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HONG KONG, July 28, 2014 (GLOBE NEWSWIRE) -- Highway Holdings Limited (Nasdaq:HIHO) today reported results for its fiscal 2015 first quarter ended June 30, 2014, reflecting increased profitability and a continued strong balance sheet.
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. 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.
"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.
Selling, general and administrative expense for the 2015 fiscal first quarter remained substantially unchanged compared with the fiscal first quarter last year, primarily due to expense management -- despite wage inflation in China and costs associated with the company's operation in Myanmar.
Kohl highlighted the company's solid financial position, with cash, cash equivalents and restricted cash of $6.9 million -- exceeding the combined short- and long-term liabilities by $3.2 million.