HIGHWAY HOLDINGS REPORTS SECOND QUARTER FISCAL YEAR 2026 RESULTS

Rhea-AI Summary

Highway Holdings (Nasdaq: HIHO) reported results for Q2 fiscal 2026 and the six months ended Sept 30, 2025: Q2 net sales $1.18M vs $2.11M year-ago, and a Q2 net loss $0.37M (loss of $0.08 per diluted share) versus prior-year net income $0.23M ($0.05 per diluted share).

Gross profit for Q2 was $0.30M (25.5% of sales) vs $0.83M (39.4%); six-month gross profit was $0.83M (30.4%) vs $1.50M (37.4%). SG&A rose to $0.84M in Q2. Cash and cash equivalents exceeded $5.6M (~$1.21 per diluted share) and total assets were $8.37M with shareholders' equity $6.0M (~$1.30 per diluted share).

Management cited OEM customer plant reorganization reducing motor revenue, an early ramp of a new OEM motor product, a returning gaming customer order, workforce reductions in Myanmar, and ongoing M&A and China-market diversification efforts.

Positive

• Cash and cash equivalents > $5.6M (~$1.21 per diluted share)
• Total shareholders' equity $6.0M (~$1.30 per diluted share)
• New OEM motor product approved for mass production (early ramp)
• Substantial order received from prior gaming customer

Negative

• Net sales declined 44% year-over-year in Q2 (from $2.11M to $1.18M)
• Q2 swung to net loss of $373,000 from prior-year net income $231,000
• Gross margin fell from 39.4% to 25.5% in Q2
• Workforce reduction in Myanmar due to onshoring of OEM motor production

Key Figures

Q2 FY26 net sales $1.18 million Second quarter fiscal 2026

Q2 FY25 net sales $2.11 million Second quarter fiscal 2025 comparison

Q2 FY26 net loss $373,000 Second quarter fiscal 2026

Q2 FY26 EPS net loss of $0.08 per diluted share Second quarter fiscal 2026

Q2 FY26 gross margin 25.5 percent Gross profit as percentage of sales, Q2 FY2026

Q2 FY26 SG&A $843,000 Selling, general and administrative expenses, Q2 FY2026

Cash & equivalents in excess of $5.6 million As of September 30, 2025

Total assets $8.37 million As of September 30, 2025

Market Reality Check

$1.17 Last Close

Volume Volume 2,333 is 0.27x the 20-day average of 8,582, indicating limited pre-news activity. low

Technical Shares at $1.17 are trading below the 200-day MA of $1.64 and 43.04% under the 52-week high.

Peers on Argus

Peers showed mixed moves: SGBX -6.9%, TG -2.2%, while TRSG and AP gained 5.16% and 3.71%. With HIHO down 2.7% pre-news and no clear peer direction, trading looked stock-specific rather than sector-driven.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Sep 11	Quarterly earnings	Negative	+2.3%	Q1 FY26 sales and earnings declined versus prior year but stayed profitable.
Jul 01	Annual results	Positive	-4.6%	FY2025 showed higher revenue, improved margins, and return to profitability.

Pattern Detected

Recent earnings releases often saw price moves diverge from fundamentals: a weaker Q1 FY26 drew a +2.33% reaction, while a stronger FY2025 report saw a -4.62% move.

Recent Company History

Over the last few earnings-related updates, Highway Holdings reported improving results in fiscal 2025, with net sales of $7.4 million and net income of $106,000, then entered FY2026 with softer trends: Q1 FY2026 net sales declined to $1.55 million and EPS eased to $0.01. Today’s Q2 FY2026 release continues that narrative of pressure on sales and margins against a still-solid cash position highlighted in prior filings.

Market Pulse Summary

This announcement highlights a challenging Q2 FY2026, with net sales of $1.18 million, a net loss of $373,000, and gross margin reduced to 25.5%. Management details OEM business loss, Myanmar workforce adjustments, and efforts to ramp a new motor program and revive gaming-related orders. Despite earnings pressure, the company reports cash above $5.6 million and total assets of $8.37 million. Tracking future quarters for margin recovery and new revenue streams will be important.

Key Terms

oem technical

"The adverse pressure on our long-term OEM business continues, including a reorganization..."

OEM stands for Original Equipment Manufacturer, which is a company that produces parts or components used in the final products made by other companies. For investors, understanding OEMs is important because their performance can impact the supply chain and overall success of major industries, especially those relying on specialized parts. Think of OEMs as the suppliers that provide the building blocks for larger products, like the engine parts for a car.

m&a financial

"We have looked at numerous German companies for the purpose of M&A only to discover..."

M&A, short for mergers and acquisitions, involves one company combining with or purchasing another company to grow, streamline operations, or gain competitive advantages. For investors, M&A activity can signal potential for increased value, new opportunities, or changes in market dynamics, making it an important factor to watch in the business landscape.

AI-generated analysis. Not financial advice.

HONG KONG, Dec. 15, 2025 /PRNewswire/ -- Highway Holdings Limited (Nasdaq: HIHO, the "Company" or "Highway Holdings") today reported results for the second quarter of fiscal year 2026 and the six months ended September 30, 2025.

Net sales for the second quarter of fiscal year 2026 were $1.18 million compared to $2.11 million in the second quarter of fiscal year 2025. Net loss for the second quarter of fiscal year 2026 was $373,000, or net loss of $0.08 per diluted share, compared with net income of $231,000, or net income of $0.05 per diluted share in the second quarter of fiscal year 2025.

Roland Kohl, chairman, president and chief executive officer of Highway Holdings, noted, "The adverse pressure on our long-term OEM business continues, including a reorganization of one of our customer's production plants which shifted a substantial part of our motor OEM business to that customer's own motor manufacturing company in Czechia. We still maintain a smaller portion of this OEM customer's motor business but the revenue contribution from this customer has been substantially reduced."

"While this action will result in a substantial reduction of our previous motor OEM business, we are fortunate that at the same time, another OEM customer finally approved the mass production of its motor product. We are in the early ramp-up phase, which will cause a time period with lower motor sales, but this new motor business is expected to eventually compensate for the loss of the other customer's motor business. Since all of the remaining motor manufacturing shall be performed in China, this will result in a workforce reduction in our Myanmar plant."

"On the positive side, we recently also received a substantial order from our old gaming industry business customer. We are happy that this prior business was not lost and is coming back strongly. But we still expect a gap in time between the loss of the old business and the new, replacement business."

"As an OEM supplier, our success remains fully dependent on the success of our customers, with failures having an outsized impact on our business. We continue to evaluate options to ease the dependent, captured situation we are faced with. We have looked at numerous German companies for the purpose of M&A only to discover during the due diligence process that their businesses were having the same or even worse problems, which would only serve to further burden our business. As a result, it has taken a much longer time to find a viable acquisition. We are, however, optimistic at this juncture that we have found a suitable target, which we are in the final stage of negotiation with. We believe there are many synergies with this company that will benefit both parties. At the same time, we continue to look actively for other types of business. For example, we started to look inside the China market. This is a longer-term effort, given we have previously focused only on manufacturing for export. We are presently in a testing phase determining how best to enter the Chinese market given our core manufacturing business.  We are also evaluating a potential entirely new revenue stream – providing services for the Chinese market's large and fast growing elderly population. As this would represent an entirely new business line, we are proceeding cautiously to test viability, while minimizing development costs. These new activities align with our long-term focus on reinvigorating revenue and profit growth, and building a more stable model that is not in a captive position. While these new activities will take time and burden in a limited way our existing business, we are confident we are moving in the right direction with the intention of moving the company into a stronger position over the coming year."

Gross profit for the second quarter of fiscal year 2026 was $301,000 compared with $834,000 in the year ago period mainly due to the 44% decrease in sales over the same period. Gross profit as a percentage of sales for the second quarter of fiscal year 2026 was 25.5 percent, compared to 39.4 percent in the year ago period, primarily due to decreased sales. Gross profit for the first half of fiscal year 2026 was $828,000 compared with $1,495,000 in the year ago period. Gross profit as a percentage of sales for the first half of fiscal year 2026 was 30.4 percent compared with 37.4 percent in the year ago period.

Selling, general and administrative expenses for the second quarter of fiscal year 2026 slightly increased to $843,000 from $724,000.

Net income for the second quarter of fiscal year 2026 reflects a currency exchange gain of $11,000 compared to a $58,000 gain in the year ago. The Company reported a currency exchange gain of $15,000 for the first half of fiscal year 2026, compared with a $96,000 gain in the year ago period.

Interest income was approximately $54,000 for the second quarter of fiscal year 2026 compared to approximately $97,000 for the first half of fiscal year 2026. The Company continues to benefit from the relatively high interest rates on fixed deposits despite the slight decrease in interest rates in the recent months. Upon review of its China tax position, the Company reversed a portion of its prior year's income tax provision for a Chinese subsidiary.

The Company's balance sheet remains strong, with total assets of $8.37 million and cash and cash equivalents in excess of $5.6 million, or approximately $1.21 per diluted share. The cash and cash equivalent amount exceeded all of its short- and long-term liabilities by approximately $3.2 million. Total shareholders' equity at September 30, 2025, was $6.0 million, or $1.30 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,
	2025		2024		2025			2024
Net sales	$1,180		$2,117		$2,727			$3,996
Cost of sales	879		1,283		1,899			2,501
Gross profit	301		834		828			1,495
Selling, general and administrative expenses	843		724		1,508			1,382
Operating income/(loss)	(542)		110		(680)			113
Non-operating items
Exchange gain /(loss), net	11		58		15			96
Interest income	54		58		97			103
Gain/(Loss) on disposal of assets	-		-		82			-
Other income/(expenses)	5		5		10			12
Total non-operating income/ (expenses)	70		121		204			211
Net income/(loss) before income tax and non- controlling interests	(472)		231		(476)			324
Income taxes	100		0		161			0
Net income/(loss) before non-controlling interests	(372)		231		(315)			324
Less: net gain/(loss) attributable to non-controlling interests	(1)		0		3			(5)
Net income/(loss) attributable to Highway Holdings Limited's shareholders	(373)		231		(312)			329
Net Gain/ (loss) per share – Basic	($0.08)		$0.05		($0.07)			$0.08
Net Gain/ (loss) per share - Diluted	($0.08)		$0.05		($0.07)			$0.08
Weighted average number of shares outstanding
Basic	4,602		4,402		4,602			4,379
Diluted	4,602		4,402		4,602			4,379

 

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Balance Sheet
(Dollars in thousands, except per share data)
	(unaudited) Sept 30,		(audited) Mar 31,
	2025		2025
Current assets:
Cash and cash equivalents	$5,557		$5,972
Accounts receivable, net of doubtful accounts	980		1,022
Inventories	728		1,146
Prepaid expenses and other current assets	377		430
Total current assets	7,642		8,570
Property, plant and equipment, (net)	168		94
Operating lease right-of-use assets	462		784
Long-term deposits	13		11
Long-term loan receivable	85		95
Investments in equity method investees	-		-
Total assets	$8,370		$9,554
Current liabilities:
Accounts payable	$390		$613
Operating lease liabilities, current	312		623
Other liabilities and accrued expenses	1,084		1,274
Income tax payable	327		486
Dividend payable	81		81
Total current liabilities	2,194		3,077
Long term liabilities :
Operating lease liabilities, non-current	178		187
Long terms accrued expenses	23		23
Total liabilities	2,395		3,287
Shareholders' equity:
Preferred shares, $0.01 par value	-		-
Common shares, $0.01 par value	46		44
Additional paid-in capital	12,232		12,178
Accumulated deficit	(5,750)		(5,437)
Accumulated other comprehensive income/(loss)	(546)		(516)
Non-controlling interest	(7)		(2)
Total shareholders' equity	5,975		6,267
Total liabilities and shareholders' equity	$8,370		$9,554

 

View original content:https://www.prnewswire.com/news-releases/highway-holdings-reports-second-quarter-fiscal-year-2026-results-302641709.html

SOURCE Highway Holdings Limited

FAQ

What were Highway Holdings (HIHO) Q2 fiscal 2026 sales and EPS on Dec 15, 2025?

Q2 fiscal 2026 net sales were $1.18M and net loss per diluted share was $0.08.

Why did HIHO revenue drop 44% year-over-year in Q2 fiscal 2026?

Management cited a customer's plant reorganization that shifted a substantial portion of motor production away from Highway, reducing motor OEM revenue.

How strong is Highway Holdings' liquidity after Q2 fiscal 2026?

The company reported cash and cash equivalents in excess of $5.6M, covering short- and long-term liabilities by about $3.2M.

Does HIHO have any new business that could offset lost motor sales?

Yes; one new OEM motor product received mass-production approval (early ramp) and a substantial order returned from a prior gaming customer.

What cost or operational impacts did Highway report for Q2 fiscal 2026?

SG&A increased slightly to $843,000 in Q2 and the company plans workforce reductions in Myanmar due to onshoring.

Is Highway pursuing strategic alternatives after Q2 fiscal 2026 results?

Management is negotiating a potential acquisition target, evaluating other German targets, and testing entry into the China market plus a new elderly-services line.