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 March 29, 2019

Commission File Number: 0-17601

BONSO ELECTRONICS INTERNATIONAL INC.

(Exact name of Registrant as specified in its charter)

British Virgin Islands

(Jurisdiction of incorporation or organization)

Unit 1404, 14/F, Cheuk Nang Centre,

9 Hillwood Road, Tsimshatsui

Kowloon, Hong Kong

(Address of principal executive offices)

Albert So, Chief Financial Officer and Secretary

Tel: (852) 2605-5822    Fax: (852) 2691-1724

Email: albert@bonso.com

Unit 1404, 14/F, Cheuk Nang Centre,

9 Hillwood Road, Tsimshatsui

Kowloon, Hong Kong

 (Name, Telephone, email and/or fax number and address of Company Contact Person)

[Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or 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.]

TABLE OF CONTENTS

REPORT FOR THE SIX-MONTH PERIOD ENDED SEPTEMBER 30, 2018 ON FORM 6-K

		Page
Consolidated Financial Statements
Unaudited Consolidated Balance Sheets as of September 30, 2018 and    Audited Consolidated Balance Sheets as of March 31, 2018		3
Unaudited Consolidated Statements of Operations and Comprehensive Income for the    Six-Month Periods Ended September 30, 2018, and September 30, 2017		4
Management’s Discussion and Analysis of Financial Condition and Results of Operations		5
Liquidity and Capital Resources		7
Stock Repurchase Program		7
Signature		8
Exhibits
99.1  Press Release disclosing Results of Operations dated March 29, 2019.

 

(Expressed in United States Dollars)

 

 

Unaudited Consolidated Statements of Operations and Comprehensive Income

(Expressed in United States Dollars)

Certain amounts in the statement of operations for the six-month period ended September 30, 2017 have been reclassified to conform to the presentation for the six-month period ended September 30, 2018.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Bonso Electronics designs, develops, manufactures, assembles and markets a comprehensive line of electronic scales, weighing instruments, health care products and pet electronics products.

During the six-month period ended September 30, 2018, our net revenue decreased approximately $1,579,000, or 21.9%, as compared to the six-month period ended September 30, 2017.  The primary reason for the decrease in net revenue was the decreased overall demand for our products during the period.  We recognized net loss of approximately $88,000 for the six-month period ended September 30, 2018, as compared to net income of approximately $688,000 during the six-month period ended September 30, 2017.

On March 29, 2019, the Company issued a press release disclosing its results of operations for the six-month period ended September 30, 2018.  A copy of this press release is attached to this Form 6-K as exhibit 99.1.

Results of Operations

Six-Month Period Ended September 30, 2018 Compared to the Six-Month Period Ended September 30, 2017

Net Revenue.  During the six-month period ended September 30, 2018, our net revenue decreased 21.9%, or approximately $1,579,000, from approximately $7,210,000 for the six-month period ended September 30, 2017 to approximately $5,631,000. The decreased revenue were primarily the result of a decrease in overall demand for our products during the period.

Cost of Revenue.  During the six-month period ended September 30, 2018, cost of revenue decreased to approximately $3,602,000 from approximately $4,481,000 during the six-month period ended September 30, 2017, a decrease of approximately $879,000, or 19.6%.  As a percentage of revenue, the cost of revenue increased from 62.1% to 64.0%.  The increase was primarily the result of increased labor cost.

 

Gross Margin.  As a result of the factors noted above, gross margin as a percentage of revenue decreased to 36.0% during the six-month period ended September 30, 2018 as compared to 37.9% during the same period in the prior year.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses increased by 1.8%, or approximately $37,000, from approximately $2,062,000 for the six-month period ended September 30, 2017 to approximately $2,099,000 for the six-month period ended September 30, 2018. The increase was primarily the result of increased selling expenses from trade exhibition costs during the six-month period ended September 30, 2018, compared to the same period in the prior year.

Other Income, Net.  Other income, net decreased approximately $132,000, or 89.2%, from approximately $148,000 for the six-month period ended September 30, 2017 to approximately $16,000 for the six-month period ended September 30, 2018. The decrease was a result of decreased gain from investment in marketable securities during the six-month period ended September 30, 2018.

Income / (Loss) From Operations.  As a result of the above changes, loss from operations was approximately $54,000 for the six-month period ended September 30, 2018, compared to an income from operations of approximately $815,000 for the six-month period ended September 30, 2017, a decrease of approximately $869,000.

Non-operating (Expenses) / Income, Net. Non-operating (expenses) / income, net decreased from a net loss of approximately $127,000 for the six-month period ended September 30, 2017 to approximately $34,000 for the six-month period ended September 30, 2018.  The decrease in net loss was primarily the result of increased interest income from approximately $15,000 during the six-month period ended September 30, 2017, to approximately $128,000 during the six-month period ended September 30, 2018.  The increase in interest income was the result of increased amounts on deposit with banks during the six-month period ended September 30, 2018.

Net Income / (Loss).  As a result of the above changes, net income decreased from a net income of approximately $688,000 for the six-month period ended September 30, 2017 to a net loss of approximately $88,000 for the six-month period ended September 30, 2018, a decrease of approximately $776,000.

Foreign Currency Translation Adjustments, Net of Tax.  Foreign currency translation adjustments, net of tax decreased from a gain of approximately $455,000 for the six-month period ended September 30, 2017 to a loss of approximately $1,424,000 for the six-month period ended September 30, 2018, an decrease of approximately $1,879,000.  The loss was primarily attributable to the result of the revaluation of assets denominated in Chinese Yuan due to different CNY/USD exchange rates at the balance sheet dates of March 31, 2018 and September 30, 2018.

Comprehensive Income.  As a result of the factors described above, comprehensive income decreased from an income of approximately $1,143,000 for the six-month period ended September 30, 2017, to a loss of approximately $1,512,000 for the six-month period ended September 30, 2018.

 

Liquidity and Capital Resources

As of September 30, 2018 we had approximately $8,400,000 in cash and cash equivalents as compared to approximately $8,751,000 as of March 31, 2018.  At September 30, 2018 working capital was  approximately $6,315,000, compared to approximately $7,016,000 at March 31, 2018. We believe that the decrease was the result of loss generated from operations, during the six-month period ended September 30, 2018.

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 twelve months.

Stock Repurchase Program

On April 25, 2018, the Board of Directors approved the expenditure of an additional $3,000,000 to repurchase shares of the Company’s common stock, bringing the aggregate amount available for repurchases to $6,000,000.  The following table contains the Company’s purchases of equity securities during the six-month period ended September 30, 2018.

During the six-month period ended September 30, 2018, the Company has purchased 83,322 shares of its common stock under the share repurchase program.  As of September 30, 2018, the Company (through its subsidiary) had repurchased an aggregate of 831,339 shares of its common stock. The Company may from time to time repurchase additional shares of its Common Stock under this program.

Exhibits

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:  March 29, 2019	By:	/s/ Albert So
		Chief Financial Officer and Secretary

 

 

Exhibit 99.1

 

PRESS RELEASE

Bonso Reports Half Year Results

HONG KONG, March 29, 2019 (Globe Newswire) -- Bonso Electronics International, Inc. (NASDAQ: BNSO) today announced its unaudited results for the six-month period ended September 30, 2018.

Bonso reported a net loss for the six-month period ended September 30, 2018, of $0.09 million, or $0.02 basic loss per share, as compared to net income of $0.69 million, or $0.14 basic earnings per share, posted during the six-month period ended September 30, 2017.  Net revenue for the six-month period ended September 30, 2018, decreased 21.9% to $5.6 million from $7.2 million for the six-month period ended September 30, 2017. The decreased net income resulted principally from the decline in revenue related to the Company’s scales and electronics products and the corresponding decline in income from the operations for the six-month period ended September 30, 2018.

Mr. Andrew So, President and CEO stated: “We are continuing our efforts to increase sales in the scales and electronic products segment of our business, and we are optimistic that these efforts will result in increased sales in the next fiscal year. Over-all this segment of our business has declined, and we expect that trend to continue for the fiscal year ended March 31, 2019. We are developing new electronic scales and pet electronic products for our customers and anticipate that we will start selling these products in our next fiscal year.”

Further, Mr. Andrew So stated: “The Company has leased out its Shenzhen factory to a third party since August 2013 and under its terms, the lease was to end on July 31, 2019.  However, in December 2018, the local environmental protection bureau ordered the tenant to cease production of its primary products as a result of the imposition of higher pollution standards resulting from the conversion two years ago of a nearby industrial factory to residential buildings.  The tenant has relocated to another factory and has paid rent to the Company through January 31, 2019.  The tenant will not pay any further rent to Bonso, since the rental agreement was terminated. The loss of rental income for this six-month period will negatively impact both our revenues and cash flow.”

Mr. So said further: "We expect that the Company will obtain all the governmental approvals for the redevelopment of the Shenzhen factory in 2019.  The reconstruction is expected to take three to four years and we believe the redeveloped property will generate substantial future rental revenue for the Company.”

About Bonso Electronics

Bonso Electronics designs, develops, manufactures, assembles and markets a comprehensive line of electronic scales, weighing instruments and pet electronics products. Bonso products are manufactured in the People's Republic of China for 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. Bonso also independently designs and develops electronic products for private label markets. Bonso rents factory space and equipment to third parties and is also continuing the process to obtain the necessary approvals to redevelop the land upon which its Shenzhen factory is located. For further information, visit the company's web site at http://www.bonso.com.

This news release includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Forward looking statements may be identified by such words or phrases as "should," "intends," "is subject to," "expects," "will," "continue," "anticipate," "estimated," "projected," "may," "I or we believe," "future prospects," "our strategy," or similar expressions. Forward-looking statements made in this press release which relate to the termination of the lease for the Shenzhen factory involve known and unknown risks and uncertainties that may cause the actual results to differ materially from those expected and stated in this announcement. We undertake no obligation to update "forward-looking" statements.

For more information please contact:

Albert So

Chief Financial Officer and Secretary

Tel: 852 2605 5822

Fax: 852 2691 1724

SOURCE Bonso Electronics

 

-- Tables to Follow –

		March 31,				September 30,
		2018				2018
		$ in thousands				$ in thousands
		(Audited)				(Unaudited)
Assets
Current assets
Cash and cash equivalents			8,751				8,400
Trade receivables, net			794				1,216
Other receivables, deposits and prepayments			745				474
Inventories, net			1,012				681
Income tax recoverable			5				0
Financial instruments at fair value			78				0
Total current assets			11,385				10,771
Investment in life settlement contracts			149				151
Other intangible assets			2,787				2,410
Property, plant and equipment, net			10,434				9,442
Total assets			24,755				22,774
Liabilities and stockholders’ equity
Current liabilities
Notes payable - secured			99				130
Bank loans - secured			0				552
Accounts payable			924				582
Accrued charges and deposits			3,178				3,164
Payable to affiliated party			73				0
Current portion of capital lease obligations			28				28
Loan from affiliated party - current portion			67				0
Total current liabilities			4,369				4,456
Capital lease obligations, net of current portion			32				17
Long-term deposit received			738				738
Long-term loan			2,527				2,248
Total liabilities			7,666				7,459
Stockholders’ equity
Common stock par value $0.003 per share
- authorized shares - 23,333,334
- issued shares: Mar 31, 2018 - 5,543,639; Sep 30, 2018 - 5,543,639			17				17
outstanding shares: Mar 31, 2018 – 4,795,622; Sep 30, 2018 - 4,712,300
Additional paid-in capital			22,474				22,474
Treasury stock at cost: Mar 31, 2018 - 748,017; Sep 30, 2018 - 831,339			(2,409	)			(2,671	)
Accumulated deficit			(6,029	)			(6,117	)
Accumulated other comprehensive income			3,036				1,612
			17,089				15,315
Total liabilities and stockholders’ equity			24,755				22,774

		Six months ended September 30, 2017				Six months ended September 30, 2018
		$ in thousands				$ in thousands
		(unaudited)				(unaudited)
Net revenue			7,210				5,631
Cost of revenue			(4,481	)			(3,602	)
Gross profit			2,729				2,029
Selling, general and administrative expenses			(2,062	)			(2,099	)
Other income, net			148				16
Income / (loss) from operations			815				(54	)
Non-operating (expenses) / income, net			(127	)			(34	)
Income / (loss) before income taxes			688				(88	)
Income tax expense			0				0
Net income / (loss)			688				(88	)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments, net of tax			455				(1,424	)
Comprehensive income			1,143				(1,512	)
Earnings / (loss) per share
Weighted average number of shares outstanding			4,967,713				4,715,384
Diluted weighted average number of shares outstanding			5,300,353				4,715,384
Earnings per common share (in U.S.Dollars)			0.14				(0.02	)
Earnings per common share (in U.S.Dollars) - assuming dilution			0.13				(0.02	)