Highway Holdings Limited (NASDAQ:HIHO)

HONG KONG--(BUSINESS WIRE)--Highway Holdings Limited (Nasdaq: HIHO) today reported results for its fiscal third quarter and nine months ended December 31, 2019 -- reflecting increased sales and profitability.

Net sales for the fiscal 2020 third quarter increased 22 percent to $3.6 million from $2.9 million a year ago. For the same period, net income increased sharply to $318,000, or $0.08 per share, from a loss of $305,000, or $0.08 per share, in the same quarter a year earlier.

For the nine months, net sales were $9.6 million compared with $10.5 million a year ago. For the same period, the company reported net income of $123,000, or $0.03 per diluted share, compared with a net loss of $444,000, or $0.12 per share, a year earlier.

"Results for the quarter benefited from the company’s multi-year investments in Myanmar, and management’s strategic focus on reducing the company’s higher manufacturing costs. As a result, these lower manufacturing costs allowed us to maintain our margin targets and create favorable economics for our customers to attract business, which contributed, we believe, to our customers’ increased sales activity and our increased orders for the quarter," said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.

Kohl noted that the recent coronavirus outbreak and the country-wide shut down of factories across China to contain the spread of the virus will impact the company’s manufacturing facility in Shenzhen, China, as well as its supply chain. "Operations at our facilities in Shenzhen are currently halted, and we aren’t sure when we will be able to resume full operations. It is difficult to predict the long-term impact, though a short-term impact to our company and customers is to be expected. Fortunately, the company’s increasing reliance on our operations in Myanmar, which already produces more than half of our monthly sales volume, is a strategic benefit and we remain optimistic about the company’s long-term prospects," Kohl said.

Gross margin as a percentage of sales for the three months ended December 31, 2019 increased to 33.7 percent from 28.7 percent a year earlier, and gross margin as a percentage of sales for the nine months increased to 29.1 percent from 26.2 percent last year.

Selling, general and administrative expenses decreased for the quarter by $287,000, and also declined by $477,000 for the nine months on a year-over-year basis, despite the company’s continued additional expenses to support its Myanmar operation with technical and managerial personnel from the company’s Hong Kong and Chinese operations.

"The continued relocation of much of our business to Myanmar is resulting in lower-work load requirements for our operations in China. Consequently, we anticipate redundancies in our work force in China, which will lead to substantial severance expense, which has been accrued. While we do not expect these severance expenses to impact our bottom-line results, these payments will somewhat reduce our cash position," Kohl said.

Net income for the fiscal third quarter reflects a currency exchange gain of $17,000 compared with a currency exchange loss of $56,000 a year ago. The company reported a $112,000 currency exchange gain for the fiscal 2020 nine months compared with a $21,000 currency exchange loss a year earlier -- mainly due to the weakening of the RMB and Kyat. 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.

Kohl noted the company’s balance sheet remains strong, despite a decrease in cash. The company’s total cash position at December 31, 2019 decreased to approximately $8.5 million, or approximately $2.2 per diluted share, from $8.8 million at March 31, 2019 -- reflecting an increase in inventory levels during the transition of operations from China to Myanmar, while maintaining order fills to customers.

The company’s current ratio was 2.5:1 at December 31, 2019, and the company's total cash exceeded all current and long-term liabilities combined by $2.6 million.

Separately, the company reported that it has entered into a new three-year lease for a portion of the existing Shenzhen, China facilities. Under the new lease, which becomes effective on March 1, 2020 and continues until February 28, 2023, the company will lease a total of approximately 15,200 square meters of space compared with its current lease of approximately 24,400 square meters of factory space and dormitories located in Shenzhen. The reduced space requirements reflect the company’s relocation of most of its labor-intensive manufacturing and assembly operations to its facility in Yangon, Myanmar. The company also reported that it has renewed the leases of its executive offices in Hong Kong. The Hong Kong office leases, which will expire in March 2020, have been extended for three years on terms substantially similar to the existing lease terms.

Second Quarter 2020 Financial Results

• Net sales for the fiscal 2020 second quarter were $3.2 million compared with $3.5 million a year earlier. 
  
• Net loss for the same period was $94,000, or $0.02 per share, compared with net loss of $222,000, or $0.06 per share, a year earlier.
  

“Results for the quarter and first half of fiscal 2020 were affected by a reduction in orders from some of the company’s major customers, as previously reported. A sharp decline in demand for products sold by one of these customers was a major factor in our order softness, as well as by worldwide business dynamics -- specifically the ongoing trade war between the United States and China,” said Roland Kohl, chairman, president and chief executive officer.

He also noted that the company’s sales for the quarter and six months were impacted by price reductions provided to customers as an incentive to utilize the company’s newly expanded Myanmar operation. Kohl noted that approximately one-half of the company’s business is now being produced at its Myanmar manufacturing facility.

Kohl emphasized the company continues to focus on cost-reduction initiatives. Despite significant cost reductions, SG&A expenses were only modestly decreased for the reported periods due to costs associated with the transfer of business and equipment from the company’s China in factory to its Myanmar operation. These costs are expected to decline for the balance of the fiscal year, since the final phase of the equipment relocation is nearing completion. In addition, Kohl noted the company is also scaling back its operations in China to reflect its decreased utilization and the ramp up of production in the Myanmar factory. He added that the cost-savings initiatives will, however, be somewhat offset by additional expenses associated with training staff in Myanmar by the company’s Hong Kong-based managers and technicians, as well as its Chinese engineers.

First Quarter 2020 Financial Results

• Gross profit for the 2020 fiscal first quarter was $746,000 compared with $1.04 million in the same period a year ago, with gross profit as a percentage of sales remaining unchanged at 26 percent. 
  
• Net loss for the fiscal first quarter was $102,000, or $0.03 per share, compared with net income of $82,000, or $0.02 per diluted share, last year.  Net sales for the same period were $2.8 million compared with $4.1 million a year earlier.

“As noted in the company’s fiscal year-end release, our business is being impacted by a large reduction in orders from two of our larger OEM customers, which we believe is due in part to a decrease in sales by those OEM customers and the ever-increasing manufacturing costs in China -- causing some of our customers to move their business to other lower-cost suppliers.  We have made progress in our efforts to reduce this trend by convincing some of our customers to transfer a substantial amount of their business to our new factory in Myanmar.  Unfortunately, the savings through the lower manufacturing costs in Myanmar is being substantially passed through to our customers; therefore, in the short term, this action will lead to lower sales turnover and lower margin for this business,” said Roland Kohl, chairman, president and chief executive officer.  

Kohl noted that the company’s ongoing cost-cutting initiatives and the expected benefits of increased utilization of Myanmar will not be fully realized until the transfer of business and machinery from the company’s Shenzhen, China, facility to the Myanmar facility is completed.  “We expect the timing of these factors will have a short-term impact, but we remain cautiously optimistic about the expected long-term benefits to be realized from our emerging operations in Myanmar,” Kohl said.

HONG KONG, May 28, 2019 (GLOBE NEWSWIRE) -- Highway Holdings Limited (HIHO)today announced its Myanmar subsidiary, Kayser Myanmar Manufacturing Company Ltd., has entered into a 50-year lease agreement for an approximately 6,900 square meter (1.67 acres) factory estate in Yangon, Myanmar.

Highway Holding owns an 84% interest in the Myanmar subsidiary. The subsidiary had been operating until December 2018 in a nearby factory that it rented from another landlord.  After a better suited manufacturing estate was identified nearby, it took approximately one year to complete and obtain official approval and the formal recording of the 50-year lease agreement.  In the interim, the company upgraded and occupied the two existing factory buildings on this new property and constructed another manufacturing building and a new office complex. Additional details concerning the structure of the terms of the lease agreement are available in the company’s Form 6-K that was filed with the SEC on May 24, 2019.
All operations and equipment from the prior Yangon facility have been relocated to the new complex.  The company has also transferred some of its manufacturing equipment and business from its China factory to its new complex in Myanmar. It is also continuing to relocate additional manufacturing machinery from the company’s factory in China to the new facilities.
“This long-term lease enables us to realize meaningful cost-savings and a competitive advantage, while maintaining the highest quality standards for our customers. We are gratified by the support of our customers who have agreed to use our operations in Myanmar for their manufacturing needs.  The current unfavorable environment for manufacturers in China, including the escalating operating costs and the increasing governmental interference in our daily operations, has for the past few years made it increasingly difficult to manufacture at prices our customers are willing to pay.  Our expanding operations in Myanmar allow us to lower our overall manufacturing costs, which is expected to help us regain our competitive advantage with existing OEM customers and should enable us to attract new customers,” said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.

Third Quarters 2019 Financial Results

• Net sales for the quarter were $2.9 million compared with $5.0 million a year ago.
• Net loss for the fiscal 2019 third quarter was $305,000, or $0.08 per share, compared with income of $379,000, or $0.10 per diluted share, in the same quarter a year earlier.

“Despite the disappointing quarter, we are cautiously optimistic that business will improve in 2019.  Several factors support our optimism: While the decision by two of our major customers to sharply reduce their inventory levels by the 2018 year-end led to the cancellation and deferral of substantial orders, this appears to have been a one-time event, and we anticipate increased orders in the future from these two customers. Secondly, while some of our customers have decreased their orders with us because of weak demand for their own products, we have been informed that business is expected to improve for these customers.  Finally, despite continued strong pricing pressures from our customers because of high manufacturing prices in China, which has resulted in the loss of manufacturing orders, we believe our lower cost operations in Myanmar will become an increasingly attractive solution to customers seeking an alternative to the inflationary trends in China,” said Roland Kohl, chairman, president and chief executive officer.

He noted that the company’s new facility in Yangon is operational and has been approved by the company’s customers. The company is in the process of expanding operations of the Yangon facility and is relocating machinery and manufacturing equipment from China to the new site.  The equipment transfer will create significant additional manufacturing capacity once completed, which is expected to occur within this calendar year.

HONG KONG, Nov. 26, 2018 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced its board of directors has declared a cash dividend of $0.05 per share on the company’s common stock. The dividend will be paid on January 16, 2019 to shareholders of record on December 24, 2018.

Second Quarter 2019 Financial Results

• Net sales for the fiscal 2019 second quarter were $3.5 million compared with $4.6 million in the same quarter a year earlier.
• Net loss for the same period was $222,000, or $0.06 loss per share, compared with net income of $211,000, or $0.06 per diluted share, a year earlier.

“Our cash balances, and to some extent our operations, were impacted this past quarter because of the expenses incurred in connection with a 50-year lease of a new manufacturing facility our subsidiary is entering into in Myanmar and the relocation and buildout of that facility. This new facility, when leased and completed, will provide a larger, more modern factory complex to produce the high-quality products that our customers have come to expect,” said Roland Kohl, chairman, president and chief executive officer.

“In light of the on-going and escalating trade dispute between USA and China, our ability to shift a significant amount of manufacturing from our facility in China to this new Myanmar facility is an additional benefit, which is expected to allow us in the near future to capture additional business,” Kohl said. The company’s Myanmar subsidiary has been conducting its operations in Yangon, Myanmar, under a lease that expires by the end of 2018. The new factory complex is an approximately 65,000 square foot factory estate that currently contains two factory buildings. Also, as previously disclosed, the company intends to build a third factory and a new office building on the site, which construction is now underway. Under the laws of Myanmar, neither Highway Holdings nor its Myanmar subsidiary can own the new factory facility due to real estate laws restricting foreign ownership. However, a 50-year lease arrangement is permitted, and the company has decided to lease the new facility for 50 years in order to secure a long-term lease of a larger facility at a predictable cost.

Kohl noted that the company and the landlord have agreed on the principal terms for a lease of the factory, including the 50-year term, but that both parties still need to resolve certain issues related to real estate taxes and utilities cost allocations. He added that the landlord recently purchased the new facility, and its official ownership registration is still being processed. Accordingly, the parties cannot yet enter into a lease until the Myanmar governmental registration had been completed.

The land registration process with the local regulatory authorities may, however, not be completed by the date on which the company’s Myanmar subsidiary is required to move out of its existing facility in December 2018. “In order to accommodate the company, the landlord has allowed us to commence transferring some of our operations to the new facility and has allowed construction to start on the two additional new buildings on the site,” Kohl added.

He noted that it is customary in Myanmar to pay the total lease amount up front upon the execution of a lease. “Since the lease for the new facility cannot yet be signed, the company has advanced $950,000 as a prepayment to its subsidiary in Myanmar.”

HONG KONG, Aug. 28, 2018 (GLOBE NEWSWIRE) -- Highway Holdings Limited (HIHO) today announced its board of directors has declared a cash dividend of $0.10 per share on the

company’s common stock. The dividend will be paid on October 22, 2018 to shareholders of record on October 1, 2018.

First Quarter 2019 Financial Results

• Gross profit for the 2019 fiscal first quarter was $1.04 million compared with $1.38 million in the same period a year ago, with gross profit as a percentage of sales remaining unchanged at 26 percent.
• Net income for the first quarter of the fiscal year ending March 31, 2019 was $82,000, or $0.02 per diluted share, compared with $217,000, or $0.06 per diluted share, last year.  Net sales for the same period were $4.1 million compared with $5.3 million a year earlier.

“Results for the quarter reflect a sharp reduction in orders from two of our larger OEM customers, which we believe was due in part to a decrease in sales by those OEM customers, and also due in part to the ever-increasing manufacturing costs in China, which caused some business to move to other lower cost suppliers. While we remain cautiously optimistic about our long-term business outlook, we are not satisfied with our performance and are taking additional measures to address the situation – including utilization of our lower-cost, high-quality production capabilities in Myanmar for lower margin business and other possible adjustments to our product mix,” said Roland Kohl, chairman, president and chief executive officer.

“Increasing the utilization of the company’s new Myanmar manufacturing facilities while reducing our operations in China may also partially insulate the company from the effects of a trade dispute between the U.S. and China,” Kohl added.

Fourth Quarter 2018 Financial Results

• Net sales for the same period were $4.1 million compared with $4.7 million a year ago.
• Net income for the fiscal fourth quarter was $742,000, or $0.20 per diluted share, compared with $219,000, or $0.06 per diluted share, in the same quarter a year ago.

“Results for fiscal 2018 reflect improvement in operational margins, which benefitted from acceptance of price increases from certain customers and the strategic elimination of low-margin business, as discussed in previous quarters.  We continued to make progress in streamlining our OEM business, which includes greater utilization of robotics and automation equipment in China and increasing utilization of our Myanmar subsidiary.  In addition, we continued to strengthen our technical capabilities with enhancements to our engineering department to support innovation and future growth,” said Roland Kohl, chairman, president and chief executive officer.

He noted that the company’s expansion in Myanmar is becoming more attractive to the company’s existing and prospective customers due to the economic impact of escalating operational costs in China. “Nonetheless, the timing of business we expect to realize from the transition of manufacturing operations to Myanmar is uncertain, and quarter-to-quarter performance will vary,” Kohl said.

“The manufacturing cost advantage of utilizing further automation and the benefits of Myanmar’s favorable labor costs are mostly passed through to our customers, which contributes to lower pricing and sales turnover. As a result, we anticipate some sales softness as we commence a new fiscal year, but remain cautiously optimistic about our longer-term prospects,” Kohl added.

Third Quarter 2017 Financial Results

• Net sales for the fiscal 2018 third quarter were $5.0 million compared with $5.4 million a year ago -- reflecting the continuous impact of a previously announced strategic decision to phase out certain low-margin business.
• Net Income per share - basic and diluted was $0.10 vs last years $0.07.

“We continue to focus on organic growth and appropriate new business opportunities to increase sales momentum,” said Roland Kohl, chairman, president and chief executive officer.

“As noted in last quarter’s financial release, an ongoing challenge for the company is to balance the increasing costs in China and Hong Kong, which result in continuously increasing wages, with the pricing expectations of our customers,” Kohl said. He added that the company’s two- pronged strategic objective is to improve this situation by greater utilization of automation in China and increased utilization of lower-cost labor manufacturing in Myanmar.

HONG KONG, Nov. 13, 2017 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced its board of directors has declared a cash dividend of $0.06 per share on the company’s common stock. The dividend will be paid on December 22, 2017 to shareholders of record on December 8, 2017.

Second Quarter 2018 Financial Results

• Net sales for the fiscal 2018 second quarter increased 9.5 percent to $4.6 million from $4.2 million in the same quarter a year earlier.
• Net income for the same period was $211,000, or $0.06 per share, compared with a net loss of $128,000, or $0.03 per share, a year earlier. 

Sales activity gained slight momentum in the first half of fiscal 2018, though customers remain hesitant to accept necessary price increases due to inflationary pressures for Chinese-manufactured products. In addition, customers are also somewhat cautious to utilize our lower-cost Myanmar operation as an alternative to our operations in China, given political issues in this emerging country,” said Roland Kohl, chairman and chief executive officer of Highway Holdings.

Kohl noted that the company is working diligently to execute its strategy to expand its business for higher margin products, which depends on the company’s ability to minimize inflationary pressures by utilizing advanced technology to improve manufacturing efficiency and offset ever-increasing operational costs in China.

He emphasized that the company is continuing initiatives in Myanmar. “Shifting more of the manufacturing operations to Myanmar will both lower the cost of operations and reduce transportation costs between the company’s China and Myanmar facilities. These factors are expected to be especially attractive to potential new customers who are seeking a lower-cost manufacturer, and to existing customers who are strategically focused on transitioning away from more expensive manufacturing in China,” said Kohl.

First Quarter 2017 Financial Results

• Net sales for the same period were $5.3 million compared with $5.2 million a year earlier.
• Net income for the fiscal 2018 first quarter increased 31.5 percent to $217,000, or $0.06 per diluted share, from $165,000, or $0.04 per diluted share, last year.

“Results for the fiscal first quarter indicate the company is nearing the end effect of its multi-year strategy to eliminate lower margin business. We are encouraged by business trends indicating the willingness of customers to accept realistic price increases to support the quality and reliability of our manufacturing services,” said Roland Kohl, chairman, president and chief executive officer.

Fourth Quarter 2017 Financial Results

• Net sales for the same period were $4.7 million compared with $5.2 million a year ago.
• Net income for the fiscal fourth quarter was $219,000, or $0.06 per diluted share, compared with $215,000, or $0.06 per diluted share, in the same quarter a year ago.

“Results for fiscal 2017 reflect improvement in operational margins, which benefitted from acceptance of price increases from some customers and the elimination of low-margin business, as noted above.  We continued to make progress in streamlining our OEM business, which includes greater utilization of automation equipment in China and increasing utilization of our Myanmar subsidiary.  In addition, we continued to strengthen our internal technology in fiscal 2017 to support innovation and future growth,” said Roland Kohl, chairman, president and chief executive officer.

He noted that the company’s expansion in Myanmar is becoming more attractive to the company’s existing and prospective customers due to the economic impact of escalating operational costs in China. “Nonetheless, the timing of business we expect to transition to our operations in Myanmar depends on a variety of factors and may continue to impact quarterly results due to higher or lower sales contributions, but we remain optimistic about our future growth prospects,” Kohl added.

HONG KONG, April 18, 2017 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced the company has increased its ownership interest to 84 percent at its Myanmar subsidiary. Terms were not disclosed.

The Myanmar subsidiary currently operates approximately 20,000 sq. ft. of manufacturing and assembly space in Yangon, Myanmar – including the recent expansion of manufacturing space at the same location.  Highway Holdings has utilized this facility for several years under a subcontracting arrangement.  The company previously held a 75 percent ownership interest in this Myanmar entity. Commerce law changes in Myanmar during the past few years have allowed non-Myanmar companies such as Highway Holdings to acquire interests in businesses that are domiciled and operating in Myanmar.  These businesses are designated as “foreign companies.”

“The increased ownership interest reflects our confidence in Myanmar and our latest success in transitioning new component manufacturing processes from our main manufacturing facilities in China to our Myanmar subsidiary. The operation in Myanmar is supported by our operation in China and enables us to realize meaningful cost-savings and a competitive advantage, while maintaining the highest quality standards for our customers,” said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.

“We are gratified by the confidence of our customers in the company’s high-quality production standards in Myanmar, supported by ongoing training and monitoring by our staff in China.  We are pleased with our progress to date in Myanmar and look forward to further opportunities for additional business based on demonstrated quality, service and capacity,” Kohl said.

Third Quarter 2017 Financial Results

• Net sales for the fiscal 2017 third quarter were $5.4 million compared with $5.6 million a year ago.
• Net income for the fiscal 2017 third quarter was $270,000, or $0.07 per diluted share, compared with $342,000, or $0.09 per diluted share, in the same quarter a year earlier.

Results for the quarter were mixed. The modest decline in net sales and the additional expenses related to the relocation of equipment in both China and Myanmar were partially offset by the operational benefits derived from utilization of our Myanmar operations. Once the previously announced component manufacturing in Myanmar fully comes on stream, the benefits should outstrip the costs we are currently incurring.  Results for the quarter were further impacted by a previously announced strategic decision to phase out certain, low-margin business despite our focus on higher-margin business and customer price increases.  We continue to focus on organic growth and on new business opportunities to offset this strategic reduction of lower margin sales, and remain hopeful about anticipated positive contributions to our operations in the future,” said Roland Kohl, chairman, president and chief executive officer.

“As noted last quarter, an ongoing challenge is to balance the increasing costs in China and Hong Kong, which includes heavy demands by employees for continuously increasing wages, with the pricing expectations of our customers,” Kohl said. He added that a key strategic objective to help offset this situation is to increase utilization of automatic manufacturing in China and increased utilization of Myanmar.

Currency exchange rates continued to negatively affect the company’s net income for the nine-month period ended December 31, 2016. The company reported a $79,000 currency exchange loss compared with a $44,000 exchange loss in fiscal 2016 -- mainly due to the weakening of the RMB at December 31, 2016 and Euro. The company does not engage in currency exchange rate hedging, and the fluctuations in the exchange rate of the RMB since January 1, 2017 are expected to affect the company’s future results.

Kohl noted the company’s balance sheet remains very strong.  The company’s total cash position at December 31, 2016 increased to $9.8 million, or approximately $2.60 per share, compared with $8.9 million at December 31, 2015, despite dividend payments and equipment and project investments. The company’s current ratio was 3:1 at December 31, 2016. The company's total cash exceeded all current and long-term liabilities combined by $4.7 million.

Second Quarter 2017 Financial Results

• Net sales for the fiscal 2017 second quarter were $4.2 million compared with $6.1 million in the same quarter a year earlier
• For the fiscal 2017 second quarter, the company reported a net loss of $128,000, or $0.03 per share, compared with net income of $391,000, or $0.10 per diluted share, a year earlier.

“The company continues to transition away from low margins business, with a focus on capturing new business to replace this business. At the same time, we are working diligently to maintain and grow business from our higher margin customers, which depends very much on the company’s ability to minimize inflationary increases of operational costs in China,” said Roland Kohl, chairman and chief executive officer of Highway Holdings.

Kohl emphasized that the company is continuing its initiatives in Myanmar by relocating some component manufacturing machinery and equipment to its Myanmar operation, with the goal of expanding its assembly and manufacturing capabilities in that emerging country. “Shifting more of the manufacturing operations to Myanmar will both lower the cost of operations and reduce transportation costs between the company’s China and Myanmar facilities. These factors are expected to be attractive to a broader customer base and to lessen the dependency on the company’s operations in China. For the short term, such adjustments may slightly influence the company’s performance, but the initiatives are expected to secure and enhance the company’s future in the medium and longer term,” Kohl said.

First Quarter 2017 Financial Results

• Net sales were $5.2 million compared with $5.9 million a year earlier.
• Net income for the fiscal 2017 first quarter was $165,000, or $0.04 per diluted share, compared with $302,000, or $0.08 per diluted share, last year.

'Results for the fiscal first quarter appear to reflect the impact of customer order patterns due to summer schedules and plant holiday closures. While it is possible that customer inventory adjustments during the quarter were due to price increases related to the inflationary environment in China, we do not believe the sales decline is a long-term trend. We are focused on year-over year growth, despite quarterly factors and operational interruptions that can impact short-term performance,' said Roland Kohl, chairman, president and chief executive officer.

He noted that the company is preparing to relocate some of its current metal stamping operations into a newly built factory in Longhua, Shenzhen. He also noted the company plans to expand in Yangon, Myanmar to accommodate increased space requirements for equipment to be utilized for component manufacturing that will be added to its existing assembly production at this emerging operation. 'Upon completion, these additions will improve efficiency and enhance our value-proposition, especially in Myanmar,' Kohl said.

Fourth Quarter 2016 Financial Results

• Net sales for the same period increased 7.4 percent to $5.2 million from $4.9 million a year ago.
• Net income for the fiscal fourth quarter increased 33.5 percent to $215,000, or $0.06 per diluted share, from $161,000, or $0.04 per diluted share, in the same quarter a year ago. Net sales for the same period increased 7.4 percent to $5.2 million from $4.9 million a year ago.

Results for fiscal 2016 reflect solid improvement in operational profitability, attributable to price increases, as noted above, a reduction in low-margin business and the benefits of the company’s continued focus on streamlining our OEM business – including increased utilization of our Myanmar subsidiary,” said Roland Kohl, chairman, president and chief executive officer.

He noted that the company’s expansion in Myanmar is expected to be an attractive alternative to competition from other low-cost manufacturers focused on gaining manufacturing business due to escalating prices in China. “Nonetheless, the timing of business we expect to transition to our operations in Myanmar depends on a variety of factors and may impact quarterly results due to higher or lower sales contributions,” Kohl added.

HIGHWAY HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except for shares and per share data)

Third Quarter 2015 Financial Results

• Net sales for the same period were $5.7 million compared with $6.0 million a year ago
• Net income for the fiscal 2016 third quarter was $342,000, or $0.09 per diluted share, compared with $361,000, or $0.10 per diluted share, in the same quarter a year earlier.

“Results for the quarter reflect better pricing and, as noted above, the benefits of utilizing our Myanmar operation. Sales were impacted by a previously announced strategic decision to phase out of certain low-margin business. We continue to focus on organic growth and new business opportunities to offset this strategic sales loss and remain encouraged by our margin contributions,” said Roland Kohl, chairman, president and chief executive officer.

“Despite certain cost and pricing advantages derived from our operation in Myanmar, a major portion of the company’s business is still manufactured and produced in China. An ongoing challenge, therefore, is to balance the highly inflationary environment of China and Hong Kong, including higher wages, with the pricing expectations of our customers,” Kohl said. He noted that the emerging utilization of Myanmar, which offers high quality and lower-cost advantages for assembly work, remains an important strategic goal for management and a competitive benefit to the company’s customers.

HONG KONG, Nov. 09, 2015 (GLOBE NEWSWIRE) -- Highway Holdings Limited (HIHO) today announced its board of directors has declared a cash dividend of $0.10 per share on the company�s common stock. The dividend will be paid on December 24, 2015 to shareholders of record on December 8, 2015. 

The foregoing dividend that will be paid on December 24, 2015 is the fourth dividend paid by the company in 2015, representing a cumulative payout of $0.40 per share. Including this dividend, the company will have paid a total of $0.75 per share in dividends since January 1, 2013.

Dividends are declared and paid from time to time at the discretion of the board of directors and depend upon, among other things, the company�s net profit after taxes, the anticipated future earnings of the company, the success of the company�s business activities, the company�s capital requirements, and the general financial conditions of the company.  Although it is the company�s intention to pay dividends during profitable years, no assurance can be given that the company will, in fact, pay any dividends in the future even if it has a profitable year or is otherwise capable of doing so. 

Second Quarter 2016 Financial Results

Net sales for the fiscal 2016 second quarter increased to $6.14 million from $5.88 million in the same period a year earlier.

Net income for the fiscal 2016 second quarter increased to $391,000, or $0.10 per diluted share, from $372,000, or $0.10 per diluted share, a year earlier.

�Results for the quarter and six months reflect a previously disclosed strategy to focus on higher margin business and a transition away from certain low-margin OEM engagements. Despite an expected short-term negative impact on sales as a result of this strategy, sales for the quarter actually increased due to the utilization of available capacity by our continuing customers,� said Roland Kohl, chairman and chief executive officer of Highway Holdings.

�We are pleased that so far we have replaced this low-margin business with higher margin business in 2016; and, we are cautiously optimistic that our existing customers will further increase their business with us during the remainder of fiscal 2016 and take advantage of our increased capacity that is being created by the phase out of low-margin business,� Kohl said.

He added that the company�s strategy to transition labor-intensive assembly manufacturing activities from the company�s higher wage facility in China to its lower wage majority-owned Myanmar subsidiary is continuing. �Our customers have the option of benefitting from the favorable cost structure of our operation in Myanmar, or continuing to have their products manufactured in our facilities in China and accept higher associated costs,� Kohl said. He noted that cost reductions from the company�s streamlining initiatives have been outpaced by the inflationary cost increases related to manufacturing in China -- particularly in the areas of administration and engineering, which the company continues to carefully monitor and address as appropriate. As a result of these inflationary pressures, the company�s selling, general and administrative expenses increased during both the fiscal 2016 three- and six-month periods.

HONG KONG, Aug. 10, 2015 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced its board of directors has declared a cash dividend of $0.10 per share on the company's common stock. The dividend will be paid on September 15, 2015 to shareholders of record on August 25, 2015.

First Quarter 2016 Financial Results

Net income for the fiscal 2016 first quarter climbed 18 percent to $302,000, or $0.08 per diluted share, from $256,000, or $0.07 per diluted share, last year.

"Results for the quarter further validate the continued success of the company's strategic initiatives implemented during the past two years. Despite an anticipated reduction in sales due to the phase out of low margin business during last year, we achieved strong sales contributions from our remaining higher margin business, which more than compensated for the lost sales. By phasing out very low margin business, we were able to satisfy the increased demand for additional production capacity from our higher margin customers. The additional demand and the improved pricing allowed us to pay higher wages and thereby retain and hire more workers, despite the extremely tight labor market in Shenzhen, China. Furthermore, our customers are utilizing this opportunity to increase their business with us," said Roland Kohl, chairman, president and chief executive officer.

HONG KONG, July 6, 2015 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced its board of directors has declared a cash dividend of $0.10 per share on the company's common stock. The dividend will be paid on August 10, 2015 to shareholders of record on July 13, 2015.

HONG KONG, June 30, 2015 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today reported results for its fiscal fourth quarter and year ended March 31, 2015, reflecting a sharp increase in profitability on a year-over-year basis and solid financial strength for the quarter and full year.

Net income for the fiscal fourth quarter increased 11 percent to $161,000, or $0.04 per diluted share, from $145,000, or $0.04 per diluted share, in the same quarter a year ago. Net sales for the same period were $4.9 million compared with $5.4 million a year ago.

Net income for fiscal 2015 increased 93 percent to $1.1 million, or $0.30 per diluted share, from $596,000, or $0.16 per diluted share, in fiscal 2014. Net sales for fiscal 2015 were $22.4 million compared with $22.9 million a year ago, reflecting a previously announced planned phase out of certain low margin business during fiscal 2015.

Operating income for fiscal 2015 increased sharply to $1.3 million from $793,000 a year earlier.

"Results for fiscal 2015 reflect solid improvement in operational profitability, attributable to price increases, a reduction in low-margin business and the benefits of the company's continued focus on streamlining its OEM business," said Roland Kohl, chairman, president and chief executive officer.

He highlighted the company's purchase in the fiscal fourth quarter of an additional 50 percent ownership interest in a Myanmar entity that operates an approximately 15,000 sq. ft. manufacturing and assembly factory in Yangon, Myanmar, that Highway Holdings has utilized for more than two years under a subcontracting arrangement. As a result of the purchase of the additional interest, the company now has a total current ownership position of 75 percent.

"Our goal in the new fiscal year is to further utilize Myanmar for labor-intensive assembly of parts and components, which enables us to offer cost-effective and competitive benefits to our customers. These cost savings are expected to support organic growth and new business opportunities," Kohl said. He noted that OE manufacturing in China continues to be challenging due to increasing labor and operational costs, and Myanmar is expected to become increasingly important to the company's future success.

Gross profit as a percentage of net sales increased in fiscal 2015 to 25.6 percent from 23.8 percent a year earlier, attributable to higher margin product sales and improved pricing � despite higher labor costs and increased costs of operating in China. Gross margins also increased as a result of the lower cost of assembly on the products assembled in Myanmar.

Selling, general and administrative expenses decreased for the full year compared with a year ago. Selling, general and administrative expenses as a percentage of net sales decreased to 19.9 percent in fiscal 2015 from 20.3 percent in fiscal 2014, primarily due to streamlining initiatives and improved operating efficiencies.

Currency exchange rates negatively affected the company's net income for fiscal 2015. The company realized a currency exchange loss of $125,000 compared with a currency exchange loss of $31,000 a year ago, mainly due to weakness of the Euro and the weakening of the RMB. The company traditionally does not undertake any currency hedging transactions.

Kohl noted that the company's balance sheet remains strong, despite three dividend distributions in fiscal 2015 -- representing an aggregate $0.20 per share. Total current assets at March 31, 2015 were $15.8 million, with working capital of $11 million and a current ratio of 3.3:1. Total cash was $9.7 million, or $2.60 per diluted share, exceeding all current and long term liabilities combined by $5 million. Kohl noted that the company's cash position increased by $3.7 million over the prior year -- due primarily to the phase out of certain low-margin business, which reduced inventory and accounts receivable and contributed to increased profitability for the fiscal year.

HONG KONG, May 11, 2015 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced it has purchased an additional 50 percent ownership interest in a Myanmar entity that operates a 15,000 sq. ft. manufacturing and assembly factory that the company has utilized for more than two years under a subcontracting arrangement. The company previously held a 25 percent ownership interest in this Myanmar entity. Terms were not disclosed.

Recent commerce law changes in Myanmar now allow non-Myanmar companies such as Highway Holdings to acquire interest in businesses that are domiciled and operating in Myanmar. These businesses are designated as "foreign companies" and provide foreign investors with a tax holiday if certain import/export conditions and government regulations are satisfied.

"The acquisition enables us to realize meaningful cost-savings and a competitive advantage, while maintaining the highest quality standards for our customers. The utilization of the facility in Myanmar complements our component manufacturing operation in China, while partially offsetting escalating costs there. We are gratified by the support of the Myanmar government agencies, our local partner, managers and employees, and look forward to long-term success in this emerging country," said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.

As previously announced, one of Highway Holdings' leading European Fortune 500 customers approved the utilization of assembly manufacturing for a series of electric synchronous motors at the facility in Myanmar, initially under a pilot test program.  Production for this product has since ramped up and approximately 500,000 units have already been shipped directly to the customer's factory in Germany from Myanmar. The production of air turbines for another customer has been ramping up simultaneously, with several millions pieces to date assembled at the Myanmar facility. "Our high-quality production standards have been successfully applied and transferred one-by-one to Myanmar, supported by ongoing training and monitoring by our staff in China. The setup of a socially responsible, modern, high-quality and world-class operation in Myanmar has been accomplished in a relatively short time frame, and we are extremely pleased with the outcome.

 "We anticipate further growth opportunities based on demonstrated quality and service, with expectations for additional business from these customers and also other multi-national organizations moving forward," Kohl said.

HONG KONG, April 27, 2015 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced it has developed a low-cost proprietary liquid carbon dioxide (CO₂) cooling system to be used for CO₂-based cleaning applications.

The new technology will lower the cost of the system and be more cost-effective than other available cooling systems. It will also require less space than other products, with a design that allows for incorporation directly into the spray gun.

The company has filed a patent application on this CO₂ cooling system in Hong Kong, and it plans to apply for patent protection in other markets worldwide.

The company also announced plans to expand the scope of its CO₂ cleaning equipment to include both the dry ice and snow-jet cleaning processes. To date, the company has only been developing a CO₂ snow jet product. CO₂ snow-jet cleaning applications are primarily utilized for industrial applications -- such as preparation for gluing materials; preparation before painting and coating of components; and cleaning of glass and electronic circuit boards. These processes are especially important for automotive and airline-related products. Dry ice CO₂ cleaning, which is slightly more abrasive than snow-jet equipment, has an even broader addressable market, with applications such as tool, engine, electrical equipment cleaning, paint stripping, rust and mold removal, de-burring metal components, refurbishing furniture and automotive repair uses.

Highway Holdings formed in 2013 a joint venture, Advanced Cleaning Innovation Asia (ACIA), with ACI Systems GmbH, based in Zimmern, Germany, to manufacture and market in Asia a series of proprietary CO₂ snow-jet cleaning systems for industrial and commercial cleaning applications.

The CO₂ snow-jet cleaning machine differs from other systems currently on the market due, in part, to the utilization of a patented nozzle technology that was developed at the internationally recognized Fraunhofer Institute based in Germany in collaboration with the founders of the ACI Group. Fraunhofer Institute is the largest application-oriented research organization in Europe. ACI Group holds the right to this patented nozzle technology, which optimizes the entire cleaning process by minimizing the consumption of CO₂. It also eliminates the negative "wet" condensation effect of other existing CO₂-based cleaning machines on the market.

CO₂ snow-jet and dry ice cleaning systems are existing technologies that utilize pressurized carbon dioxide to clean in an environmentally friendly manner. The pressurized CO₂ used in the cleaning process is derived from the atmosphere, as well as from industrial processes as a by-product, representing environmental friendly sourcing. 

"The expansion and improvement of our CO₂-based cleaning technology addresses increasing demand for sophisticated and environmentally friendly cleaning equipment, particularly given ongoing global concerns about chemical cleaning solvents and their effect on human health and the environment. Europe, during the last few years, for example, has adopted strict import regulations with regard to certain toxic cleaning chemicals and products treated with such chemicals. All importers into Europe must now comply with these regulations and certify compliance with these new standards. We anticipate market demand for CO₂ cleaning products will increase significantly due to increasing environmental considerations and the anticipated reduction in the cost of cleaning machines," said Roland Kohl, president and chief executive officer of Highway Holdings.

Kohl noted that the market for CO₂ cleaning products is evolving and currently being served by a small number of companies. "This market is gaining momentum and the expansion into CO₂ cleaning products supports our ongoing strategic commitment to add product lines with strong growth prospects that complement the company's OEM business," Kohl said.

Highway Holdings owns a 51 percent interest in the joint venture, and ACI Systems owns the remaining 49 percent. Highway provides ACIA with manufacturing and assembly facilities for the production of the cleaning systems. ACI Group sells the patented nozzle to ACIA, and provides technology, technical support and training to the joint venture.

HONG KONG, Feb. 9, 2015 (GLOBE NEWSWIRE) -- Highway Holdings Limited (HIHO) today announced its board of directors has declared a cash dividend of $0.10 per share on the Company's common stock. The dividend will be paid on April 16, 2015 to shareholders of record on March 9, 2015.

Third Quarter 2015 Financial Results

• Net sales for the same period increased to $6.0 million from $5.8 million a year ago,
• Net income for the fiscal 2015 third quarter increased to $361,000, or $0.10 per diluted share, from $149,000, or $0.04 per diluted share, in the same quarter a year earlier.

"Results for the quarter reflect better pricing and, as noted above, a previously announced strategy to phase out low-margin, or unprofitable, business. This phase out has been completed and we are diligently focused on organic growth and new business opportunities to offset the low-margin sales," said Roland Kohl, chairman, president and chief executive officer.

Kohl emphasized the company has further increased its marketing efforts to gain new business by highlighting the company's quality manufacturing and other value-added services to potential customers. "These initiatives, while still developing, are particularly important for our future success and the emerging utilization of Myanmar, which offers high quality and lower-cost advantages for assembly work.

He noted that despite certain cost and pricing advantages of the company's Myanmar operation, most of the company's business activities are still in China � although the company is continuing efforts to shift its labor intensive assembly business to Myanmar. "An ongoing key challenge, therefore, is to balance the highly inflationary environment in China and Hong Kong, including higher wages for employees, with customer pricing expectations," Kohl added.

"Results for the quarter reflect better pricing and, as noted above, a previously announced strategy to phase out low-margin, or unprofitable, business. This phase out has been completed and we are diligently focused on organic growth and new business opportunities to offset the low-margin sales," said Roland Kohl, chairman, president and chief executive officer.

Kohl emphasized the company has further increased its marketing efforts to gain new business by highlighting the company's quality manufacturing and other value-added services to potential customers. "These initiatives, while still developing, are particularly important for our future success and the emerging utilization of Myanmar, which offers high quality and lower-cost advantages for assembly work.

He noted that despite certain cost and pricing advantages of the company's Myanmar operation, most of the company's business activities are still in China � although the company is continuing efforts to shift its labor intensive assembly business to Myanmar. "An ongoing key challenge, therefore, is to balance the highly inflationary environment in China and Hong Kong, including higher wages for employees, with customer pricing expectations," Kohl added.

Currency exchange rates negatively affected the company's net income for the nine-month period ended December 31, 2014. The company reported a $52,000 currency exchange loss compared with a $28,000 exchange gain in fiscal 2014 -- mainly due to the weakening of the RMB and Euro currencies at December month ended.

Kohl noted the company's balance sheet remains very strong. The company's total cash position at December 31, 2014 was $8.7 million, or approximately $2.29 per share compared with $6.06 million at March 31, 2014, despite several dividend payments since April 2014. The phase out of certain low margin business resulted in the monetization of certain inventories, which translated into a higher cash position. The company's current ratio was 3.7:1 at December 31, 2014. The total cash exceeded all current and long term liabilities combined by $4.7 million.

Second Quarter 2014 Financial Results

• Net Sales $5.88 Million vs. last years $5.85 Million.
• Net income for the fiscal 2015 second quarter increased to $372,000, or $0.10 per diluted share, from net income of $153,000, or $0.04 per diluted share, a year earlier.

"Results for both the second quarter and the year-to-date period reflect a previously highlighted strategy to focus on higher margin business and transition away from certain low margin OEM engagements, despite the expected short-term impact to sales," said Roland Kohl, chairman and chief executive officer of Highway Holdings.

"The phasing out of lower margin business is still ongoing and should be completed on or before the end of the company's fiscal year; and, we are guardedly optimistic that our focus on higher margin business will mitigate the short-term impact on sales turnover and the absorption of expenses," Kohl said.

He noted the company's higher margin business strategy incorporates both the on-going streamlining initiatives as well as the company's efforts to transition much of the labor-intensive assembly manufacturing activities from China to Myanmar. Kohl added that results for the quarter benefited from the sale of obsolete machinery and equipment, which had been fully written off, but retained excellent resale value. "The sale of these assets is consistent with the company's streamlining initiatives, supported by a planned machinery and equipment upgrade," Kohl added.

He also added that wage inflation in Hong Kong and China remains a concern, particularly in the areas of administration and engineering, and the company continues to carefully monitor the situation and address it, as appropriate.

Kohl noted results for the past two quarters were still impacted by direct and indirect costs and expenses associated with supporting and upgrading the assembly operation of the company's subcontractor and joint venture partner in Myanmar. He added that the company is continuing its efforts to acquire a majority interest in the Myanmar operation from the local current subcontractors. "This potential investment has been enabled by recent changes to business laws in Myanmar permitting foreign direct investment and participation in domestic companies, within a structure that is still evolving. Highway Holdings' investment in the Myanmar facility still is subject to central government approval and new procedures for which the timing is still unknown," Kohl said.

He added that the operation in Myanmar, based on present business volume, has achieved profitability, and the company's interest in the Myanmar operation is accounted for under an equity method in the company's consolidated financial statements.

Kohl said he is cautiously optimistic about the company's long-term sales and earnings growth opportunities, supported by current and new business trends � including the ongoing transfer of an increasing volume of the company's labor-intensive assembly work to operations in Myanmar. Once our existing and new customers overcome their concerns about manufacturing their products in Myanmar, we believe that they will come to appreciate the benefits of our lower cost, high-quality assembly facilities and will agree to a cost structure that is mutually beneficial," Kohl added.

HONG KONG, Aug. 7, 2014 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced its board of directors has declared an additional cash dividend of $0.05 per share on the company's common stock. The dividend will be paid on September 1, 2014 to shareholders of record on August 20, 2014.

On July 7, 2014, the company declared a cash dividend of $0.05 per share on the company's common stock which is payable tomorrow, August 8, to shareholders of record on July 28, 2014.

First Quarter 2014 Financial Results

• Net sales for the same period were $5.6 million compared to $5.9 million a year earlier � reflecting the reduction of some low margin business.
• Net income for the fiscal first quarter increased sharply to $256,000, or $0.07 per diluted share, from $150,000, or $0.04 per diluted share, last year.

"Results for the quarter further validate the success of the company's strategic initiatives implemented during the past three years. Despite anticipated reduced sales, net income increased substantially -- benefiting from continuous operational improvements and increased pricing to major customers," said Roland Kohl, chairman, president and chief executive officer.

Kohl added that he expects the company's increased utilization of the lower-cost Myanmar facility as an alternative solution for its higher-cost assembly manufacturing in China will enhance organic growth and generate new business opportunities. Although net sales decreased in the fiscal 2015 first quarter due to the loss of low margin sales, gross margin and gross profit increased compared with a year ago. Gross profit for the 2015 fiscal first quarter was $1.33 million compared with $1.25 million in the same period a year ago, with gross profit as a percentage of sales increasing to 23.7 percent from 21.3 percent a year ago.

HONG KONG, July 7, 2014 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced its board of directors has declared a cash dividend of $0.05 per share on the company's common stock. The dividend will be paid on August 8, 2014 to shareholders of record on July 28, 2014.

Fourth Quarter 2014 Financial Results

• Net sales for the fiscal fourth quarter were $5.4 million compared with $5.5 million a year earlier.
• Net income for the same period was $145,000, or $0.04 per diluted share, compared with $274,000, or $0.07 per diluted share, a year earlier mainly due to a tax credit of $142,000 that the company received in fiscal 2013.

"Despite continued challenges for OEM manufacturers in China, we improved profitability and maintained a solid financial position in fiscal 2014. Our goal in the new fiscal year is to establish a presence outside of China for labor-intensive assembly of parts and components to offset increasing labor and administrative costs impacting our operations in China. These proactive initiatives include transferring some of our assembly work to a lower cost facility in Myanmar that complements our manufacturing and technological capabilities in China. We are encouraged by the success of the new Myanmar assembly production operation and by our sales and earnings growth regaining momentum," said Roland Kohl, president and chief executive officer of Highway Holdings.

HONG KONG, Feb. 3, 2014 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced its board of directors has declared a cash dividend of $0.04 per share on the company's common stock. The dividend will be paid on March 28, 2014 to shareholders of record on March 3, 2014.

Third Quarter 2014 Financial Results

• Net income for the fiscal 2014 third quarter was $149,000, or $0.04 per diluted share, compared with $18,000, or $0.01 per diluted share, in the third quarter a year earlier.
• Net Sales was 5.8 Million up from last years of $5.6 Million

"Results for the quarter reflect the company's focus on quality manufacturing and customer service to increase business to existing customers and attract additional business opportunities. A key challenge is to balance a highly inflationary environment in China and Hong Kong, including higher wages for employees, with customer pricing expectations," said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.

Kohl noted that the company is presently in discussions with most of its major customers for further price increases to match escalating operating costs in China and/or authorization to transfer labor intensive assembly work to its lower-cost, sub-contracting operation in Myanmar. "The relocation of certain labor intensive assembly services to Myanmar should be an attractive alternative to our customers, since it is a practical solution to maintaining quality and service without, in most cases, further price increases," Kohl said.

He noted that the Chinese government recently announced another minimum wage increase of approximately 13 percent effective February 1, 2014 for the Shenzhen region, reflecting the difficulty of attracting workers and further contributing to an inflationary environment in China.

HONG KONG, Jan. 13, 2014 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced it has entered into a cooperation agreement with California-based Sumar International, Inc., whereby Highway Holdings will develop two products under a pilot program intended to ultimately establish the company as the OEM provider for a majority of Sumar's mount- and stand-related product lines for television electronics and accessory applications.

"We are gratified by the confidence of Sumar in Highway Holdings' quality and capabilities and look forward to further opportunities to expand a valued-relationship that has evolved over several years," said Roland Kohl, president and chief executive officer of Highway Holdings.

He noted the two products under the pilot program are in the design and development stage, and tooling for full-production is expected to be completed this month.

Kohl added that he anticipates Highway Holdings will utilize a variety of the company's capabilities for Sumar's OEM requirements, including metal component manufacturing services, plastic component molding and assembly.

HONG KONG, Dec. 9, 2013 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced it has received three tooling orders designed to produce plastic components for printers offered by a leading U.S. printer company.

"This new additional business represents an expansion of an OEM relationship that has evolved since 2007. We are gratified by the confidence of our customer in the company's quality and capabilities and look forward to further opportunities to expand our valued-relationship," said Roland Kohl, president and chief executive officer of Highway Holdings.

Kohl noted that the commencement of plastic component production represents a significant strategic opportunity to expand the relationship with this prestigious customer, which to date has only utilized Highway Holdings' metal component manufacturing services. "We are now well-positioned to leverage our established metal parts supplier relationship to expand and become a leading plastic parts supplier for this customer in the near future.  This is particularly significant since the plastic components business is much larger than metal components and the opportunities for future growth much greater," Kohl said.

HONG KONG, Nov. 25, 2013 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced it has received approval from one of its leading European Fortune 500 customers for assembly manufacturing of one series of electric synchronous motors at the company's subcontracting facility in Myanmar.

Assembly production, which was approved following extensive testing and quality control evaluation, has commenced and finished products are being shipped directly to the customer's factory in Germany.

"The assembly of these motors in Myanmar complements our component manufacturing operation in China and enables us to realize meaningful cost-savings and a competitive advantage, while maintaining the highest quality standards. We appreciate our customer's confidence in our capabilities and support; and, we are gratified that this more than 10-year relationship continues to flourish," said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.

Kohl noted he expects the customer's entire line of synchronous motors will be assembled in Myanmar by September 2014, at the latest. He added that this is Highway Holdings' second major customer to utilize its capabilities in Myanmar, with strong expectations that additional businesses will transition assembly work to the company's operation in this country to take advantage of the significant cost benefits.

HONG KONG, Nov. 12, 2013 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced it has formed a joint venture with ACI Group GmbH, based in Zimmern, Germany, to manufacture and  market in Asia a series of proprietary CO₂ snow-jet cleaning systems for industrial and commercial cleaning applications.

The newly formed Hong Kong-based joint venture is named "Advanced Cleaning Innovation Asia" (ACIA) and will initially utilize Highway Holdings' facilities in Hong Kong and Shenzhen, China for its operations. Highway Holdings owns a 51 percent interest in the joint venture, and ACI Group owns the remaining 49 percent. Highway will provide manufacturing and assembly facilities for the production of the cleaning systems.  ACI Group will provide the technology (including the rights to the patented nozzle), technical support and training.  ACIA will market the products in Asia.

The CO₂ snow-jet cleaning is an existing technology that utilizes pressurized carbon dioxide to clean industrial equipment in a non-destructive, non-abrasive and environmentally friendly manner. The pressurized CO₂ used in the cleaning process is derived from the atmosphere, as well as from industrial processes as a by-product, representing environmental friendly sourcing. The technology is capable of removing a variety of contaminants, such as oil, grease, dirt and flux, by blasting the surface without leaving a residue. Cleaning applications include preparation before welding and gluing of materials and preparation before painting and coating of components -- a process that is especially important for automotive and airline-related products. Additional applications of equal importance are to be found in the medical field and in the production of electronic appliances.

The CO₂ snow-jet cleaning machine to be manufactured and sold by the new joint venture differs from other systems currently on the market because it utilizes a patented nozzle technology that was developed at the internationally recognized Fraunhofer Institute based in Germany in collaboration with the founders of the ACI Group. Fraunhofer Institute is the largest application-oriented research organization in Europe. ACI Group holds the exclusive right to this patented nozzle technology, which eliminates the negative "wet" condensation effect of other existing CO₂-based cleaning machines on the market.

"Demand for such sophisticated and environmentally friendly cleaning equipment is expected to increase dramatically as a result of ongoing global concerns about chemical cleaning solvents and their affect on human health and the environment. Europe, during the last few years, for example, has adopted strict import regulations with regard to certain toxic cleaning chemicals and products treated with such chemicals. All importers into Europe must now comply with these regulations and certify compliance with these new standards. The CO₂ snow-jet cleaning technology represents an important alternative to toxic cleaning solvents," said Roland Kohl, president and chief executive officer of Highway Holdings.

 Kohl noted that CO₂ snow-jet cleaning is particularly effective for automation manufacturing processes, which complements Highway Holdings' and ACI Group's expertise.

"Our company's more than twenty-year history in Asia and reputation for high-quality manufacturing were important considerations for our partners in the establishment of this joint venture. We look forward to leveraging our combined strengths to capitalize on the significant market opportunities," Kohl said.

HONG KONG, Nov. 7, 2013 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced its board of directors has declared a cash dividend of $0.04 per share on the company's common stock. The dividend will be paid on December 24, 2013 to shareholders of record on December 12, 2013.

Second Quarter 2014 Financial Results

• Net sales was $5.85 million vs. last years quarter of $5.5 million.
• Net income for the fiscal 2014 second quarter increased to $153,000, or $0.04 per diluted share, from net income of $27,000, or $0.01 per diluted share, a year earlier. Net sales for the same period climbed 6.3 percent to $5.9 million from $5.5 million in the same period a year earlier.

"Results for the quarter reflect organic sales growth, supported by ongoing streamlining initiatives and a focus on addressing labor cost increases and other related issues in China," said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.

He noted results for the past two quarters were impacted by direct and indirect costs and expenses of approximately $100,000 associated with supporting and upgrading the assembly operation of the company's subcontractor in Myanmar. Kohl added that the company has commenced negotiations to acquire a majority interest in the Myanmar operation from the local current subcontractors. Kohl emphasized this potential investment has been enabled by recent changes to business laws in Myanmar concerning foreign direct investment and participation in local companies. However, Highway Holdings' investment in the Myanmar facility still is subject to central government approval, the timing of which is unknown.

Kohl said he is optimistic about the company's long-term sales and earnings growth opportunities, supported by current and new business trends and the anticipated transfer of much of the company's labor-intensive assembly business to Myanmar. "We anticipate that our overall manufacturing costs and expenses will be greatly reduced in the future once most of the company's labor intensive assembly work has been transferred to this lower-cost facility," Kohl said.

HONG KONG, Aug. 5, 2013 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced its board of directors has declared a cash dividend of $0.04 per share on the company's common stock. The dividend will be paid on October 9, 2013 to shareholders of record on September 25, 2013.

HONG KONG, July 29, 2013 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today reported results for its fiscal 2014 first quarter ended June 30, 2013, reflecting increased sales and profitability, and a continued strong balance sheet.

Net sales for the fiscal first quarter increased 11 percent to $5.87 million from $5.27 million a year earlier. Net income for the same period increased 16.3 percent to $150,000, or $0.04 per diluted share, from $129,000, or $0.03 per diluted share, last year.

"Results for the quarter were encouraging. Despite weakness in global markets, as well as a slowing Chinese economy, we managed to increase sales. In addition, even with expenses incurred related to the development of an assembly operation in Myanmar and inflationary pressures in China, operational costs remained substantially unchanged. We are optimistic that the new fiscal year is off to an excellent beginning and look forward to benefiting from our emerging presence in Myanmar to complement our operations in China, as well as potential synergistic new business opportunities," said Roland Kohl chairman, president and chief executive officer of Highway Holdings.

Gross profit as a percentage of sales for the 2014 fiscal first quarter was 21.3 percent compared with 21.6 percent in the same period a year ago.

Selling, general and administrative expense for the 2014 fiscal first quarter slightly increased by $110,000 compared with same quarter last year -- primarily due to the increased staff of engineers and technicians to manage more sophisticated production techniques, as well as additional expenses related to the Myanmar and higher employee salaries in China, as noted above.

Kohl highlighted the company's solid financial position, with cash, cash equivalents and restricted cash of $5.3 million -- exceeding the combined short- and long-term liabilities by $1.75 million. At June 30, 2013 the company had working capital of $10.4 million. Kohl noted, however, that approximately $1.4 million is on deposit with the Chinese Customs Department as security for certain payments related to the company's import contracts for raw materials. These deposits, included in "Prepaid expenses and other current assets" on the balance sheet, are expected to increase by approximately $500,000 in the near future.  All deposits are expected to be released to the company for its working capital purposes during the next year.  Until the deposits are released, the company will not have access to these funds.

Total shareholders' equity at June 30, 2013 was $12.18 million compared with $12.01 million as of March 31, 2013. The company's current ratio was 3.98:1 at June 30, 2013 compared with 4.01:1 at June 30, 2012

Fourth Quarter 2013, Financial Results

• Net income for the fiscal fourth quarter climbed to $274,000, or $0.07 per diluted share, from $92,000, or $0.02 per diluted share, a year earlier. Net sales for the same period were $5.6 million compared with $6.0 million a year earlier.
• Net income for fiscal year 2013 sharply increased to $448,000, or $0.12 per diluted share, from $184,000, or $0.05 per diluted share, in fiscal 2012. Net sales for fiscal 2013 were $21.9 million compared with $25.4 million a year ago.

"Despite continued challenges for OEM manufacturers in China, we improved profitability and maintained a solid financial position in fiscal 2013. Our goal in the new fiscal year is to establish a presence outside of China for labor-intensive assembly of parts and components to offset increasing labor costs and associated labor shortages we are experiencing in China. If successful, these proactive active initiatives will complement our manufacturing and technology capabilities based in China and should enable the company to regain its sales and earnings growth momentum," said Roland Kohl, president and chief executive officer of Highway Holdings.

Kohl noted that approximately $3.4 million of the decrease in net sales in fiscal 2013 was attributable to low margin plastic product sales to a single customer. "As a result of the loss of the low margin sales, gross profit as a percentage of net sales increased in fiscal 2013 to 22.3 percent from 20.2 percent a year earlier, despite high labor costs and the increased cost of operating in China," he said. Kohl added that ongoing cost-savings initiatives and increased utilization of automation were not sufficient to offset significant increases in worker salaries throughout Southern China. Gross profit was also impacted by lower sales compared with a year earlier.

HONG KONG, May 23, 2013 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced it received a multi-year order for vacuum cleaner components valued at approximately $400,000 per year from a leading international appliance manufacturer.

Production has already commenced, and an initial order of approximately three million components has been delivered to the customer for vacuum cleaner kits that require nine different plastic parts manufactured by Highway Holdings.

"We are gratified by this leading OEM's confidence in our capabilities and quality and look forward to additional opportunities to work together," said Roland Kohl, president and chief executive officer of Highway Holdings.

HONG KONG, Aug. 13, 2012 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced its board of directors has declared a cash dividend of $0.03 per share on the company's common stock. The dividend will be paid on October 10, 2012 to shareholders of record on September 1, 2012.

In July the company declared a cash dividend payable on September 10, 2012 to shareholders of record on August 1, 2012.

HONG KONG, Aug. 13, 2012 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced its board of directors has declared a cash dividend of $0.03 per share on the company's common stock. The dividend will be paid on October 10, 2012 to shareholders of record on September 1, 2012.

In July the company declared a cash dividend payable on September 10, 2012 to shareholders of record on August 1, 2012.

First Quarter 2013 Results

• Net sales for the fiscal first quarter were $5.27 million compared with $6.46 million a year earlier. Net income for the same period was $129,000, or $0.03 per diluted share, compared with $381,000, or $0.10 per diluted share, last year.
• Gross profit as a percentage of sales for the 2013 fiscal first quarter was 21.6 percent compared with 21.3 percent in the same period a year ago
• Total shareholders' equity at June 30, 2012 was $12.012 million compared with $11.998 million as of March 31, 2012. The company's current ratio was 4.01:1 at June 30, 2012 compared with 3.42:1 at June 30, 2011.

"Net sales for the fiscal first quarter were mainly impacted by continued weakness of the global economy and the relocation of mobile phone case manufacturing business to Mexico by one of our customers, as previously reported," said Roland Kohl chairman, president and chief executive officer of Highway Holdings. Kohl indicated that the sales impact due to the relocation of the low-margin mobile phone business resulted in an approximately $750,000 decrease in sales in this year's fiscal quarter compared with the same quarter a year ago.

"The company's financial position remains solid and is, in fact, still improving, even with dividend distributions of $0.20 per share paid during fiscal year 2012. In addition, a dividend of $0.03 was recently approved by the board of directors and will be paid September 10, 2012," Kohl said.

He noted the company has made significant progress in terms of operational restructuring initiatives, with particular success in streamlining its manufacturing process. "We anticipate these actions will enable us to better serve our OEM customers, while enhancing the company's competitive position, profitability and future growth potential," Kohl said.

Fourth Quarter 2012 Results

• Net sales for the fourth quarter 2012 were $5.9 million compared with $7.8 million a year earlier.
• Net income for the fiscal fourth quarter was $92,000, or $0.02 per diluted share, compared with $789,000, or $0.21 per diluted share, a year earlier.

"Fiscal 2012 was a challenging period for the company due, in large part, to global issues that impacted our customers and net sales. This situation was directly affected by the inflationary environment in China -- particularly higher labor costs and the significant increase in operating costs. Fortunately our financial position remains strong and the company's established customers continue their long-term relationships. In order to further improve our operating efficiency, we are in the process of shifting some of our labor intensive work, which for economic reasons cannot be automated, to a lower-cost assembly supplier arrangement outside of China as a proactive initiative," said Roland Kohl, president and chief executive officer of Highway Holdings.

Third Quarter 2012 Results

• Net sales for the period were $7.3 million compared with $9.0 million a year ago.
• Net income for the fiscal 2012 third quarter was $75,000, or $0.02 per diluted share, compared with $407,000, or $0.11 per diluted share, in the third quarter a year earlier.

"Results for both the last quarter and the most recent nine-month period were impacted by a continued challenging business environment, with less revenue and higher manufacturing expenses due to increased labor costs in China," said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.

Kohl noted that net sales in the third quarter were impacted by a reduction in orders from two of the company's metal component customers, which represents approximately $1.0 million less compared with the same period a year earlier. The company expects to start making up for this lost business beginning in the current fiscal fourth quarter, as presently new tooling is being made for the production of new metal components for these customers.

Kohl noted that labor force shortages during the past months and a high local inflation rate put further pressure on labor costs and consequently on operating margins, which could lead to even higher customer pricing. He emphasized that the company's ongoing focus on increasing operating efficiency through automation and new production methods can only partially absorb increased payroll expenses. Kohl highlighted the dramatic increase in Chinese wages -- particularly during the last two years with statutory minimum salaries in China increasing by about 67 percent and market wage rates climbing to about 100 percent due to competitive wage pressure in Shenzhen. "If the present labor shortage continues, wages may increase even further in the foreseeable future," Kohl added.

As a result of such extreme increases in labor costs, the company, therefore, is also exploring the possibility of outsourcing some of the company's very labor intensive assembly work to low-labor cost countries under its direct management. 

"The company's strategic focus is to continue our efforts to further upgrade Highway Holdings' facilities in China into a much smaller high-tech operation – utilizing automation and becoming the premier model for modern and highly efficient manufacturing in China," Kohl said.

"The company is confident, despite the loss of assembly work to lower cost labor countries, that such activities eventually will benefit our operation, because such countries usually lack a strong supplier network for mechanical components. Such a situation may in fact provide significant new business opportunities," Kohl said.

LOS ANGELES, Jan. 31, 2012 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today announced it has established a strategic marketing alliance with Hongtuo Precision Metalware Co., Limited, a Shenzhen, China-based company that is part of the Hot-Top Group. Terms were not disclosed.

"This new marketing alliance is intended to accelerate business opportunities within the local China market by capitalizing on Hongtuo Precision Metalware's extensive regional customer relationships and leveraging our high-tech and high-volume manufacturing capabilities -- which should be attractive to large local Chinese companies, particularly within the white goods, lighting fixture and stepping motor product industries," said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.

Kohl noted that the conversion of the company's China-based operations to a wholly foreign owned enterprise (WFOE) structure from a subcontracting licensing arrangement in Southern China, as required by recently implemented local Chinese government regulations, now allows Highway Holdings to sell to local Chinese companies. Under the company's previous twenty-year business license arrangement in China, Highway Holdings was only permitted to export the products it manufactured.

Second Quarter 2012 Results

• The company reported a net loss of $364,000, or $0.09 per share, for its 2012 fiscal second quarter compared with a net profit of $410,000, or $0.11 per diluted share, a year earlier. Net sales for the same period were $5.6 million compared with $7.8 million in fiscal 2011.
• Net income for the six-months was $17,000, or $0.01 per diluted share, compared with net income of $454,000, or $0.12 per diluted share, a year earlier. Net sales for the six-month period were $12.1 million compared with $14.3 million a year ago.

"Results a year earlier were enhanced by a large order for mobile phone cases, while case orders for a new recently introduced popular mobile phone were not received until after the end of the second quarter of fiscal 2012," said Roland Kohl, president and chief executive officer of Highway Holdings.

Kohl said he expects the most recent model mobile phone case order should positively impact results in the second half of the current fiscal year. He added that the timing and size of orders can vary greatly based on the release of certain popular mobile phones and demand for the product.

Kohl noted that fiscal 2012 second quarter sales were also impacted by the loss of business from two customers who would not accept price increases. "Despite the impact of global economic conditions, we are encouraged by modest gains in business from some of our European customers. We are also optimistic that the second half will improve based on customer feedback, which can be characterized as cautious rather than negative," Kohl said.

• Net sales for the fiscal first quarter were $6.46 million compared with $6.45 million a year earlier.
• Net income for the same period climbed sharply to $381,000, or $0.10 per diluted share, from $44,000, or $0.01 per diluted share, last year, supported by a favorable currency exchange gain of $100,000. During the comparable quarter in 2010, the company had a currency exchange loss of $257,000.
• Operating income for the current quarter increased 17.8 percent to $357,000 from $303,000 a year earlier.

"Net sales for the fiscal first quarter, which were essentially unchanged from last year, reflect the impact of current world economic conditions. Although we remain guardedly optimistic that demand for our manufacturing services from our global customers base will increase this year, the current unstable global economic environment has caused uncertainty in the timing of orders and the volume of business," said Roland Kohl chairman, president and chief executive officer of Highway Holdings.

HONG KONG, Jan. 31, 2011 (GLOBE NEWSWIRE) -- Highway Holdings Limited today reported solid results for its third fiscal quarter ended December 31, 2010, reflecting continued sales momentum and increased profitability.

• Net income for the fiscal 2011 third quarter climbed 59 percent to $407,000, or $0.11 per diluted share, from $256,000, or $0.07 per diluted share, in the third quarter a year earlier.
• Net sales for the same period increased 51.4 percent to $9.0 million from $5.9 million a year ago.
• Net income for the nine-month period of fiscal 2011 increased more than three-fold to $861,000, or $0.23 per diluted share, from $259,000, or $0.07 per diluted share, a year earlier.
• Net sales for the nine months ended December 31, 2010 increased 48 percent to $23.3 million from $15.8 million in the comparable period a year earlier.

"Results for the quarter reflect the benefits of an improving business environment, as our major customers have become more confident in the sustainability of the global economic recovery and have increased their production orders," said Roland Kohl, chairman, president and chief executive officer of Highway Holdings.

Fiscal 2011 Second Quarter Results

• Net sales for same period climbed 50 percent to $7.8 million from $5.2 million a year earlier.

• Net income for the 2011 fiscal second quarter increased to $410,000 or $0.11 per diluted share, from $139,000, or $0.04 per diluted share, a year earlier.

Despite a significant increase in both net sales and net income, Kohl stated that net income could have been higher. He noted that operating income for the quarter was $167,000, or approximately two percent of net sales, due to a 60 percent increase in labor costs, most of which had not yet been passed through to customers under terms of existing contracts. Under terms of many of the company's OEM contracts, prices are adjusted quarterly to reflect increases in raw material and employment costs. Kohl added that the company's strong sales gains for the quarter were not sufficient to offset these sharp labor and personnel cost increases. "We anticipate operating income will improve in future quarters as these higher labor costs are passed through as price increases to our customers," Kohl said. He said that prior initiatives designed to reduce dependency on certain labor processes through assembly automation and robotic manufacturing technology helped to partially offset the higher labor costs in the quarter.

GeoTeam® Note: Excluding currency gains Fiscal 2011 second quarter EPS would have been about $0.04.

"It appeared early in the quarter that the global recession was having only a modest impact on our business. Unfortunately, some of our European customers were impacted late in the economic cycle -- thereby reducing our fiscal first quarter performance. However, while the fiscal second quarter also has been slow to ramp up, business inquiries from new and existing customers started to accelerate within the last week. These trends that are very encouraging and offer hope for a near-term recovery," said Roland Kohl, president and chief executive officer.

Source: GlobeNewswire (August 17, 2009)

"Despite a worldwide economic slowdown, the company was able to achieve an increase in net sales in fiscal 2009 and return to profitability. However, demand for manufacturing services in the short term is still weak and is not expected to regain momentum until our international customers gradually start increasing their orders to restore depleted inventories to meet anticipated consumer demand as the global economy slowly recovers. The business environment, near term, therefore, continues to be challenging and unpredictable -- with sales for the first fiscal quarter expected to be soft, based on current order flow. Nonetheless, we believe that the company is well-positioned to capitalize on its solid financial footing and operational strengths to maintain and hopefully increase existing business, as well as capture business from those competitors that may not be able to survive the turmoil," said Roland Kohl, president and chief executive officer.

Source: GlobeNewswire (June 22, 2009)

"The worldwide financial crisis has not yet had a direct material effect on the company's operations, but indications from some of its customers suggest a softer near-term outlook. Kohl noted the company is therefore particularly focused on maintaining a strong financial position in order to be prepared should the situation change. As an example, the company reduced its accounts receivable from $4.77 million on March 31, 2008 to $3.09 million on December 31, 2008. In addition, Kohl highlighted the company's success in reducing inventory levels while increasing sales levels. He noted that a further reduction in inventory levels is an important goal of the company for the foreseeable future.

The tightening credit markets resulted in the termination of one of the company's three credit facilities. The withdrawal of this credit facility by one of the company's three banks is not expected to affect the company, as its cash position has increased, its use of its line of credit has decreased, and the amount of credit available from its two other banks is expected to exceed its anticipated requirements."

Source: GlobeNewswire (February 17, 2009)