HONG KONG, Aug. 15, 2016 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today reported results for its fiscal 2017 first quarter ended June 30, 2016.
Net income for the fiscal 2017 first quarter was $165,000, or $0.04 per diluted share, compared with $302,000, or $0.08 per diluted share, last year. Net sales were $5.2 million compared with $5.9 million a year earlier.
“Results for the fiscal first quarter appear to reflect the impact of customer order patterns due to summer schedules and plant holiday closures. While it is possible that customer inventory adjustments during the quarter were due to price increases related to the inflationary environment in China, we do not believe the sales decline is a long-term trend. We are focused on year-over year growth, despite quarterly factors and operational interruptions that can impact short-term performance,” said Roland Kohl, chairman, president and chief executive officer.
He noted that the company is preparing to relocate some of its current metal stamping operations into a newly built factory in Longhua, Shenzhen. He also noted the company plans to expand in Yangon, Myanmar to accommodate increased space requirements for equipment to be utilized for component manufacturing that will be added to its existing assembly production at this emerging operation. “Upon completion, these additions will improve efficiency and enhance our value-proposition, especially in Myanmar,” Kohl said.
Gross profit for the 2017 fiscal first quarter was $1.29 million compared with $1.44 million in the same period a year ago, with gross profit as a percentage of sales increasing to 24.6 percent from 24.4 percent a year ago.
Selling, general and administrative expense for the 2017 fiscal first quarter decreased 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 currency exchange loss decreased to $17,000 in the quarter from $34,000 in the same period last year due to a weakening RMB.
Kohl highlighted the company’s solid financial position, with cash and cash equivalents of $9.0 million -- exceeding the combined short- and long-term liabilities by $3.9 million. At June 30, 2016, the company had working capital of $10.9 million.
Total shareholders’ equity at June 30, 2016 was $12.1 million compared with $11.9 million as of March 31, 2016. The company’s current ratio at June 30, 2016 was 3.2:1.
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 | ||||||||
| 2016 | 2015 | |||||||
| Net sales | $ | 5,225 | $ | 5,899 | ||||
| Cost of sales | 3,940 | 4,457 | ||||||
| Gross profit | 1,285 | 1,442 | ||||||
| Selling, general and administrative expenses | 1,054 | 1,090 | ||||||
| Operating income | 231 | 352 | ||||||
| Non-operating income (expense): | ||||||||
| Interest expense | - | - | ||||||
| Exchange gain (loss), net | (17 | ) | (34 | ) | ||||
| Interest income | 1 | 4 | ||||||
| Other income (expense) | 0 | 1 | ||||||
| Total non-operating income (expenses) | (16 | ) | (29 | ) | ||||
| Net income before income tax and non-controlling interests | 215 | 323 | ||||||
| Income taxes | (50 | ) | (17 | ) | ||||
| Net income | 165 | 306 | ||||||
| Net profit attributable to non-controlling interests | (0 | ) | (4 | ) | ||||
| Net income attributable to Highway Holdings Limited’s Shareholders | $ | 165 | $ | 302 | ||||
| Net income per share – basic and diluted | $ | 0.04 | $ | 0.08 | ||||
| Weighted average number of shares outstanding: | ||||||||
| Basic | 3,802 | 3,787 | ||||||
| Diluted | 3,802 | 3,787 | ||||||
HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Balance Sheet
(In thousands, except per share data)
| June 30 | March 31 | |||||
| 2016 | 2016 | |||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 9,027 | $ | 9,140 | ||
| Accounts receivable, net of doubtful accounts | 4,202 | 4,321 | ||||
| Inventories | 1,800 | 1,425 | ||||
| Prepaid expenses and other current assets | 874 | 844 | ||||
| Total current assets | 15,903 | 15,730 | ||||
| Property, plant and equipment, net | 1,060 | 1,121 | ||||
| Goodwill | 77 | 77 | ||||
| Long-term deposits | 111 | 111 | ||||
| Investments in equity method investees | - | - | ||||
| Total assets | 17,151 | 17,039 | ||||
| Current liabilities: | ||||||
| Accounts payable | $ | 1,767 | $ | 1,307 | ||
| Accrued expenses and other liabilities | 2,659 | 2,789 | ||||
| Income tax payable | 465 | 440 | ||||
| Dividend payable | 123 | 537 | ||||
| Total current liabilities | 5,014 | 5,073 | ||||
| Deferred income taxes | 32 | 32 | ||||
| Total liabilities | 5,046 | 5,105 | ||||
| Shareholders' equity: | ||||||
| Common shares, $0.01 par value | 38 | 38 | ||||
| Additional paid-in capital | 11,370 | 11,370 | ||||
| Retained earnings | 677 | 512 | ||||
| Accumulated other comprehensive income | (28 | ) | (34 | ) | ||
| Treasury shares, at cost – 5,049 shares as of June 30, 2016; and on March 31, 2016 | (14 | ) | (14 | ) | ||
| Non-controlling interest | 62 | 62 | ||||
| Total shareholders' equity | 12,105 | 11,934 | ||||
| Total liabilities and shareholders' equity | $ | 17,151 | $ | 17,039 | ||