Highway Holdings Limited (Nasdaq: HIHO) today reported results
for its fiscal 2022 second quarter and six-months ended September
30, 2021.
Net sales for the fiscal 2022 second quarter increased 23.7
percent to $3.4 million from $2.7 million a year earlier. Net
income for the same period was $242,000, or $0.06 per diluted
share, compared with net income of $229,000, or $0.06 per diluted
share, a year earlier.
Net sales for the first half of fiscal 2022 increased 33.2
percent to $6.4 million from $4.8 million a year earlier. Net
income for the same period was $575,000, or $0.14 per diluted
share, compared with $6,000, or $0.00 per diluted share, a year
ago.
“Despite the worldwide impact of COVID-19, including raw
material shortages, late material deliveries and price increases,
shipping delays due to container shortages, and related issues
impacting daily operating activities, our financial performance was
strong for the quarter. We are encouraged by the increase of
business from certain customers, indicating that these companies
appear to be recovering from the pandemic. This bodes well for our
business longer term,” said Roland Kohl, chairman, president and
chief executive officer.
Kohl noted, however, that challenges remain for numerous
industrial companies, especially those operating in China –
reflecting electronic component, plastic material, steel, aluminum
and electricity shortages and environmental considerations. “These
factors impacted our material suppliers and consequently Highway
Holdings’ production schedules during the quarter,” Kohl added.
As an example of the unpredictable fluctuations in the
manufacturing industry, Kohl noted that sales in July were down
about 75 percent of normal activity due to delay of material
shipments. “Only exceptional, more expensive, working efforts in
August and September at our production facilities in China and
Myanmar allowed us to offset the soft start to the quarter,” Kohl
said.
“Despite headwinds mentioned above, we are encouraged by our
evolving new business opportunities, which have been constrained by
strict lockdown and quarantine regulations in China, Hong Kong and
Myanmar. This could slow down the company’s strong recovery
progress,” Kohl said.
Gross profit for the second quarter of fiscal 2022 was
$1,093,000 compared with $931,000 a year ago. Gross profit as a
percentage of sales for the same period was 32.5 percent compared
with 34.2 percent a year earlier. Gross profit for the six-month
period of fiscal 2022 was $2.0 million compared with $1.5 million a
year ago. Gross profit as a percentage of sales for the same period
was 32.0 percent compared with 30.4 percent a year earlier. “Gross
profit for both the quarter and six months of fiscal 2022 is not
fully comparable with fiscal 2021 due to the various operational
constraints, delays and shifting business, as well recovery of
certain back payments and some one-time governmental assistance
that the company received in fiscal 2021,” Kohl said.
Net income for the fiscal 2022 second quarter reflects a
currency exchange gain of $3,000 compared with a $18,000 currency
exchange loss for the same period last year -- mainly due to a
stronger U.S. dollar. For the fiscal 2022 six-month period, the
company reported a currency exchange loss of $4,000 compared with a
currency exchange loss of $38,000 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 $7.2 million, or approximately
$1.7 per diluted share, exceeding all of its short- and long-term
liabilities by approximately $1.7 million.
Current liabilities at September 30, 2021 totaled $4.3 million
and current assets were $12.2 million. Total shareholders’ equity
at September 30, 2021 was $10.3 million, or $2.44 per diluted
share, compared with $9.8 million, or $2.44 per diluted share, at
March 31, 2021.
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.
(Financial Tables Follow)
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,
2021
2020
2021
2020
Net sales
$3,364
$2,719
$6,362
$4,776
Cost of sales
2,271
1,788
4,339
3,324
Gross profit
1,093
931
2,023
1,452
Selling, general and administrative
expenses
859
698
1,476
1,428
Operating income
234
233
547
24
Non-operating items
Exchange gain /(loss), net
3
(18)
(4)
(38)
Interest income
5
4
6
8
Gain/(Loss) on disposal of Asset
14
8
14
9
Other income/(expenses)
1
7
1
8
Total non-operating income/ (expenses)
23
1
17
(13)
Net income before income tax and
non-controlling interests
257
234
564
11
Income taxes
(5)
0
28
0
Net income before non-controlling
interests
252
234
592
11
Less: net gain attributable to
non-controlling interests
10
5
17
5
Net income attributable to Highway
Holdings Limited’s shareholders
242
229
575
6
Net Gain/ (loss) per share – Basic
$0.06
$0.06
$0.14
$0.00
Net Gain/ (loss) per share - Diluted
$0.06
$0.06
$0.14
$0.00
Weighted average number of shares
outstanding
Basic
4,033
3,904
4,033
3,909
Diluted
4,205
3,981
4,205
3,981
HIGHWAY HOLDINGS LIMITED AND
SUBSIDIARIES
Consolidated Balance
Sheet
(Dollars in thousands, except per
share data)
Sept 30
Mar 31
2021
2021
Current assets:
Cash and cash equivalents
$7,222
$7,757
Accounts receivable, net of doubtful
accounts
2,671
973
Inventories
2,095
2,238
Prepaid expenses and other current
assets
217
513
Total current assets
12,205
11,481
Property, plant and equipment, (net)
784
833
Operating lease right-of-use assets
2,406
2,795
Long-term deposits
287
282
Long-term loan receivable
95
95
Investments in equity method investees
-
-
Total assets
$15,777
$15,486
Current
liabilities:
Accounts payable
$917
$653
Operating lease liabilities, current
877
821
Other liabilities and accrued expenses
2,254
2,347
Income tax payable
47
58
Dividend payable
243
85
Total current liabilities
4,338
3,964
Long term
liabilities :
Operating lease liabilities,
non-current
619
1,142
Deferred income taxes
546
607
Total liabilities
5,503
5,713
Shareholders’
equity:
Preferred shares, $0.01 par value
-
-
Common shares, $0.01 par value
40
40
Additional paid-in capital
11,773
11,709
Accumulated deficit
(1,709)
(2,041)
Accumulated other comprehensive
income/(loss)
136
48
Treasury shares, at cost – Nil shares as
of Sept 30, 2021; and on March 31, 2021
-
-
Non-controlling interest
34
17
Total shareholders’ equity
10,274
9,773
Total liabilities and shareholders’
equity
$15,777
$15,486
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211018005314/en/
Gary S. Maier (310) 471-1288
Highway (NASDAQ:HIHO)
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