--Sales Up Sharply for Both Periods; Return
to Profitability for Year--
Highway Holdings Limited (Nasdaq: HIHO) today reported
results for its fiscal year ended March 31, 2022 – reflecting a
year-over-year improvement due to more normalized levels of
operational activity at the company’s factories since the beginning
of the global pandemic, coupled with increased demand for
products.
Net sales for the fiscal 2022 fourth quarter increased 62.8
percent to $3.0 million from $1.8 million a year ago – reflecting
the benefit of a more normalized level of operations at the
company’s factory in Myanmar. Sales a year ago were impacted by the
closure of the company’s Myanmar factory for a two-week period in
March due to the military takeover and a shortage of raw materials
and components that limited production.
The company reported a reduced net loss for the quarter of
$369,000, or $0.09 per share, compared with a net loss of $551,000,
or $0.14 per share, a year earlier. Results for the quarter were
impacted by a shutdown at the company’s factory in China for
approximately 10 days due to government mandates related to
Covid-related case levels in the area. In addition, results were
impacted by conservative provisions related to certain items for
income tax provisions, anticipated credit losses on accounts
receivable, aged inventories and potential severance payments.
Net sales for fiscal 2022 increased 34.8 percent to $12.4
million from $9.2 million a year ago. Net income for fiscal 2022
was $443,000, or $0.11 per diluted share, compared with a net loss
of $461,000, or $0.12 per diluted share, a year earlier.
“The increase in net sales for fiscal 2022, as well as the
fourth quarter, was primarily attributable to (i) a more normalized
level of operating activity at both our Yangon, Myanmar and
Shenzhen, China factories, (ii) improved delivery of electronic
components and delivery of a new electronic product to a new
customer based in the United States, and (iii) a general resurgence
of demand in Europe, following the reduction of COVID-19 cases,”
said Roland Kohl, chairman, president and chief executive
officer.
He noted fiscal 2022 financial results were impacted by
world-wide material shortages, including electronic components and
semiconductors, in particular electronic components and circuits
for an electronic game product for a U.S. customer, which was
delayed by approximately one year due to these supply chain
factors.
Gross profit for the fiscal 2022 fourth quarter was $889,000
compared with $387,000 a year ago. Gross profit as a percentage of
sales was 29.6 percent compared with 20.9 percent in fiscal 2021.
Gross profit as a percentage of sales for the fiscal 2022 fourth
quarter returned to more normalized levels. Gross margin a year ago
was impacted by negative events such as the closure of the
company’s Myanmar factory for a two-week period in March and the
shortage of raw materials and components that limited
production.
Gross profit for fiscal 2022 was $3.8 million compared with $2.7
million a year earlier. Gross profit as a percentage of sales for
fiscal 2022 was 30.5 percent compared with 29.5 percent a year
earlier.
Selling, general and administrative expenses increased slightly
to $1,055,000 from $1,046,000 a year ago. For the full fiscal year,
selling general and administrative expenses decreased slightly to
$3.2 million from $3.3 million last year, as a result of the
company’s continuous control of expenses.
The company realized a currency exchange loss of $24,000 in
fiscal 2022 compared with a currency exchange loss of $60,000 a
year ago, mainly due to a stronger RMB. The company does not
undertake any currency hedging transactions.
Kohl noted that the company’s balance sheet remains strong.
Total current assets at March 31, 2022, were $12.3 million, with
working capital of $7.1 million and a current ratio of 2.4:1. Total
cash and time deposits were $7.1 million, or $1.69 per diluted
share. Total accounts receivable at March 31, 2022 increased to
$2.3 million from $1.0 million a year ago. The significant increase
in net sales in the fiscal 2022 fourth quarter contributed to this
increase.
Kohl highlighted the company’s strong financial position with
total equity of $9.3 million at March 31, 2022 -- representing
approximately $2.21 per diluted share.
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, the political situation in Myanmar, 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)
Three Months Ended
Year Ended
March 31,
(Unaudited)
March 31,
(Audited)
2022
2021
2022
2021
Net sales
$3,008
$1,848
$12,365
$9,168
Cost of sales
2,119
1,461
8,595
6,461
Gross profit
889
387
3,770
2,707
Selling, general and administrative
expenses
1,055
1,046
3,203
3,323
Operating (loss)/income
(166)
(659)
567
(616)
Non-operating items
Exchange loss, net
(4)
0
(24)
(60)
Interest income
2
1
11
16
Gain on disposal of assets
0
0
14
9
Other (expense)/income
(1)
43
0
51
Total non-operating (expenses)/income
(3)
44
1
16
Net (loss)/income before income tax and
non-controlling interests
(169)
(615)
568
(600)
Income taxes
(201)
66
(101)
146
Net (loss)/income before non-controlling
interests
(370)
(549)
467
(454)
Less: Net gain/(loss) attributable to
non-controlling interests
(1)
2
24
7
Net (loss)/income attributable to Highway
Holdings Limited shareholders
($369)
($551)
$443
($461)
Net (loss)/income per share:
Basic
($0.09)
($0.14)
$0.11
($0.12)
Diluted
($0.09)
($0.14)
$0.11
($0.12)
Weighted average number of shares
outstanding:
Basic
4,033
4,006
4,033
4,006
Diluted
4,033
4,006
4,188
4,006
HIGHWAY HOLDINGS LIMITED AND
SUBSIDIARIES
Consolidated Balance
Sheet
(In thousands, except per share
data)
March 31,
March 31,
2022
2021
Current
assets:
Cash and cash equivalents
$6,010
$7,757
Time deposits
1,075
-
Accounts receivable, net of doubtful
accounts
2,260
973
Inventories
2,350
2,238
Prepaid expenses and other current
assets
620
513
Income tax recoverable
7
-
Total current assets
12,322
11,481
Property, plant, and equipment, (net)
643
833
Operating lease right-of-use assets
1,799
2,795
Long-term deposits
-
282
Long-term loan receivable
95
95
Investments in equity method investees
-
-
Total assets
$14,859
$15,486
Current
liabilities:
Accounts payable
$828
$653
Operating lease liabilities, current
933
821
Accrual expenses and other liabilities
2,599
2,347
Income tax payable
620
58
Dividend payable
202
85
Total current liabilities
5,182
3,964
Long-term
liabilities:
Operating lease liabilities,
non-current
268
1,142
Deferred income taxes
140
607
Total liabilities
5,590
5,713
Shareholders'
equity:
Preferred shares, $0.01 par value
-
-
Common shares, $0.01 par value
40
40
Additional paid-in capital
11,816
11,709
Accumulated deficit
(2,284)
(2,041)
Accumulated other comprehensive
(loss)/income
(303)
48
Non-controlling interests
-
17
Total equity
9,269
9,773
Total liabilities and shareholders'
equity
$14,859
$15,486
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220630005784/en/
Gary S. Maier (310) 471-1288
Highway (NASDAQ:HIHO)
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