- Posted GAAP EPS of $0.03 and Non-GAAP EPS of $0.04 -
- Closed quarter with $137 million in cash and securities & no debt -
NEW YORK, May 21 /PRNewswire-Asia-FirstCall/ -- Global Sources Ltd. (Nasdaq: GSOL) ( http://www.globalsources.com ) reported financial results for the first quarter ended March 31, 2009.
(Logo: http://www.prnasia.com/sa/200708071747.jpg )
Global Sources' chairman and CEO, Merle A. Hinrichs, said: "As we anticipated, during the first quarter we were significantly impacted by the global recession. However, we maintained strong fiscal discipline and achieved GAAP and Non-GAAP earnings per share of $0.03 and $0.04, respectively. While we expect continued pressure on revenue and profitability, we are carefully managing costs and believe business conditions may improve later this year.
"We believe Global Sources is well positioned to help our customers through these challenging times. We have a valuable market position serving the larger professional buyers and suppliers that account for the majority of trade. This position is supported by our end-to-end offering of online, shows and magazines, and by industry leading services that help buyers distinguish between verified and unverified suppliers," concluded Hinrichs.
Financial highlights -- First quarter: 2009 compared to 2008
-- Revenue was $34.8 million, down 14% from $40.6 million.
-- Online revenue was $22.0 million for each period.
-- Exhibitions revenue was $4.5 million, down 25% from $6.0 million.
-- Print revenue was $7.5 million, down 35% from $11.6 million.
-- Revenue from mainland China was $23.4 million, down 3% from $24.1
million.
-- GAAP net income was $1.2 million, or $0.03 per diluted share, which
included a non-cash stock based compensation (SBC) expense of
$526,000 based on the March 31, 2009 stock price of $3.89. For the
first quarter of 2008, GAAP net income was $8.2 million, or $0.16
per diluted share, which included a credit of $1.6 million in
non-cash SBC expense based on the March 31, 2008 stock price of
$14.85.
-- Non-GAAP net income was $1.7 million, or $0.04 per diluted share,
compared to $6.6 million, or $0.13 per diluted share, for the first
quarter of 2008.
-- Total deferred income and customer prepayments were $85.1 million
as at March 31, 2009, compared to $96.1 million as at March 31,
2008.
Global Sources' non-GAAP metrics
Management believes non-GAAP metrics are useful measures of operations and provides GAAP to non-GAAP reconciliation tables at the end of this press release. Global Sources defines non-GAAP net income as net income excluding non-cash, stock-based compensation (SBC) expense or credit, gains or losses on acquisitions and investments, and/or impairment charges, for all historical and future references to non-GAAP metrics. Non-GAAP EPS is defined as non-GAAP net income divided by the weighted average of diluted common shares outstanding.
Global Sources' Deputy CFO, David Gillan, said: "In the first quarter, we maintained a very strong balance sheet. We increased our cash, cash equivalents and available-for-sale securities to a total of $136.7 million, up from $131.0 million at Dec. 31, 2008. In addition, we have no debt and we have negligible receivables risk with days sales outstanding (DSOs) at a company record low of 10 days."
Recent Corporate Highlights
-- Held six China Sourcing Fairs and an India Sourcing Fair in April and
early May at the AsiaWorld-Expo in Hong Kong. Buyers from many of the
world's top retailers attended including Ahlens, Atico, Auchan,
Carrefour, Coles Group, Creata, Dollar General, Halfords, Intelbras,
Home Depot, LG Sourcing, Li & Fung, Marks & Spencer, Monsoon
Accessorize, Otto International, Playtex, Samsung, Sears and Staples.
-- Two new shows, China Sourcing Fair: Home Products and the first
ever show dedicated to India suppliers India Sourcing Fair: Home
Products, were held in conjunction with China Sourcing Fair: Baby &
Children's Products. The three fairs showcased a total of 1,500
booths from 9 countries and regions, with a vast majority of
exhibitors from Greater China.
-- The first ever China Sourcing Fair: Gifts & Premiums was held in
conjunction with China Sourcing Fair: Fashion Accessories and China
Sourcing Fair: Underwear & Swimwear. The three shows featured
nearly 2,000 booths from 14 countries and regions.
-- Held the largest-ever spring China Sourcing Fair: Electronics &
Components, featuring over 2,500 booths from 13 countries and
regions.
-- More than twenty Private Sourcing Events were held in mainland China,
New Delhi, and Vietnam since January 2009. Participating buyers
included Dollar General, Metro, Lowe's, El Corte Ingles, Newell
Rubbermaid, Otto International, ThreeSixty Sourcing, Monster Cable and
Carrefour.
-- The 14th International IC-China Conference & Exhibition was held. Key
companies attending included Altium, Analog Devices, Atmel, Fairchild
Semiconductor, Intel, Intersil, Maxim, Micrel, Microchip Technology,
Microsoft Windows Embedded, NEC Electronics, Numonyx, NXP
Semiconductors, Texas Instruments and Vishay.
-- Achieved record lead generation, which is measured as requests for
information (RFIs) from buyers to suppliers through Global Sources
Online. There were more than 67 million RFIs during the 12 months
ended March 31, 2009, up more than 105% compared to the same period
last year.
-- Increased Global Sources' independently certified community of active
buyers to more than 803,000 at the end of the first quarter, 15%
higher than the same time last year.
-- Awarded for the fourth consecutive year, IR Global Rankings' "Best
Ranked IR Website in Greater China & Asia/Pacific" and "Best Ranked
Corporate Governance Practices in Greater China".
Conference call for Global Sources first quarter 2009 earnings
Chairman and CEO, Merle A. Hinrichs, CFO Eddie Heng, and Deputy CFO David Gillan are scheduled to conduct a conference call at 8:00 a.m. ET on May 21, 2009 (8:00 p.m. on May 21, 2009 in Hong Kong) to review these results in more detail. To participate please call at least 10 minutes in advance to ensure all callers are placed into the call at start time. Investors in the United States may participate in the call by dialing (888) 212-8315, and international participants may dial (1-706) 643-0144. Investors in Hong Kong are required to provide the conference ID #95532839; are encouraged to dial into the call 10 to 15 minutes prior to the call to prevent delay in joining; and may participate by dialing (852) 3011-4522. A live webcast of the conference call is scheduled to be available on Global Sources' corporate site at http://www.investor.globalsources.com .
For those who cannot listen to the live broadcast, a webcast replay of the call is scheduled to be available on the company's corporate site for at least 30 days. A telephone replay of the call is also scheduled to be available through May 25, 2009. To listen to the telephone replay, dial (800) 642-1687, or dial (1-706) 645-9291 outside the United States, and enter pass code 95532839#. For those in the Hong Kong area, the replay dial-in number is (852) 3011-4541, and the pass code is 95532839#.
About Global Sources
Global Sources is a leading business-to-business media company and a primary facilitator of trade with Greater China. The core business uses English-language media to facilitate trade from Greater China to the world. The other business segment utilizes Chinese-language media to enable companies to sell to, and within Greater China.
The company provides sourcing information to volume buyers and integrated marketing services to suppliers. It helps a community of over 803,000 active buyers source more profitably from complex overseas supply markets. With the goal of providing the most effective ways possible to advertise, market and sell, Global Sources enables suppliers to sell to hard-to-reach buyers in over 240 countries.
The company offers the most extensive range of media and export marketing services in the industries it serves. It delivers information on 4.3 million products and more than 196,000 suppliers annually through 14 online marketplaces, 13 monthly magazines, over 100 sourcing research reports and 12 specialized trade shows which run 29 times a year across 10 cities.
Suppliers receive more than 67 million sales leads annually from buyers through Global Sources Online ( http://www.globalsources.com ) alone.
Global Sources has been facilitating global trade for 38 years. Global Sources' network covers more than 69 cities worldwide. In mainland China, Global Sources has over 2,500 team members in more than 44 locations, and a community of over 1 million registered online users and magazine readers for Chinese-language media.
Safe Harbor Statement
This news release contains forward-looking statements within the meaning of Section 27-A of the Securities Act of 1933, as amended and Section 21-E of the Securities Exchange Act of 1934, as amended. The company's actual results could differ materially from those set forth in the forward-looking statements as a result of the risks associated with the company's business, changes in general economic conditions, and changes in the assumptions used in making such forward-looking statements.
- Tables Follow -
GLOBAL SOURCES LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)
At At
March 31 December 31
2009 2008
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $116,054 $70,225
Available-for-sale securities 20,674 60,786
Accounts receivable, net 5,019 6,025
Receivables from sales representatives 4,517 5,574
Inventory 996 1,306
Prepaid expenses and other current assets 20,177 16,513
Deferred tax assets 28 28
Total Current Assets 167,465 160,457
Property and equipment, net 81,650 82,657
Long term investments 100 100
Deferred tax assets 328 323
Other noncurrent assets 1,646 1,561
Total Assets $251,189 $245,098
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $8,032 $10,117
Deferred income and customer prepayments 81,544 73,636
Accrued liabilities 9,270 11,579
Income taxes payable 360 261
Total Current Liabilities 99,206 95,593
Deferred income and customer prepayments 3,536 3,044
Deferred tax liability 251 318
Total Liabilities 102,993 98,955
Shareholders' equity:
Common shares, US$0.01 par value; 75,000,000
shares authorized; 51,416,300 (2008: 51,376,335)
shares issued and 44,541,300 (2008: 44,501,335)
shares outstanding 514 514
Additional paid in capital 134,448 133,922
Treasury shares, at cost -- 6,875,000
(2008: 6,875,000) shares (50,000) (50,000)
Retained earnings 56,456 55,259
Accumulated other comprehensive income 1,934 2,225
Total Company Shareholders' Equity 143,352 141,920
Non-controlling interest 4,844 4,223
Total Equity 148,196 146,143
Total Liabilities and Equity $251,189 $245,098
GLOBAL SOURCES LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)
Three months ended March 31,
2009 2008
(Unaudited)(Unaudited)
Revenue:
Online and other media services (Note 1) $29,495 $33,532
Exhibitions 4,488 5,961
Miscellaneous 805 1,121
34,788 40,614
Operating Expenses:
Sales (Note 2) 13,738 12,316
Event production 821 1,005
Community (Note 2) 5,197 6,043
General and administrative (Note 2) 11,595 11,228
Online services development (Note 2) 1,411 1,479
Amortization of software costs 42 40
Total Operating Expenses 32,804 32,111
Income from Operations 1,984 8,503
Interest and dividend income 65 1,297
Foreign exchange losses, net (93) (256)
Income before Income Taxes 1,956 9,544
Income Tax Expense (138) (233)
Net Income $1,818 $9,311
Net income attributable to non-controlling
interest (621) (1,106)
Net Income Attributable to the Company $1,197 $8,205
Diluted net income per share attributable to
the Company's shareholders $0.03 $0.16
Total shares used in diluted net income per
share calculations 45,671,181 52,064,034
Note: 1. Online and other media services consists of:
Three months ended March 31,
2009 2008
(Unaudited)(Unaudited)
Online services $21,970 $21,930
Print services 7,525 11,602
$29,495 $33,532
Note: 2. Non-cash compensation expenses associated with the employee
equity compensation plans and Directors Purchase Plan included
under various categories of expenses are as follows:
Three months ended March 31,
2009 2008
(Unaudited)(Unaudited)
Sales $9 $(1,393)
Community 7 15
General administrative 436 (247)
Online services development 74 48
$526 $(1,577)
GLOBAL SOURCES LTD. AND SUBSIDIARIES
ACTUAL GAAP to NON-GAAP RECONCILIATION
(In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)
Three months Three months
ended March 31, ended March 31,
2009 2008
GAAP EPS $0.03 $0.16
GAAP Net Income $1,197 $8,205
Non-cash stock based compensation expense/
(credit) (Note 1) 526 (1,577)
Non-GAAP Net Income $1,723 $6,628
Non-GAAP diluted net income per share $0.04 $0.13
Total shares used in non-GAAP diluted
net income per share calculations 45,671,181 52,064,034
Note:
(1) Actual SBC is calculated based on actual share price on date of
the awards for employees and revaluation based on the share price
of the last day of the quarter for consultants.
For financial matrix, please visit:
http://www.prnasia.com/hkinfo/GSOL/20090521/HKTH003.pdf .
Global Sources Press Contact in Asia
Camellia So
Tel: +852-2555-5021
Email: cso@globalsources.com
Global Sources Press Contact in U.S.
James W.W. Strachan
Tel: +1-480-664-8309
Email: strachan@globalsources.com
Global Sources Investor Contact in Asia
Investor Relations Department
Tel: +852-2555-4777
Email: investor@globalsources.com
Global Sources Investor Contact in U.S.
Kirsten Chapman & Timothy Dien
Lippert/Heilshorn & Associates, Inc.
Tel: +1-415-433-3777
Email: tdien@lhai.com
