SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For November 10, 2003
BONSO ELECTRONICS INTERNATIONAL INC.
------------------------------------
(Translation of Registrant's name into English)
Unit 1106-1110, 11F., Star House 3 Salisbury Road,
Tsimshatsui Kowloon, Hong Kong
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(Address of principal executive offices)
[Indicate by check mark whether the Registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.]
Form 20-F [X] Form 40-F [ ]
[Indicate by check mark whether the Registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.]
Yes [ ] No [X]
BONSO ELECTRONICS INTERNATIONAL INC.
Information for the Quarter Ended September 30, 2003
2
TABLE OF CONTENTS
REPORT FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003 ON FORM 6-K
Page
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Second Quarter Shareholders Letter 4
Consolidated Financial Statements
Audited Consolidated Balance Sheets as of March 31, 2003 and
Unaudited Consolidated Balance Sheets as of
September 30, 2003 6
Unaudited Consolidated Statements of Income and
Comprehensive Income for the Six-Month Periods
Ended September 30, 2002 and 2003 and the Three-Month
Periods Ended June 30, 2002 and 2003 8
Management Discussion and Analysis of Financial Conditions 9
and Results of Operations
Results of Operations 9
Liquidity and Capital Resources 12
Stock Repurchase Program 13
Warrant Expiration 13
Legal Proceedings 13
Press Release Reporting Second Quarter Results 16
Signature 17
3
[Bonso Electronics International Inc. Letterhead]
Dear Shareholders: 10 November 2003
The first half was a period of exceptional growth for our company, and we
believe that the dynamics that have driven this growth are continuing unabated.
Building capabilities in-house to respond rapidly to high volume customer demand
has taken years and cost a significant amount of money. It appears these
investments in people, plant and equipment are starting to pay off with
increased sales and profits from new, as well as, existing customers.
Net income of approximately $1,504,000 or $0.265 per share (diluted) on revenues
of approximately $41,080,000 for the six months ended 30 September 2003,
represented an increase of 174% and 98% respectively over earnings of
approximately $549,000 or $0.096 per share (diluted) and sales of approximately
$20,728, 000 posted in the same period last year.
Net income in the three months ended 30 September 2003 rose to approximately
$796,000 or $0.140 per share over approximately $26, 000 and $0.005 per share
for the same period last year, an increase of 2,962%. Sales increased to
approximately $21,035,000, a 98% increase over approximately $10,611,000 last
year.
I am pleased to report that for the second quarter in a row our sales came close
to doubling last year's levels. These sales improvements came from increases in
both telecom and sensor based scale products.
I feel the first half year's results represent a significant positive change in
our business. The steps we have taken to provide for vertical integration in our
manufacturing operation so that we are less dependent upon third party suppliers
and vendors have contributed to our financial success. This makes for an
extremely flexible, fast moving, competent organization, capable of responding
quickly to changing customer requirements.
The first half year's results further demonstrated that we were able to
significantly increase our sales volume while maintaining positive cash flow
from operations, improve our cash and cash equivalents position to approximately
$15,000,000 or $2.64 per share with long term debt of approximately $1,318,000.
Although I am very optimistic about Bonso's financial performance during the
current fiscal year, I do not expect to sustain the almost doubling of sales in
the second half of the year as a result of increased seasonality in the sales of
the Company's major product lines.
Credit for these increases rests squarely with our employees. Our employee teams
have worked tirelessly to help reduce material costs, refine processes, improve
delivery and cut overall expenses through productivity and lean manufacturing
initiatives
As we look forward, we believe we are well positioned to forge ahead with our
long-term growth strategies. We will continue to work closely with our existing
customers to innovate and assist them in designing cost effective and
competitive solutions for their needs and desires. We will continue to expand
our global reach and aggressively pursue new customer relationships for sensor
based and telecommunications applications. We will also continue seeking new
acquisition candidates to fit our search profile of innovative sensor
technology, as well as, companies that may benefit from a relationship with an
off-shore manufacturing company like Bonso.
4
We remain cautiously optimistic in the short-to medium-term global economic
outlook. The world's economy remains fragile as economic expansion in Europe and
in the United States moves ahead at between 2 and 4 percent a year; China is
expected to deliver annual growth of 8 percent. China offers a cheap, educated
workforce, a booming population and an emerging middle class. China is
attracting sophisticated investors, such as Warren Buffet who recently purchased
13.5% of Petro China. Direct foreign investment in China is expected to double
in 2003 to $60 billion. Further driving growth is China's entry into the World
Trade Organization, as well as, the 2008 Olympics in Beijing. As the time for
the Olympics approaches, increased journalistic coverage should improve the
world's opinion of China's technological capabilities.
We shall endeavor to continue to earn your support through hard work, open
communications and superior performance. We appreciate your confidence and will
continue to strive every day to enhance returns on your invested capital.
Best regards,
Bonso Electronics International, Inc.
/s/ Anthony So
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Anthony So
Chairman, President and Chief Executive Officer
U. S. Contact: George O'Leary (949) 760 9611. (949) 760 9607 (Fax) Hong Kong
Contact: Cathy Pang (852) 2605 5822. (852) 2691 1724 Attachments: 1. Balance
Sheet 2. Income Statement
The statements contained in this release which are not historical fact are
forward looking statements that involve certain risks and uncertainties
including, but not limited to, risks associated with the uncertainty of future
financial results, seasonality of sales of certain products, additional
financing requirements, development of new products, government approval
processes, the impact of competitive products or pricing, technological changes,
currency fluctuations, estimates of market growth, the effect of economic
conditions and other uncertainties detailed in the company's filings with the
Securities and Exchange Commission.
5
BONSO ELECTRONICS INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEET
(In U.S. Dollars)
Sept 30 March 31
------- --------
2003 2003
---- ----
(Unaudited) (Audited)
Assets
Current assets
Cash and cash equivalents 14,959,859 3,633,528
Restricted cash deposits -- 4,104,168
Trade receivables, net 10,282,453 6,191,627
Inventories, net 9,454,532 12,656,518
Notes receivable -- 358,188
Tax recoverable 458,525 52,087
Deferred income tax assets - current 38,348 38,348
Other receivables, deposits and prepayments 1,089,105 1,166,234
Total current assets 36,282,822 28,200,698
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Deposits 551,399 551,399
Deferred income tax assets - non current 42,559 128,887
Goodwill 1,089,258 1,100,962
Brand name, net 2,614,851 2,597,392
Property, plant and equipment 17,636,936 16,331,398
Total assets 58,217,825 48,910,736
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Liabilities and shareholders' equity
Current liabilities
Bank Overdraft 292,506 216,410
Notes payable 7,618,566 4,818,971
Accounts payable 10,928,516 6,350,527
Accrued charges and deposits 2,056,832 1,827,286
Short-term loans 4,472,729 4,727,988
Current portion of long-term debt and capital lease obligations 552,063 482,940
---------- ----------
Total current liabilities 25,921,212 18,424,122
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6
Long-term debt and capital lease obligations, net of current maturities 1,317,555 606,488
Minority Interests 92,369 55,275
Redeemable Common Stock
Redeemable Common Stock par value $0.003 per share - issued and outstanding
shares : March 2003 - 180,726
September 2003 - 180,726 1,445,808 1,445,808
Shareholders' equity
Preferred stock par value $0.01 per share
-authorized shares - 10,000,000
-issued and outstanding shares : March & September-0 -- --
Common stock par value $0.003 per share
- authorized shares - 23,333,334
- issued and outstanding shares : March 2003 - 5,529,133 16,488 16,583
September 2003 - 5,494,657
Additional paid-in capital
21,394,128 21,458,376
Capital Reserves
Retained earnings 7,752,359 6,533,224
Accumulated other comprehensive income 277,906 409,692
Common stock held in treasury, at cost -- (38,832)
----------- -----------
29,440,881 28,379,043
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Total liabilities and shareholders' equity
58,217,825 48,910,736
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7
BONSO ELECTRONICS INTERNATIONAL INC.
CONSOLIDATED INCOME STATEMENT
(In Thousands of U.S. Dollars)
Unaudited
Three months ended Sept 30 Six months ended Sept 30
-------------------------- ------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net sales
21,035 10,611 41,080 20,728
Cost of sales
(17,022) (7,797) (33,251) (15,046)
---------- ---------- ---------- ----------
Gross margin 4,013 2,814 7,829 5,682
Selling expenses 653 545 1,482 1,002
Salaries and related costs 1,246 1,199 2,522 2,186
Research and development expenses 158 75 256 152
Administration and general expenses 925 883 1,714 1,477
Amortization of Brand Name 45 11 102 114
---------- ---------- ---------- ----------
Income from operations 986 101 1,753 751
Interest Income 12 30 24 30
Other income 37 143 164 276
Interest Expenses (191) (153) (465) (314)
Foreign exchange gains 62 20 80 16
Consultancy fee (96) -- (191)
---------- ---------- ---------- ----------
Income before income taxes and minority interest 906 45 1,556 568
Income tax expense (96) (11) (15) (11)
---------- ---------- ---------- ----------
Net income before minority interest 810 34 1,541 557
Minority interests (14) (8) (37) (8)
---------- ---------- ---------- ----------
Net income 796 26 1,504 549
---------- ---------- ---------- ----------
Earnings per share
Basic & diluted 0.140 0.005 0.265 0.096
Weighted average shares Outstanding 5,675,383 5,709,859 5,675,383 5,709,859
8
Management Discussion and Analysis of Financial Conditions and Results of
Operations
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This section and other parts of this Form 6-K contain forward-looking
statements that involve risks and uncertainties. The Company's actual results
may differ significantly from the results discussed in the forward-looking
statements. Factors that might cause such differences include, but are not
limited to, those discussed in the section entitled "Risk Factors" contained in
the Company's Form 20-F that was filed with the Securities and Exchange
Commission for the Fiscal Year Ended March 31, 2003. The following discussion
should be read in conjunction with the 2003 Form 20-F for the fiscal year ended
March 31, 2003, and the condensed consolidated financial statements included
elsewhere in this Form 6-K. All information is based on the Company's fiscal
calendar.
Results of Operations
---------------------
Six Month Period ended September 30, 2003 compared to the Six Month period ended
September 30, 2002
Net Sales. Our sales increased 98% from approximately $20,728,000 for the
six-month period ended September 30, 2002, to approximately $41,080,000 for the
six-month period ended September 30, 2003. The driving force behind the increase
came from the strong growth of both scales and telecommunication products. Our
scales business increased by approximately $8,300,000 from $14,700,000 for the
period ended September 30, 2002 to $23,000,000 for the period ended September
30, 2003. Orders for telecommunications products increased by approximately
$12,000,000 from approximately $6,000,000 for the period ended September 30,
2002 to $18,100,000 for the period ended September 30, 2003.
Gross Margin. Gross margin as a percentage of revenue declined to 19%
during the six-month period ended September 30, 2003 as compared to 27.4% during
the same period in the prior year. This decline was principally caused by
increased pressure upon the sales price of our FRS telecommunication products
and also as a result of increased sales of body scales to new customers. Since
body scales have a lower gross margin, this change in our product mix has
impacted the Company's gross margin.
Selling Expenses. Selling expenses increased by 48% from approximately
$1,002,000 for the six-month period ended September 30, 2002 to approximately
$1,482,000 for the six-month period ended September 30, 2003. This increase is
primarily attributable to the increased sales volume experienced during this
six-month period when compared to the same period in the prior year. However,
selling expenses decreased as a percentage of revenue to 3.6% during the period
ended September 30, 2003 as compared to 4.8% during the prior year.
Salaries And Related Costs. Salaries and related costs increased by 15%
from approximately $2,186,000 for the six-month period ended September 30, 2002
to approximately $2,522,000 for the six-month period ended September 30, 2003.
This increase was primarily due to the inclusion of an additional four months of
Gram Precision salaries, which was acquired by Bonso on August 1, 2002.
9
Research And Development. Research and development expenses increased 68%
from approximately $152,000 for the six month period ended September 30, 2002 to
approximately $256,000 for the six month period ended September 30, 2003 due to
increased research and development activities for telecommunications products
and new models of scales. Research and Development as a percentage of revenue
declined to 0.6% during the period ended September 30, 2003 as compared to 0.7%
during the prior year.
Administration And General Expenses. Administration and general expenses
increased by 16% from approximately $1,477,000 for the six-month period ended
September 30, 2002 to approximately $1,714,000 for the six-month period ended
September 30, 2003. This increase was primarily due to the inclusion of an
additional four months administration and general expenses of Gram Precision,
which was acquired by Bonso on August 1, 2002, and an increase in insurance
premiums covering our plant and business operations.
Amortization Of Brand Names. The brand name is amortized using the
straight-line method over the related estimated useful life of 15 years.
Income From Operations. As a result of the above changes, income from
operations increased by 133% from approximately $751,000 for the six-month
period ended September 30, 2002 to $1,753,000 for the six-month period ended
September 30, 2003.
Interest Income. Interest income amounted to approximately $24,000 for the
six-month period ended September 30, 2003, compared to $30,000 in the six-month
period ended September 30, 2002. This decrease was mainly due to generally lower
interest rates for deposits despite the increase of cash balances with our
banks.
Other Income. Other income decreased 41% from approximately $276,000 for
the six-month period ended September, 2002 to approximately $164,000 for the
six-month period ended September 30, 2003. The decrease resulted from lower
sales of scrap during the period and a decrease in other adjustments that had
resulted in the generation of other income during the same period in the prior
year.
Interest Expenses. Interest expenses increased 48% from approximately
$314,000 for the six-month period ended September 30, 2002 to approximately
$465,000 for the six-month period ended September 30, 2003. This increase
primarily resulted from fact that the Company used more of its banking
facilities to support sales during the current fiscal year.
Foreign Exchange Gains. Foreign exchange gain increased from approximately
$16,000 for the six-month period ended September 30, 2002 to a gain of
approximately $80,000 for the six-month period ended September 30, 2003. The
gain was primarily attributable to the revaluation of United States denominated
liabilities in Gram Precision.
Consultancy Fee. We entered into an agreement with a third party to provide
consulting/advisory services relating to our capital structure and fund-raising
activities. The period of service was from July 2000 to January 2003. A total
consultancy fee of $1,144,260 was capitalized in 2000 and was amortized over
three years of the contract, resulting in a non-cash consultancy fee of
approximately $191,000 for the six month period ended September 30, 2002,
relating to warrants that were issued to the consultant. There was no
consultancy fee for the six-month period ended September 30, 2003.
10
Net Income. As a result of the above changes, net income increased from
approximately $549,000 for the six month period ended September 30, 2002 to
$1,504,000 for the six month period ended September 30, 2003, an increase of
approximately $955,000, or 174%.
Three Month Period ended September 30, 2003 compared to the Three Month period
ended September 30, 2002
Net Sales. For the three months ended September 30, 2003, net sales of
approximately $21,035,000 represented an increase of approximately $10,424,000,
or 98%, from the same prior year period. The increase was primarily due to
strong growth of both scales and telecommunication products.
Gross Margin. Gross margin as a percentage of revenue declined to 19%
during the three-month period ended September 30, 2003 as compared to 26.5%
during the prior year. . This decline was principally caused by increased
pressure upon the sales price of our FRS telecommunication products and also as
a result of increased sales of body scales to new customers. Since body scales
have a lower gross margin, this change in our product mix has impacted the
Company's gross margin.
Selling Expenses. Selling expenses increased by 19.8% from approximately
$545,000 for the period ended September 30, 2002 to approximately $653,000 for
the period ended September 30, 2003. This increase is primarily attributable to
the increased sales volume experienced during the three-month period when
compared to the same period in the prior year. However, selling expenses
decreased as a percentage of revenue to 3.1% during the period ended September
30, 2003 as compared to 5.1% during the same period in the prior year.
Salaries And Related Costs. Salaries and related costs increased by 3.9%
from approximately $1,199,000 for the three months ended September 30, 2002 to
approximately $1,246,000 for the three months ended September 30, 2002. This
increase was primarily due to an increase in the number of employees.
Research And Development. Research and development expenses increased 110%
from approximately $75,000 for the three months ended September 30, 2002 to
approximately $158,000 for the three months ended September 30, 2003 due to
increased research and development activities for telecommunications products
and new models of scales.
Administration And General Expenses. Administration and general expenses
increased by 4.7% from approximately $883,000 for the three months ended
September 30, 2002 to approximately $925,000 for the three months ended
September 30, 2003. This increase was primarily due to additional expenses
associated with the increased selling activities.
11
Income From Operations. As a result of the above changes, income from
operations decreased by 876% from approximately $101,000 for the three months
ended September 30, 2002 to $986,000 for the three months ended September 30,
2003.
Interest Income. Interest income amounted to approximately $12,000 for the
three months ended September 30, 2003, compared to $30,000 in the three months
ended September 30, 2002. This decrease primarily resulted from generally lower
interest rates for deposits despite the increase of cash balances with our
banks.
Other Income. Other income decreased 74% from approximately $143,000 for
the three months ended September, 2002 to approximately $37,000 for the three
months ended September 30, 2003. The decrease resulted from lower sales of scrap
during the period and a decrease in other adjustments that had resulted in the
generation of other income during the same period in the prior year.
Interest Expenses. Interest expenses increased 24% from approximately
$153,000 for the three months ended September 30, 2002 to approximately $191,000
for the three months ended September 30, 2003. This increase primarily resulted
from the fact that the Company used more of its banking facilities to support
sales during the current fiscal year.
Foreign Exchange Losses/Gains. Foreign exchange gain improved from
approximately $20,000 for the three months ended September 30, 2002 to a gain of
approximately $62,000 for the three months ended September 30, 2003. This
increase primarily resulted from the revaluation of United States denominated
liabilities in Gram Precision.
Consultancy Fee. We entered into an agreement with a third party to provide
consulting/advisory services relating to our capital structure and fund-raising
activities. The period of service was from July 2000 to January 2003. A total
consultancy fee of $1,144,260 was capitalized in 2000 and was amortized over
three years of the contract, resulting in a non-cash consultancy fee of
approximately $96,000 for the period ended September 30, 2002, relating to
warrants that were issued to the consultant. There was no consultancy fee for
the three-month period ended September 30, 2003.
Net Income. As a result of the above changes, net income decreased from
approximately $26,000 for the three month ended September 30, 2002 to $796,000
for the three months ended September 30, 2003, an increase of approximately
$770,000, or 2,962%.
Liquidity and Capital Resources
-------------------------------
We have financed our growth and cash needs to date primarily from
internally generated funds and bank debt. We do not use off-balance sheet
financing arrangements, such as securitization of receivables or obtaining
access to assets through special purpose entities, as sources of liquidity. Our
primary uses of cash have been to fund expansions and upgrades of our
manufacturing facilities, to make strategic acquisitions and to fund increases
in inventory and accounts receivable resulting from increased sales.
12
We believe that our cash flows from operations, our current cash balance
and funds available under our working capital and credit facilities will be
sufficient to meet our working capital needs and planned capital expenditures
for the next 12 months. As of September 30, 2003, we had $14,959,859 in cash and
cash equivalents as compared to $10,560,667 as of June 30, 2003. Working capital
at September 30, 2003 was $10,361,610 compared to $10,372,903 at June 30, 2003.
We believe our working capital is sufficient for our present requirements.
Stock Repurchase Program
------------------------
In August 2001, the Company's Board of Directors authorized a program for
the Company to repurchase up to $500,000 of its common stock. This repurchase
program does not obligate the Company to acquire any specific number of shares
or acquire shares over any specified period of time. Three thousand seven
hundred seventy six (3,776) shares were repurchased during the first six months
of fiscal 2003. The Company may from time to time repurchase shares of its
Common Stock under this program.
Warrant Expiration
------------------
Currently, the Company has outstanding 2,174,403 warrants to purchase common
stock which are publicly traded on NASDAQ under the symbol BNSOZ and are
exercisable to purchase 1,087,201 shares of common stock at $17.50 per share.
The warrants originally were exercisable any time prior to 2:00 p.m. (Pacific
Time) on December 31, 2001. In October 2001, the board of directors extended the
expiration date until December 31, 2002, and in July 2002, extended the
expiration date until December 31, 2003. The warrants expire on December 31,
2003, and the Company does not intend to extend the expiration date of the
warrants. Holders of the warrants are cautioned that upon expiration of the
warrants, the warrants will have no value and the holders will not be able to
exercise their warrants to purchase shares of the Company's common stock.
Legal Proceedings
-----------------
In May of 2001, Bonso acquired KORONA Haushaltswaren GmbH & Co. KG
("Korona") from Augusta Technologie AG ("Augusta"). Part of the purchase price
paid to Augusta was the issue of 180,726 shares of Bonso's restricted common
stock. The Stock Purchase Agreement gave Augusta the right to exchange the
common stock for a promissory note in the amount of $1,445,808 if the
registration of the stock had not been declared effective by the Securities and
Exchange Commission on or before January 31, 2002. Bonso filed a registration
statement to register the common stock held by Augusta, which was declared
effective by the Securities and Exchange Commission on March 7, 2002. In March
2002, Augusta demanded that Bonso deliver the promissory note to it in exchange
for the common stock. Bonso refused to exchange the Note for the common stock
for the reasons described below. The promissory note is in the amount of
$1,445,808, repayable in nine monthly payments which would have commenced April
1, 2002 and bearing interest at a rate of 8% per annum which would have resulted
in an interest cost of approximately $50,000 for the whole period of the
promissory note.
13
On October 22, 2002, Augusta filed a request for arbitration in the state
of New York asserting breach of the Agreement and registration rights agreement.
On January 13, 2003, we filed our answer to Augusta's request for arbitration
asserting that Augusta breached the Agreement and the implied duty of good faith
and fair dealing by withholding consent from Korona's auditors to assist Bonso
in preparing the audited financial statements necessary for the registration of
common stock. In September 2003, a three-member panel of the arbitration
tribunal heard testimony from Bonso and Augusta during a two-day hearing. We
have submitted post hearing arguments and as of the date of this report have not
received a ruling or a request for further testimony from the tribunal.
Although we are optimistic that we will be successful in the arbitration,
there can be no assurance that this will occur. Further, if the arbitration
proceeds, there will be additional legal fees, travel expenses and other costs
related to the arbitration that will be incurred by us in defending the matter.
If we do not succeed in the arbitration, we may be obligated to exchange the
stock for the promissory note, to be repaid with accrued interest, over a
nine-month period of time and may be required to reimburse Augusta its attorneys
fees and expenses incurred in the arbitration.
Management believes that Bonso was not required to accept Augusta's tender
of their shares, because Augusta hindered the registration process by refusing
to allow Korona's auditors to update and certify Korona's financial statements.
Although management believes that it has meritorious defenses to the claims
asserted by Augusta and intends to defend these claims vigorously, the outcome
of the arbitration is uncertain and Bonso may not prevail in the arbitration
proceeding.
On or about August 20, 2003, Bonso and five of Bonso's directors were
served with a copy of a Complaint filed on July 23, 2003 in District Court of
Jefferson County, State of Colorado, Case No. 03CV2505. Plaintiffs Doug
Moreland, William Pinard, Richard Pinard, Leigh Investment Company, LP, Patricia
Johnson, Jason Pinard and Larry Rowe (collectively the "Plaintiffs") name
Anthony So, George O'Leary, Henry F. Schlueter, Cathy Pang, and John Stewart
Jackson (the "Individual Defendants") and Bonso as defendants in the case.
The Complaint alleges that the Individual Defendants breached their
fiduciary duties for insider trading and misappropriation of information by
selling shares of Bonso's common stock while in possession of material adverse
non-public information pertaining to Bonso's financial outlook. The Complaint
also alleges that the Individual Defendants breached their fiduciary duties of
care, loyalty, and good faith by causing Bonso, through its directors, to
disseminate to the market materially misleading and inaccurate information and
its failure to correct such information. Further the Complaint alleges that each
of the Individual Defendants failed to disclose materially adverse information
so the stock price would trade at artificially inflated prices. The Complaint
also alleges the Defendants committed corporate waste by possessing confidential
proprietary information and using such information for their personal benefit by
selling shares of Bonso's common stock while providing no consideration to the
Company for such benefit. The Complaint also alleges negligent
misrepresentations and fraud by Bonso and the Individual Defendants for
negligently representing its intention to conduct a share buyback and selling
shares of Bonso at inflated prices for their own benefit. The Complaint seeks
unspecified damages in an amount to be determined at trial, plus pre- and
post-judgment interest, and attorneys' fees costs.
14
On September 26, 2003, Bonso and the Individual Defendants filed a motion
to dismiss the Complaint for lack of standing, failure to state a claim, and
failure to comply with the appropriate procedural requirements for out of state
defendants instituting and maintaining a legal action in the state of Colorado.
On October 30, 2003, Plaintiffs filed a Verified Amended Complaint in which they
added derivative claims for breach of fiduciary duties for insider selling and
misappropriation of information against all defendants, breach of fiduciary
duties for dissemination of misleading and inaccurate information against the
Individual Defendants, and a claim for waste of corporate assets against the
Individual Defendants.
Bonso believes there is no basis for the claims asserted by the Plaintiffs
in the Complaint and intends to defend this action vigorously.
Press Release
-------------
Bonso issued the following press release on November 10, 2003.
Bonso Electronics Reports Record Sales for The
First Half with Earnings Up 174%
HONG KONG, Nov. 10 /PRNewswire-FirstCall/- Bonso Electronics International,
Inc (Nasdaq: BNSO) today reported net income of $1,504,000 or 0.265 per share
(diluted) on revenues of $41,080,000 for the six months ended 30 September 2003;
an increase of 174 percent and 98 percent respectively over earnings of $549,000
or $0.096 per share (diluted) and sales of $20,728,000 posted in the same period
last year.
Net income in the three months ended 30 September rose to $796,000 or
$0.140 per share over $26,000 and $0.005 per share; an increase of 2,962% over
the same period last year. Sales increased to $21,035,000, a 98% increase over
$10,611,000 last year.
"I am pleased to report our second quarter in a row where sales came close
to doubling last year's levels. These sales improvements came from increases in
both Telecom and Sensor based (scale) products," said Mr. Anthony So, Bonso
Chairman, CEO and President. Mr. So further stated, "I feel the first half
results represent a significant positive change in our business. Building
capabilities in-house to respond rapidly to high volume customer demand has
taken years and has cost a significant amount of money. It appears these
investments in people, plant and equipment are starting to pay off in increased
sales and profits from new, as well as, existing customers."
"The first half results further demonstrate that we can significantly
increase our sales volume while maintaining positive cash flow from operations
thereby improving our cash position to over approximately $15,000,000 or $2.64
per share with little long term debt."
15
Mr. So stated that although he remains very optimistic about Bonso's
financial performance during the current fiscal year, he does not expect to
sustain the almost doubling of sales in the second half of the year as a result
of increased seasonality in the sales of the Company's major product lines.
Mr. So also said that the Company has received a number of inquiries with
respect to the exercise price and current expiration date of the Company's
publicly traded common stock purchase warrants that trade on NASDAQ under the
symbol BNSOZ. He said the warrants expire on December 31, 2003, and each two
warrants are exercisable to purchase one share of the Company's common stock at
an exercised price of $17.5 per share. Mr. So said that the Company did not
intend to extend the expiration date of the warrants.
About Bonso Electronics
Headquartered in Hong Kong, Bonso Electronics designs, develops,
manufactures, assembles and markets a comprehensive line of telecommunications
products, electronic scales and weighing instruments. Bonso products are
manufactured in the People's Republic of China with customers primarily located
in North America and Europe. Company services include product design and
prototyping, production tooling, procurement of components, total quality
management, and just-in-time delivery. For further information, visit the
company's website at http://www.bonso.com .
The statements contained in this press release which are not historical
fact are forward looking statements that involve certain risks and uncertainties
including, but not limited to, risks associated with the uncertainty of future
financial results, seasonality of sales of certain products, additional
financing requirements, development of new products, government approval
processes, the impact of competitive products or pricing, technological changes,
currency fluctuations, estimates of market growth, the effect of economic
conditions and other uncertainties detailed in the company's filings with the
Securities and Exchange Commission.
The press release also included the consolidated financial statements
presented above beginning on page 6.
For more information, please contact,
In US - George OLeary,
Tel: +1-949-760-9611
Fax: +1-949-760-9607
In Hong Kong - Cathy Pang,
Tel: +852-2605-5822
Fax: +852-2691-1724
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Web Site: http://www.bonso.com
SOURCE Bonso Electronics International, Inc
-0- 11/10/2003
/Contact: In US - George Oleary, +1-949-760-9611, or fax,
+1-949-760-9607; In Hong Kong, Cathy Pang, +852-2605-5822, or fax,
+852-2691-1724, both for Bonso Electronics International /
/Web Site: http://www.bonso.com /
(BNSO)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BONSO ELECTRONICS INTERNATIONAL INC.
(Registrant)
Date: November 10, 2003 By: /s/ Henry F. Schlueter
----------------- ---------------------------------------
Henry F. Schlueter, Assistant Secretary
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