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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.