HIGHWAY HOLDINGS RESTATES UNAUDITED FINANCIAL STATEMENTS FOR 3 AND 9 MONTHS ENDED DECEMBER 31, 2023 RESULTING IN HIGHER NET INCOME FOR BOTH PERIODS

HONG KONG, July 12, 2024 /PRNewswire/ — Highway Holdings Limited (Nasdaq: HIHO) (the “Company” or “Highway Holdings”) today announced it has restated its unaudited quarterly financial statements for the three and nine months ended December 31, 2023, which were released in an earnings press release on February 1, 2024. The decision to restate the financial statements was approved on July 12, 2024 by Highway Holdings’ Board of Directors upon the recommendation of the Audit Committee of the Board of Directors and after consultation with management.

Investors should no longer rely upon the previously released financial statements cited above. Similarly, any other press releases and investor communications containing information derived from such financial statements should no longer be relied upon.

The Company has concluded that the interim financial statements cannot be relied upon due to the misapplication of a revenue recognition accounting standard following a change in inventory fulfillment and transfer procedures by one of the Company’s customers. The inventory adjustment resulted in the erroneous inclusion of $1,875,000 in net sales and $1,921,000 in cost of sales from the transfers of certain parts to be included in products manufactured by the Company for its customer. This misapplication was identified during the preparation of Highway Holdings’ Annual Report on Form 20-F for the fiscal year ended March 31, 2024. The restated financial statements for the three and nine months ended December 31, 2023 are attached to this press release.

The adjustments to net sales and other line items resulting from the changed inventory transfer policies resulted in an increase in net income for the third quarter of fiscal year 2024 from $302,000, or $0.07 per diluted share, to $348,000, or $0.08 per diluted share, and resulted in an increase in net income for the first nine months of fiscal year 2024 from $177,000, or $0.04 per diluted share, to $223,000, or $0.05 per diluted share in the restated financial statements

Today’s announcement reiterates Highway Holdings’ continued commitment to improve its practices and uphold the highest standards of financial reporting.

About Highway Holdings 

Highway Holdings is an international manufacturer of a wide variety of quality parts and products for blue chip equipment manufacturers based primarily in Germany. Highway Holdings’ administrative offices are located in Hong Kong and its manufacturing facilities are located in Yangon, Myanmar and Shenzhen, China. For more information visit website www.highwayholdings.com.

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)







Three Months Ended


Nine Months Ended



December 31,


December 31,












2023

Announced


2023

Restated


2023

Announced


2023

Restated













Net sales

$4,107


$2,232


$6,776


$4,901



Cost of sales

3,231


1,310


5,140


3,219



Gross profit

876


922


1,636


1,682













Selling, general and administrative expenses

679


679


1,728


1,728



Operating income/(loss)

197


243


(92)


(46)













Non-operating items




















Exchange gain /(loss), net

27


27


58


58



Interest income

63


63


156


156


Gain/(Loss) on disposal of Asset

3


3


16


16



Other income/(expenses)

8


8


14


14



Total non-operating income/ (expenses)

101


101


244


244























Net income before income tax and non-controlling interests

298


344


152


198



Income taxes

1


1


7


7



Net income before non-controlling interests

299


345


159


205



Net loss attributable to non-controlling interests

3


3


18


18



Net income attributable to Highway

Holdings Limited‘s shareholders

 

302


 

348


 

177


 

223













Net Gain/ (loss) per share – Basic                     

 

$0.07


$0.08


$0.04


$0.05



Net Gain/ (loss) per share – Diluted                    

$0.07


$0.08


  

$0.04


 

$0.05













Weighted average number of shares outstanding  










Basic

4,386


4,386


4,314


4,314



Diluted

 

4,396


 

4,396


 

4,323


 

4,323
























 

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Balance Sheet

(Dollars in thousands, except per share data)






Dec 31


Dec 31


2023

Announced


2023

Restated





Current assets:




Cash and cash equivalents

$6,186


$6,186

Accounts receivable, net of doubtful accounts

3,533


1,658

Inventories

1,812


1,858

Prepaid expenses and other current assets

200


200

Income tax recoverable


Total current assets

11,731


9,902





Property, plant and equipment, (net)

379


379

Operating lease right-of-use assets

2,004


2,004

Long-term deposits

205


205

Long-term loan receivable

95


95

Investments in equity method investees


Total assets

$14,414


$12,585





Current liabilities:




Accounts payable

$2,477


$602

Operating lease liabilities, current

586


586

Other liabilities and accrued expenses

1,845


1,845

Income tax payable

551


551

Dividend payable

46


46

Total current liabilities

5,505


3,630





Long term liabilities:




Operating lease liabilities, non-current

1,013


1,013

Deferred income taxes

98


98

Long terms accrued expenses

17


17

Total liabilities

6,633


4,758





Shareholders’ equity:




Preferred shares, $0.01 par value


Common shares, $0.01 par value

44


44

Additional paid-in capital

12,140


12,140

Accumulated deficit

(3,879)


(3,833)

Accumulated other comprehensive income/(loss)

(517)


(517)

Non-controlling interest

(7)


(7)

   Total shareholders’ equity

7,781


7,827





Total liabilities and shareholders’ equity

$14,414


$12,585





















 

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SOURCE Highway Holdings Limited

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