HIGHWAY HOLDINGS REPORTS FISCAL 2023 THIRD QUARTER AND NINE-MONTH RESULTS

HONG KONG, Feb. 15, 2023 /PRNewswire/ -- Highway Holdings Limited (Nasdaq:HIHO) (the "Company" or "Highway Holdings") today reported results for its fiscal third quarter and nine months ended December 31, 2022, with approximately $1.54 in cash per diluted share.

Net sales for the third quarter of fiscal year 2023 were $2.6 million compared with $3.0 million a year ago, reflecting the renewed impact of the COVID-19 pandemic on the Company, its customers and its supply chain, which affected the Company's overall business in the fiscal third quarter. Net income for the third quarter of fiscal year 2023 was $52,000, or $0.01 per diluted share, compared with $240,000 or $0.06 per diluted share for the same period last year. The Company noted the comparisons are not very meaningful because of the disruptions and subsidies impacting different periods and distorting the numbers.

Net sales for the first nine months of fiscal year 2023 were $8.5 million compared with $9.3 million for the same period last year. Net income for the first nine months of 2023 was $831,000, or $0.20 per diluted share, compared with a net income of $812,000, or $0.19 per diluted share for the same period last year.

Gross margin for the third quarter of fiscal year 2023 was 28.4 percent, compared to 28.6 percent for the same period last year. For the first nine months of fiscal year 2023, gross margin increased by 300 basis points to 33.7 percent from 30.7 percent for the same period last year.

Roland Kohl, chairman, president and chief executive officer of Highway Holdings, said, "We continue to work closely with our customers and supply chain to navigate the ongoing challenges we are collectively facing. We went from disruptive "zero-tolerance" COVID shutdowns to the sudden unrestricted opening causing havoc and disrupting our China operations. To put the recent situation into perspective, we recently had over half of our Chinese employees reporting sickness, with some recovering and returning to work, while others still remain out. While we are pleased to see our workforce has now substantially returned to full capacity after the annual Chinese New Year holiday, we believe the lack of full workforce status before that date will also adversely impact our business in the current quarter. As this situation exists not only in our own operation but across our supply chain and at certain customers, it will be a headwind to our otherwise generally improved situation. Longer term, since China has finally opened up and removed most COVID restrictions, we are hopeful and optimistic that we can return to a more stable and predictable business environment once the initial surge of infections ends and the holidays are over."

The Company reported a $26,000 currency exchange gain for the fiscal 2023 nine months compared with a $20,000 currency exchange loss a year earlier. The currency exchange gain in the current year was mainly due to the strengthened RMB. The Company does not engage in currency exchange rate hedging, and the fluctuations in the exchange rate of the RMB and Kyat are expected to affect the Company's future results.

The Company's balance of cash at December 31, 2022 was approximately $6.3 million, or approximately $1.54 per diluted share, compared with a balance of cash of $6 million at March 31, 2022. Cash utilization primarily reflects prepayments for long-term orders, which were made to secure delivery of future production materials and the return of capital to shareholders through dividends.

The Company's current ratio was 3.6:1 at December 31, 2022, and the Company's total cash exceeded all current and long-term liabilities combined by $2.8 million.

About Highway Holdings 

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, the 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)

 

 

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,
	2022		2021			2022				2021
Net sales	$2,562		$2,995			$8,547				$9,357
Cost of sales	1,835		2,137			5,669				6,476
Gross profit	727		858			2,878				2,881
Selling, general and administrative expenses	722		671			2,130				2,148
Operating income	5		187			748				733
Non-operating items
Exchange gain /(loss), net	3		(15)			26				(20)
Interest income	16		3			35				9
Gain/(Loss) on disposal of Asset	2		0			7				14
Other income/(expenses)	0		0			5				1
Total non-operating income/ (expenses)	21		(12)			73				4
Net profit before income tax and non-controlling interests	26		175			821				737
Income taxes benefit/(expense)	15		72			10				100
Net profit before non-controlling interests	41		247			831				837
Less: net gain/(loss) attributable to non-controlling           interests	(11)		7			0				25
Net income attributable to Highway Holdings Limited's shareholders	52		240			831				812
Net gain per share – Basic and Diluted                      Basic	$0.01		$0.06			$0.20				$0.20
Diluted	$0.01		$0.06			$0.20				$0.19
Weighted average number of shares outstanding
Basic	4,072		4,030			4,058				4,030
Diluted	4,130		4,205			4,115				4,205

 

 

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES Consolidated Balance Sheet (Dollars in thousands, except per share data)
	Dec 31		Mar 31
	2022		2022
Current assets:
Cash and cash equivalents	$6,326		$6,010
Time deposits	-		1,075
Accounts receivable, net of doubtful accounts	2,954		2,260
Inventories	1,493		2,350
Prepaid expenses and other current assets	775		620
Income tax recoverable	7		7
Total current assets	11,555		12,322
Property, plant and equipment, (net)	433		643
Operating lease right-of-use assets	843		1,799
Long-term deposits	21		-
Long-term loan receivable	95		95
Investments in equity method investees	-		-
Total assets	$12,947		$14,859
Current liabilities:
Accounts payable	$448		$828
Operating lease liabilities, current	236		933
Other liabilities and accrued expenses	1,732		2,599
Income tax payable	571		620
Dividend payable	204		202
Total current liabilities	3,191		5,182
Long term liabilities :
Operating lease liabilities, non-current	243		268
Deferred income taxes	109		140
Total liabilities	3,543		5,590
Shareholders' equity:
Preferred shares, $0.01 par value	-		-
Common shares, $0.01 par value	40		40
Additional paid-in capital	11,964		11,816
Accumulated deficit	(2,271)		(2,284)
Accumulated other comprehensive income/(loss)	(329)		(303)
Non-controlling interest	0		0
Total shareholders' equity	9,404		9,269
Total liabilities and shareholders' equity	$12,947		$14,859

 

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SOURCE Highway Holdings Limited