6-K 1 v04145_6k.htm 103179_1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

For the month of June 2004

  HIGHWAY HOLDINGS LIMITED  
(Translation of Registrant's Name Into English)

Suite 810, Level 8
Landmark North
39 Lung Sum Avenue
Sheung Shui
______New Territories, Hong Kong________
(Address of Principal Executive Offices)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F   X     Form 40-F ___

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes ___   No   X  

(If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_______________.)

Attached to this Report on Form 6-K is the press release issued by the registrant on June 23, 2004.

     
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

  HIGHWAY HOLDINGS LIMITED
   
   
Date: June 23, 2004  By /s/ ROLAND W. KOHL
   
    Roland W. Kohl
    Chief Executive Officer

NEWS RELEASE

CONTACT:       Gary S. Maier/Sophie Xu 
  Maier & Company, Inc. 
  (310) 442-9852 

HIGHWAY HOLDINGS LIMITED REPORTS STRONG
FISCAL YEAR-END RESULTS

—Fourth Quarter Sales Highest in Company's History—

     HONG KONG — June 23, 2004 — Highway Holdings Limited (Nasdaq: HIHO) today announced financial results for its fiscal periods ended March 31, 2004, reflecting a significant increase in sales and net income for both the fiscal fourth quarter and year.

     For the fourth quarter of fiscal 2004, net income increased more than three-fold to $408,000, or $0.12 per diluted share, from $134,000, or $0.05 per diluted share, a year ago. Net sales for the 2004 fiscal fourth quarter climbed 24.6 percent to $6.7 million from $5.4 million in fiscal 2003.

     For the full fiscal year, net income more than doubled to $982,000, or $0.30 per diluted share, compared with net income of $485,000, or $0.17 per diluted share, last year. Net sales for the same period increased 24.5 percent to $25.4 million from $20.4 million a year earlier.

"Results for fiscal 2004 reflect the second consecutive year of sales and earnings growth and the eighth consecutive growth quarter, with the fourth quarter representing the highest sales in the company's history -- a period that historically has been impacted by a two-week holiday for the Chinese New Year," said Roland Kohl, chairman and chief executive officer of Highway Holdings.

     Kohl attributed the company's solid performance to a strategic shift in early 2003, which leverages Highway Holdings' vertically integrated technology capabilities to design, manufacture and assemble complete components for global customers, rather than simply offering services for metal stamped parts.

     Kohl also attributed the company's strength and momentum to being more aggressive in terms of its overall marketing activities. In addition, the company continues to capitalize on its well known and highly respected Kienzle trademark, with further benefits expected moving forward from a reorganization in fiscal 2004 of its German marketing operation, Kienzle Uhrenfabriken GmbH.

     Gross profit for the fourth quarter increased 71.2 percent to $1.6 million from $952,000 last year. Gross profit as a percentage of sales for the fourth quarter of fiscal 2004 was 24.3 percent compared with 17.7 percent in the fiscal 2003 fourth quarter, reflecting product mix, an increase in the company's more profitable metal business and higher production efficiencies derived from larger production orders.

(more)

TRIBECA PLAZA • 12233 WEST OLYMPIC BOULEVARD, SUITE 322-A • LOS ANGELES, CALIFORNIA 90064
 
TELEPHONE   310.442.9852
 
FACSIMILE    310.442.9855

Highway Holdings Limited
2-2-2 

      Gross profit for the March 31, 2004, twelve-month period climbed 31.2 percent to $5.1 million from $3.9 million a year ago. Gross profit as a percentage of sales for the twelve months was 20.1 percent compared with 19.1 percent last year.

      Kohl noted that sales derived from the company's metal manufacturing division for fiscal 2004 increased by 26.5 percent. As a result, sales from metal manufacturing represented 58.3 percent of total sales, compared with 57.4 percent a year ago. Kohl attributed the division's growth to the ongoing benefits of its new strategy and an overall improved business environment.

      Sales for the company's camera division, which manufactures 35mm cameras and single-use cameras, grew approximately 22 percent for fiscal 2004. Camera sales represented 23.6 percent of total sales, compared with 24.1 percent a year ago.

      Sales of watches and clocks increased 21.4 percent, or $808,000, for fiscal 2004 over a year earlier. Nonetheless, Kohl said the sales performance did not meet the company's expectations. He attributed this to the weak marketing performance of Kienzle AG and Kienzle GmbH, the company's marketing office in Germany, which was recently reorganized.

      Selling, general and administrative expenses for fiscal 2004 increased by $496,000, or 13.3 percent, but decreased slightly as a percentage of total net sales to 16.6 percent from 18.3 percent in fiscal 2004 due to the greater increase in net sales in fiscal 2004. The increase in selling, general and administrative expenses reflects higher insurance costs, increased marketing activities, an increase in professional fees (due in part to the additional compliance procedures imposed by the U.S. Sarbanes-Oxley Act of 2002 and related regulations), and increased transportation costs.

     The combination of increased sales, improved gross margins as a percentage of sales and controlled selling, general and administrative expenses resulted in Highway Holdings generating operating income of $875,000 compared with $159,000 a year ago. Kohl said the company's balance sheet remains strong. At March 31, 2004, the company had working capital of $8.8 million, compared with $7.7 million at March 31, 2003. Total Shareholders' equity improved to $12.8 million from $11.9 million last year. The company's current ratio was 2.61:1 at March 31, 2004, with essentially no long-term debt.

(more)

Highway Holdings Limited
3-3-3

About Highway Holdings:

      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. It also manufactures clocks, clock movements and watches for sale under the company's own Kienzle Uhren brand name, as well as for unaffiliated companies. Additionally, Highway Holdings manufactures or produces other finished products, including single-use and 35mm cameras and certain electronic products. Highway Holdings is headquartered in Hong Kong and operates manufacturing facilities in Shenzhen province of the People's Republic of 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)

    Quarter Ended   Twelve Months Ended  
    (Unaudited)   (Audited)  
    March 31,   March 31,  
    2004    2003   2004   2003  
   
 
 
 
 
Net sales       
$   
  6,712      
$   
  5,385      
$   
25,356      
$   
20,370      
Cost of sales   
5,083  
4,433  
20,262  
16,488  
 
Gross profit   
1,629  
952  
5,094  
3,882  
Selling, general and administrative expenses   
1,118  
914  
4,219  
3,723  
 
Operating income   
511  
38  
875  
159  
   
   
   
   
   
Non-operating items   
 
 
 
 
         Interest expenses   
(23 ) 
(19 ) 
(77 ) 
(64 ) 
         Exchange gain (loss), net   
(43 )  
38  
278  
344  
         Interest income   
(1 ) 
5  
9  
20  
         Other income   
55  
57  
105  
81  
 
         Total non-operating income (expense)   
(12 ) 
81  
315  
381  
   
   
   
   
   
Affiliates   
 
 
 
 
         Impairment of investment in an affiliate   
(109 ) 
0  
(109 )
0  
         Equity in (loss) income of an affiliate   
2  
0  
2  
(5 ) 
 
   
(107 ) 
0  
(107 ) 
(5 ) 
   
   
   
   
   
Net income before income taxes   
392  
119  
1,083  
535  
Income taxes   
(16 ) 
(15 ) 
100  
50  
 
Net income before Minority Interest   
$ 
408  
$ 
134  
$ 
983  
$ 
485  
   
   
   
   
   
Minority Interest   
0  
0  
(1 ) 
0  
 
Net income after Minority Interest   
$ 
408  
$ 
134  
$ 
982  
$ 
485  
 
   
   
   
   
   
   
   
   
   
   
Earnings per share - basic   
$ 
0.13  
$ 
0.05  
$ 
0.32  
$ 
0.17  
 
Weighted average number of shares   
3,030  
2,903  
3,030  
2,902  
 
   
   
   
   
   
Earnings per share -diluted   
$ 
0.12  
$ 
0.05  
$ 
0.30  
$ 
0.17  
 
Weighted average number of shares   
3,258  
2,903  
3,258  
2,902  
 

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Balance Sheet
(In thousands, except per share data)

  March 31  
March 31
  
 
  
2004
  
2003
  
   
 
 
 
    
 
    
 
  
Current assets
    
 
    
 
  
Cash and cash equivalents
      
$     
4,158
      
$     
3,148
      
Restricted cash
    
965
    
1,157
  
Short term investment
    
309
    
0
  
Accounts receivable, net of doubtful accounts
    
3,763
    
2,872
  
Inventories
    
4,394
    
4,572
  
Prepaid expenses and other current assets
    
639
    
254
  
   
 
 
Total current assets
    
14,228
    
12,003
  
 
    
 
    
 
  
Property, plant and equipment, net
    
3,780
    
3,657
  
Investment and advance in affiliate
    
7
    
109
  
Industrial property rights
    
673
    
725
  
   
 
 
 
    
 
    
 
  
Total assets
  
$
18,688
  
$
16,494
  
   
 
 
 
    
 
    
 
  
Current liabilities:
    
 
    
 
  
Short-term borrowings
  
$
1,933
  
$
1,156
  
Current portion of long-term debt
    
173
    
125
  
Accounts payable
    
2,296
    
1,917
  
Accrued mold charges
    
233
    
147
  
Accrual payroll and employee benefits
    
321
    
349
  
Payable to affiliate
    
0
    
109
  
Other liabilities and accrued expenses
    
420
    
447
  
Income tax payable
    
78
    
0
  
   
 
 
Total current liabilities
    
5,454
    
4,250
  
   
 
 
 
    
 
    
 
  
Long-term debt
    
212
    
105
  
Deferred income taxes
    
178
    
231
  
Minority interest
    
2
    
1
  
 
    
 
    
 
  
Shareholders’ equity:
    
 
    
 
  
Common shares, $0.01 par value
    
 
    
 
  
Authorized, 20,000,000 shares; issued 3,074,123 shares at March 31, 2004;
   
   
 
outstanding 3,036,323 shares at March 31, 2004
     31     30  
Additional paid-in capital
    
9,035
    
8,793
  
Retained earnings
    
3,955
    
3,210
  
Accumulated other comprehensive income
    
(126
)
  
(73
)
Treasury shares, at cost-37,800 shares
    
(53
)
  
(53
)
   
 
 
Total shareholders’ equity
    
12,842
    
11,907
  
 
    
 
    
 
  
Total liabilities and shareholders’ equity
  
$
18,688
  
$
16,494