Highway Holdings Reports Fiscal 2013 Fourth Quarter/ Year-End Results

Highway Holdings Reports Fiscal 2013 Fourth Quarter/ Year-End Results

HONG KONG, June 28, 2013 (GLOBE NEWSWIRE) -- Highway Holdings Limited
(Nasdaq:HIHO) today reported results for the fourth quarter and fiscal year
ended March 31, 2013, reflecting profitability for the quarter and year.

Net income for the fiscal fourth quarter climbed to $274,000, or $0.07 per
diluted share, from $92,000, or $0.02 per diluted share, a year earlier. Net
sales for the same period were $5.6 million compared with $6.0 million a year
earlier.

Net income for fiscal year 2013 sharply increased to $448,000, or $0.12 per
diluted share, from $184,000, or $0.05 per diluted share, in fiscal 2012. Net
sales for fiscal 2013 were $21.9 million compared with $25.4 million a year
ago.

"Despite continued challenges for OEM manufacturers in China, we improved
profitability and maintained a solid financial position in fiscal 2013. Our
goal in the new fiscal year is to establish a presence outside of China for
labor-intensive assembly of parts and components to offset increasing labor
costs and associated labor shortages we are experiencing in China.If
successful, these proactive active initiatives will complement our
manufacturing and technology capabilities based in China and should enable the
company to regain its sales and earnings growth momentum," said Roland Kohl,
president and chief executive officer of Highway Holdings.

Kohl noted that approximately $3.4 million of the decrease in net sales in
fiscal 2013 was attributable to low margin plastic product sales to a single
customer."As a result of the loss of the low margin sales, gross profit as a
percentage of net sales increased in fiscal 2013 to 22.3 percent from 20.2
percent a year earlier, despite high labor costs and the increased cost of
operating in China," he said.Kohl added that ongoing cost-savings initiatives
and increased utilization of automation were not sufficient to offset
significant increases in worker salaries throughout Southern China.Gross
profit was also impacted by lower sales compared with a year earlier.

Selling, general and administrative expenses decreased for the full year
compared with a year ago due to lower sales and an overall reduction in the
number of employees dedicated to selling and administration services. However,
SG&A expenses did not decrease proportionally to lower net sales, due to
ongoing cost increases.Selling, general and administrative expense as a
percentage of net sales increased to 20.7 percent in fiscal 2013 from 19.3
percent in fiscal 2012.

Operating income for the 2013 fiscal fourth quarter was $100,000 compared with
$178,000 in the same period a year earlier.For the full 2013 fiscal year,
operating income was $355,000 compared with $230,000 due to improvements in
efficiency and continuous cost savings efforts.

The fluctuation of the Euro/U.S. dollar exchange rates have, in the past,
resulted in significant currency exchange gains and losses.For fiscal 2013,
the company realized a currency exchange loss of $27,000 compared with a
currency exchange gain of $126,000 a year ago. The company does not undertake
any currency hedging transactions.The company does, however, have agreements
with certain of its European customers that limit the risk of currency
fluctuations, and the company is increasingly denominating its European sales
in U.S. dollars rather than Euros.

Kohl noted that the company's balance sheet remains strong with total current
assets at March 31, 2013 of $13.4 million; working capital of $10 million; and
long-term loans, net of the current portion of $112,000. The company's current
ratio was 4.1:1 at March 31, 2013 compared with 3.38 at March 31, 2012.

Kohl highlighted the company's cash position of $1.23 per diluted share and
total shareholders' equity of $12 million at March 31, 2013 -- representing
approximately $3.17 per diluted share.

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 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.

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)
                                                                 
                                      Three Months Ended  Year Ended
                                      March 31,           March 31,
                                      (Unaudited)        ( Audited )
                                                                 
                                      2013      2012      2013      2012
                                                                 
Net sales                              $5,535    $5,976    $21,933   $25,370
Cost of sales                          4,225     4,631     17,029    20,249
Gross profit                           1,310     1,345     4,904     5,121
Selling, general and administrative    1,210     1,167     4,549     4,891
expenses
                                                                 
Operating income                       100       178       355       230
                                                                 
Non-operating items                                               
Interest expenses                      (2)       (2)       (9)       (24)
Exchange (loss) gain, net              (1)       49        (27)      126
Interest income                        7         1         14        4
Other income                           28        (8)       78        34
                                                                 
Total non-operating income            32        40        56        140
                                      --        --                 
Income before income tax and           132       218       411       370
non-controlling Interest
Income taxes credit (expense)          142       (126)     37        (186)
Net Income before non-controlling      274       92        448       184
interests
Loss attributable to non-controlling   --        --        --        --
Interests
Net Income attributable to Highway     $274      $92       $448      $184
Holdings Limited shareholders
                                                                 
NetIncome per share:                                             
Basic                                  $0.07     $0.02     $0.12     $0.05
Diluted                                $0.07     $0.02     $0.12     $0.05
                                                                 
Weighted average number of shares                                 
outstanding:
Basic                                  3,778,825 3,777,850 3,778,825 3,777,850
Diluted                                3,781,307 3,788,302 3,781,307 3,788,302


HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Balance Sheet
(In thousands, except per share data)
                                                                     
                                                              31-Mar  31-Mar
                                                              2013    2012
Current assets:                                                       
Cash and cash equivalents                                      $4,634  $5,575
Restricted cash                                                643     643
Accounts receivable, net ofdoubtful accounts                  3,958   3,724
Inventories                                                    2,957   3,970
Amount due from an equity method investee                      110     174
Prepaid expenses and other current assets                      1,114   424
Total current assets                                           13,416  14,510
                                                                     
Property, plant and equipment, (net)                           1,769   2,027
Deposit for purchase of property, plant and equipment          --      42
Loan Receivable                                                167     --
Investments in equity investees                               --      --
Total assets                                                   $15,352 $16,579
                                                                     
Current liabilities:                                                  
Accounts payable                                               $1,515  $2,547
Long-term loans-current portion                                112     262
Obligation under capital leases – current portion              --      3
Accrual expenses and other liabilities                         1,386   1,324
Income tax payable                                             158     153
Dividend payable                                               114     --
Total current liabilities                                      3,285   4,289
Obligations under capital leases-net of current portion        0       0
Deferred income taxes                                          59      180
Long-term loans – net of current portion                      0       112
Total liabilities                                              3,344   4,581
                                                                     
Shareholders' equity:                                                 
Common shares, $0.01 par value                                 38      38
Additional paid-in capital                                     11,340  11,340
Retained earnings                                              628     634
Treasury shares, at cost – 5,049 shares as of March 31, 2013   (14)    (14)
and 2012
Accumulated other comprehensive income                         16      --
Total Highway Holdings Limited shareholders' equity            12008   11,998
Non-controlling interest                                       --      --
Total Equity                                                   12,008  11,998
Total liabilities and shareholders' equity                     $15,352 $16,579

CONTACT: Gary S. Maier
         Maier & Company, Inc.
         (310) 471-1288
 
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