HONG KONG, July 29, 2013 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today reported results for its fiscal 2014 first quarter ended June 30, 2013, reflecting increased sales and profitability, and a continued strong balance sheet.
Net sales for the fiscal first quarter increased 11 percent to $5.87 million from $5.27 million a year earlier. Net income for the same period increased 16.3 percent to $150,000, or $0.04 per diluted share, from $129,000, or $0.03 per diluted share, last year.
"Results for the quarter were encouraging. Despite weakness in global markets, as well as a slowing Chinese economy, we managed to increase sales. In addition, even with expenses incurred related to the development of an assembly operation in Myanmar and inflationary pressures in China, operational costs remained substantially unchanged. We are optimistic that the new fiscal year is off to an excellent beginning and look forward to benefiting from our emerging presence in Myanmar to complement our operations in China, as well as potential synergistic new business opportunities," said Roland Kohl chairman, president and chief executive officer of Highway Holdings.
Gross profit as a percentage of sales for the 2014 fiscal first quarter was 21.3 percent compared with 21.6 percent in the same period a year ago.
Selling, general and administrative expense for the 2014 fiscal first quarter slightly increased by $110,000 compared with same quarter last year -- primarily due to the increased staff of engineers and technicians to manage more sophisticated production techniques, as well as additional expenses related to the Myanmar and higher employee salaries in China, as noted above.
Kohl highlighted the company's solid financial position, with cash, cash equivalents and restricted cash of $5.3 million -- exceeding the combined short- and long-term liabilities by $1.75 million. At June 30, 2013 the company had working capital of $10.4 million. Kohl noted, however, that approximately $1.4 million is on deposit with the Chinese Customs Department as security for certain payments related to the company's import contracts for raw materials. These deposits, included in "Prepaid expenses and other current assets" on the balance sheet, are expected to increase by approximately $500,000 in the near future. All deposits are expected to be released to the company for its working capital purposes during the next year. Until the deposits are released, the company will not have access to these funds.
Total shareholders' equity at June 30, 2013 was $12.18 million compared with $12.01 million as of March 31, 2013. The company's current ratio was 3.98:1 at June 30, 2013 compared with 4.01:1 at June 30, 2012.
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 | ||
| 2013 | 2012 | |
| Net sales | $5,872 | $5,272 |
| Cost of sales | 4,622 | 4,135 |
| Gross profit | 1,250 | 1,137 |
| Selling, general and administrative expenses | 1,025 | 915 |
| Operating income | 225 | 222 |
| Non-operating income( expense) : | ||
| Interest expense | (1) | (2) |
| Exchange gain (loss), net | 3 | (75) |
| Interest income | 4 | 1 |
| Other income | 0 | 46 |
| Total non-operating income (expenses) | 6 | (30) |
| Net income before income tax and non-controlling interests | 231 | 192 |
| Income taxes | (81) | (63) |
| Net income | 150 | 129 |
| Loss attributable to non-controlling interests | 0 | 0 |
| Net income attributable to Highway Holdings Limited Shareholders | $150 | $129 |
| Net income per share – basic and diluted | $0.04 | $0.03 |
| Weighted average number of shares outstanding: | ||
| Basic | 3,779 | 3,777 |
| Diluted | 3,781 | 3,788 |
| HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES | ||
| Consolidated Balance Sheet | ||
| (In thousands, except per share data) | ||
| June 30 | March 31 | |
| 2013 | 2013 | |
| Current assets: | ||
| Cash and cash equivalents | $4,646 | $4,634 |
| Restricted cash | 643 | 643 |
| Accounts receivable, net of doubtful accounts | 3,423 | 3,958 |
| Inventories | 3,155 | 2,957 |
| Prepaid expenses and other current assets | 1,979 | 1,224 |
| Total current assets | 13,846 | 13,416 |
| Property, plant and equipment, net | 1,647 | 1,769 |
| Loan | 227 | 167 |
| Total assets | $15,720 | $15,352 |
| Current liabilities: | ||
| Accounts payable | $1,867 | $1,515 |
| Long-term loans – current portion | 45 | 112 |
| Other liabilities and accrued expenses | 1,346 | 1,386 |
| Dividend payable | 0 | 114 |
| Income tax payable | 224 | 158 |
| Total current liabilities | 3,482 | 3,285 |
| Deferred income taxes | 59 | 59 |
| Long-term loans – net of current portion | -- | -- |
| Total liabilities | 3,541 | 3,344 |
| Shareholders' equity: | ||
| Common shares, $0.01 par value | 38 | 38 |
| Additional paid-in capital | 11,340 | 11,340 |
| Retained earnings | 778 | 628 |
| Accumulated other comprehensive income | 37 | 16 |
| Treasury shares, at cost – 5,049 shares as of March 31, 2013; and on June 30, 2013 | (14) | (14) |
| Total shareholders' equity | 12,179 | 12,008 |
| Total liabilities and shareholders' equity | $15,720 | $15,352 |