HONG KONG , Aug. 1, 2024 /PRNewswire/ — Highway Holdings Limited (Nasdaq: HIHO) today reported financial results for the first quarter of fiscal year 2025 ended June 30, 2024.
Net sales for the first quarter of fiscal year 2025 ended June 30, 2024 increased 39.3% to $1.88 million compared with $1.35 million in the first quarter of fiscal year 2024. Net gain for the first quarter of fiscal year 2025 was $98,000, or $0.02 per diluted share, compared with net loss of $338,000, or a loss of $0.08 per diluted share in the first quarter of fiscal year 2024.
Roland Kohl, chairman, president and chief executive officer of Highway Holdings, commented, "We are seeing signs of improvement and have reason for cautious optimism. The growth in sales this quarter compared to the year ago period was the result of substantially all our customers increasing their orders. We have still not returned to the level our business was at pre-COVID, therefore we were only able to reach breakeven on an operating level, which is a significant improvement compared to the $400,000 operating loss in the year ago period.
"We are pleased to maintain a solid financial position, which we believe gives us the ability to navigate the operating challenges and forge a path that supports a return to long-term growth. In the most recent quarter, our reported net profit came mainly from interest income based on the fortified cash position we built, and a favorable currency exchange gain. Overall, the favorable trend of orders for our existing business from our main customers is stable to slightly increasing. We are cautiously optimistic this trend will continue along with the contribution of a pending new business line, and the revival of some mature previously deemphasized business lines, which taken together would ultimately help us return to improved profitability."
Gross profit for the first quarter of fiscal year 2025 increased to $661,000, or 35%, compared with $377,000 and 28%, respectively, in the first quarter of fiscal year 2024, primarily due to a favorable product mix.
Selling, general and administrative expenses for the first quarter of fiscal year 2025 declined by 15.3% to $658,000 in the first quarter 2025 from $777,000 in the year ago period, reflecting the positive benefit of the Company’s operating expense reduction strategy.
The Company recognized a $38,000 currency exchange gain in the first quarter of fiscal year 2025, compared to $17,000 in the first quarter of fiscal year 2024, with $52,000 in interest and other income in the first quarter of 2025 compared to $40,000 in the year ago period, primarily due to the continued benefit of foreign currency hedging activities and higher interest rates.
The Company ended the first quarter of fiscal year 2025 in a solid financial position with $6.0 million of cash and cash equivalents, which exceeded its combined short- and long-term liabilities by $1.65 million. At June 30, 2024, the Company had a working capital balance of $5.7 million, with a current ratio of 2.6:1, and total shareholders’ equity of $6.5 million, compared to $6.6 million as of March 31, 2024.
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 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)
HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Statement of Income(In thousands of U.S. dollars, except for shares and per share data)
Fiscal First Quarter Ended
June 30
(Unaudited)
2024
2023
Net sales
$1,879
$1,347
Cost of sales
1,218
970
Gross profit
661
377
Selling, general and administrative expenses
658
777
Operating income (loss)
3
(400)
Non-operating income (expense):
Exchange gain (loss), net
38
17
Interest income
45
40
Gain (loss) on disposal of assets
–
–
Other income (expense)
7
–
Total non-operating income (expenses)
90
57
Net income (loss) before income taxes
93
(343)
Income taxes
–
3
Net income (loss)
93
(340)
Less: net gain/(loss) attributable to non-controlling interests
(5)
(2)
Net income attributable to Highway Holdings Limited’s
$98
($338)
Shareholders
Net income (loss) per share – Basic
$0.02
($0.08)
Net income (loss) per share – Diluted
$0.02
($0.08)
Weighted average number of shares outstanding:
Basic
4,506
4,248
Diluted
4,506
4,248
HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Balance Sheet(In thousands of U.S. dollars, except for shares and per share data)
June 30
(Unaudited)
March 31
(Audited)
2024
2024
Current assets:
Cash and cash equivalents
$5,991
$6,601
Accounts receivable, net of doubtful accounts
1,660
1,253
Inventories
1,532
1,566
Prepaid expenses and other current assets
149
226
Total current assets
9,332
9,646
Goodwill, net
–
–
Property, plant and equipment, net
34
–
Operating lease right-of-use assets
1,217
1,375
Long-term deposits
201
202
Long-term loan receivable
95
95
Total assets
10,879
11,318
Current liabilities:
Accounts payable
$807
$935
Operating lease liabilities, current
595
588
Accrued expenses and other liabilities
1,719
1,789
Income tax payable
471
480
Dividend payable
60
45
Total current liabilities
3,652
3,837
Operating lease liabilities, non-current
650
803
Long term accrued expenses
40
40
Total liabilities
4,342
4,680
Shareholders’ equity:
Preferred shares, $0.01 par value
–
–
Common shares, $0.01 par value
44
44
Additional paid-in capital
12,144
12,117
Accumulated deficit
(5,137)
(5,015)
Accumulated other comprehensive (loss) / income
(502)
(501)
Non-controlling interest
(12)
(7)
Total shareholders’ equity
6,537
6,638
Total liabilities and shareholders’ equity
$10,879
$11,318
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