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Highway Holdings Ltd. (HIHO) Posts Solid Q2 FY2011 Results

Highway Holdings Ltd., a China-based manufacturer of various products for blue-chip original equipment manufacturers, today posted its financial results for the second fiscal quarter ended September 30, 2010. The company’s solid performance reflects an overall improved business atmosphere and new business gains.

Highway Holdings reported net income for the 2011 fiscal second quarter at $410,000, or $0.11 per diluted share, up from $139,000, or $0.04 per diluted share, reported for the same period last year. Net sales for the second quarter of 2011 increased 50% to $7.8 million compared to $5.2 million reported a year earlier.

Net income for the first half of fiscal 2011 was $ 454,000, or $0.12 per diluted share, compared with net income of $3,000, or $0.00 per diluted share, for the first half of fiscal 2010. Net sales for the six-month period increased 45.3% to $14.3 million from $9.8 million a year ago.

“Results for the quarter and first half of fiscal 2011 reflect a greatly improved business environment, with increased order flow from existing and new customers,” Roland Kohl, Highway Holdings president and CEO stated in the press release.

Operating income for the quarter was $167,000, roughly 2% of net sales, due to a 60% increase in labor costs.

“We anticipate operating income will improve in future quarters as these higher labor costs are passed through as price increases to our customers,” Kohl said.

As of September 30, 2010, the company had cash and cash equivalents and restricted cash of $7.8 million, or approximately $2.07 cash per share.

Current liabilities at September 30, 2010, totaled $6.8 million; current assets were $17.2 million. The company reported total shareholders’ equity at September 30, 2010, of $11.9 million, or $3.15 per diluted share, compared with $11.7 million, or $3.11 per diluted share, at March 31, 2010.

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