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HONG KONG, Nov. 5, 2013 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today reported results for its fiscal 2014 second quarter ended September 30, 2013 -- reflecting sales growth, gross margin improvement and higher net income.
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.
Net income for the six-month period increased 94.2 percent to $303,000, or $0.08 per diluted share, from net income of $156,000, or $0.04 per diluted share, a year earlier. Net sales for the six-month period increased 8.79 percent to $11.7 million from $10.8 million a year ago.
"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.
Gross profit for the fiscal 2014 second quarter increased to $1.4 million from $1.2 million a year ago due to increased net sales and increased gross margins. Gross profit as a percentage of sales for the same period was 24 percent compared with 22 percent a year earlier. Gross profit for the fiscal 2014 six-month period increased to $2.6 million from $2.3 million a year ago, while gross profit as a percentage of sales increased to 23 percent from 22 percent in the same period in fiscal 2013.