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HONG KONG, June 28, 2013 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today reported results for the fourth quarter and fiscal year ended March 31, 2013, reflecting profitability for the quarter and year.
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.