HIGHWAY HOLDINGS REPORTS FIRST QUARTER FISCAL 2026 RESULTS

Rhea-AI Summary

Highway Holdings (Nasdaq: HIHO) reported its Q1 fiscal 2026 results, with net sales declining to $1.55 million from $1.88 million in the year-ago period. Net income decreased to $0.01 per diluted share from $0.02 in Q1 fiscal 2025.

The company maintains a strong financial position with $5.82 million in cash and cash equivalents, working capital of $5.7 million, and a current ratio of 3.2:1. Despite challenges including post-COVID demand reduction and global trade tensions, Highway Holdings sees promising developments, including renewed interest in their CO₂ cleaning machines and potential revival of gaming console production relationships.

Gross profit margin slightly decreased to 34% from 35% year-over-year, while SG&A expenses increased marginally by 1% to $665,000. The company also recorded a $82,000 gain from property disposal and earned $43,000 in interest income.

Positive

• None.

Negative

• Net sales declined 17.6% to $1.55 million from $1.88 million year-over-year
• Net income decreased to $61,000 from $98,000 year-over-year
• Gross profit dropped to $527,000 from $661,000 year-over-year
• SG&A expenses increased 1% despite lower sales

Insights

Financial Analyst

Highway Holdings reported declining Q1 FY2026 results amid persistent customer demand challenges, though maintaining solid financial position with promising new business opportunities.

Highway Holdings' Q1 FY2026 results reveal continued business challenges with net sales declining 17.6% to $1.55 million compared to $1.88 million in Q1 FY2025. Net income dropped 37.8% to $61,000 ($0.01 per diluted share) from $98,000 ($0.02 per diluted share). Gross profit fell to $527,000 with margins slightly decreasing to 34% from 35%.

The company's struggles stem from lingering post-pandemic effects, where customers' over-ordering and subsequent demand reductions haven't yet normalized. Adding to these difficulties are global trade tensions, including U.S. tariffs, and geopolitical conflicts creating market instability. Despite these headwinds, there are emerging positive signals with renewed interest from former customers, including orders for proprietary CO₂ cleaning machines that had been dormant for years, potentially opening a new revenue stream.

Highway Holdings maintains a strong balance sheet with $5.82 million in cash and cash equivalents, exceeding combined liabilities by $3.06 million. The company reports $5.7 million in working capital with a healthy current ratio of 3.2:1. Total shareholders' equity slightly improved to $6.4 million from $6.3 million at the fiscal year-end. This financial stability provides flexibility as management works to diversify beyond its traditional OEM model and pursue strategic growth initiatives to break free from past business cycle constraints.

HONG KONG, Sept. 11, 2025 /PRNewswire/ -- Highway Holdings Limited (Nasdaq: HIHO) today reported financial results for the first quarter of fiscal year 2026 ended June 30, 2025.

Net sales for the first quarter of fiscal year 2026 were $1.55 million compared to $1.88 million in the first quarter of fiscal year 2025. Net income for the first quarter of fiscal year 2026 was $61,000, or net income of $0.01 per diluted share, compared with net income of $98,000, or net income of $0.02 per diluted share in the first quarter of fiscal year 2025.

Roland Kohl, chairman, president and chief executive officer of Highway Holdings, commented, "As an OEM supplier, our fortunes are closely tied to the performance of our customers. Following the COVID pandemic, which saw over-ordering, high inventories followed by strong reductions in demand, many of our customers until today have not yet recovered. Since we are heavily dependent on them, our business was also negatively impacted. Furthermore, recent uncertainties from increased tariffs imposed by the U.S. globally, the threat of additional new tariffs, and the conflicts in Ukraine and the Middle East have created market instability and have further added significant challenges.  

"Despite these headwinds, we have maintained a solid financial position, which provides us the strength and flexibility to navigate this difficult environment as we seek a path back to sustainable growth. Despite reduced demand from existing customers, we are encouraged to see unexpected interest in new business from former customers. For example, we recently received a small order for our proprietary CO₂ cleaning machines, which had no sales activity for several years. The new interest in our cleaning machines follows governmental efforts by the Chinese government to replace toxic cleaning solvents with alternative non-environmental damaging cleaning solutions. This is a promising development that could be the beginning of a new product line and additional business. Furthermore, we also received renewed interest from a previous gaming console customer who, after a two-year pause, would like to ramp-up product production."

"We are working relentlessly to diversify beyond the constraints of our OEM model, pursuing strategic actions that we believe will ultimately free us from the stranglehold of past business cycles. While the path forward involves challenges, we are confident in our ability to adapt, capitalize on new opportunities, and emerge stronger. Our focus remains on building a company that, in the long-term, is more resilient, more innovative, and better positioned to deliver long-term value."

Gross profit and profit margins for the first quarter of fiscal year 2026 decreased to $527,000, or 34%, compared with $661,000 and 35%, respectively, in the first quarter of fiscal year 2025, primarily due to decreased sales.

Selling, general and administrative expenses for the first quarter of fiscal year 2026 slightly increased by 1% to $665,000 in the first quarter 2026 from $658,000 in the year ago period due to inflationary increases.  

The Company recognized a $4,000 currency exchange gain in the first quarter of fiscal year 2026, compared to $38,000 in the first quarter of fiscal year 2025.  The Company also earned $43,000 in interest and had an $82,000 gain on the disposal of a small underutilized real property in the first quarter of 2026, as the Company continues to benefit from a relatively high interest rate.  The Company does not engage in foreign currency hedging activities.

The Company ended the first quarter of fiscal year 2026 in a solid financial position with $5.82 million of cash and cash equivalents, which exceeded its combined short- and long-term liabilities by $3.06 million. At June 30, 2025, the Company had a working capital balance of $5.7 million, with a current ratio of 3.2:1, and total shareholders' equity of $6.4 million, compared to $6.3 million as of March 31, 2025.

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 the prospects of its proprietary CO₂ cleaning machines and new orders for gaming consoles, economic, competitive, governmental, political and technological factors affecting the company's revenues, operations, markets, products and prices, the remaining impact of the worldwide COVID-19 pandemic, 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)

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HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Statement of Income
(In thousands of U.S. dollars, except for shares and per share data)
	Quarter Ended
	June 30
	2025 (unaudited)		2024 (unaudited)
Net sales	$1,547		$1,879
Cost of sales	1,020		1,218
Gross profit	527		661
Selling, general and administrative expenses	665		658
Operating income (loss)	(138)		3
Non-operating income (expense):
Exchange gain (loss), net	4		38
Interest income Gain (loss) on disposal of assets	43 82		45 -
Other income (expense)	5		7
Total non-operating income (expenses)	134		90
Net income (loss) before income taxes	(4)		93
Income taxes	61		-
Net income	57		93
Less: net gain/(loss) attributable to non-controlling interests	(4)		(5)
Net income attributable to Highway Holdings Limited's	$61		$98
Shareholders
Net income (loss) per share – Basic	$0.01		$0.02
Net income (loss) per share - Diluted	$0.01		$0.02
Weighted average number of shares outstanding:
Basic	4,445		4,506
Diluted	4,445		4,506

 

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Balance Sheet
(In thousands of U.S. dollars, except for shares and per share data)
	June 30	March 31
	2025 (unaudited)	2025 (audited)
Current assets:
Cash and cash equivalents	$5,816	$5,972
Accounts receivable, net of doubtful accounts	1,039	1,022
Inventories	956	1,146
Prepaid expenses and other current assets	458	430
Total current assets	8,269	8,570
Goodwill, net	-	-
Property, plant and equipment, net	126	94
Operating lease right-of-use assets	622	784
Long-term deposits	12	11
Long-term loan receivable	95	95
Total assets	9,124	9,554
Current liabilities:
Accounts payable	$472	$613
Operating lease liabilities, current	468	623
Accrued expenses and other liabilities	1,108	1,274
Income tax payable	423	486
Dividend payable	81	81
Total current liabilities	2,552	3,077
Operating lease liabilities, non-current	184	187
Long term accrued expenses	23	23
Total liabilities	2,759	3,287
Shareholders' equity:
Preferred shares, $0.01 par value	-	-
Common shares, $0.01 par value	46	44
Additional paid-in capital	12,201	12,178
Accumulated deficit	(5,378)	(5,437)
Accumulated other comprehensive (loss) / income	(498)	(516)
Non-controlling interest	(6)	(2)
Total shareholders' equity	6,365	6,267
Total liabilities and shareholders' equity	$9,124	$9,554

 

 

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SOURCE Highway Holdings Limited

FAQ

What were Highway Holdings (HIHO) Q1 2026 earnings results?

Highway Holdings reported net sales of $1.55 million and net income of $61,000 ($0.01 per diluted share), compared to $1.88 million in sales and $98,000 in net income ($0.02 per share) in Q1 2025.

How much cash does Highway Holdings (HIHO) have on its balance sheet?

As of June 30, 2025, Highway Holdings had $5.82 million in cash and cash equivalents, with working capital of $5.7 million and a current ratio of 3.2:1.

What is Highway Holdings (HIHO) gross profit margin in Q1 2026?

Highway Holdings reported a gross profit margin of 34% in Q1 2026, slightly down from 35% in Q1 2025, with gross profit of $527,000.

What new business opportunities is Highway Holdings (HIHO) pursuing?

Highway Holdings is seeing renewed interest in their CO₂ cleaning machines due to Chinese government environmental initiatives, and a potential revival of business from a previous gaming console customer after a two-year pause.

How have global market conditions affected Highway Holdings (HIHO)?

The company has been negatively impacted by post-COVID demand reduction, increased U.S. tariffs, potential new tariffs, and market instability from conflicts in Ukraine and the Middle East.