– Net Sales Up 46 Percent; Profitability Returns –

Highway Holdings Limited (NASDAQ:HIHO) today reported results for its fiscal 2022 first quarter ended June 30, 2021.

Net sales for the fiscal first quarter increased approximately 46 percent to $3.0 million from $2.1 million a year earlier. Net income for the same period was $333,000, or $0.08 per diluted share, compared with a net loss of $223,000, or $0.06 per share, last year.

"Results for the fiscal 2022 first quarter benefitted from the carryover of orders that were delayed in the fiscal 2021 fourth quarter due to the global pandemic and other factors discussed in the company's recently announced fiscal year-end results. While we remain cautious about the near-term consequences related to the global pandemic and supply chain issues impacting most industries, we are starting fiscal 2022 off on a solid foundation with excellent order demand," said Roland Kohl, chairman, president and chief executive officer.

Gross profit for the 2022 fiscal first quarter was $930,000 compared with $520,000 in the same period a year ago, with gross profit as a percentage of sales approximately 31 percent compared with 25 percent a year ago, representing a six percent improvement on a year-over-year basis.

Selling, general and administrative expense for the 2022 fiscal first quarter decreased by $113,000 – benefiting from some of the management salary reductions. As a percentage of net sales, SG&A expenses decreased to 21 percent from 35 percent, despite an almost 46 percent increase in sales.

The company realized a small currency exchange loss of $7,000 in the quarter compared with an exchange loss of $20,000 in the same period last year, primarily due to a stronger RMB during the first two months of the fiscal 2022 first quarter.

Kohl highlighted the company's solid financial position, with cash and cash equivalents of $ 7.7 million – exceeding combined short- and long-term liabilities by $2.2 million. At June 30, 2021, the company had working capital of $7.9 million.

Total shareholders' equity at June 30, 2021 was $10.1 million compared with $9.8 million as of March 31, 2021. The company's current ratio at June 30, 2021 was 3.0 :1.

About Highway Holdings

Highway Holdings is an international manufacturer of a wide variety of high-quality parts and products for blue chip equipment manufacturers based primarily in Germany. Highway Holdings' administrative office is located in Hong Kong and its manufacturing facilities are located in Yangon, Myanmar and Shenzhen, 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, the impact of the worldwide COVID-19 pandemic, 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)

	Quarter Ended
	June 30
		2021			2020
Net sales	$	2,998		$	2,057
Cost of sales		2,068			1,537
Gross profit		930			520
Selling, general and administrative expenses		617			730
Operating income/(loss)		313			(210	)

Non-operating income (expense):

Exchange (loss), net		(7	)		(20	)
Interest income Gain/(loss) on disposal of asset		1 -			4 1
Other income (expense)		-			1
Total non-operating (expenses) income		(6	)		(14	)

Net income/(loss) before income taxes		307			(224	)
Income taxes		33			-
Net income/(loss)		340			(224	)

Less: net gain/(loss) attributable to non-controlling interests		7			(1	)

Net income/(loss) attributable to Highway Holdings Limited's Shareholders	$	333		($	223	)

Net income/(loss) per share – Basic	$	0.08		($	0.06	)
Net income/(loss) per share – Diluted	$	0.08		($	0.06	)
Weighted average number of shares outstanding:
Basic		4,019			3,910
Diluted		4,160			3,910

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES Consolidated Balance Sheet (In thousands, except per share data)

	June 30			March 31
		2021			2021
Current assets:
Cash and cash equivalents	$	7,691		$	7,757
Accounts receivable, net of doubtful accounts		1,752			973
Inventories		2,171			2,238
Prepaid expenses and other current assets		246			513
Total current assets		11,860			11,481

Property, plant and equipment, net		798			833
Operating lease right-of-use assets		2,562			2,795
Long-term deposits		285			282
Long-term loan receivable		95			95
Investments in equity method investees		-			-
Total assets		15,600			15,486

Current liabilities:
Accounts payable	$	885		$	653
Operating lease liabilities, current		822			821
Accrued expenses and other liabilities		2,249			2,347
Income tax payable		32			58
Dividend payable		5			85
Total current liabilities		3,993			3,964

Operating lease liabilities, non-current		929			1,142
Deferred income taxes		572			607
Total liabilities		5,494			5,713

Shareholders' equity:
Preferred shares, $0.01 par value		-			-
Common shares, $0.01 par value		40			40
Additional paid-in capital		11,731			11,709
Accumulated deficit		(1,708	)		(2,041	)
Accumulated other comprehensive income/(loss)		19			48
Non-controlling interest		24			17
Total shareholders' equity		10,106			9,773

Total liabilities and shareholders' equity	$	15,600		$	15,486

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Highway Holdings Reports Fiscal 2022 First Quarter Results