Bonso Electronics Reports Results for the Second Quarter Ended 30 September 2007

TORTOLA, British Virgin Island, March 27 /Xinhua-PRNewswire-FirstCall/ -- Bonso Electronics International, Inc. (NASDAQ:BNSO) a designer and manufacturer of sensor based and communications products, today announced financial results for the second quarter ended 30 September 2007.

The company reported that net sales for the three-month period ended 30 September 2007 decreased by 5.8% to $19,505,000 as compared to $20,710,000 during the same period last year. Net income dropped by 429.8% to a loss of $1,593,000 or $0.28 per share (diluted) as compared to an income of $483,000 or $0.08 per share (diluted) during the same period last year.

Net sales for the six month period ended 30 September 2007 was $35,607,000, which was 3.3% below $36,831,000 in the same period last year. Net income for the six month period ended 30 September 2007 was a loss of $1,350,000 or $0.23 per share (diluted), a 243.5% decrease when compared to the net income of $941,000 or $0.15 per share (diluted) in the same period last year.

Mr. Anthony So, Bonso's Chairman, President and CEO stated: "Our sensor based product sales were 16.5% down from last year; however, the market demand for our telecommunication products and services remained strong and increased by about 33.6%. Like many other businesses in this competitive environment, we have been facing increasing price pressure from rising crude oil, higher metal and raw material price, together with rising labor cost in China. Comparing with the same period last year, the gross profit margin in the second quarter has dropped from 17.8% to 6.9%. We expect the new launched operational restructuring and strategic plan would help bring the profit margin back to normal level (15% to 18%) in the fourth quarter in this fiscal year.

Mr. So further stated, "Our focus for the second half of the year is on our core business with existing customers and looking forward to new potential customers in our niche markets of sensor based and telecommunication products with the right product mix.

"Our efforts upon the continue progress we have made in strengthening our Balance Sheet put the cash position at the end of the second quarter is $9.9 million, or approximately $1.76 per share."

About Bonso Electronics

Bonso Electronics designs, develops, manufactures, assembles and markets a comprehensive line of telecommunications products, electronic scales and weighing instruments and health care 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. For further information, visit the company's web site at .

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 "should," "intends," "is subject to," "expects," "will," "continue," "anticipate," "estimated," "projected," "may," "we believe," "future prospects," or similar expressions. The forward-looking statements above involve a number of risks and uncertainties. Factors that might cause actual results to differ include, but are not limited to conditions in the general economy and in the markets served by the Company; competitive factors, such as price pressures and the potential emergence of rival technologies; interruptions of suppliers' operations affecting availability of component materials at reasonable prices; timely development and market acceptance, and warranty performance of new products; changes in product mix, costs and yields, fluctuations in foreign currency exchange rates; uncertainties related to doing business in Hong Kong and China; and the risk factors listed from time to time in the Company's SEC reports. Forward-looking statements do not include the impact of acquisitions or dispositions of assets, which could affect results in the near term. Actual results may differ materially. The Company assumes no obligation to update the information in this issue.

                          -- Tables to Follow --

                           CONSOLIDATED BALANCE SHEET
                                 (In U.S. Dollars)

                                             Sep 30,            Mar 31,
                                               2007              2007
                                          (Unaudited)       (Unaudited)

    Current assets
     Cash and cash equivalents              9,923,622         8,118,018
     Trade receivables, net                 9,826,842         6,739,567
     Inventories, net                      14,666,759        14,997,788
     Tax recoverable                          324,552             2,117
     Other receivables, deposits and
      prepayments                           3,233,289         2,678,328
     Investment                               700,000           700,000

     Total current assets                  38,675,064        33,235,818

    Deferred income tax assets                 87,369            87,369
    Goodwill                                  842,821           842,821
    Brand name and other intangible
     assets, net                            2,295,531         2,313,434
    Property, plant and equipment, net     10,273,067        11,039,173

     Total assets                          52,173,852        47,518,615

    Liabilities and shareholders' equity

    Current liabilities
     Bank overdraft                           461,708           459,710
     Notes payable                          5,976,764         3,736,526
     Accounts payable                       9,281,464         5,354,326
     Accrued charges and deposits           1,898,699         2,357,132
     Short-term loans                       3,998,962         3,576,366
     Income tax payable                       754,673           814,374
     Current portion of long-term debts
      and capital lease obligations           189,005            95,725

     Total current liabilities             22,561,275        16,394,159

    Long-term debt and capital lease
     obligations, net of current
     maturities                               280,070            59,258
    Deferred income tax liabilities            13,901            13,901
    Total Liabilities                      22,855,246        16,467,318

    Shareholders' equity

    Preferred stock par value $0.01 per
    -authorized shares -- 10,000,000               --                --
    -issued and outstanding shares:
      September 30, 2007 and March
      31, 2007
      Common stock par value $0.003
       per share
       - authorized shares -- 23,333,334           --                --
    - issued and outstanding shares:
      September 30, 2007 and March
      31, 2007 -- 5,577,639                    16,729            16,729
    Additional paid-in capital             21,764,788        21,764,788
    Treasury stock                         -1,328,560        -1,328,560
    Retained earnings                       8,232,109         9,584,181
    Accumulated other comprehensive
     income                                   633,540         1,014,159
                                           29,318,606        31,051,297

    Total liabilities and shareholders'
     equity                                52,173,852        47,518,615

                         CONSOLIDATED INCOME STATEMENT
                         (In Thousands of U.S. Dollars)

                               Three months ended      Six months ended
                                     SEP 30                SEP 30
                                  2007       2006       2007       2006

    Net sales                   19,505     20,710     35,607     36,831
    Cost of sales              (18,159)   (17,023)   (31,184)   (29,866)

    Gross margin                 1,346      3,687      4,423      6,965

    Selling expenses               578        729      1,176      1,256
    Salaries and related costs   1,544      1,474      2,970      2,793
    Research and development
     expenses                      161        125        266        236
    Administration and general
     expenses                      744        716      1,598      1,464
    Amortization of brand name      50         50        100        100

    (Loss)\Income from
     operations                 (1,731)       593     (1,687)     1,116
    Interest income                 44         75         75        123
    Other income                   172         40        264         96
    Interest expenses             (170)      (154)      (304)      (271)
    Foreign exchange gain\(loss)    94        (71)       305       (101)
    Impairment of Goodwill           0          0         --         --
   (Loss)\Income before income taxes
     and minority interest      (1,591)       483     (1,347)       963
    Income tax expense              (2)         0         (3)       (22)

    Net (loss)\ Income before
     minority interest          (1,593)       483     (1,350)       941
    Minority interests              --         --         --         --

    Net (loss)\Income           (1,593)       483     (1,350)       941

    Earnings per share (in
     U.S.Dollars per share)
     Basic                      -0.285      0.086     -0.242      0.168
     Diluted                    -0.282      0.081     -0.239      0.158

    Weighted average shares
     (Basic)                 5,577,639  5,577,639  5,577,639  5,577,639
    Weighted average shares
     (Diluted)               5,646,810  5,945,411  5,646,810  5,945,411

    For more information about Bonso, please contact:

    Albert So
    Financial Controller
    Tel: +852-2605-5822
    Fax: +852-2691-1724

Source: Bonso Electronics International, Inc.

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