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 April 3, 2007
BONSO ELECTRONICS
INTERNATIONAL INC.
------------------
(Translation of Registrant's name into English)
Unit 1106-1110, 11/F., 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 ]
TABLE OF CONTENTS
REPORT FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2006 ON FORM 6-K
Page
Consolidated Financial Statements 3 - 5
Audited Consolidated Balance Sheets as of March 31, 2006 and
Unaudited Consolidated Balance Sheets as of September 30, 2006 3
Unaudited Consolidated Statements of Income and Comprehensive
Income for the Six-Month Periods Ended September 30, 2005
and 2006 and the Three-Month Periods Ended September 30, 2005 and 2006 5
Management Discussion and Analysis of Financial Conditions 6
and Results of Operations
Liquidity and Capital Resources 8
Stock Repurchase Program 8
Section 404 Compliance 9
Submission of Matters to a Vote of Security Holders 9
Exhibit List 9
Signature 10
Exhibit 99.1
2
BONSO ELECTRONICS INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEET
(In U.S. Dollars)
30-Sep 31-Mar
2006 2006
--------- ---------
(Unaudited) (Audited)
Assets
Current assets
Cash and cash equivalents 10,692,437 8,582,257
Trade receivables, net 8,111,697 6,740,229
Inventories, net 14,955,434 15,035,216
Tax recoverable 416,349 183,393
Other receivables, deposits and prepayments 2,535,078 1,963,007
-----------------------------------
Total current assets 36,710,995 32,504,102
Deposits 188,767 188,525
Long term investment 946,711 500,000
Deferred income tax assets - non current 89,992 82,529
Goodwill 842,821 842,821
Brand name net 2,523,443 2,526,982
Property, plant and equipment, net 12,001,357 12,833,929
-----------------------------------
Total assets 53,304,086 49,478,888
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Liabilities and shareholders' equity
Current liabilities
Bank overdraft 488,658 471,254
Notes payable 6,845,269 3,310,673
-----------------------------------
Accounts payable 5,881,097 6,288,213
Accrued charges and deposits 2,352,865 2,434,994
Short-term loans 2,215,131 2,936,467
Current portion of long-term debt 103,878 215,131
and capital lease obligations
-----------------------------------
-----------------------------------
Total current liabilities 18,489,235 15,656,732
3
Deferred income tax 19,889 19,863
Total Liabilities 18,509,124 15,676,595
Shareholders' equity
Preferred stock par value $0.01 per share
- authorized shares - 10,000,000
- issued and outstanding shares : March 2006 &
September 2006-nil -- --
Common stock par value $0.003 per share
- authorized shares - 23,333,334
- issued and outstanding shares : March 2006 & 16,729 16,729
September 2006 - 5,577,639
Additional paid-in capital 21,764,788 21,764,788
Retained earnings 12,175,139 11,234,006
Accumulated other comprehensive income 838,306 786,770
-----------------------------------
34,794,962 33,802,293
-----------------------------------
Total liabilities and shareholders' equity 53,304,086 49,478,888
-----------------------------------
4
BONSO ELECTRONICS INTERNATIONAL INC.
CONSOLIDATED INCOME STATEMENT
(In Thousands of U.S. Dollars)
Unaudited
Three months ended September 30 Six months ended September 30
2006 2005 2006 2005
---- ---- ---- ----
Net sales 20,710 15,962 36,831 34,112
Cost of sales -17,023 -12,840 -29,866 -27,380
Gross margin 3,687 3,122 6,965 6,732
Selling expenses 729 492 1,256 1,107
Salaries and related 1,474 1,375 2,793 2,743
costs
Research and 125 164 236 272
development expenses
Administration and 716 875 1,464 1,616
general expenses
Amortization of Brand 50 50 100 100
Name
Income from operations 593 166 1,116 894
Interest Income 75 31 123 86
Other income 40 172 96 255
Interest Expenses (154) (83) -271 -220
Foreign exchange gains (71) (82) -101 -119
\(Loss)
Income before income 483 204 963 896
taxes and minority
interest
Income tax expense - 40 -22 -5
Net income before 483 244 941 891
minority interest
Minority interests - - - -
Net income 483 244 941 891
Earnings per share
Basic 0.09 0.04 0.17 0.16
Diluted 0.08 0.04 0.16
0.16
Weighted average shares 5,577,639 5,577,639 5,577,639 5,577,639
Adjusted weighted 5,945,411 5,945,411 5,945,411 5,759,135
average shares
5
Six Month Period ended September 30, 2006 compared to the Six Month period ended
September 30, 2005
Net Sales. During the six-month period ended September 30, 2006, our sales
increased 8% from approximately $34,112,000 for the six-month period ended
September 30, 2005, to approximately $36,831,000. The increased sales were
primarily the result of increase of demand for our scales products. Sales from
our scales business increased by approximately $4,944,000 from $22,183,000 for
the six-month period ended September 30, 2005 to $27,127,000 for the six-month
period ended September 30, 2006. Sales from our telecommunications products
decreased by approximately $2,225,000 from approximately $11,929,000 for the
period ended September 30, 2005 to $9,704,000 for the period ended September 30,
2006.
Gross Margin. Gross margin as a percentage of revenue decreased to 18.9%
during the six-month period ended September 30, 2006 as compared to 19.7% during
the same period in the prior year. This decline was primarily the result of our
cost increase in the area of materials and labor and the increased pressure on
the sales price from our customers for both our FRS telecommunication products
and scales products.
Selling Expenses. Selling expenses increased by 13% from approximately
$1,107,000 for the six-month period ended September 30, 2005 to approximately
$1,256,000 for the six-month period ended September 30, 2006. The increase was
primarily the result of increased in sales and the increase in freight cost due
to the rise in oil price. Selling expenses increased as a percentage of revenue
to 3.4% during the six-month period ended September 30, 2006 as compared to 3.2%
during the period in the prior year.
Salaries And Related Costs. Salaries and related costs increased by 2% from
approximately $2,743,000 for the six-month period ended September 30, 2005 to
approximately $2,793,000 for the six-month period ended September 30, 2006. This
increase was primary due to the increased in salaries to our employee.
Research And Development. Research and development expenses decreased 13%
from approximately $272,000 for the six-month period ended September 30, 2005 to
approximately $236,000 for the six-month period ended September 30, 2006. The
decrease was primarily due to the completion of various new products design in
early this calendar year. Research and development as a percentage of revenue
decreased to 0.6% during the period ended September 30, 2006 as compared to 0.8%
during the prior year.
Administration And General Expenses. Administration and general expenses
decreased by 9% from approximately $1,616,000 for the six-month period ended
September 30, 2005 to approximately $1,464,000 for the six-month period ended
September 30, 2006. This decrease was primarily the result of decreased expenses
in consultancy fee and repair and maintenance fee.
Income From Operations. As a result of the above changes, income from
operations increased by 25% from approximately $894,000 for the six-month period
ended September 30, 2005 to $1,116,000 for the six-month period ended September
30, 2006.
Interest Income. Interest income amounted to approximately $123,000 for the
six-month period ended September 30, 2006, compared to $86,000 in the six-month
period ended September 30, 2005. This increase was primarily the result of
depositing our cash into higher yield accounts and the increase in interest
rates.
6
Other Income. Other income decreased 62% from approximately $255,000 for
the six-month period ended September 30, 2005 to approximately $96,000 for the
six-month period ended September 30, 2006. The decrease was primarily due to a
decrease in the disposal of fixed assets.
Interest Expenses. Interest expenses increased 23% from approximately
$220,000 for the six-month period ended September 30, 2005 to approximately
$271,000 for the six-month period ended September 30, 2006. The increase was
primarily the result of increased use of the Company's banking facilities.
Foreign Exchange Gains/(Loss) Foreign exchange loss decreased from
approximately $119,000 for the six-month period ended September 30, 2005 to a
loss of approximately $101,000 for the six-month period ended September 30,
2006. The decreased loss was primarily attributable to the less fluctuation
between EURO and US$ during this period as compared to the same period last
year.
Net Income. As a result of the above changes, net income increased from
approximately $891,000 for the six month period ended September 30, 2005 to
$941,000 for the six month period ended September 30, 2006, an increase of
approximately $50,000, or 6%.
Three Month Period ended September 30, 2006 compared to the Three Month period
ended September 30, 2005
Net Sales. During the three month period ended September 30, 2006, net
sales were approximately $20,710,000 as compared to $15,962,000 during the three
month period ended September 30, 2005, representing an increase of approximately
$4,748,000. The increase was due to the increase demand from our major customers
for our telecommunication products and scales. Sales from our scales business
increased by approximately $4,370,000 from $11,098,000 for the three-month
period ended September 30, 2005 to $15,468,000 for the three-month period ended
September 30, 2006. Sales from our telecommunications products increased by
approximately $378,000 from approximately $4,864,000 for the three-month period
ended September 30, 2005 to $5,242,000 for the period ended September 30, 2006.
Gross Margin. Gross margin as a percentage of revenue declined to 17.8%
during the three-month period ended September 30, 2006 as compared to 19.6%
during the prior year. This decrease was principally caused by increased labor
and material cost of our FRS telecommunication products and scales products.
Selling Expenses. Selling expenses increased by 48.2% from approximately
$492,000 for the period ended September 30, 2005 to approximately $729,000 for
the period ended September 30, 2006. This increase is primarily attributable to
the increased sales as compared to the same period in the prior year. Selling
expenses as a percentage of revenue increase slightly to 3.5% during the three
month period ended September 30, 2006 as compared to 3.1% the same period in the
prior year.
Salaries And Related Costs. Salaries and related costs increased by 37.2%
from approximately $1,375,000 for the three months ended September 30, 2005 to
approximately $1,474,000 for the three months ended September 30, 2006. This
increase was primary the result of the increased in salaries to our employee.
Research And Development. Research and development expenses decreased 23.8%
from approximately $164,000 for the three months ended September 30, 2005 to
approximately $125,000 for the three months ended September 30, 2006. The
decrease was primarily due to the completion of various new products design in
early this calendar year.
7
Administration And General Expenses. Administration and general expenses
decreased by 18.3% from approximately $875,000 for the three months ended
September 30, 2005 to approximately $716,000 for the three months ended
September 30, 2006. This decrease was primarily the result of decreased expenses
in consultancy fee and repair and maintenance fee.
Income From Operations. As a result of the above changes, income from
operations increased by 427% from approximately $166,000 for the three months
ended September 30, 2005 to $593,000 for the three months ended September 30,
2006.
Interest Income. Interest income increased to approximately $75,000 for the
three months ended September 30, 2006, compared to $31,000 in the three months
ended September 30, 2005. This increase was primarily the result of depositing
our cash into higher yield accounts and the increase in interest rates.
Other Income. Other income decreased 76.7% from approximately $172,000 for
the three months ended September 2005 to approximately $40,000 for the three
months ended September 30, 2006. The decrease was primarily due to a decrease in
the disposal of fixed assets.
Interest Expenses. Interest expenses increased 85.5% from approximately
$83,000 for the three months ended September 30, 2005 to approximately $154,000
for the three months ended September 30, 2006. The increase was primarily the
result of increased use of the company's banking facilities.
Foreign Exchange Losses/Gains. Foreign exchange loss decreased from
approximately $82,000 for the three months ended September 30, 2005 to a loss of
approximately $71,000 for the three months ended September 30, 2006. The
decreased loss was primarily attributable to the less fluctuation between EURO
and US$ during this period as compared to the same period last year.
Net Income. As a result of the above changes, net income increased from
approximately $244,000 for the three month ended September 30, 2005 to $483,000
for the three months ended September 30, 2006, an increase of approximately
$239,000, or 98%.
Liquidity and Capital Resources
We have financed our growth and cash needs to date primarily from
internally generated funds and bank debt. 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, 2006, we had $10,692,437 in cash and cash equivalents
as compared to $8,582,257 as of March 31, 2006. Working capital at September 30,
2006 was $18,221,760 compared to $16,847,370 at March 31, 2006. 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.
8
Stock Repurchase Program
On November 16, 2006, the Company's Board of Directors authorized a program
for the Company to repurchase up to $1,000,000 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. Two thousand six
hundred seventeen (2,617) shares were purchased under this program in the third
quarter of fiscal 2007. The Company may from time to time repurchase shares of
its Common Stock under this program. This authorization to repurchase shares
increases the amount authorized for repurchase from $500,000 to $1,500,000. The
Board authorized the previous repurchase program in August of 2001.
Section 404 Compliance
----------------------
On December 15, 2006, the Securities and Exchange Commission ("the SEC")
advised that it was extending further the dates that were published on September
29, 2005, to postpone the compliance date for filing internal control reports by
companies not designated as accelerated filers. Under this revised compliance
schedule, the Company will be required to include an internal control report of
management with the annual report on Form 20-F beginning with the fiscal year
ending March 31, 2008 (unless otherwise extended by the SEC). Further, the
Company will not be required to file the auditor's attestation report on
internal control over financial reporting until it files it annual report for
the fiscal year ending March 31, 2009 (unless otherwise extended by the SEC).
Exhibits List
99.1 Press Release dated November 15, 2006, re the Company's Second Quarter
Financial Results
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: April 3, 2007 By: /s/ Henry F. Schlueter
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Henry F. Schlueter, Assistant Secretary
9