Jul 25, 2022   SOURCE: BusinessWire

Highway Holdings Reports Fiscal 2023 First Quarter Results

Highway Holdings Limited (Nasdaq: HIHO) today reported results for its fiscal 2023 first quarter ended June 30, 2022.

Net sales for the fiscal 2023 first quarter were $2.94 million compared with $2.99 million a year earlier. Net income for the same period was $390,000, or $0.09 per diluted share, compared with $333,000, $0.08 per diluted share, a year ago.

"Results for fiscal first quarter benefited from financial assistance provided by the Chinese and Hong Kong governments to offset some of the costs we incurred as a result of COVID-related required shutdowns that impacted the company’s operations in prior periods,” said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.

Kohl added that as long as the Chinese government continues its “zero” COVID policy with frequent shutdowns impacting operations of the company, comparisons with prior periods may not be appropriate, nor may current operations be predictive of future operating activities. The company’s operations also are negatively impacted by these COVID policies that restrict the services and business of the company’s suppliers, customers, and logistic providers.

Gross profit for the 2023 fiscal first quarter was $1,052,000 compared with $930,000 in the same quarter a year ago, with gross profit as a percentage of sales approximately 35.7 percent compared with 31 percent a year ago – representing a 4.7 percent improvement compared with last year. This improvement primarily reflects the benefit of reduced rental expenses provided by the Chinese government to offset the impact of shutdowns in prior periods. Selling, general and administrative expenses for the 2023 fiscal first quarter increased slightly by $70,000.

The company realized a small currency exchange gain of $18,000 in the quarter compared with an exchange loss of $7,000 in the same period last year, primarily due to weakness in the RMB during the period.

Kohl highlighted the company’s solid financial position, with cash and cash equivalents of $6.4 million -- exceeding combined short- and long-term liabilities by $2.0 million. At June 30, 2022, the company had working capital of $8.2 million. The company’s current ratio at June 30,2022 was 3.0:1.

Total shareholders’ equity at June 30, 2022 was $9.7 million compared with $9.3 million as of March 31, 2022.

About Highway Holdings

Highway Holdings is an international manufacturer of a wide variety of high-quality parts and products for blue chip equipment manufacturers based primarily in Germany. Highway Holdings’ administrative office is located in Hong Kong and its manufacturing facilities are located in Yangon, Myanmar, and Shenzhen, 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, the impact of the worldwide COVID-19 pandemic, 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.

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Statement of Income

(In thousands of U.S. dollars, except for shares and per share data)

 

 

Quarter Ended

 

 

June 30

 

 

2022

 

2021

Net sales

 

$

2,942

 

$

2,998

 

Cost of sales

 

 

1,890

 

 

2,068

 

Gross profit

 

 

1,052

 

 

930

 

 

Selling, general and administrative expenses

 

 

 

 

687

 

 

 

 

617

 

 

Operating income

 

 

365

 

 

313

 

 

 

 

 

 

Non-operating income (expense):

 

 

 

 

 

 

 

 

 

Exchange gain (loss), net

 

 

18

 

 

(7

)

Interest income

 

 

 

 

4

-

 

 

 

1

-

 

 

Other income (expense)

 

 

5

 

 

-

 

Total non-operating income (expenses)

 

 

27

 

 

(6

)

 

 

 

 

 

Net income before income taxes

 

 

392

 

 

307

 

Income taxes

 

 

4

 

 

33

 

Net income

 

 

396

 

 

340

 

 

 

 

 

 

Less: net gain/(loss) attributable to non-controlling interests

 

 

6

 

 

7

 

 

 

 

 

 

Net income attributable to Highway Holdings Limited’s

Shareholders

 

$

390

 

$

333

 

 

 

 

 

 

 

Net income per share – Basic

 

$

0.10

 

$

0.08

 

Net income per share - Diluted

 

 

$

0.09

 

$

0.08

 

Weighted average number of shares outstanding:

 

 

 

 

Basic

 

 

4,036

 

 

4,019

 

Diluted

 

 

 

 

4,279

 

 

 

 

4,160

 

 

 

 HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Balance Sheet

(In thousands of U.S. dollars, except for shares and per share data)

 

 

June 30

 

March 31

 

 

2022

 

2022

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

6,403

 

 

$

6,010

 

Time deposits

 

 

-

 

 

 

1,075

 

Accounts receivable, net of doubtful accounts

 

 

2,949

 

 

 

2,260

 

Inventories

 

 

2,217

 

 

 

2,350

 

Prepaid expenses and other current assets

 

 

574

 

 

 

620

 

Income tax recoverable

 

 

7

 

 

 

7

 

Total current assets

 

 

12,150

 

 

 

12,322

 

 

 

 

 

 

Goodwill, net

 

 

-

 

 

 

-

 

Property, plant and equipment, net

 

 

562

 

 

 

643

 

Operating lease right-of-use assets

 

 

1,305

 

 

 

1,799

 

 

 

 

 

 

Long-term loan receivable

 

 

95

 

 

 

95

 

 

 

 

 

 

Total assets

 

 

14,112

 

 

 

14,859

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

776

 

 

$

828

 

Operating lease liabilities, current

 

 

491

 

 

 

933

 

Accrued expenses and other liabilities

 

 

2,133

 

 

 

2,599

 

Income tax payable

 

 

592

 

 

 

620

 

Dividend payable

 

 

-

 

 

 

202

 

Total current liabilities

 

 

3,992

 

 

 

5,182

 

 

 

 

 

 

Operating lease liabilities, non-current

 

 

263

 

 

 

268

 

Deferred income taxes

 

 

131

 

 

 

140

 

Total liabilities

 

 

4,386

 

 

 

5,590

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

Preferred shares, $0.01 par value

 

 

-

 

 

 

-

 

Common shares, $0.01 par value

 

 

40

 

 

 

40

 

Additional paid-in capital

 

 

11,838

 

 

 

11,816

 

Accumulated deficit

 

 

(1,895

)

 

 

(2,284

)

Accumulated other comprehensive income (loss)

 

 

(263

)

 

 

(303

)

Non-controlling interest

 

 

6

 

 

 

0

 

Total shareholders' equity

 

 

9,726

 

 

 

9,269

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

14,112

 

 

$

14,859