HONG
KONG, Oct. 23, 2023 /PRNewswire/ -- Highway
Holdings Limited (Nasdaq: HIHO, "the Company" or "Highway
Holdings") today reported results for the second quarter of
fiscal year 2024 and the six months ended September 30, 2023.
Reflecting the significantly negative impact of the post-COVID
boom and bust cycle on Highway Holdings' customers' demand levels,
which was made worse by the compounding effect of the ongoing
Russia/Ukraine war and global inflation, net sales
for the second quarter of fiscal year 2024 were $1.3 million, compared with $3.0 million in the year ago period. While
still able to maintain profitability, the negative operating
environment led to a reduction in net income for the second quarter
of fiscal year 2024 to $213,000,
or $0.05 per diluted share, compared
with a net income of $396,000, or
$0.10 per diluted share in the year
ago period. The Company cautions that the net income comparison
should not be viewed by investors as an accurate measure of
normalized operations because the year ago period benefitted from
reduced rental expenses provided by the Chinese government and some
salary subsidies provided by the Hong
Kong government to the Company. In addition, the second
quarter of fiscal year 2024 benefitted from the reversal of
approximately 80% of a bad debt reserve following the collection of
amounts that had been outstanding for almost two years.
Net sales for the first half of fiscal year 2024 were only
$2.7 million, compared with
$6 million in the year-ago period.
Net loss for the first half of fiscal year 2024 was $125,000, or $0.03
per diluted share, compared with net income of $783,000 or $0.19
per diluted share in the year-ago period.
Roland Kohl, chairman, president
and chief executive officer of Highway Holdings, noted, "We are
experiencing an extremely difficult operating environment, with
pressure across all points of our business. We took action to
reduce costs where opportunities existed, which helped us to reduce
our expenses. In addition, we benefitted from a one-time
reversal of previously taken provisions for potential bad debts.
The combination of the negative impact of the COVID boom and bust
cycle, demand reduction related to the ongoing Russia/Ukraine war, global inflation, and severe
supply constraints, however, had too great a negative impact on
customer demand and ultimately our topline revenue. Despite the
incredibly challenging environment, we have recently started to see
some positive signs. In particular, we expect to benefit from a
resumption in demand from one of our larger customers, Playmaji,
Inc., which owns the Polymega game console business. Playmaji
recently announced that it has entered into a partnership with, and
has received a minority investment from Atari. Based on discussions
with Playmaji, a return to full production in Q3 2023 is
anticipated, with regular deliveries to customers and distributors
to continue thereafter. Importantly, the improved situation allowed
the customer to pay us in full all outstanding owed amounts that
were held on record for approximately two years, which resulted in
the above-noted reversal of a bad debt reserve."
"We are cautiously optimistic that we have come through the
worst part of this cycle. We believe that we have a healthy balance
sheet that will enable us to emerge successful over the long-term
as the business environment further improves. We are fully
committed to building value for the Company and our shareholders,
as we continue to build on our track record of success over the
long-term."
Select Additional Financial Results:
Gross profit for the second quarter of fiscal year 2024 was
$383,000 compared with $1,099,000 a year ago mainly due to the decline
in sales. Gross profit as a percentage of sales for the second
quarter of fiscal year 2024 was 29.0 percent, compared to 36.1
percent in the year ago period. Gross profit for the first half of
fiscal year 2024 was $760,000
compared with $2.1 million in the
year ago period. Gross profit as a percentage of sales for the
first half of fiscal year 2024 was 28.5 percent compared with
35.9 percent in the year ago period. The Company noted these
comparisons are not very meaningful due to the production, supply
chain, logistics and overall business disruptions related to the
COVID boom and bust cycle, and the above noted non-recurring salary
and rental benefits the Company received in the year ago period,
which benefits the Company did not receive in the current fiscal
year period.
Selling, general and administrative expenses for the second
quarter of fiscal year 2024 decreased to $272,000 from $716,000, reflecting the above-noted bad debt
provision reversal, combined with the Company's major cost cutting
actions. The year ago period included the above mentioned benefits
of reduced rental expenses provided by the Chinese government and
some salary subsidies provided by the Hong Kong government to the Company, which did
not repeat in the current second quarter of fiscal year 2024.
Net income for the second quarter of fiscal year 2024 reflects
a currency exchange gain of $14,000 compared to a $6,000 gain in the year ago period. The Company
reported a currency exchange gain of $31,000 for the first half of fiscal year 2024,
compared with a $24,000 gain in the
year ago period.
The Company had interest income of approximately $53,000 for the second quarter of fiscal year
2024, and interest income of approximately $93,000 for the first half of fiscal year 2024
due to the increase in interest rates.
The Company's balance sheet remains strong, with
$12.3 million dollar of total
assets and cash and cash equivalents in excess of
$7.0 million, or approximately
$1.62 per diluted share. The cash and
cash equivalent amount exceeded all of its short- and
long-term liabilities by approximately $2.4
million. Total shareholders' equity at September 30, 2023, was $7.7 million, or $1.80 per diluted share.
About Highway Holdings Limited
Highway Holdings is an international manufacturer of a wide
variety of 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. For more information visit
website www.highwayholdings.com.
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,
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Net sales
|
$1,322
|
|
$3,043
|
|
$2,669
|
|
$5,984
|
|
Cost of
sales
|
939
|
|
1,944
|
|
1,909
|
|
3,835
|
|
Gross profit
|
383
|
|
1,099
|
|
760
|
|
2,149
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
272
|
|
716
|
|
1,049
|
|
1,403
|
|
Operating
income
|
111
|
|
383
|
|
(289)
|
|
746
|
|
|
|
|
|
|
|
|
|
Non-operating
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange gain
/(loss),
net
|
14
|
|
6
|
|
31
|
|
24
|
|
Interest
income
|
53
|
|
15
|
|
93
|
|
19
|
|
Gain/(Loss) on
disposal of assets
|
13
|
|
6
|
|
13
|
|
6
|
|
Other
income/(expenses)
|
6
|
|
0
|
|
6
|
|
5
|
|
Total non-operating
income/ (expenses)
|
86
|
|
27
|
|
143
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income before income
tax and non-controlling
interests
|
197
|
|
410
|
|
(146)
|
|
800
|
|
Income taxes
|
3
|
|
(8)
|
|
6
|
|
(5)
|
|
Net income before
non-controlling interests
|
200
|
|
402
|
|
(140)
|
|
795
|
|
Less: net gain
attributable to
non-controlling
interests
|
(13)
|
|
6
|
|
(15)
|
|
12
|
|
Net income
attributable to Highway
Holdings
Limited's shareholders
|
213
|
|
396
|
|
(125)
|
|
783
|
|
|
|
|
|
|
|
|
|
Net Gain/ (loss) per
share –
Basic
|
$0.05
|
|
$0.10
|
|
$(0.03)
|
|
$0.19
|
|
Net Gain/ (loss) per
share -
Diluted
|
$0.05
|
|
$0.10
|
|
$(0.03)
|
|
$0.19
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
4,219
|
|
4,072
|
|
4,345
|
|
4,046
|
|
Diluted
|
4,235
|
|
4,165
|
|
4,345
|
|
4,158
|
|
HIGHWAY HOLDINGS
LIMITED AND SUBSIDIARIES
Consolidated Balance
Sheet
(Dollars in thousands,
except per share data)
|
|
|
(unaudited)
Sept 30,
|
|
(audited)
Mar 31,
|
|
2023
|
|
2023
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$7,051
|
|
$6,952
|
|
Accounts receivable,
net of doubtful accounts
|
667
|
|
1,886
|
|
Inventories
|
1,563
|
|
1,413
|
|
Prepaid expenses and
other current assets
|
308
|
|
406
|
|
Income tax
recoverable
|
3
|
|
3
|
|
Total current
assets
|
9,592
|
|
10,660
|
|
|
|
|
|
Property, plant and
equipment, (net)
|
336
|
|
401
|
|
Operating lease
right-of-use assets
|
2,125
|
|
2,514
|
|
Long-term
deposits
|
201
|
|
213
|
|
Long-term loan
receivable
|
95
|
|
95
|
|
Investments in equity
method investees
|
-
|
|
-
|
|
Total assets
|
$12,349
|
|
$13,883
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$362
|
|
$928
|
|
Operating lease
liabilities, current
|
563
|
|
573
|
|
Other liabilities and
accrued expenses
|
1,857
|
|
1,991
|
|
Income tax
payable
|
540
|
|
568
|
|
Dividend
payable
|
32
|
|
1
|
|
Total current
liabilities
|
3,354
|
|
4,061
|
|
|
|
|
|
Long term liabilities
:
|
|
|
|
|
Operating lease
liabilities, non-current
|
1,139
|
|
1,482
|
|
Deferred income
taxes
|
101
|
|
107
|
|
Long terms accrued
expenses
|
17
|
|
17
|
|
Total
liabilities
|
4,611
|
|
5,667
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Preferred shares, $0.01
par value
|
-
|
|
-
|
|
Common shares, $0.01
par value
|
44
|
|
41
|
|
Additional paid-in
capital
|
12,150
|
|
12,003
|
|
Accumulated
deficit
|
(3,960)
|
|
(3,396)
|
|
Accumulated other
comprehensive income/(loss)
|
(493)
|
|
(444)
|
|
Non-controlling
interest
|
(3)
|
|
12
|
|
Total shareholders' equity
|
7,738
|
|
8,216
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$12,349
|
|
$13,883
|
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content:https://www.prnewswire.com/news-releases/highway-holdings-reports-second-quarter-fiscal-year-2024-results-301963912.html
SOURCE Highway Holdings Limited
