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 September 23, 2002
BONSO ELECTRONICS INTERNATIONAL INC.
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(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
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BONSO ELECTRONICS INTERNATIONAL INC.
Information for the Quarter Ended June 30, 2002
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TABLE OF CONTENTS
REPORT FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002 ON FORM 6-K
Page
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First Quarter FY2003 Shareholders Letter 4
Consolidated Financial Statements 7
Unaudited Consolidated Balance Sheets as of
March 31, 2002 and June 30, 2002 7
Unaudited Consolidated Statements of Income and
Comprehensive Income for the Three Month Periods
Ended June 30, 2001 and 2002 9
Management Discussion and Analysis of Financial Conditions
and Results of Operations 10
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[Bonso Electronics International Inc. Letterhead]
23 September 2002
Dear Shareholders:
I have mixed results to report to you for the first quarter of fiscal 2003,
which mirror our economic times. Shipments to major customers in the
telecommunications industry were significantly reduced, as consumer demand for
products such as wireless telephones and two-way radios continue to decline.
Revenues from the distribution of consumer and professional scale products
increased, but not enough to offset downturns in other segments.
As a result, revenues were down 19.6 percent to $10,118,000 for the three months
ended June 30, 2002, while net income declined 22 percent to $522,000, or $0.09
per share. At the same time, the gross profit margin improved 7 percent.
Overall, the telecommunications industry is facing a 5 percent decline this year
in worldwide demand, according to International Data Corporation, an industry
research firm. Most analysts agree, however, that the wireless segment will lead
any recovery trend, fueled by new technologies and carrier services.
Historically, technology has been the driving force for energizing a lethargic
consumer electronics market. Once again, the industry is committed to a new
generation of products in the near future that focus on high-speed Internet
access, a combination of voice and data services and direct interoperability
with other mobile devices, among many advanced features.
As for the scales segment, we continue to benefit from last year's acquisition
of Korona GmbH and its consumer-oriented product line. In a further move to
strengthen our industry position, Bonso acquired a majority interest in Gram
Precision, a distributor of digital scales for laboratories, industrial, jewelry
and other markets requiring precise measurement and high resolution. We will pay
$1 million in cash over five years and 125,000 shares of Bonso common stock for
a 51 percent equity ownership, subject to certain provisions for adjustment of
the purchase price.
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Gram Precision is well known to Bonso management and has been a contract
manufacturing customer for five years. The company, which is headquartered near
Toronto, has excellent brand recognition in its vertical markets and its primary
geographic markets in the U.S. and Canada. A distribution center is operated at
Reno, Nevada for the benefit of U.S. customers. We believe this is an excellent
investment based on potential growth of ongoing operations, as well as our
ability to help expand geographic markets.
We are continuing to enhance our position as a major player in scale technology
with the added capacity for in-house production of a key component. We are now
producing the piezo-resistive material used in strain gauges for a high level of
weighing accuracy. Requiring a process that resembles semiconductor technology,
this project is a milestone in our efforts to achieve high quality, low cost and
higher margins for both household and laboratory scales. We have previously
purchased this material at a significantly higher cost than making it in-house.
Investor relations activities are being sustained by meetings throughout the
U.S. We presented at the Red Chip Conference in Seattle in May and will
participate in Red Chip's Phoenix conference on November 23. An updated analyst
report on Bonso has been issued by Taglich Brothers, a New York-based specialist
in small-cap securities (please see footnote). Internet users can obtain further
information on how to view our Red Chip presentation by visiting our Web site at
www.bonso.com.
Finally, we have scheduled our Annual Meeting of Shareholders for October 9 at
the head office in Hong Kong for 10:00 AM. It is not unrealistic to expect that
by the end of the second fiscal quarter we will have much better visibility on
the telecommunication industry and our own prospects for the year. Thank you for
your continuing support.
FOOTNOTE: Please note that any opinions, estimates or forecasts regarding
Bonso's performance made by this analyst (Luis Martins, Taglich Brothers) are
his alone and do not represent the opinions, forecasts or predictions of Bonso
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or its management. Bonso does not by its reference or distribution imply its
endorsement of or concurrence with such information, conclusions or
recommendations, nor does it undertake any obligation to publish any corrective
information regarding statements made by this analyst.
Best regards
Bonso Electronics International, Inc.
Anthony So
Chairman, President and Chief Executive Officer
The statements contained in this letter which are not historical facts are
forward-looking statement that involve certain risks and uncertainties
including, but not limited to, risks associated with the uncertainty of future
financial results, additional financial requirements, development of new
products, government approval processes, the impact of competitive products or
pricing, technological changes, the effect of economic conditions and other
uncertainties detailed in the Company's filings with the Securities and Exchange
Commission.
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BONSO ELECTRONICS INTERNATIONAL
INC.
CONSOLIDATED BALANCE SHEET
(In U.S. Dollars)
June 30 March 31
2002 2002
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(Unaudited) (Audited)
Assets
Current assets
Cash and cash equivalents 4,420,667 1,878,156
Restricted cash deposits 2,509,348 3,972,542
Trade receivables, net 5,169,532 6,838,576
Inventories, net 8,971,260 8,861,952
Notes receivable 559,327 686,258
Deferred income tax assets - current 13,013 27,219
Other receivables, deposits and prepayments 1,287,402 822,646
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Total current assets 22,930,549 23,087,349
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Deposits -- 16,038
Deferred income tax assets - non current 96,217 84,422
Goodwill 155,368 204,217
Brand name, net 2,742,136 2,797,392
Property, plant and equipment 18,147,895 18,261,659
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Total assets 44,072,165 44,451,077
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BONSO ELECTRONICS INTERNATIONAL
INC.
CONSOLIDATED BALANCE SHEET
(In U.S. Dollars)
Liabilities and shareholders' equity
Current liabilities
Notes payable 2,344,568 2,857,533
Accounts payable 3,653,849 4,122,443
Accrued charges and deposits 1,503,873 2,022,472
Income taxes payable 95,409 83,614
Short-term loans 4,450,349 3,754,477
Current portion of long-term debt
and capital lease obligations 592,720 647,501
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Total current liabilities 12,640,768 13,488,040
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Long-term debt and capital lease
obligations, net of current maturities 167,789 317,009
Redeemable Common Stock 1,445,808 1,445,808
Shareholders' equity
Common stock par value $0.003 per share
- authorized shares - 23,333,334
- issued and outstanding shares : 2000-5,712,610;
2001-5,496,133; 30 September 2001- 5,601,859 16,208 16,208
Additional paid-in capital 21,152,502 21,152,502
Capital Reserves
Deferred consultancy fee (286,065) (381,420)
Retained earnings 8,699,183 8,176,958
Accumulated other comprehensive income 235,972 235,972
Common stock held in treasury, at cost -- --
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29,817,800 29,200,220
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Total liabilities and shareholders' equity 44,072,165 44,451,077
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BONSO ELECTRONICS INTERNATIONAL
INC.
CONSOLIDATED INCOME STATEMENT
(In Thousands of U.S. Dollars)
Unaudited
Three months ended June 30
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2002 2001
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Net sales 10,118 12,581
Cost of sales (7,249) (9,894)
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Gross margin 2,869 2,687
Selling expenses 457 413
Salaries and related costs 1,039 808
Research and development expenses 25 65
Administration and general expenses 594 543
Amortization of brand name 55 --
Amortization of Goodwill 49 --
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Income from operations 650 858
Interest Income
Interest Expenses (161) (200)
Foreign exchange gains/(losses) (4) (13)
Other income 132 143
Consultancy fee (95) (95)
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Income before income taxes 522 693
Income tax benefit/(expense) -- (24)
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Net income 522 669
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Earnings per share (in cents)
Basic 9.35 12.13
Diluted 9.34 12.13
Weighted average shares Outstanding 5,584,859 5,513,166
Incremental shares from assumed
Exercise of warrants and Stock options 7,032 --
Adjusted weighted average shares 5,591,891 5,513,166
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Management Discussion and Analysis of Financial Conditions and Results of
Operations
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The following Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A") should be read in conjunction with the audited
consolidated financial statements and notes thereto contained in our Annual
Report on Form 20-F for the fiscal year ended March 31, 2002.
RESULTS OF OPERATIONS
Period ended June 30, 2002 compared to period ended June 30, 2001
Net Sales. Our sales decreased 20% from approximately $12,581,000 for the
period ended June 30, 2001, to approximately $10,118,000 for the period ended
June 30, 2002, primarily as a result of the reduction in contribution from our
telecommunications products. Our scales business was up by 19% but not enough to
offset the downturn of 63% in sales for telecom products.
Gross Margin. Gross margin rose 6.8% to 28.4% for the period ended June 30,
2002, as compared with 21.4% in the prior year. The gain is attributed to a
formal program for improving manufacturing efficiency and overall business
processes.
Selling Expenses. Selling expenses increased by 11% from approximately
$413,000 for the period ended June 30, 2001 to approximately $457,000 for the
period ended June 30, 2002. This increase was attributable primarily to the
consolidation of Korona's expenses. During the first quarter of the previous
fiscal year, we only incorporated 2 months of Korona's results; however, we have
included 3 months of Korona's results in the first quarter of this year.
Salaries And Related Costs. Salaries and related costs increased by 29%
from approximately $808,000 for the period ended June 30, 2001 to approximately
$1,039,000 for the period ended June 30, 2002. This increase was primarily due
to the inclusion of three months Korona's salaries of $328,000 for the current
period, compared with $118,000 for the two months period ended June 30, 2001.
Research And Development. Research and development expenses decreased 62%
from approximately $65,000 for the period ended June 30, 2001 to approximately
$25,000 for the period ended June 30, 2002 due to decreased research and
development activities for telecommunications products.
Administration And General Expenses. Administration and general expenses
increased by 9% from approximately $543,000 for the period ended June 30, 2001
to approximately $594,000 for the period ended June 30, 2002. This increase was
primarily due to inclusion of Korona's general and administrative expenses.
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Amortization Of Brand Names and Goodwill. We amortized approximately
$104,000 relating to the brand name acquired upon the acquisition of Korona
during the period ended June 30, 2002. 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 decreased by 24% from approximately $858,000 for the period ended
June 30, 2001 to $650,000 for the period ended June 30, 2002.
Interest Income. Interest income amounted to approximately $1,000 for the
period ended June 30, 2002, compared to nil in the period ended June 30, 2001,
This increase was mainly due to increase of cash balances with our banks.
Interest Expenses. Interest expenses decreased 20% from approximately
$200,000 for the period ended June 30, 2001 to approximately $161,000 for the
period ended June 30, 2002. This decrease primarily resulted from the decline in
sales, because the Company used less of its banking facilities to support sales
during the first quarter of this year.
Foreign Exchange Losses/Gains. Foreign exchange losses decreased from
approximately $13,000 for the period ended June 30, 2001 to a loss of
approximately $4,000 for the period ended June 30, 2002. The loss was primarily
attributable to the stronger Euro against US Dollars which benefits Korona's
sales in Europe.
Other Income. Other income decreased 8% from approximately $143,000 for the
period ended June 30, 2001 to approximately $132,000 for the period ended June
30, 2002. This decrease was primarily a result of reduced scrap sales from
reduction in production volume as the scrap mainly represented the remains of
steel plate and plastics after the production process.
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 is from July 2000 to January 2003. A total
consultancy fee of $1,144,260 was capitalized in 2000 and is being amortized
over three years of the contract, resulting in a non-cash consultancy fee of
approximately $95,000 for the period ended June 30, 2002, relating to warrants
that were issued to the consultant.
Net Income. As a result of the above changes, net income decreased from
approximately $669,000 for the period ended June 30, 2001 to $522,000 for the
period ended June 30, 2002, an decrease of approximately $147,000, or 22%.
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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: September 23, 2002 By: /s/ Henry F. Schlueter
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Henry F. Schlueter,
Assistant Secretary
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