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HONG KONG, Jan. 27, 2014 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today reported results for its fiscal third quarter ended December 31, 2013 -– reflecting increased sales and profitability for both the quarter and nine-month period.
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 for the same period increased 3.5 percent to $5.8 million from $5.6 million a year ago.
Net income for the nine-month period of fiscal 2014 increased sharply to $451,000, or $0.12 per diluted share, from $174,000, or $0.05 per diluted share, a year earlier. Net sales for the nine months climbed 7 percent to $17.5 million from $16.4 million in the comparable period a year earlier.
Gross profit margin for the three- and nine-month periods ended December 31, 2013 increased to 22.6 percent and 22.6 percent, respectively, compared with 22.2 percent and 21.9 percent, respectively, a year earlier. Gross profit margin increased due to ongoing streamlining efforts and slight price increases to customers.
Operating income for the three-month period ended December 31, 2013 was $132,000 compared with $8,000 in the prior year. Operating income for the nine months more than doubled to $563,000 from $255,000 a year earlier.
"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.