HIGHWAY HOLDINGS REPORTS FISCAL 2023 THIRD QUARTER AND NINE-MONTH RESULTS

HONG KONG,Feb. 15,2023 --Highway Holdings Limited (Nasdaq:HIHO) (the "Company" or "Highway Holdings") today reported results for its fiscal thirdquarter and nine months ended December 31,2022,with approximately $1.54 in cash per diluted share.

Net sales for the third quarter of fiscal year 2023 were $2.6 million compared with $3.0million a year ago,reflecting the renewed impact of the COVID-19 pandemic on the Company,its customers and its supply chain,which affected the Company's overall business in the fiscal third quarter. Net income for the third quarter of fiscal year 2023 was $52,000,or $0.01 per diluted share,compared with $240,000 or $0.06per diluted share for the same period last year. The Company noted the comparisons are not very meaningful because of the disruptions and subsidies impacting different periods and distorting the numbers.

Net sales for the first nine months of fiscal year 2023 were$8.5 million compared with $9.3 million for the same period last year. Net income for the first nine months of 2023 was $831,or $0.20 per diluted share,compared with a net income of $812,or $0.19 per diluted share for the same period last year.

Gross margin for the third quarter of fiscal year 2023 was28.4 percent,compared to 28.6percent for the same period last year. For the first nine months of fiscal year 2023,gross margin increased by 300 basis points to 33.7 percent from 30.7 percent for the same period last year.

Roland Kohl,chairman,president and chief executive officer of Highway Holdings,said,"We continue to work closely with our customers and supply chain to navigate the ongoing challenges we are collectively facing. We went from disruptive "zero-tolerance" COVID shutdowns to the sudden unrestricted opening causing havoc and disrupting our China operations. To put the recent situation into perspective,we recently had over half of our Chinese employees reporting sickness,with some recovering and returning to work,while others still remain out. While we are pleased to see our workforce has now substantially returned to full capacity after the annual Chinese New Year holiday,we believe the lack of full workforce status before that date will also adversely impact our business in the current quarter. As this situation exists not only in our own operation butacross our supply chain and at certain customers,it will be a headwind to our otherwise generally improved situation. Longer term,since China has finally opened up and removed most COVID restrictions,we are hopeful and optimistic that we can return to a more stable and predictable business environment once the initial surge of infections ends and the holidays are over."

The Company reported a $26,000 currency exchange gain for the fiscal 2023 nine monthscompared with a $20,000 currency exchange loss a year earlier. The currency exchange gain in the current year was mainly due to the strengthened RMB. The Company does not engage in currency exchange rate hedging,and the fluctuations in the exchange rate of the RMB and Kyat are expected to affect the Company's future results.

The Company's balance of cash atDecember 31,2022 was approximately $6.3 million,or approximately $1.54 per diluted share,compared with a balance of cash of $6 million at March 31,2022. Cash utilization primarily reflects prepayments for long-term orders,which were made to secure delivery of future production materials and the return of capital to shareholders through dividends.

The Company's currentratio was 3.6:1 at December 31,and the Company's total cash exceeded all current and long-term liabilities combined by $2.8 million.

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,

2022

2021

2022

2021

Net sales

$2,562

$2,995

$8,547

$9,357

Cost of sales

1,835

2,137

5,669

6,476

Gross profit

727

858

2,878

2,881

Selling,general and administrative expenses

722

671

2,130

2,148

Operating income

5

187

748

733

Non-operating items

Exchange gain /(loss),net

3

(15)

26

(20)

Interest income

16

3

35

9

Gain/(Loss) on disposal of Asset

2

7

14

Other income/(expenses)

5

1

Total non-operating income/ (expenses)

21

(12)

73

4

Net profit before income tax and non-controlling interests

26

175

821

737

Income taxes benefit/(expense)

15

72

10

100

Net profit before non-controlling interests

41

247

831

837

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

interests

(11)

7

25

Net income attributable to Highway

Holdings Limited's shareholders

52

240

831

812

Net gain per share – Basic and Diluted

Basic

$0.01

$0.06

$0.20

$0.20

Diluted

$0.01

$0.06

$0.20

$0.19

Weighted average number of shares outstanding

Basic

4,072

4,030

4,058

4,030

Diluted

4,130

4,205

4,115

4,205

HIGHWAY HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Balance Sheet

(Dollars in thousands,except per share data)

Dec 31

Mar31

2022

2022

Current assets:

Cash and cash equivalents

$6,326

$6,010

Time deposits

-

1,075

Accounts receivable,net of doubtful accounts

2,954

2,260

Inventories

1,493

2,350

Prepaid expenses and other current assets

775

620

Income tax recoverable

7

7

Total current assets

11,555

12,322

Property,plant and equipment,(net)

433

643

Operating lease right-of-use assets

843

1,799

Long-term deposits

21

-

Long-term loan receivable

95

95

Investments in equity method investees

-

-

Total assets

$12,947

$14,859

Current liabilities:

Accounts payable

$448

$828

Operating lease liabilities,current

236

933

Other liabilities and accrued expenses

1,732

2,599

Income tax payable

571

620

Dividend payable

204

202

Total current liabilities

3,191

5,182

Long term liabilities :

Operating lease liabilities,non-current

243

268

Deferred income taxes

109

140

Total liabilities

3,543

5,590

Shareholders' equity:

Preferred shares,$0.01 par value

-

-

Common shares,$0.01 par value

40

40

Additional paid-in capital

11,964

11,816

Accumulated deficit

(2,271)

(2,284)

Accumulated other comprehensive income/(loss)

(329)

(303)

Non-controlling interest

Total shareholders' equity

9,404

9,269

Total liabilities and shareholders' equity

$12,859

View original content:https://www.prnewswire.com/news-releases/highway-holdings-reports-fiscal-2023-third-quarter-and-nine-month-results-301746924.html