SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
6-K
REPORT
OF
FOREIGN ISSUER
PURSUANT
TO RULE 13a-16 OR 15d-16 OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the
month of October 2006
HIGHWAY
HOLDINGS LIMITED
(Translation
of Registrant's Name Into English)
Suite
810, Level 8
Landmark
North
39
Lung
Sum Avenue
Sheung
Shui
New
Territories, Hong Kong
(Address
of Principal Executive Offices)
(Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.)
|
Form
20-F x
|
Form
40-F o
|
(Indicate
by check mark whether the registrant by furnishing the information contained
in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
|
Yes
o
|
No
x
|
(If
"Yes"
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-_______________.)
Attached
to this Report on Form 6-K is the press release issued by the registrant on
October 31, 2006.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
HIGHWAY
HOLDINGS LIMITED
|
||
| |
|
|
| Date: October 31, 2006 | By: | /s/ ROLAND W. KOHL |
|
Roland
W. Kohl
|
||
|
Chief
Executive
Officer
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||
2
 |
NEWS
RELEASE
|
|
CONTACTS:
|
Gary
S. Maier/Crystal Chang Warner
|
|
Maier
& Company, Inc.
|
|
|
(310)
442-9852
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HIGHWAY
HOLDINGS REPORTS FISCAL 2007 SECOND QUARTER RESULTS
--
Net Income Up 77 Percent for Six-Month Period --
HONG
KONG — October 31, 2006 —
Highway
Holdings Limited (Nasdaq:HIHO)
today
reported results
for its second fiscal quarter ended September 30, 2006, reflecting both the
improvement in operations as a result of the recently completed reorganization
and business strategy revision, and contributions from the company’s new tooling
and metal operations located in Wuxi.
The
results for the fiscal 2007 second quarter do not include any contributions
derived from the company’s acquisition on September 18, 2006 of Golden Bright
Plastic Manufacturing, which will be reflected in the results commencing in
the
third fiscal quarter.
Net
income for the fiscal 2007 second quarter was $188,000, or $0.05 per diluted
share, compared with a net loss of $112,000, or $0.03
per
share, during the same period last year. Net sales for the 2007 fiscal second
quarter increased 8.4 percent to $7.4 million from $6.9 million a year
earlier.
Net
income for the six-month period increased 77 percent to $758,000 from $428,000
a
year earlier. Results in the same period a year ago included a one-time $940,000
gain related to the sale of the company’s rights to its Kienzle trademark. Net
sales for the fiscal 2007 first half increased 9.7 percent to $14.7 million
compared with $13.4 million a year ago.
“Results
for the first half of fiscal 2007 highlight the company’s success in offsetting
the loss of approximately $1.6 million in sales due to the divestiture of most
of the company’s unprofitable clock, watch and camera businesses and the benefit
of our strategic decision to curtail these business segments in fiscal 2006.
Our
year-to-date performance indicates that the company is on the right course
by
emphasizing its OEM operations. Metal, mechanical and electronic OEM net sales
for the quarter represented approximately $13.6 million, or 92.1 percent of
the
company’s total net sales, which underscores the company’s successful transition
away from non-core businesses to its profitable OEM manufacturing operations,”
said Roland Kohl, chief executive officer.
(more)
3
Highway
Holdings Ltd.
Gross
profit as a percentage of sales for the second fiscal quarter of fiscal 2007
was
20 percent compared with 18 percent in the same period a year ago, due primarily
to the shift from the very low margin clock, watch and camera businesses to
higher margin OEM operations. Gross profit increased 21.8 percent to $1.5
million from $1.2 million last year, reflecting both increased sales and a
focus
on higher margin OEM business.
Selling,
general and administrative expenses for the fiscal quarter declined by $154,000,
or 11.02 percent, from the same period a year ago primarily due to the
retrenchment of the company’s German clock and watch marketing operations in the
recent reorganization.
Kohl
noted the company’s balance sheet remains strong. Cash and cash equivalents were
$6.3 million at September 30, 2006, compared with $6.4 million at fiscal year
end, March 31, 2006, despite approximately $600,000 of additional purchases
of
fixed assets for new machinery and equipment and a $514,000 payment related
to
the company’s Golden Bright Plastic Manufacturing acquisition in mid-September
and dividend payments totaling $703,000. The total shareholders equity at
September 30, 2006 was $12.35 million compared with $12.27 million at 2006
fiscal year end. The company’s current ratio was 2.09:1 at September 30,
2006.
Kohl
indicated that continuing increases in raw material costs during the past 18
months, particularly oil combined with rapid industry expansion throughout
China, have had an inflationary effect on operating costs, such as
transportation, labor and electricity. He added that these additional expenses
are expected to have a short-term impact on Highway Holdings, as well as on
the
company’s competitors. Because the company may not be able to immediately pass
all of the cost increases through to its customers, future operating results
may
reflect the consequences of higher costs. However, over the longer term, the
company is working with customers to address these higher expenses.
About
Highway Holdings
Highway
Holdings produces a wide variety of high-quality products for blue chip original
equipment manufacturers -- from simple parts and components to sub-assemblies.
It also manufactures finished products, such as LED Lights, radio chimes and
other electronic products. Highway Holdings is headquartered in Hong Kong and
operates four manufacturing facilities in the People's Republic of
China.
Except
for the historical information contained herein, the matters discussed in this
press release are forward-looking statements 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 company’s annual reports on Form 20-F.
(Financial
Tables Follow)
#
#
#
4
HIGHWAY
HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated
Statement of Income
(Dollars
in thousands, except per share data)
(Unaudited)
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
|
September
30,
|
September
30,
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
Net
sales
|
$
|
7,428
|
$
|
6,855
|
14,723
|
13,418
|
|||||||
|
Cost
of sales
|
5,964
|
5,653
|
11,733
|
10,835
|
|||||||||
|
Gross
profit
|
1,464
|
1,202
|
2,990
|
2,583
|
|||||||||
|
Selling,
general and administrative expenses
|
1,243
|
1,397
|
2,430
|
2,736
|
|||||||||
|
Gain
on sale of industrial property rights
|
0
|
0
|
0
|
(940
|
)
|
||||||||
|
Operating
income
|
221
|
(195
|
)
|
560
|
787
|
||||||||
|
Non-operating
items
|
|||||||||||||
|
Interest
expenses
|
(54
|
)
|
(27
|
)
|
(101
|
)
|
(56
|
)
|
|||||
|
Exchange
gain (loss), net
|
(22
|
)
|
(58
|
)
|
226
|
(456
|
)
|
||||||
|
Interest
income
|
35
|
13
|
81
|
23
|
|||||||||
|
Other
income/ (expense)
|
8
|
155
|
18
|
160
|
|||||||||
|
Total
non-operating income (expenses)
|
(33
|
)
|
83
|
224
|
(329
|
)
|
|||||||
|
Net
income/(loss) before income tax
|
188
|
(112
|
)
|
784
|
458
|
||||||||
|
Income
taxes
|
0
|
0
|
26
|
30
|
|||||||||
|
Net
income/(loss)
|
$
|
188
|
$
|
(112
|
)
|
$
|
758
|
$
|
428
|
||||
|
Earning
per share - basic
|
$
|
0.05
|
($0.03
|
)
|
$
|
0.21
|
$
|
0.13
|
|||||
|
Weighted
average number of shares - basic
|
3,611
|
3,302
|
3,611
|
3,302
|
|||||||||
|
Earning
per share - diluted
|
$
|
0.03
|
($0.03
|
)
|
$
|
0.21
|
$
|
0.12
|
|||||
|
Weighted
average number of shares - diluted
|
3,611
|
3,455
|
3,611
|
3,455
|
|||||||||
5
HIGHWAY
HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated
Balance Sheet
(In
thousands, except per share data)
|
September
30,
|
March
31
|
||||||
|
2006
|
2006
|
||||||
|
(Unaudited)
|
|||||||
|
Current
assets
|
|||||||
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Cash
and cash equivalents
|
$
|
6,262
|
$
|
6,384
|
|||
|
Restricted
cash
|
965
|
965
|
|||||
|
Accounts
receivable, net of doubtful accounts
|
4,386
|
3,789
|
|||||
|
Inventories
|
4,247
|
4,118
|
|||||
|
Short
term investment
|
306
|
300
|
|||||
|
Prepaid
expenses and other current assets
|
745
|
546
|
|||||
|
Total
current assets
|
16,911
|
16,102
|
|||||
|
Property,
plant and equipment, net
|
3,314
|
2,787
|
|||||
|
Investment
and advance in affiliate
|
516
|
2
|
|||||
|
Total
assets
|
$
|
20,741
|
$
|
18,891
|
|||
|
Current
liabilities:
|
|||||||
|
Accounts
payable
|
$
|
3,630
|
$
|
2,498
|
|||
|
Short-term
borrowing
|
2,613
|
2,015
|
|||||
|
Current
portion of long-term debt
|
419
|
481
|
|||||
|
Accrued
mould charges
|
281
|
246
|
|||||
|
Accrual
payroll and employee benefits
|
358
|
292
|
|||||
|
Income
tax payable
|
26
|
0
|
|||||
|
Other
liabilities and accrued expenses
|
761
|
610
|
|||||
|
Total
current liabilities
|
8,088
|
6,142
|
|||||
|
Long-term
liabilities:
|
|||||||
|
Long-term
debt
|
143
|
322
|
|||||
|
Deferred
income taxes
|
153
|
153
|
|||||
|
Shareholders’
equity:
|
|||||||
|
Common
shares, $0.01 par value, authorized 20,000,000 shares
|
35
|
35
|
|||||
|
Additional
paid-in capital
|
10,256
|
10,245
|
|||||
|
Retained
earnings
|
2,187
|
2,133
|
|||||
|
Accumulated
other comprehensive income
|
(68
|
)
|
(86
|
)
|
|||
|
Treasury
shares, at cost-37,800 shares
|
(53
|
)
|
(53
|
)
|
|||
|
Total
shareholders’ equity
|
12,357
|
12,274
|
|||||
|
Total
liabilities and shareholders’ equity
|
$
|
20,741
|
$
|
18,891
|
|||
6