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: January 16, 2009
BONSO ELECTRONICS
INTERNATIONAL INC.
------------------
(Translation of Registrant's name into English)
Unit 1915-1916, 19/F, Delta House
3 On Yiu Street, Shek Mun,
Shatin, Hong Kong
(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 ]
TABLE OF CONTENTS
REPORT FOR THE SIX MONTH PERIOD ENDED SEPTEMBER 30, 2008 ON FORM 6-K
Page
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Consolidated Financial Statements
Unaudited Consolidated Balance Sheets as of September 30, 2008 and
March 31, 2008 3
Unaudited Consolidated Statements of Income and 5
Comprehensive Income for the Six-Month Periods
Ended September 30, 2008 and 2007
Management's Discussion and Analysis of Financial Condition 6
and Results of Operations
Liquidity and Capital Resources 7
Stock Repurchase Program 8
Section 404 Compliance 8
Signature 9
Exhibits 10
99.1 Press Release Disclosing First Quarter Results dated January 7, 2009
2
BONSO ELECTRONICS INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEET
(In U.S. Dollars) September 30, March 31,
2008 2008
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(Unaudited) (Audited)
Assets
Current assets
Cash and cash equivalents 11,742,683 10,195,362
Trade receivables, net 7,508,758 5,264,074
Inventories, net 14,402,188 11,391,318
Tax recoverable 774,051 2,117
Other receivables, deposits and prepayments 2,787,229 4,144,676
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Total current assets 37,214,909 30,997,547
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Deferred income tax assets - non current 21,776 191,618
Other non-current assets -- 155,125
Brand name and other intangible assets net 500,520 502,494
Property, plant and equipment, net 8,486,456 9,939,064
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Total assets 46,223,661 41,785,848
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Liabilities and shareholders' equity
Current liabilities
Bank overdraft 484,715 811,354
Notes payable 7,545,628 3,863,465
Accounts payable 7,747,099 5,985,403
Accrued charges and deposits 3,014,840 3,359,557
Short-term loans 3,754,400 3,894,159
Income tax payable 24,423 6,888
Current portion of long 146,611 176,930
lease obligations
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3
Total current liabilities 22,717,716 18,097,756
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Long-term debt and capital lease obligations, net of 114,337 183,761
current maturities
Income tax liabilities 2,595,135 2,595,135
Deferred income tax 4,460 4,460
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Total liabilities 25,431,648 20,881,112
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Preferred stock par--value $0.01 per share
- authorized shares - 10,000,000
- issued and outstanding shares: September 30,
2008 and March 31, 2008 -- --
Common stock par value $0.003 per share
- authorized shares 23,333,334 -- --
- issued and outstanding shares: September 30, 2008 16,729 16,729
and March 31, 2008 - 5,577,639
Additional paid-in capital 21,764,788 21,764,788
Treasury stock (1,440,374) (1,328,560)
Retained earning (686,268) (1,129,819)
Accumulated other comprehensive income 1,137,138 1,581,598
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20,792,013 20,904,736
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Total liabilities and shareholder's equity 46,223,661 41,785,848
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4
BONSO ELECTRONICS INTERNATIONAL INC.
CONSOLIDATED INCOME STATEMENT
(In Thousand of U.S. Dollars) Six months ended September 30
-----------------------------
2008 2007
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(Unaudited) (Unaudited)
Net sales 30,100 35,607
Cost of sales (24,309) (31,184)
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Gross margin 5,791 4,423
Selling expenses 1,026 1,176
Salaries and related costs 2,474 2,970
Research and development expenses 291 266
Administration and general expenses 1,428 1,598
Amortization of Brand Name -- 100
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Income from operations 572 (1,687)
Interest Income 64 75
Other income 62 264
Interest Expenses (193) (304)
Foreign exchange gains \(Loss) (55) 305
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Income/(loss) before income taxes and minority interest 450 (1,347)
Income tax expense (6) (3)
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Net income/(loss) before minority interest 444 (1,350)
Minority interests -- --
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Net income/(loss) 444 (1,350)
========== ==========
Earnings per share (in U.S.Dollars per share)
Basic 0.08 (0.24)
Diluted 0.08 (0.24)
Weighted average shares (Basic) 5,577,639 5,577,639
Adjusted weighted average shares (diluted) 5,577,639 5,577,639
5
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Six Month Period ended September 30, 2008 compared to the Six Month period ended
September 30, 2007
Net Sales. During the six-month period ended September 30, 2008, our
sales decreased 15.5% from approximately $35,607,000 for the six-month period
ended September 30, 2007 to approximately $30,100,000. The decreased sales were
primarily the result of a decrease in sales for our telecommunications products
offset by an increase in sales of our scales products. Sales from our scales
products increased by approximately $608,000 from approximately $22,644,000 for
the six-month period ended September 30, 2007 to approximately $23,252,000 for
the six-month period ended September 30, 2008. Sales from our telecommunications
products decreased by approximately $6,115,000 from approximately $12,963,000
for the period ended September 30, 2007 to approximately $6,848,000 for the
period ended September 30, 2008.
Cost of Sales. During the six-month period ended September 30, 2008,
cost of sales decreased to approximately $24,309,000 from approximately
$31,184,000 during the six-month period ended September 30, 2007, an decrease of
approximately $6,875,000 or 22.0%. The decrease in cost of sales was primarily
the result of decreased sales together with decreased cost of materials.
Gross Margin. As a result, gross margin as a percentage of revenue
increased to 19.2% during the six-month period ended September 30, 2008 as
compared to 12.4% during the same period in the prior year.
Selling Expenses. Selling expenses decreased by 12.8% from
approximately $1,176,000 for the six-month period ended September 30, 2007 to
approximately $1,026,000 for the six-month period ended September 30, 2008. The
decrease was primarily the result of decreased sales. Selling expenses increased
as a percentage of revenue to 3.4% during the six-month period ended September
30, 2008 as compared to 3.3% during the period in the prior year.
Salaries And Related Costs. Salaries and related costs decreased by
16.7% from approximately $2,970,000 for the six-month period ended September 30,
2007 to approximately $2,474,000 for the six-month period ended September 30,
2008. This decrease was primary due to the decrease in number of employees at
the factory during the six month period ended September 30, 2008.
Research And Development. Research and development expenses increased
by 9.4% from approximately $266,000 for the six-month period ended September 30,
2007 to approximately $291,000 for the six-month period ended September 30,
2008. The increase was primarily due to increase salaries to our engineers at
the factory, and increase in development costs for scale products. Research and
development as a percentage of revenue increased to 1.0% during the six month
period ended September 30, 2008 as compared to 0.7% during the six month period
ended September 30, 2007.
6
Administration And General Expenses. Administration and general
expenses decreased by 10.6% from approximately $1,598,000 for the six-month
period ended September 30, 2007 to approximately $1,428,000 for the six-month
period ended September 30, 2008. This decrease was primarily the result of
decreased expenses in legal and professional fees, and bank charges.
Amortization Of Brand Names. During the six-month period ending
September 30, 2008, there is no amortization charge for brand name as the brand
name was fully impaired as of March 31, 2008, and was written off in the
financial statements for that fiscal year. We amortized approximately $100,000
relating to the brand names acquired upon the acquisitions of Korona and Gram
Precision during the six-month period ending September 30, 2007. Brand names are
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 was approximately $572,000 for the six-month period ended September
30, 2008, compared to loss from operations of approximately $1,687,000 for the
six-month period ended September 30, 2007, a increase of approximately
$2,259,000 or 133.9%.
Interest Income. Interest income decreased by 14.7% from approximately
$75,000 for the six-month period ended September 30, 2007 to approximately
$64,000 for the six-month period ended September 30, 2008. This decrease was
primarily the result of reduced interest rates, compared to the prior year, in
our interest bearing bank accounts.
Other Income. Other income decreased 76.5% from approximately $264,000
for the six-month period ended September 30, 2007 to approximately $62,000 for
the six-month period ended September 30, 2008. The increase was primarily due to
decrease in the disposal of fixed assets.
Interest Expenses. Interest expenses decreased 36.5% from approximately
$304,000 for the six-month period ended September 30, 2007 to approximately
$193,000 for the six-month period ended September 30, 2008. The decrease was
primarily the result of reduced interest rates, compared to the prior year, as a
result of the use of the Company's banking facilities.
Foreign Exchange Gains/(Loss). Foreign exchange gain/(loss) decreased
from a gain of approximately $305,000 for the six-month period ended September
30, 2007 to a loss of approximately $55,000 for the six-month period ended
September 30, 2008. The foreign exchange loss increase was primarily
attributable to the depreciation of the Canadian Dollar and the Euro against the
United States Dollar.
Income Tax Expense. Income tax expense increased 100.0% from
approximately $3,000 for the six-month period ended September 30, 2007 to
approximately $6,000 for the six-month period ended September 30, 2008. The
increase was primarily the result of income tax income of one of the
subsidiaries in year 2007.
Net Income. As a result of the above changes, net income increased from
a loss of approximately $1,350,000 for the six-month period ended September 30,
2007 to a net gain of approximately $444,000 for the six-month period ended
September 30, 2008, an increase of $1,794,000 or 132.9%.
7
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 and to fund increases in inventory.
As of September 30, 2008 we had $11,742,683 in cash and cash
equivalents as compared to $10,195,362 as of March 31, 2008. Working capital at
September 30, 2008 was $14,497,193 compared to $12,899,791 at March 31, 2008.
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
in the foreseeable future.
Stock Repurchase Program
On September 19, 2007, the Company's Board of Directors authorized a new program
(the "New Share Repurchase Program") for the Company to repurchase up to
$1,500,000 of its common stock. The New Share Repurchase Program does not
obligate the Company to acquire any specific number of shares or acquire shares
over any specified period of time. During the six months ended September 30,
2008, the Company purchased 61,135 shares of its common stock under the New
Share Repurchase Program and the Company may, from time to time, repurchase
shares of its Common Stock under this program. The Company had previously
authorized a program for the Company to repurchase up to $1,500,000 of its
common stock and under this plan, had purchased 321,852 shares valued at
$1,440,374. This authorization to repurchase shares under the New Share
Repurchase Program increases the aggregate amount available for repurchase under
the New Share Repurchase Program and the previous program to $1,559,626.
Subsequent Events
On December 19, 2008, the Company completed the sale of it 51% interest
in its subsidiary, Gram Precision Scales Inc. ("Gram"), to a company controlled
by the president of Gram ("the Gram Sale"). A copy of the Share Purchase
Agreement is attached hereto as an exhibit. Under the terms of the Share
Purchase Agreement the Company has agreed to forgive approximately $3.3 million
(US) that was owed by Gram to the Company, and has received a promissory note in
the amount of $1.7 million (US). The total amount owed to the Company by Gram
was approximately $5.0 million immediately prior to the Gram Sale. The terms of
the Gram Sale made the transaction effective as of November 1, 2008. The Company
completed the Gram Sale in order to eliminate the ongoing operating losses of
this subsidiary from its operations. The Company is assessing the net effect of
this transaction on its financial statements.
The Company intends to sell its interest in its German subsidiary,
Korona Haushaltswaren GmbH & Co KG ("Korona"), and the Company is currently in
discussions with a potential buyer. This action is being taken in order to
reduce the ongoing losses that the Company has suffered with the inclusion of
Korona's operations in the Company's profit and loss. Management is optimistic
that it will be able to conclude the sale of Korona, but there can be no
assurance that it will be able to do so.
8
Exhibits
4.7 Stock Purchase Agreement for the sale of the Company's 51%
equity interest in Gram Precisions Scales Inc. effective
November 1, 2008
99.1 Press Release dated January 7, 2009
SIGNATURE
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: January 16, 2009 By: /s/ Albert So
---------------------------------
Albert So, Financial Controller
9