Highway Holdings Limited (Nasdaq: HIHO) today reported results
for its fiscal 2021 second quarter and six-months ended September
30, 2020.
Net sales for the fiscal 2021 second quarter were $2.7 million
compared with $3.2 million a year earlier. Net income for the same
period was $229,000, or $0.06 per diluted share, compared with a
net loss of $94,000, or $0.02 per share, a year earlier.
Net sales for the first half of fiscal 2021 were $4.8 million
compared with $6.0 million a year earlier. Net income for the same
period was $6,000, or $0.00 per diluted share, compared with a net
loss of $196,000, or $0.05 per share, a year ago.
“Results for the quarter and first half of fiscal 2021 reflect
the worldwide impact of the coronavirus pandemic. Nonetheless,
despite unfavorable year-over-year sales comparisons, sales on a
quarterly sequential basis actually increased 30 percent. Net
income performance, though modest, was encouraging, despite the
continued impact of the pandemic on operations and on our
customers,” said Roland Kohl, chairman, president and chief
executive officer.
Kohl noted that results for the quarter benefited from various
subsidies provided by the governments in Hong Kong and Shenzhen due
to the continued impact of COVID-19, as well as from voluntary
reductions of substantially all staff salaries.
Kohl emphasized the company expects to be effected by the
coronavirus for at least another quarter, and potentially for the
rest of the fiscal year -- reflecting the offset of certain
customer business increases by other customers more sharply
experiencing the impact of COVID-19 and reducing order
activity.
“Nonetheless, new business opportunities are continuing and are
encouraging, though the timing can be difficult to gauge and
closing new business opportunities take longer due to the numerous
travel restrictions caused by COVID-19. We remain optimistic about
the future and believe the trade friction between the United States
and China may actually be to our benefit because of our ability to
manufacture in Myanmar,” Kohl said.
Gross profit for the second quarter of fiscal 2021 was $931,000
compared with $845,000 a year ago. Gross profit as a percentage of
sales for the same period was 34.2 percent compared with 26.4
percent a year earlier. Gross profit for the six-month period of
fiscal 2021 was $1.5 million compared with $1.6 million a year ago.
Gross profit as a percentage of sales for the same period was 30.4
percent compared with 26.3 percent a year earlier. “Gross profit
for both the quarter and six months of 2021 is not truly
representative of the company’s expected annualized financial
performance due to the many operational constraints and
extraordinary income from varies governmental agencies,” Kohl
said.
Net gain for the second quarter reflects a currency exchange
loss of $18,000 compared with a $54,000 currency exchange gain for
the same period last year -- mainly due to weakening of RMB. For
the fiscal 2021 six-month period, the company reported a currency
exchange loss of $38,000 compared with a currency exchange gain of
$95,000 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 $8.6 million, or approximately
$2.2 per diluted share, exceeding all of its short- and long-term
liabilities by approximately $2.4 million.
Current liabilities at September 30, 2020 totaled $4.4 million
and current assets were $12.2 million. Total shareholders’ equity
at September 30, 2020 was $10.5 million, or $2.64 per diluted
share, compared with $10.9 million, or $2.80 per diluted share, at
March 31, 2020.
About Highway Holdings Limited
Highway Holdings is an international manufacturer of a wide
variety quality parts and products for blue chip equipment
manufacturers based primarily in Germany. Highway Holdings’
administrative offices are 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, 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,
2020
2019
2020
2019
Net sales
$2,719
$3,195
$4,776
$6,040
Cost of sales
1,788
2,350
3,324
4,449
Gross profit
931
845
1452
1,591
Selling, general and administrative
expenses
698
1,014
1,428
1,926
Operating income/(loss)
233
(169
)
24
(335
)
Non-operating items
Exchange gain /(loss), net
(18
)
54
(38
)
95
Interest income
4
19
8
29
Gain/(Loss) on disposal of Asset
8
2
9
3
Other income/(expenses)
7
-
8
1
Total non-operating income/ (expenses)
1
75
(13
)
128
Net income (loss) before income tax and
non-controlling interests
234
(94
)
11
(207
)
Income taxes
0
0
0
0
Net income (loss) before non-controlling
interests
234
(94
)
11
(207
)
Less: net gain/(loss) attributable to
non-controlling interests
5
0
5
(11
)
Net income/(loss) attributable to
Highway
Holdings Limited’s shareholders
229
(94
)
6
(196
)
Net Gain/ (loss) per share – Basic
$0.06
($0.02
)
$0.00
($0.05
)
Net Gain/ (loss) per share - Diluted
$0.06
($0.02
)
$0.00
($0.05
)
Weighted average number of shares
outstanding
Basic
3,909
3,904
3,909
3,853
Diluted
3,981
3,904
3,981
3,853
HIGHWAY HOLDINGS LIMITED AND
SUBSIDIARIES
Consolidated Balance
Sheet
(Dollars in thousands, except per
share data)
Sept 30
Mar 31
2020
2020
Current assets:
Cash and cash equivalents
$8,642
$8,827
Accounts receivable, net of doubtful
accounts
1,800
2,008
Inventories
1,536
2,000
Prepaid expenses and other current
assets
209
388
Total current assets
12,187
13,223
Property, plant and equipment, (net)
911
878
Operating lease right-of-use assets
3,288
3,710
Long-term deposits
263
263
Long-term loan receivable
95
95
Investments in equity method investees
-
-
Total assets
$16,744
$18,169
Current
liabilities:
Accounts payable
$608
$997
Operating lease liabilities, current
853
782
Other liabilities and accrued expenses
1,917
2,294
Income tax payable
588
564
Dividend payable
399
351
Total current liabilities
4,365
4,988
Long term
liabilities :
Operating lease liabilities,
non-current
1,648
2,034
Deferred income taxes
229
229
Total liabilities
6,242
7,251
Shareholders’
equity:
Preferred shares, $0.01 par value
-
-
Common shares, $0.01 par value
40
40
Additional paid-in capital
11,574
11,537
Accumulated deficit
(1,257)
(865)
Accumulated other comprehensive
income/(loss)
129
196
Treasury shares, at cost – Nil shares as
of Sep 30, 2020; and on March 31, 2020
-
-
Non-controlling interest
16
10
Total shareholders’ equity
10,502
10,918
Total liabilities and shareholders’
equity
$16,744
$18,169
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201007005315/en/
Gary S. Maier (310) 471-1288
Highway (NASDAQ:HIHO)
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