OREANDA-NEWS. Highway Holdings Limited today reported results for its fiscal 2017 first quarter ended June 30, 2016.

Net income for the fiscal 2017 first quarter was $165,000, or $0.04 per diluted share, compared with $302,000, or $0.08 per diluted share, last year. Net sales were $5.2 million compared with $5.9 million a year earlier.

“Results for the fiscal first quarter appear to reflect the impact of customer order patterns due to summer schedules and plant holiday closures. While it is possible that customer inventory adjustments during the quarter were due to price increases related to the inflationary environment in China, we do not believe the sales decline is a long-term trend. We are focused on year-over year growth, despite quarterly factors and operational interruptions that can impact short-term performance,” said Roland Kohl, chairman, president and chief executive officer.

He noted that the company is preparing to relocate some of its current metal stamping operations into a newly built factory in Longhua, Shenzhen. He also noted the company plans to expand in Yangon, Myanmar to accommodate increased space requirements for equipment to be utilized for component manufacturing that will be added to its existing assembly production at this emerging operation. “Upon completion, these additions will improve efficiency and enhance our value-proposition, especially in Myanmar,” Kohl said.

Gross profit for the 2017 fiscal first quarter was $1.29 million compared with $1.44 million in the same period a year ago, with gross profit as a percentage of sales increasing to 24.6 percent from 24.4 percent a year ago. 

Selling, general and administrative expense for the 2017 fiscal first quarter decreased slightly compared with the fiscal first quarter last year, despite wage inflation in China and costs associated with the company’s ongoing investment in its operation in Myanmar. The company’s currency exchange loss decreased to $17,000 in the quarter from $34,000 in the same period last year due to a weakening RMB. 

Kohl highlighted the company’s solid financial position, with cash and cash equivalents of $9.0 million -- exceeding the combined short- and long-term liabilities by $3.9 million. At June 30, 2016, the company had working capital of $10.9 million.

Total shareholders’ equity at June 30, 2016 was $12.1 million compared with $11.9 million as of March 31, 2016. The company’s current ratio at June 30, 2016 was 3.2:1.

Highway Holdings produces a wide variety of high-quality products for blue chip original equipment manufacturers -- from simple parts and components to sub-assemblies and finished products. Highway Holdings’ administrative offices are located in Hong Kong and its manufacturing facilities are located in Shenzhen in the People's Republic of China and Myanmar.