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Press Release

Aug 31, 2020 12:00 UTC

Highway Holdings Reports Fiscal 2021 First Quarter Results

HONG KONG--(Business Wire)--Highway Holdings Limited (Nasdaq: HIHO) today reported results for its fiscal 2021 first quarter ended June 30, 2020.

Net loss for the fiscal first quarter was $223,000, or $0.06 per share, compared with net loss of $102,000, or $0.03 per share, last year. Net sales for the same period were $2.1 million compared with $2.8 million a year earlier.

"The company’s financial results were negatively affected by the COVID-19 pandemic and the temporary closure of operations during the quarter at its Myanmar factory. The effects of the COVID-19-related closure were exacerbated because workers at the Myanmar factory could not return to work from year-end national holidays due to the impact of the pandemic on transportation, which essentially shut down operations for the month of April and impacted the month of May. These factors contributed to substantially lower sales volume in April and May. Both of our factories are now in full operation and we are encouraged by business trends,” said Roland Kohl, chairman, president and chief executive officer.

Gross profit for the 2021 fiscal first quarter was $520,000 compared with $746,000 in the same period a year ago, with gross profit as a percentage of sales approximately 25 percent compared with 26 percent a year ago.

Selling, general and administrative expense for the 2021 fiscal first quarter decreased by $182,000 – benefiting from sharp cost-cutting initiatives. As a percentage of net sales, SG&A expenses increased to 35 percent from 32 percent due to the sharp sales decrease for the quarter.

The company realized a currency exchange loss of $20,000 in the quarter compared with an exchange gain of $41,000 in the same period last year, primarily due to weakness in the RMB during the period.

Kohl highlighted the company’s solid financial position, with cash and cash equivalents of $ 9.1 million -- exceeding combined short- and long-term liabilities by $2.9 million. At June 30, 2020, the company had working capital of $8 million.

Total shareholders’ equity at June 30, 2020 was $10.7 million compared with $10.9 million as of March 31, 2020. The company’s current ratio at June 30, 2020 was 2.9 :1.

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 offices are 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, including all statements about operations in Yangon, Myanmar, the impact of the COVID-19 pandemic on the company’s longer-term business outlook, and the prospects of establishing longer-term relationships with new customers, 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.

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Statement of Income

(Dollars in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

Quarter Ended

 

 

June 30

 

 

2020

 

2019

Net sales

$

2,057

 

 

$

2,845

 

Cost of sales

 

1,537

 

 

 

2,099

 

Gross profit

 

520

 

 

 

746

 

 

Selling, general and administrative expenses

 

 

 

730

 

 

 

 

 

 

912

 

 

Operating (loss) / income

 

(210

)

 

 

(166

)

 

 

 

 

Non-operating income (expense):

 

 

 

 

 

 

 

Exchange gain (loss), net

 

(20

)

 

 

41

 

Interest income

 

4

 

 

 

10

 

Gain/(loss) on disposal of asset

 

1

 

 

1

 

Other income (expense)

 

1

 

 

 

1

 

Total non-operating income (expenses)

 

(14

)

 

 

53

 

 

 

 

 

Net (loss)/income before income taxes

 

(224

)

 

 

(113

)

Income taxes

 

-

 

 

 

-

 

Net (loss)/ income

 

(224

)

 

 

(113

)

 

 

 

 

Less: net gain/(loss) attributable to non-controlling interests

 

(1

)

 

 

(11

)

 

 

 

 

Net (loss)/income attributable to Highway Holdings Limited’s

Shareholders

($

223

)

 

($

102

)

 

 

 

 

 

 

 

 

Net (loss)/income per share – Basic and Diluted

($

0.06

)

 

($

0.03

)

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

Basic

 

3,910

 

 

 

3,802

 

Diluted

3,910

3,802

 

 

 

 

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Balance Sheet

(In thousands, except per share data)

 

 

 

 

 

 

 

June 30

 

March 31

 

 

2020

 

2020

Current assets:

 

 

Cash and cash equivalents

$

9,099

 

$

8,827

 

Accounts receivable, net of doubtful accounts

 

1,119

 

 

2,008

 

Inventories

 

1,765

 

 

2,000

 

Prepaid expenses and other current assets

 

221

 

 

388

 

Total current assets

 

12,204

 

 

13,223

 

 

 

 

Property, plant and equipment, net

 

891

 

 

878

 

Operating lease right-of-use assets

 

3,497

 

 

3,710

 

Long-term deposits

 

263

 

 

263

 

Long-term loan receivable

 

95

 

 

95

 

Investments in equity method investees

 

-

 

 

-

 

Total assets

 

16,950

 

 

18,169

 

 

 

 

Current liabilities:

 

 

Accounts payable

$

749

 

$

997

 

Operating lease liabilities, current

 

806

 

 

782

 

Accrued expenses and other liabilities

 

2,066

 

 

2,294

 

Income tax payable

 

571

 

 

564

 

Dividend payable

 

2

 

 

351

 

Total current liabilities

 

4,194

 

 

4,988

 

 

 

 

Operating lease liabilities, non-current

 

1,823

 

 

2,034

 

Deferred income taxes

 

229

 

 

229

 

Total liabilities

 

6,246

 

 

7,251

 

 

 

 

Shareholders' equity:

 

 

Preferred shares, $0.01 par value

 

-

 

 

-

 

Common shares, $0.01 par value

 

40

 

 

40

 

Additional paid-in capital

 

11,552

 

 

11,537

 

Accumulated deficit

 

(1,089

)

 

(865

)

Accumulated other comprehensive income/(loss)

 

190

 

 

196

 

Treasury shares, at cost – Nil shares as of June 30, 2020; and on March 31, 2020

 

-

 

 

-

 

Non-controlling interest

 

11

 

 

10

 

Total shareholders' equity

 

10,704

 

 

10,918

 

 

 

 

Total liabilities and shareholders' equity

$

16,950

 

$

18,169

 

 

 

 

 

 

 

 

 

 

 

Gary S. Maier
Maier & Company, Inc.
(310) 471-1288

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