Unassociated Document
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 November 2007


             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 ___

(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 ___ 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 a press release issued by the registrant on November 15, 2007.


 
 
 

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: November 30, 2007
By
/s/ ROLAND W. KOHL
 
  
Roland W. Kohl
 
  
Chief Executive Officer

 
 
 


NEWS RELEASE



CONTACT:
Gary S. Maier
Maier & Company, Inc.
(310) 442-9852


HIGHWAY HOLDINGS REPORTS FISCAL 2008 SECOND QUARTER RESULTS
-- Net Sales Up 20.4 Percent for Six-Month Period --

HONG KONG — November 15, 2007 — Highway Holdings Limited (Nasdaq:HIHO) today reported results for its second fiscal quarter ended September 30, 2007, reflecting the benefits of its strategy to increase sales by expanding the company’s original equipment manufacturing capabilities and customer base.
 
Net sales for the 2008 fiscal second quarter climbed 18.4 percent to $8.8 million from $7.4 million a year ago. Net income for the same period was $83,000, or $0.02 per diluted share, compared with net income of $188,000, or $0.05 per diluted share, last year.
 
Net sales for the first six months of fiscal 2008 increased 20.4 percent to $17.7 million from $14.7 million a year earlier. Net income for the same period was $331,000, or $0.09 per diluted share, compared with $758,000, $0.21 per diluted share, in the first half of fiscal 2007.
 
“Metal, mechanical and electronic OEM sales for the six months represented approximately $16.8 million, or 94.9 percent of the company’s total net sales, which further underscores the company’s successful transition away from non-core businesses to its original equipment manufacturing operations,” said Roland Kohl, president and chief executive officer.
 
Gross profit for the quarter increased 12.8 percent to $1.65 million from $1.46 million last year, reflecting the benefits of OEM sales initiatives. Gross profit as a percentage of sales was 18.8 percent compared with 19.7 percent in the same period a year ago, due primarily to manufacturing cost increases - such as labor, transportation and raw materials, which cost increases could not all be passed on to customers.
 
Selling, general and administrative expenses increased by $353,000 for the fiscal quarter and $704,000 for the current six-month period primarily due to the additional general and administrative expenses related to the new Golden Bright Plastic Manufacturing division that Highway Holdings acquired in September 2006. In addition, the higher general and administration expenses also reflect the initial costs of restructuring and integrating the systems of the Golden Bright Plastics division and new Wuxi Metal division that was established in 2006. Kohl noted that the expenses necessary to restructure certain aspects of both acquired operations were higher than anticipated. “We believe the most difficult tasks are now behind us, and we are optimistic that our investments will produce solid contributions over the long term,” Kohl said.

 
 
 
Highway Holdings Ltd.
2-2-2

Kohl noted the company’s balance sheet remains strong. The total shareholders’ equity at September 30, 2007 was $12.37 million compared with $12.17 million at 2007 fiscal year end. The company’s current ratio was 1.98:1 at September 30, 2007.
 
Kohl reiterated a previous comment concerning raw material costs, which have continued to increase during the past 18 months -- particularly oil prices throughout China and the inflationary effect on operating costs, such as transportation, labor and electricity. He added that these additional expenses are impacting Highway Holdings, as well as the company’s competitors.
 
He added that new Chinese governmental rules and regulations, such as the imposition of new customs deposits on imports and for some exported materials and goods, as well as increased enforcement of new and existing labor laws and regulations, have adversely affected the business environment and resulted in higher costs and potential operating liabilities. These governmental actions have recently impacted the operating costs of all companies located in the coastal areas of China. The company has not yet been able to pass all of the cost increases through to all of its customers, but management is working diligently with these customers to address these higher expenses. “While the situation is potentially detrimental, Highway Holdings might benefit from the elimination of less financially strong competitors that are unable to absorb the incremental costs,” Kohl said.
 
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)# # #

 
 
 


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,
  
                           
   
2007
  
2006
  
2007
  
2006
  
                   
Net sales
  
$
8,796
  
$
7,428
  
$
17,728
  
$
14,723
  
Cost of sales
    
7,145
    
5,964
    
14,261
    
11,733
  
Gross profit
    
1,651
    
1,464
    
3,467
    
2,990
  
Selling, general and administrative expenses
    
1,596
    
1,243
    
3,134
    
2,430
  
Operating income
   
55
    
221
    
333
    
560
  
                           
Non-operating items
                          
Interest expenses
    
(63
)
  
(54
)
  
(122
)
  
(101
)
Exchange gain (loss), net
    
74
   
(22
)
  
82
    
226
  
Interest income
    
17
   
35
    
50
    
81
  
Other income
    
0
   
8
    
7
    
18
  
Total non-operating income (expenses)
    
28
    
(33
)
  
17
    
224
  
                           
Net income before income tax
    
83
    
188
    
350
    
784
  
Income taxes
    
0
    
0
    
19
    
26
  
Net income
 
$
83
  
$
188
  
$
331
  
$
758
  
                           
Earnings per share - basic
  
$
0.02
  
$
0.05
  
$
0.09
  
$
0.21
  
Weighted average number of shares - basic
    
3,785
    
3,611
    
3,785
    
3,611
  
                           
Earnings per share - diluted
  
$
0.02
  
$
0.05
  
$
0.09
  
$
0.21
  
Weighted average number of shares - diluted
    
3,817
    
3, 611
    
3,817
    
3,611
  


 
 
 

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Balance Sheet
(In thousands, except per share data)
 
 
           
   
September 30,
 
March 31
  
   
2007
  
2007
  
   
(Unaudited)
      
Current assets
          
Cash and cash equivalents
  
$
3,907
  
$
5,299
  
Restricted cash
    
1,350
    
1,221
  
Accounts receivable, net of doubtful accounts
    
5,309
    
4,742
  
Inventories
    
6,857
    
6,104
  
Short term investment
    
318
    
316
  
Prepaid expenses and other current assets
    
1,091
    
680
  
Total current assets
    
18,832
    
18,362
  
               
               
Property, plant and equipment, net
    
3,685
    
3,980
  
Industrial property rights
    
61
    
70
  
Investment and advance in affiliate
    
2
    
2
  
Total assets
  
$
22,580
  
$
22,414
  
               
Current liabilities:
              
Accounts payable
  
$
4,205
  
$
3,990
  
Short-term borrowing
    
2,807
    
3,097
  
Current portion of long-term debt
    
359
    
478
  
Accrued mould charges
    
344
    
253
  
Accrual payroll and employee benefits
    
405
    
446
  
Income tax payable
    
19
    
0
  
Other liabilities and accrued expenses
    
1,356
    
1,154
  
Total current liabilities
    
9,495
    
9,418
  
               
Long-term liabilities:
              
Long-term debt
    
544
    
655
  
Deferred income taxes
    
174
    
174
  
               
Shareholders’ equity:
              
Common shares, $0.01 par value, authorized 20,000,000 shares
    
38
    
38
  
Additional paid-in capital
    
11,304
    
11,304
  
Retained earnings
    
1,635
    
1,439
  
Accumulated other comprehensive income
    
(44
)
  
(48
)
Subscription receivable
    
(513
)
  
(513
)
Treasury shares, at cost-37,800 shares
   
(53
)
  
(53
)
Total shareholders’ equity
    
12,367
    
12,167
  
               
Total liabilities and shareholders’ equity
  
$
22,580
  
$
22,414