Highway Holdings Limited Reports Second Quarter Results.HONG n. 1. A mercantile establishment or factory for foreign trade in China, as formerly at Canton; a succession of offices connected by a common passage and used for business or storage. KONG--(BUSINESS WIRE)--Nov. 18, 1999-- Highway Holdings Limited (Nasdaq:HIHO) today announced financial results for the second fiscal quarter and six months ended Sept. 30, 1999. Net income for its second quarter was $23,000, or $0.01 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with $759,000, or $0.26 per diluted share, a year ago, based upon 2,855,000 and 2,969,000 shares outstanding, respectively. The company noted that the decrease in the number of shares for the quarter was due to the purchase of shares under a previously announced stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program. For the same period, net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were $4.8 million compared with $7.0 million a year earlier. For the six-month period, net income was $122,000, or $0.04 per diluted share, compared with $1.3 million, or $0.47 per diluted share last year. Net sales for the same period were $9.4 million compared with $14.6 million in 1998. Roland Roland (rō`lənd), the great French hero of the medieval Charlemagne cycle of chansons de geste, immortalized in the Chanson de Roland (11th or 12th cent.). Kohl kohl n. A cosmetic preparation, such as powdered antimony sulfide, used especially in the Middle East to darken the rims of the eyelids. [Arabic ku , Highway Holdings' chairman and chief executive officer, stated, "Notwithstanding the results for the quarter, our performance was in line with management's expectations. The past year has been a difficult period, but we expect the second half of this fiscal year to show positive improvement. Several factors support our optimism Optimism See also Hope. Bontemps, Roger personification of cheery contentment. [Fr. Lit.: “Roger Bontemps” in Walsh Modern, 66] Candide beset by inconceivable misfortunes, hero indifferently shrugs them off. [Fr. : the upcoming introduction of a new range of clocks and cameras specifically designed for the new millennium millennium [Lat.,=1,000 years], the period of 1,000 years in which, according to some schools of Christian eschatology, Christ will reign again gloriously on earth. Belief in the millennium, based on Rev. 20, has recurred in Christianity since the earliest times. , the potential benefits from strengthening the company's marketing and sales efforts, and the economic recovery in Asia." Kohl noted that Highway Holding's metal stamping stamp v. stamped, stamp·ing, stamps v.tr. 1. To bring down (the foot) forcibly. 2. To bring the foot down onto (an object or surface) forcibly. 3. business is beginning to show signs of improvement, as demand for metal stamping parts increases due to the overall improvement of the Asian economy. Sales for the second quarter increased 40 percent over the preceding first quarter of fiscal 2000. Nevertheless, on a year-to-year basis, however, sales of metal stamped parts and components for second quarter amounted to $3.1 million, a decrease of $0.9 million, or 22.7 percent -- representing 65.2 percent of the company's total sales. The lower level of sales was due to declining overall orders from the company's major Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and customers and pricing pressures resulting from financially strained competitors. Sales of clocks for the second quarter amounted to $0.9 million, a decrease of $0.6 million, or 40 percent, over the same period a year ago -- representing 19.2 percent of total sales. The company indicated that because of the Asian economic crisis, which created an extremely fierce competitive business environment, Highway Holdings initiated quick changes during the quarter to upgrade its low-end low-end adj. 1. Cheapest in a line of merchandise: low-end subcompact cars. 2. Informal Of, relating to, or intended for low-income consumers; downscale: range of clock products in order to create a new platform with a more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. cost structure. Sales of cameras for second quarter amounted to $0.7 million, a decrease of $0.7 million, or 50 percent, over a year earlier -- representing 15.6 percent of the company's total sales. The sales decline was impacted by the Asian financial crisis, which necessitated an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. 10 percent price reduction and a subsequent decision to halt further price concessions to customers, as well as the effect of a recent ruling by the U.S. International Trade Commission prohibiting the sale by the company's customers of recycled, disposable disposable Nursing adjective Referring to that which is discarded or disposed of noun An item used in health care-related Pt contact which is discarded after use–eg masks, gloves, gowns, needles, paper products, syringes, wipes. See Biohazardous waste. cameras in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . During the quarter and six-month period, gross margins decreased by 6.9 percent and 4.3 percent, respectively. The decrease in the gross margins was due to increased price competition in all three of the company's product lines. Selling, general and administrative expenses for the second quarter declined 21 percent to $914,000 from $1.2 million a year ago, representing 19.2 percent and 16.5 percent of total sales respectively. The decrease reflects management's focus on reducing operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and improving efficiencies, including the closing of one of the company's two Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. offices, the relocations of certain operations and functions to China and staff reductions. At Sept. 30, 1999, the company had a working capital of $7.1 million compared with $7.7 million at Sept. 30, 1998. The company believes that its existing capital resources and cash generated from operations will be sufficient to meet all of its currently foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. capital needs. Highway Holdings manufactures clocks and clock movements for sale under the company's own Kienzle Uhren brand name, as well as for unaffiliated clock companies. It also manufactures a wide variety of high-quality metal parts and components for blue chip original equipment manufacturers. Additionally, Highway Holdings manufactures finished products, including single-use and 35 mm cameras and other products. The company is headquartered in Hong Kong and operates manufacturing facilities in nearby Shenzhen Shenzhen (shĕn`jŭn`), city (1994 est. pop. 695,600), S Guangdong prov., China, on the South China Sea, N of Hong Kong. Designated a special economic zone in 1979, the city's spectacular economic growth led China to create over a dozen more province of the People's Republic People's Republic n. A political organization founded and controlled by a national Communist party. of China. Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. which involve risks and uncertainties, including but not limited to economic, competitive, governmental, political and technological factors affecting the company's revenues, operations, markets, products and prices, and other factors discussed in the company's various filings with the Securities and Exchange Commission, including without limitation the Registration Statement on Form F-1, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. (Registration No. 333-05980), and the company's annual reports on Form 20-F. -0-
HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Statement of Income
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
September 30, September 30,
1999 1998 1999 1998
Net sales $ 4,766 $ 7,009 $ 9,356 $ 14,623
Cost of sales 3,845 5,171 7,526 11,129
-------- -------- -------- ---------
Gross profit 921 1,838 1,830 3,494
Selling, general
and administrative
expenses 914 1,156 1,675 2,171
-------- -------- -------- ---------
Operating income 7 682 155 1,323
Interest expenses (29) (52) (58) (112)
Exchange gain, net 23 161 (41) 184
Interest income 35 34 70 69
Other income 14 25 23 41
-------- -------- -------- ---------
Income before
income taxes 50 850 149 1,505
Income taxes 27 91 27 161
-------- -------- -------- ---------
Net income $ 23 $ 759 $ 122 $ 1,344
======== ======== ======== =========
Earnings per
share - basic $ 0.01 $ 0.27 $ 0.04 $ 0.47
======== ======== ======== =========
Weighted average
number of shares
- basic 2,855 2,861 2,858 2,861
======== ======== ======== =========
Earnings per share
- diluted $ 0.01 $ 0.26 $ 0.04 $ 0.45
======== ======== ======== =========
Weighted average
number of shares
- diluted 2,855 2,969 2,883 2,996
======== ======== ======== =========
Consolidated Balance Sheets
Sept. 30, March 31,
1999 1999
Assets
Current assets
Cash and cash equivalents $ 2,829 $ 3,051
Restricted cash 652 652
Accounts Receivable 3,063 2,404
Inventories 4,762 3,903
Income taxes receivable 39 1
Prepaid expenses and other
current assets 357 273
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Total current assets 11,702 10,284
----------- -----------
Property, plant and equipment, net 5,728 5,694
Industrial property rights 874 913
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Total assets $ 18,304 $ 16,891
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Sept. 30, March 31,
1999 1999
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowing $ 1,359 $ 282
Cur 29 29
Additional paid-in capital 8,661 8,677
Retained earnings 4,718 4,599
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Total shareho =========== ===========
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