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
