Highway Holdings Limited (Nasdaq: HIHO) today reported results
for its fiscal 2020 second quarter and six-month period ended
September 30, 2019.
Net sales for the fiscal 2020 second quarter were $3.2 million
compared with $3.5 million a year earlier. Net loss for the same
period was $94,000, or $0.02 per share, compared with net loss of
$222,000, or $0.06 per share, a year earlier.
For the six-month period, net sales were $6.0 million compared
with $7.5 million a year earlier. The company incurred a net loss
of $196,000, or $0.05 per share, compared with a net loss of
$139,000, or $0.04 per share, for the same period a year ago.
“Results for the quarter and first half of fiscal 2020 were
affected by a reduction in orders from some of the company’s major
customers, as previously reported. A sharp decline in demand for
products sold by one of these customers was a major factor in our
order softness, as well as by worldwide business dynamics --
specifically the ongoing trade war between the United States and
China,” said Roland Kohl, chairman, president and chief executive
officer.
He also noted that the company’s sales for the quarter and six
months were impacted by price reductions provided to customers as
an incentive to utilize the company’s newly expanded Myanmar
operation. Kohl noted that approximately one-half of the company’s
business is now being produced at its Myanmar manufacturing
facility.
Kohl emphasized the company continues to focus on cost-reduction
initiatives. Despite significant cost reductions, SG&A expenses
were only modestly decreased for the reported periods due to costs
associated with the transfer of business and equipment from the
company’s China in factory to its Myanmar operation. These costs
are expected to decline for the balance of the fiscal year, since
the final phase of the equipment relocation is nearing completion.
In addition, Kohl noted the company is also scaling back its
operations in China to reflect its decreased utilization and the
ramp up of production in the Myanmar factory. He added that the
cost-savings initiatives will, however, be somewhat offset by
additional expenses associated with training staff in Myanmar by
the company’s Hong Kong-based managers and technicians, as well as
its Chinese engineers.
Gross profit for the second quarter of fiscal 2020 was $845,000
compared with $864,000 a year ago. Gross profit as a percentage of
sales for the same period was 26.4 percent compared with 24.7
percent a year earlier. Gross profit for the six-month period of
fiscal 2020 was $1.6 million compared with $1.9 million a year ago.
Gross profit as a percentage of sales for the same period was 26.3
percent compared with 25.3 percent a year earlier. “Gross profit
for both the quarter and six months of 2020 is not truly
representative of the company’s expected annualized financial
performance due to the rapid changes and extraordinary costs
associated with the relocation, aside from lower net sales and
lower gross margins for both periods,” Kohl said.
Net loss for the second quarter reflects a currency exchange
gain of $54,000 compared with a $2,000 currency exchange gain for
the same period last year -- mainly due to weakening of RMB. For
the fiscal 2020 six-month period, the company reported a currency
exchange gain of $95,000 compared with a currency exchange gain of
$35,000 a year earlier. Since the company does not engage in
currency exchange rate hedging, Highway Holdings will in the future
continue to realize currency exchange gains and losses due to the
fluctuation of currency exchange rates.
Kohl noted the company’s balance sheet remains strong, with cash
and cash equivalents in excess of $8.0 million, or approximately
$2.08 per diluted share, exceeding all of its short- and long-term
liabilities by approximately $2.0 million.
Current liabilities at September 30, 2019 totaled $5.8 million
and current assets were $13.9 million. Total shareholders’ equity
at September 30, 2019 was $10.3 million, or $2.67 per diluted
share, compared with $10.1 million, or $2.7 per diluted share, at
March 31, 2019.
About Highway Holdings Limited
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 in Yangon in 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.
HIGHWAY HOLDINGS LIMITED AND
SUBSIDIARIES
Consolidated Statement of
Income
(Dollars in thousands, except per
share data)
(Unaudited)
Three Months Ended
Six Months Ended
September 30,
September 30,
2019
2018
2019
2018
Net sales
$
3,195
$
3,495
$
6,040
$
7,545
Cost of sales
2,350
2,631
4,449
5,637
Gross profit
845
864
1,591
1,908
Selling, general and administrative
expenses
1,014
1,115
1,926
2,116
Operating (loss)
(169
)
(251
)
(335
)
(208
)
Non-operating items
Exchange gain /(loss), net
54
2
95
35
Interest income
19
5
29
7
Gain/(Loss) on disposal of Asset
2
-
3
28
Other income/(expenses)
-
-
1
6
Total non-operating income/ (expenses)
75
7
128
76
Net (loss) before income tax and
non-controlling interests
(94
)
(244
)
(207
)
(132
)
Income taxes
0
32
-
-
Net (loss) before non-controlling
interests
(94
)
(212
)
(207
)
(132
)
Less: net gain/(loss) attributable to
non-controlling interests
0
10
(11
)
7
Net income/(loss) attributable to
Highway
Holdings Limited’s shareholders
(94
)
(222
)
(196
)
(139
)
Net (loss) per share – Basic
($
0.02
)
($
0.06
)
($
0.05
)
($
0.04
)
Net (loss) per share - Diluted
($
0.02
)
($
0.06
)
($
0.05
)
($
0.04
)
Weighted average number of shares
outstanding
Basic
3,904
3,802
3,853
3,802
Diluted
3,904
3,802
3,853
3,802
HIGHWAY HOLDINGS LIMITED AND
SUBSIDIARIES
Consolidated Balance
Sheet
(Dollars in thousands, except per
share data)
Sept 30
Mar 31
2019
2019
Current assets:
Cash and cash equivalents
$
8,039
$
8,827
Accounts receivable, net of doubtful
accounts
2,198
2,264
Inventories
2,220
1,539
Prepaid expenses and other current
assets
930
722
Operating leases
476
-
Total current assets
13,863
13,352
Property, plant and equipment, (net)
876
886
Operating lease
1,157
-
Long-term deposits
66
66
Long-term loan receivable
75
75
Long-term prepayment
299
-
Long-term rental prepayment
-
871
Total assets
$
16,336
$
15,250
Current
liabilities:
Accounts payable
$
989
$
1,161
Other liabilities and accrued expenses
3,448
2,989
Lease liability
464
-
Income tax payable
556
602
Dividend payable
329
329
Total current liabilities
5,786
5,081
Long term
liabilities:
Lease liability
243
-
Deferred income taxes
32
32
Total liabilities
6,061
5,113
Shareholders’
equity:
Common shares, $0.01 par value
39
38
Additional paid-in capital
11,712
11,370
Retained earnings / (Deficit)
(1,430
)
(1,233
)
Accumulated other comprehensive
income/(loss)
(70
)
(35
)
Treasury shares, at cost – 5,049 shares as
of September, 30, 2019; and March 31, 2019 respectively
(14
)
(14
)
Non-controlling interest
38
11
Total shareholders’ equity
10,275
10,137
Total liabilities and shareholders’
equity
$
16,336
$
15,250
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191112005372/en/
Gary S. Maier (310) 471-1288
Highway (NASDAQ:HIHO)
Historical Stock Chart
From Aug 2024 to Sep 2024
Highway (NASDAQ:HIHO)
Historical Stock Chart
From Sep 2023 to Sep 2024