 percent compared with 21.3 percent in the same period a year ago, reflecting improved manufacturing efficiency noted above.
Selling, general and administrative expense for the 2013 fiscal first quarter decreased sharply by $106,000 compared with same quarter last year, due primarily to ongoing non-production related streamlining initiatives.
Kohl highlighted the company's solid financial position, with cash equivalents and restricted cash of $5.95 million -- exceeding the combined short- and long-term liabilities by $2.35 million. At June 30, 2012 the company had working capital of $10.3 million.
Total shareholders' equity at June 30, 2012 was $12.012 million compared with $11.998 million as of March 31, 2012. The company's current ratio was 4.01:1 at June 30, 2012 compared with 3.42:1 at June 30, 2011. "The company's financial position remains solid and is, in fact, still improving, even with dividend distributions of $0.20 per share paid during fiscal year 2012. In addition, a dividend of $0.03 was recently approved by the board of directors and will be paid September 10, 2012," Kohl said.
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 |
||
| 2012 | 2011 | |
| Net sales | $5,272 | $6,463 |
| Cost of sales | 4,135 | 5,085 |
| Gross profit | 1,137 | 1,378 |
| Selling, general and administrative expenses | 915 | 1,021 |
| Operating income | 222 | 357 |
| Non-operating income (expense) : | ||
| Interest expense | (2) | (10) |
| Exchange gain (loss), net | (75) | 100 |
| Interest income | 1 | 1 |
| Other income | 46 | -- |
| Total non-operating income (expenses) | (30) | 91 |
| Net income before income tax and non-controlling interests | 192 | 448 |
| Income taxes | (63) | (67) |
| Net income | 129 | 381 |
| Loss attributable to non-controlling interests | 0 | 0 |
| Net income attributable to Highway Holdings Limited Shareholders | $129 | $381 |
| Net income per share – basic and diluted | $0.03 | $0.10 |
| Weighted average number of shares outstanding: | ||
| Basic | 3,777 | 3,765 |
| Diluted | 3,788 | 3,777 |
| HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES | ||
| Consolidated Balance Sheet | ||
| (In thousands, except per share data) | ||
|
June 30 2012 |
March 31 2012 |
|
| Current assets: | ||
| Cash and cash equivalents | $5,311 | $5,575 |
| Restricted cash | 643 | 643 |
| Accounts receivable, net of doubtful accounts | 3,627 | 3,724 |
| Inventories | 3,369 | 3,970 |
| Prepaid expenses and other current assets | 771 | 598 |
| Total current assets | 13,721 | 14,510 |
| Property, plant and equipment, net | 1,892 | 2,027 |
| Deposit for purchase of property, plant & equipment | -- | 42 |
| Total assets | $15,613 | $16,579 |
| Current liabilities: | ||
| Accounts payable | $1,705 | $2,547 |
| Short-term borrowings | 262 | -- |
| Long-term loans – current portion | 49 | 262 |
| Obligations under capital leases - current portion | 0 | 3 |
| Other liabilities and accrued expenses | 1,087 | 1,324 |
| Dividend payable | 114 | -- |
| Income tax payable | 204 | 153 |
| Total current liabilities | 3,421 | 4,289 |
| Obligations under capital leases – net of current portion | -- | -- |
| Deferred income taxes | 180 | 180 |
| Long-term loans – net of current portion | -- | 112 |
| Total liabilities | 3,601 | 4,581 |
| Shareholders' equity: | ||
| Common shares, $0.01 par value | 38 | 38 |
| Additional paid-in capital | 11,340 | 11,340 |
| Retained earnings | 648 | 634 |
| Treasury shares, at cost – 5,049 shares as of March 31, 2012; and on June 30, 2012 | (14) | (14) |
| Total shareholders' equity | 12,012 | 11,998 |
| Total liabilities and shareholders' equity | $15,613 | $16,579 |