Bonso Electronics International Inc 6-K, filed Mar 31, 2020
Bonso Electronics International Inc (BNSOF)
About this 6-K
Bonso Electronics International Inc filed this 6-K on March 31, 2020.
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 30, 2020
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.]
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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TABLE OF CONTENTS
REPORT FOR THE SIX-MONTH PERIOD ENDED SEPTEMBER 30, 2019 ON FORM 6-K
| Page | ||
| Consolidated Financial Statements | 3 | |
| Unaudited Consolidated Balance Sheets as of September 30, 2019 and Audited Consolidated Balance Sheets as of March 31, 2019 | 3 | |
| Unaudited Consolidated Statements of Operations and Comprehensive Loss for the Six-Month Periods Ended September 30, 2019, and September 30, 2018 | 4 | |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations | 5 | |
| Liquidity and Capital Resources | 7 | |
| Stock Repurchase Program | 7 | |
| Exhibits | 7 | |
| Signature | 8 |
99.1 Press Release disclosing Results of Operations dated March 30, 2020.
| 2 |
Unaudited Consolidated Balance Sheets
(Expressed in United States Dollars)
| March 31, | September 30, | |||||||
| 2019 | 2019 | |||||||
| $ in thousands | $ in thousands | |||||||
| (Audited) | (Unaudited) | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | 7,527 | 6,999 | ||||||
| Trade receivables, net | 600 | 688 | ||||||
| Other receivables, deposits and prepayments | 1,341 | 1,525 | ||||||
| Inventories, net | 829 | 470 | ||||||
| Income tax recoverable | 5 | 5 | ||||||
| Financial instruments at fair value | 102 | 1,025 | ||||||
| Total current assets | 10,404 | 10,712 | ||||||
| Investment in life settlement contracts | 153 | 155 | ||||||
| Other intangible assets | 2,338 | 2,064 | ||||||
| Property, plant and equipment, net | 9,591 | 8,749 | ||||||
| Total assets | 22,486 | 21,680 | ||||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities | ||||||||
| Bank loans - secured | 445 | 1,338 | ||||||
| Accounts payable | 443 | 918 | ||||||
| Contract liabilities | 17 | 0 | ||||||
| Accrued charges and deposits | 3,168 | 3,088 | ||||||
| Payable to affiliated party | 54 | 0 | ||||||
| Current portion of capital lease obligations | 28 | 18 | ||||||
| Total current liabilities | 4,155 | 5,362 | ||||||
| Capital lease obligations, net of current portion | 5 | 0 | ||||||
| Long-term deposit received | 692 | 592 | ||||||
| Long-term loan | 2,485 | 2,399 | ||||||
| Total liabilities | 7,337 | 8,353 | ||||||
| Stockholders’ equity | ||||||||
| Common stock par value $0.003 per share | ||||||||
| - authorized shares - 23,333,334 | ||||||||
| - issued shares: Mar 31, 2019 - 5,543,639; Sep 30, 2019 - 5,543,639 | 17 | 17 | ||||||
| outstanding shares: Mar 31, 2019 - 4,670,773; Sep 30, 2019 - 4,644,920 | ||||||||
| Additional paid-in capital | 22,474 | 22,474 | ||||||
| Treasury stock at cost: Mar 31, 2019 - 872,866; Sep 30, 2019 - 898,719 | -2,773 | -2,841 | ||||||
| Accumulated deficit | -6,492 | -7,080 | ||||||
| Accumulated other comprehensive income | 1,923 | 757 | ||||||
| 15,149 | 13,327 | |||||||
| Total liabilities and stockholders’ equity | 22,486 | 21,680 | ||||||
| 3 |
Unaudited Consolidated Statements of Operations and Comprehensive Income
(Expressed in United States Dollars)
| Six months ended September 30, 2018 | Six months ended September 30, 2019 | |||||||
| $ in thousands | $ in thousands | |||||||
| (unaudited) | (unaudited) | |||||||
| Net revenue | 5,631 | 4,409 | ||||||
| Cost of revenue | -3,602 | -3,448 | ||||||
| Gross profit | 2,029 | 961 | ||||||
| Selling, general and administrative expenses | -2,099 | -2,058 | ||||||
| Other income, net | 16 | 82 | ||||||
| Loss from operations | -54 | -1,015 | ||||||
| Non-operating (expenses) / income, net | -34 | 427 | ||||||
| Loss before income taxes | -88 | -588 | ||||||
| Income tax expense | 0 | 0 | ||||||
| Net loss | -88 | -588 | ||||||
| Other comprehensive loss, net of tax: | ||||||||
| Foreign currency translation adjustments, net of tax | -1,424 | -1,166 | ||||||
| Comprehensive loss | -1,512 | -1,754 | ||||||
| Earnings / (loss) per share | ||||||||
| Weighted average number of shares outstanding | 4,715,384 | 4,644,920 | ||||||
| Diluted weighted average number of shares outstanding | 4,715,384 | 4,644,920 | ||||||
| Loss per common share (in U.S.Dollars) | -0.02 | -0.13 | ||||||
| Loss per common share (in U.S.Dollars) - assuming dilution | -0.02 | -0.13 | ||||||
| 4 |
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, 2019, our net revenue decreased approximately $1,222,000, or 21.7%, as compared to the six-month period ended September 30, 2018. The primary reason for the decrease in net revenue was the decreased overall demand for our electronic products during the period and a decline in rental income after the lease of our Shenzhen factory was terminated. We recognized a net loss of approximately $588,000 for the six-month period ended September 30, 2019, as compared to a net loss of approximately $88,000 during the six-month period ended September 30, 2018.
On March 30, 2020, the Company issued a press release disclosing its results of operations for the six-month period ended September 30, 2019. 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, 2019 Compared to the Six-Month Period Ended September 30, 2018
Net Revenue. During the six-month period ended September 30, 2019, our net revenue decreased 21.7%, or approximately $1,222,000, from approximately $5,631,000 for the six-month period ended September 30, 2018 to approximately $4,409,000. The decreased revenue was primarily the result of a decrease in overall demand for our products and a decline in rental income after the lease of our Shenzhen factory was terminated.
Cost of Revenue. During the six-month period ended September 30, 2019, cost of revenue decreased to approximately $3,448,000 from approximately $3,602,000 during the six-month period ended September 30, 2018, a decrease of approximately $154,000, or 4.3%. As a percentage of revenue, the cost of revenue increased from 64.0% to 78.2%. The increase was primarily the result of the decline in rental income during the six-month period ended September 30, 2019 after the lease of our Shenzhen factory was terminated, while there were similar level of maintenance and depreciation costs for the Shenzhen factory in both periods.
| 5 |
Gross Margin. As a result of the factors noted above, gross margin decreased by $1,068,000 from $2,029,000 in the six months ended September 30, 2018 to $961,000 during the six months ended September 30, 2019. As a percentage of revenue, gross margin declined to 21.8% during the six-month period ended September 30, 2019 as compared to 36.0% during the same period in the prior year.
Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased by 2.0%, or approximately $41,000, from approximately $2,099,000 for the six-month period ended September 30, 2018 to approximately $2,058,000 for the six-month period ended September 30, 2019. As a percentage of Net Revenue, selling, general and administrative expenses were 37.3% during the six months ended September 30, 2018, compared to 46.7% for the six months ended September 30, 2019. The decrease of $41,000 was primarily the result of reduced salary and related costs during the six-month period ended September 30, 2019, compared to the same period in the prior year.
Other Income, Net. Other income, net increased approximately $66,000, or 412.5%, from approximately $16,000 for the six-month period ended September 30, 2018 to approximately $82,000 for the six-month period ended September 30, 2019. The increase was a result of increased gain from investment in marketable securities during the six-month period ended September 30, 2019.
Loss From Operations. As a result of the above changes, the loss from operations was approximately $1,015,000 for the six-month period ended September 30, 2019, compared to a loss from operations of approximately $54,000 for the six-month period ended September 30, 2018, an increase of approximately $961,000.
Non-operating (Expenses) / Income, Net. Non-operating (expenses) / income, net increased from a loss of approximately $34,000 for the six-month period ended September 30, 2018 to a gain of approximately $427,000 for the six-month period ended September 30, 2019. The increase in net non-operating income was primarily the result of increased interest income and foreign exchange gain during the six-month period ended September 30, 2019. The increase in interest income was the result of increased amounts on fixed deposit with banks during the six-month period ended September 30, 2019.
| 6 |
Net Loss. As a result of the above changes, net loss increased from a net loss of approximately $88,000 for the six-month period ended September 30, 2018 to a net loss of approximately $588,000 for the six-month period ended September 30, 2019, an increase of approximately $500,000.
Foreign Currency Translation Adjustments, Net of Tax. Foreign currency translation adjustments, net of tax decreased from a loss of approximately $1,424,000 for the six-month period ended September 30, 2018 to a loss of approximately $1,166,000 for the six-month period ended September 30, 2019, a decrease of approximately $258,000. The loss was primarily attributable to the result of the revaluation of assets denominated in Chinese Yuan (“CNY”) due to different CNY/USD exchange rates at the balance sheet dates of March 31, 2019 and September 30, 2019.
Comprehensive Loss. As a result of the factors described above, comprehensive loss increased from a loss of approximately $1,512,000 for the six-month period ended September 30, 2018, to a loss of approximately $1,754,000 for the six-month period ended September 30, 2019.
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 operations, expansions and upgrades of our manufacturing facilities.
As of September 30, 2019, we had approximately $7,000,000 in cash and cash equivalents as compared to approximately $7,527,000 as of March 31, 2019. At September 30, 2019, working capital was approximately $5,350,000, compared to approximately $6,249,000 at March 31, 2019. The decrease was the result of loss generated from operations, during the six-month period ended September 30, 2019.
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
The following table contains the Company’s purchases of equity securities during the six-month period ended September 30, 2019.
| Issuer Purchases of Equity Securities | ||||||||||||||||
| Period | (a) Total Number of Shares (or Units) Purchased | (b) Average Price Paid per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||||||||||
| April 1, 2019 to April 30, 2019 | 1,320 | $ | 2.63 | 1,320 | $ | 3,130,936 | ||||||||||
| May 1, 2019 to May 31, 2019 | 9,006 | $ | 2.65 | 9,006 | $ | 3,107,101 | ||||||||||
| June 1, 2019 to June 30, 2019 | 7,078 | $ | 2.73 | 7,078 | $ | 3,087,767 | ||||||||||
| July 1, 2019 to July 31, 2019 | 0 | 0 | 0 | $ | 3,087,767 | |||||||||||
| August 1, 2019 to August 31, 2019 | 0 | 0 | 0 | $ | 3,087,767 | |||||||||||
| September 1, 2019 to September 30, 2019 | 8,449 | $ | 2.38 | 8,449 | $ | 3,067,638 | ||||||||||
| TOTAL | 25,853 | $ | 2.58 | 25,853 | ||||||||||||
During the six-month period ended September 30, 2019, the Company has purchased 25,853 shares of its common stock under the share repurchase program. As of September 30, 2019, the Company (through its subsidiary) had repurchased an aggregate of 932,719 shares of its common stock. The Company may from time to time repurchase additional shares of its Common Stock under this program.
Exhibits
99.1 Press Release disclosing Results of Operations dated March 30, 2020.
| 7 |
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.
March 30, 2020
BONSO ELECTRONICS INTERNATIONAL, INC. (Registrant) |
||
| By: | /s/ Albert So | |
| Albert So, Chief Financial Officer
and Secretary |
||
Exhibit 99.1
PRESS RELEASE
Bonso Reports Half Year Results
HONG KONG, March 30, 2020 (Globe Newswire) -- Bonso Electronics International, Inc. (NASDAQ: BNSO) today announced its unaudited results for the six-month period ended September 30, 2019.
Bonso reported a net loss for the six-month period ended September 30, 2019, of $0.59 million, or $0.13 basic loss per share, as compared to a net loss of $0.09 million, or $0.02 basic loss per share, posted during the six-month period ended September 30, 2018. Net revenue for the six-month period ended September 30, 2019, decreased 21.7% to $4.4 million from $5.6 million for the six-month period ended September 30, 2018. The decreased net income resulted principally from the decline in revenue related to the Company’s scales, electronic pet products, and the decline in rental income for the six-month period ended September 30, 2019.
Mr. Andrew So, President and CEO stated: “Our net revenue during the six-month period ended September 30, 2019 decreased as a result of reduced sales of electronic products, and a decline in rental income after the lease of our Shenzhen factory terminated in January 2019. We are continuing our efforts to develop and manufacture new products for our customers and for our own sales. We anticipate that demand for our products will most likely decline during the next fiscal year due to the worldwide impact of the COVID 19 virus outbreak. We are working closely with our customers to coordinate our manufacturing with the changes in their requirements and demand for the products that they sell.”
Further, Mr. Andrew So stated: “The rental agreement for leasing out our Shenzhen factory to a third party terminated in January 2019. The Company and its development partner have obtained some of the governmental approvals for the redevelopment of the Shenzhen factory, and we expect to obtain the remaining approvals by September 2020. The reconstruction is expected to take three to four years. We continue to believe the redeveloped property will generate substantial future rental revenue for the Company.”
Mr. So noted the Company’s balance sheet remains strong. The Company’s total cash position at September 30, 2019 was approximately $7.0 million, or approximately $1.5 per share, and the Company’s current ratio was 2.0 at September 30, 2019.
| |
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 that relate to the redevelopment of our old 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 –
| |
Unaudited Consolidated Balance Sheets
(Expressed in United States Dollars)
| March 31, | September 30, | |||||||
| 2019 | 2019 | |||||||
| $ in thousands | $ in thousands | |||||||
| (Audited) | (Unaudited) | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | 7,527 | 6,999 | ||||||
| Trade receivables, net | 600 | 688 | ||||||
| Other receivables, deposits and prepayments | 1,341 | 1,525 | ||||||
| Inventories, net | 829 | 470 | ||||||
| Income tax recoverable | 5 | 5 | ||||||
| Financial instruments at fair value | 102 | 1,025 | ||||||
| Total current assets | 10,404 | 10,712 | ||||||
| Investment in life settlement contracts | 153 | 155 | ||||||
| Other intangible assets | 2,338 | 2,064 | ||||||
| Property, plant and equipment, net | 9,591 | 8,749 | ||||||
| Total assets | 22,486 | 21,680 | ||||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities | ||||||||
| Bank loans - secured | 445 | 1,338 | ||||||
| Accounts payable | 443 | 918 | ||||||
| Contract liabilities | 17 | 0 | ||||||
| Accrued charges and deposits | 3,168 | 3,088 | ||||||
| Payable to affiliated party | 54 | 0 | ||||||
| Current portion of capital lease obligations | 28 | 18 | ||||||
| Total current liabilities | 4,155 | 5,362 | ||||||
| Capital lease obligations, net of current portion | 5 | 0 | ||||||
| Long-term deposit received | 692 | 592 | ||||||
| Long-term loan | 2,485 | 2,399 | ||||||
| Total liabilities | 7,337 | 8,353 | ||||||
| Stockholders’ equity | ||||||||
| Common stock par value $0.003 per share | ||||||||
| - authorized shares - 23,333,334 | ||||||||
| - issued shares: Mar 31, 2019 - 5,543,639; Sep 30, 2019 - 5,543,639 | 17 | 17 | ||||||
| outstanding shares: Mar 31, 2019 - 4,670,773; Sep 30, 2019 - 4,644,920 | ||||||||
| Additional paid-in capital | 22,474 | 22,474 | ||||||
| Treasury stock at cost: Mar 31, 2019 - 872,866; Sep 30, 2019 - 898,719 | -2,773 | -2,841 | ||||||
| Accumulated deficit | -6,492 | -7,080 | ||||||
| Accumulated other comprehensive income | 1,923 | 757 | ||||||
| 15,149 | 13,327 | |||||||
| Total liabilities and stockholders’ equity | 22,486 | 21,680 | ||||||
| |
Unaudited Consolidated Statements of Operations and Comprehensive Income
(Expressed in United States Dollars)
| Six months ended September 30, 2018 | Six months ended September 30, 2019 | |||||||
| $ in thousands | $ in thousands | |||||||
| (unaudited) | (unaudited) | |||||||
| Net revenue | 5,631 | 4,409 | ||||||
| Cost of revenue | -3,602 | -3,448 | ||||||
| Gross profit | 2,029 | 961 | ||||||
| Selling, general and administrative expenses | -2,099 | -2,058 | ||||||
| Other income, net | 16 | 82 | ||||||
| Loss from operations | -54 | -1,015 | ||||||
| Non-operating (expenses) / income, net | -34 | 427 | ||||||
| Loss before income taxes | -88 | -588 | ||||||
| Income tax expense | 0 | 0 | ||||||
| Net loss | -88 | -588 | ||||||
| Other comprehensive loss, net of tax: | ||||||||
| Foreign currency translation adjustments, net of tax | -1,424 | -1,166 | ||||||
| Comprehensive loss | -1,512 | -1,754 | ||||||
| Earnings / (loss) per share | ||||||||
| Weighted average number of shares outstanding | 4,715,384 | 4,644,920 | ||||||
| Diluted weighted average number of shares outstanding | 4,715,384 | 4,644,920 | ||||||
| Loss per common share (in U.S.Dollars) | -0.02 | -0.13 | ||||||
| Loss per common share (in U.S.Dollars) - assuming dilution | -0.02 | -0.13 | ||||||
| |