EX-99.1 2 v433033_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 



NEWS RELEASE

 

 

CONTACT: Gary S. Maier
  Maier & Company, Inc.
  (310) 471-1288

 

HIGHWAY HOLDINGS REPORTS FISCAL 2016 THIRD QUARTER

AND NINE-MONTH RESULTS

 

HONG KONG — February 2, 2016 — Highway Holdings Limited (Nasdaq:HIHO) today reported results for its fiscal third quarter and nine months ended December 31, 2015.

 

Net income for the fiscal 2016 third quarter was $342,000, or $0.09 per diluted share, compared with $361,000, or $0.10 per diluted share, in the same quarter a year earlier. Net sales for the same period were $5.7 million compared with $6.0 million a year ago -- reflecting year-end order adjustments by certain customers and a previously announced planned phase out of certain low-margin business.

 

Net income for the nine-month period of fiscal 2016 increased to $1,036,000, or $0.27 per diluted share, from $989,000, or $0.26 per diluted share, a year earlier. Net sales for the nine months were $17.7 million compared with $17.5 million a year ago.

 

Gross profit margin for the three- and nine-month periods ended December 31, 2015 increased to 26.0 percent and 25.4 percent, respectively, compared with 24.7 percent and 24.2 percent, respectively, a year earlier. Gross profit benefitted from the company’s Myanmar cost structure, price increases to customers, the planned phase out of low-margin business, and product mix.

 

Operating income for the three-month period ended December 31, 2015 was $426,000 compared with $458,000 in the prior year. Operating income for the nine months increased to $1,188,000 from $1,077,000 a year earlier.

 

“Results for the quarter reflect better pricing and, as noted above, the benefits of utilizing our Myanmar operation. Sales were impacted by a previously announced strategic decision to phase out of certain low-margin business. We continue to focus on organic growth and new business opportunities to offset this strategic sales loss and remain encouraged by our margin contributions,” said Roland Kohl, chairman, president and chief executive officer.

 

“Despite certain cost and pricing advantages derived from our operation in Myanmar, a major portion of the company’s business is still manufactured and produced in China. An ongoing challenge, therefore, is to balance the highly inflationary environment of China and Hong Kong, including higher wages, with the pricing expectations of our customers,” Kohl said. He noted that the emerging utilization of Myanmar, which offers high quality and lower-cost advantages for assembly work, remains an important strategic goal for management and a competitive benefit to the company’s customers.

 

 

 

 

Currency exchange rates negatively affected the company’s net income for the nine-month period ended December 31, 2015. The company reported a $44,000 currency exchange loss compared with a $40,000 exchange loss in fiscal 2015 -- mainly due to the weakening of the RMB at December 31, 2015.

 

The company does not engage in currency exchange rate hedging, and the fluctuations in the exchange rate of the RMB since January 1, 2016 are expected to affect the company’s future results.

 

Kohl noted the company’s balance sheet remains very strong. The company’s total cash position at December 31, 2015 was $8.9 million, or approximately $2.30 per share, compared with $8.7 million at December 31, 2014, despite several dividend payments and equipment investments since April 2015. The company’s current ratio was 3.2:1 at December 31, 2015. The total cash exceeded all current and long- term liabilities combined by $4.0 million.

 

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. 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 Yangon, 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.

 

(Financial Tables Follow)

 

# # #

 

 

 

 

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Statement of Income

(Dollars in thousands, except per share data)

(Unaudited)

  

   Three Months Ended   Nine Months Ended 
   December 31,   December 31, 
             
   2015   2014   2015   2014 
                 
Net sales  $5,650   $6,006   $17,687   $17,486 
Cost of sales   4,176    4,524    13,195    13,262 
Gross profit   1,474    1,482    4,492    4,224 
                     
Selling, general and administrative expenses   1,048    1,024    3,304    3,147 
Operating income   426    458    1,188    1,077 
                     
Non-operating items                    
Interest expenses   -    -    -    - 
Exchange gain /(loss), net   (44)   (40)   (20)   (52)
Interest income   2    3    8    11 
Gain/Loss on disposal of Asset   -    -    -    110 
Other income/( expenses)   -    2    2    2 
Total non-operating income/ (expenses)   (42)   (35)   (10)   71 
                     
Share of profits/ (loss) of equity investees   -    1    -    7 
Net income before income tax and non-controlling interests
   384    424    1,178    1,155 
Income taxes   35    63    131    167 
Net Income before non-controlling interests   349    361    1,047    988 
Less : net gain/(loss) attributable to non-controlling interests   7    -    11    (1)
Net Income attributable to Highway
Holdings Limited shareholders		  $342   $361   $1,036   $989 
                     
                     
Net Income per share - basic and diluted  $0.09   $0.10   $0.27   $0.26 
                     
Weighted average number of shares outstanding                     
Basic   3,787    3,788    3,787    3,788 
Diluted   3,795    3,804    3,795    3,804 
                     
                     

 

 

 

 

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Balance Sheet

(In thousands, except per share data)

  

   December 31   March 31 
   2015   2015 
         
Current assets:        
         
Cash and cash equivalents  $8,918   $9,727 
Accounts receivable, net of doubtful accounts   3,858    2,943 
Inventories   1,795    2,081 
Prepaid expenses and other current assets   1,001    987 
Total current assets   15,572    15,738 
           
Property, plant and equipment, (net)   1,264    1,094 
Goodwill   77    77 
Long-term deposits   78    78 
Total assets  $16,991   $16,987 
           
Current liabilities:          
Accounts payable  $1,542   $1,579 
Other liabilities and accrued expenses   2,806    2,429 
Income tax payable   443    334 
Dividend payable   98    380 
Total current liabilities   4,889    4,722 
Long term liabilities :          
           
Deferred income taxes   32    32 
Total liabilities   4,921    4,754 
           
Shareholders’ equity:          
Common shares, $0.01 par value   38    38 
Additional paid-in capital   11,370    11,370 
Retained earnings   679    782 
Accumulated other comprehensive income   (70)   8 
Treasury shares, at cost – 5,049 shares as of December 31, 2015;
and March 31, 2015 respectively		   (14)   (14)
Total Highway Holdings Limited shareholders’ equity   12,003    12,184 
           
Non-controlling interest   67    49 
Total shareholders’ equity   12,070    12,233 
Total liabilities and shareholders’ equity  $16,991   $16,987