NEW YORK, August 5, 2015 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the second quarter ended June 30, 2015.
Global Sources' executive chairman, Merle A. Hinrich, said: "In the second quarter, total revenue was $68.5 million, with our exhibition business revenue growing 42 percent year-over-year, driven primarily by the performance of our large electronics international trade shows held in Hong Kong in April and the move of our SIMM machinery shows from the first quarter of 2014 to the second quarter of 2015. We were especially pleased with the revenue and attendance growth for the Global Sources Electronics and Mobile Electronics shows.
"Recently, we completed three important actions to return value to our shareholders and to focus on our core business. First, we completed a cash tender offer to return up to approximately $50 million to shareholders, which commenced on June 26, 2015 and expired at 12:00 midnight, New York City time, on July 27, 2015. Second, we completed the sale of our eMedia subsidiary. And third, following the end of the second quarter, we entered into an agreement to sell an investment property in Shenzhen."
Financial highlights - Second quarter: 2015 compared to 2014
As a result of completing the sale of its eMedia subsidiary during the quarter, the eMedia business has been reclassified as a discontinued operation.
Financial highlights - Six months ended June 30: 2015 compared to 2014
Global Sources' CFO, Connie Lai, stated: "Our second quarter 2015 results reflect growth of the electronics trade shows held in April, the SIMM machinery shows moving from the first quarter last year to the second quarter of 2015 and the capital gain of $6.2 million recorded from the sale of our eMedia subsidiary. We continue to maintain an efficient cost structure, while maintaining a strong balance sheet with no short- or long-term debt."
Financial expectations for the second half of 2015 under IFRS
"It is important to note that our second half 2015 guidance takes into consideration the impact on revenue resulting from the sale of our eMedia subsidiary, as well as capital gains from the expected sale of our Shenzhen investment property," Lai stated.
"For the second half of 2015, we expect the revenue mix to range between 52% and 54% for exhibitions, 41% and 42% for online and print, and approximately 6% for miscellaneous. This compares to a second half 2014 revenue mix of approximately 52% for exhibitions, 44% for online and print and 4% for miscellaneous," Lai concluded.
Recent Corporate Highlights
Conference call for Global Sources second quarter 2015 earnings
Executive chairman Merle A. Hinrich and CFO Connie Lai are scheduled to conduct a conference call at 8:00 a.m. ET on Aug. 5, 2015 (8:00 p.m. on Aug. 5, 2015 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (888) 737-3616, and non-Hong Kong international participants may dial (1-913) 312-1391. Investors in Hong Kong may participate by dialing (852) 3008-0382. The conference ID is 3671969 and participants are encouraged to dial 10 minutes prior to the call to prevent a delay in joining. 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 30 days. A telephone replay of the call is also scheduled to be available through Aug. 12, 2015. To listen to the telephone replay dial (888) 203-1112 or dial (1-719) 457-0820 outside the United States, and enter pass code 3671969. For those in the Hong Kong area, the replay dial-in number is (800) 901-108, and the pass code is 3671969.
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 facilitates trade between Asia and the world using English-language media such as online marketplaces (GlobalSources.com), print and digital magazines, private sourcing events, and trade shows.
More than 1 million international buyers, including 95 of the world's top 100 retailers, use these services to obtain product and company information to help them source more profitably from overseas supply markets. These services also provide suppliers with integrated marketing solutions to build corporate image, generate sales leads and win orders from buyers in more than 240 countries and territories.
Now in its fifth decade, Global Sources has been publicly listed on the NASDAQ since 2000.
Global Sources' non-IFRS metrics
Management believes non-IFRS metrics are useful measures of operations and provides IFRS to non-IFRS reconciliation tables at the end of this press release. Global Sources defines non-IFRS net income as net income excluding non-cash, SBC expense or credit, amortization of intangibles as it relates to certain equity compensation plans, profits or losses on acquisitions, investments and disposal net of transaction costs and related tax expenses, and/or impairment charges net of related taxes, for all historical and future references to non-IFRS metrics. Non-IFRS EPS is defined as non-IFRS net income divided by the weighted average of diluted common shares outstanding. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, impairment of goodwill and intangible assets, and profits or losses on acquisitions, investments and disposal net of transaction costs and related tax expenses.
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) |
|||||||
As at June 30, |
As at December 31, |
||||||
2015 |
2014 |
||||||
(Unaudited) |
|||||||
ASSETS |
|||||||
Current assets |
|||||||
Cash and cash equivalents |
$ |
86,614 |
$ |
90,223 |
|||
Term deposits with banks |
8,387 |
4,285 |
|||||
Financial assets, available-for-sale |
- |
3,952 |
|||||
Accounts receivables, net |
879 |
2,269 |
|||||
Receivables from sales representatives |
11,145 |
7,900 |
|||||
Inventories |
151 |
154 |
|||||
Prepaid expenses and other current assets |
29,155 |
17,027 |
|||||
136,331 |
125,810 |
||||||
Non-current assets |
|||||||
Property and equipment |
61,799 |
63,519 |
|||||
Investment properties |
84,453 |
85,546 |
|||||
Intangible assets |
29,484 |
37,732 |
|||||
Long term investment |
100 |
100 |
|||||
Deferred income tax assets |
323 |
196 |
|||||
Other non-current assets |
1,920 |
1,108 |
|||||
178,079 |
188,201 |
||||||
Total assets |
$ |
314,410 |
$ |
314,011 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
Current liabilities |
|||||||
Accounts payable |
$ |
7,459 |
$ |
9,418 |
|||
Deferred income and customer prepayments |
81,501 |
84,869 |
|||||
Accrued liabilities |
17,277 |
19,100 |
|||||
Income tax liabilities |
3,223 |
3,848 |
|||||
109,460 |
117,235 |
||||||
Non-current liabilities |
|||||||
Accounts payable |
294 |
889 |
|||||
Deferred income and customer prepayments |
4,712 |
3,971 |
|||||
Deferred income tax liabilities |
5,407 |
6,842 |
|||||
10,413 |
11,702 |
||||||
Total liabilities |
119,873 |
128,937 |
|||||
Equity attributable to Company's shareholders |
|||||||
Common shares |
532 |
529 |
|||||
Treasury shares |
(200,089) |
(200,089) |
|||||
Other reserves |
162,225 |
161,242 |
|||||
Retained earnings |
224,419 |
209,924 |
|||||
Total Company shareholders' equity |
187,087 |
171,606 |
|||||
Non-controlling interests |
7,450 |
13,468 |
|||||
Total equity |
$ |
194,537 |
$ |
185,074 |
|||
Total liabilities and equity |
$ |
314,410 |
$ |
314,011 |
|||
GLOBAL SOURCES LTD. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)
|
||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||
Revenue: |
||||||||||||
Online and other media services (Note 2) |
$ |
17,721 |
$ |
21,022 |
$ |
35,730 |
$ |
42,381 |
||||
Exhibitions |
46,096 |
32,412 |
46,171 |
41,272 |
||||||||
Miscellaneous |
2,137 |
2,051 |
4,015 |
3,813 |
||||||||
65,954 |
55,485 |
85,916 |
87,466 |
|||||||||
Operating Expenses: |
||||||||||||
Sales (Note 3) |
18,798 |
18,270 |
24,693 |
26,506 |
||||||||
Event production |
12,197 |
8,991 |
12,224 |
10,742 |
||||||||
Community and content (Note 3) |
6,677 |
5,919 |
10,203 |
10,335 |
||||||||
General and administrative (Note 3 & 4) |
10,635 |
12,819 |
20,752 |
26,004 |
||||||||
Information and technology (Note 3) |
3,245 |
2,939 |
6,452 |
6,012 |
||||||||
Total Operating Expenses |
51,552 |
48,938 |
74,324 |
79,599 |
||||||||
Profit on sale of subsidiary |
6,159 |
- |
6,159 |
- |
||||||||
Profit from Operations |
20,561 |
6,547 |
17,751 |
7,867 |
||||||||
Interest income |
273 |
311 |
566 |
707 |
||||||||
Gain on sale of available-for-sale securities |
90 |
- |
136 |
10 |
||||||||
Interest expenses |
(13) |
(45) |
(59) |
(92) |
||||||||
Profit before Income Taxes |
20,911 |
6,813 |
18,394 |
8,492 |
||||||||
Income tax expense |
(2,684) |
(440) |
(2,549) |
(830) |
||||||||
Net Profit from continuing operations |
$ |
18,227 |
$ |
6,373 |
$ |
15,845 |
$ |
7,662 |
||||
Net Profit/(loss) from discontinued |
(187) |
(293) |
(392) |
(699) |
||||||||
Net profit |
$ |
18,040 |
$ |
6,080 |
$ |
15,453 |
$ |
6,963 |
||||
Net (profit)/loss attributable to non-controlling |
||||||||||||
Continuing operations |
(1,562) |
712 |
(1,222) |
(242) |
||||||||
Discontinued operations |
144 |
195 |
264 |
411 |
||||||||
Total |
(1,418) |
907 |
(958) |
169 |
||||||||
Net profit/(loss) attributable to the Company's |
||||||||||||
Continuing operations |
$ |
16,665 |
$ |
7,085 |
$ |
14,623 |
$ |
7,420 |
||||
Discontinued operations |
(43) |
(98) |
(128) |
(288) |
||||||||
Total |
$ |
16,622 |
$ |
6,987 |
$ |
14,495 |
$ |
7,132 |
||||
Diluted net profit/(loss) per share |
||||||||||||
Continuing operations |
$ |
0.52 |
$ |
0.20 |
$ |
0.46 |
$ |
0.21 |
||||
Discontinued operations |
* |
* |
* |
(0.01) |
||||||||
Total |
$ |
0.52 |
$ |
0.20 |
$ |
0.46 |
$ |
0.20 |
||||
Shares used in diluted net profit per share calculations |
31,743,270 |
35,183,171 |
31,534,448 |
35,672,551 |
||||||||
* Diluted net loss per share attributable to the Company's shareholders from discontinued operations is less than $0.01 |
||||||||||||
Note: 1. Total revenue from both the continuing operations and discontinued operations during the three months and six months |
||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||
Continuing operations |
$ |
65,954 |
$ |
55,485 |
$ |
85,916 |
$ |
87,466 |
||||
Discontinued operations |
2,535 |
2,852 |
4,776 |
5,341 |
||||||||
$ |
68,489 |
$ |
58,337 |
$ |
90,692 |
$ |
92,807 |
|||||
Note: 2. Online and other media services consists of: |
||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||
Online services |
$ |
16,440 |
$ |
19,293 |
$ |
33,201 |
$ |
39,200 |
||||
Print services |
1,281 |
1,729 |
2,529 |
3,181 |
||||||||
$ |
17,721 |
$ |
21,022 |
$ |
35,730 |
$ |
42,381 |
|||||
Note: 3. Non-cash compensation expenses associated with the several equity compensation plans and Global Sources Directors |
||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||
Sales |
$ |
141 |
$ |
139 |
$ |
178 |
$ |
146 |
||||
Community and content |
31 |
27 |
41 |
(32) |
||||||||
General and administrative |
404 |
347 |
768 |
530 |
||||||||
Information and technology |
56 |
50 |
133 |
120 |
||||||||
$ |
632 |
$ |
563 |
$ |
1,120 |
$ |
764 |
|||||
Note: 4. General and administrative expenses consist of: |
||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||
General and administrative expenses before |
$ |
9,627 |
$ |
9,395 |
$ |
18,305 |
$ |
17,692 |
||||
Amortization of intangible assets |
989 |
1,354 |
2,107 |
4,659 |
||||||||
Impairment charge on intangible assets |
- |
2,238 |
- |
2,238 |
||||||||
Foreign exchange losses (gains) |
19 |
(168) |
340 |
1,415 |
||||||||
$ |
10,635 |
$ |
12,819 |
$ |
20,752 |
$ |
26,004 |
GLOBAL SOURCES LTD. AND SUBSIDIARIES |
||||||||||||||
ACTUAL IFRS to NON-IFRS RECONCILIATION |
||||||||||||||
(In U.S. Dollars Thousands, Except Number of Shares and Per Share Data) |
||||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||||
IFRS diluted net profit per share |
$ |
0.52 |
$ |
0.20 |
$ |
0.46 |
$ |
0.20 |
||||||
IFRS Net Profit |
$ |
16,622 |
$ |
6,987 |
$ |
14,495 |
$ |
7,132 |
||||||
Non-cash stock based compensation expense (Note 1) |
632 |
563 |
1,120 |
764 |
||||||||||
Amortization of intangibles (Note 2) |
82 |
151 |
293 |
404 |
||||||||||
Impairment of goodwill and intangibles (Note 3) |
- |
1,678 |
- |
1,678 |
||||||||||
Profit on sale of subsidiary |
(6,159) |
- |
(6,159) |
- |
||||||||||
Non-IFRS Net Profit |
$ |
11,177 |
$ |
9,379 |
$ |
9,749 |
$ |
9,978 |
||||||
Non-IFRS diluted net profit per share |
$ |
0.35 |
$ |
0.27 |
$ |
0.31 |
$ |
0.28 |
||||||
Total shares used in non-IFRS diluted net profit |
||||||||||||||
per share calculations |
31,743,270 |
35,183,171 |
31,534,448 |
35,672,551 |
||||||||||
Notes: |
||||||||||||||
(1) Actual SBC is calculated based on actual share price on date of the awards. |
||||||||||||||
(2) Amortization of intangible assets relating to certain non-compete agreements. |
||||||||||||||
(3) Impairment of intangibles are net of related taxes. |
GLOBAL SOURCES LTD. AND SUBSIDIARIES ADJUSTED EBITDA RECONCILIATION (In U.S. Dollars Thousands) |
||||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||||
IFRS profit from operations |
$ |
20,295 |
$ |
6,203 |
$ |
17,083 |
$ |
7,061 |
||||||
Depreciation and amortization |
2,620 |
2,819 |
5,365 |
7,665 |
||||||||||
EBITDA |
22,915 |
9,022 |
22,448 |
14,726 |
||||||||||
Non-cash stock based compensation expense |
632 |
563 |
1,120 |
764 |
||||||||||
Impairment of goodwill and intangibles |
- |
2,238 |
- |
2,238 |
||||||||||
Profit on sale of subsidiary |
(6,159) |
- |
(6,159) |
- |
||||||||||
Adjusted EBITDA |
$ |
17,388 |
$ |
11,823 |
$ |
17,409 |
$ |
17,728 |
GLOBAL SOURCES LTD. AND SUBSIDIARIES |
||||||
GUIDANCE IFRS to NON-IFRS RECONCILIATION |
||||||
(In U.S. Dollars Million, Except Number of Shares and Per Share Data) |
||||||
GUIDANCE |
ACTUAL |
|||||
Six months |
Six months |
|||||
ended December 31, |
ended December 31, |
|||||
2015 |
2014 |
|||||
Revenue |
$86.0 |
to |
$88.0 |
$91.8 |
||
IFRS EPS |
$0.50 |
to |
$0.55 |
$0.32 |
||
Non-cash stock based compensation expense (Note 1) |
$0.04 |
$0.04 |
$0.03 |
|||
Amortization of intangibles (Note 2) |
$0.01 |
$0.01 |
$0.01 |
|||
Gain on sale of investment property, net of transaction costs & |
(0.29) |
(0.29) |
- |
|||
Non-IFRS diluted net income per share |
$0.26 |
to |
$0.31 |
$0.36 |
||
Total shares used in non-IFRS diluted net income |
||||||
per share calculations |
26,331,586 |
26,331,586 |
31,490,737 |
|||
Notes: |
||||||
(1) Actual SBC is calculated based on actual share price on date of the awards. |
||||||
(2) Amortization of intangible assets relating to certain non-compete agreements. |
For financial matrix, please visit: http://photos.prnasia.com/prnk/20150805/8521505087
Press Contact in Asia |
Investor Contact in Asia |
Camellia So |
Connie Lai |
Tel: (852) 2555-5021 |
Tel: (852) 2555-4747 |
e-mail: cso@globalsources.com |
e-mail: investor@globalsources.com |
Press Contact in U.S. |
Investor Contact in U.S. |
Brendon Ouimette |
Cathy Mattison |
Tel: (1-480) 664-8309 |
LHA |
e-mail: bouimette@globalsources.com |
Tel: (1-415) 433-3777 |
e-mail: cmattison@lhai.com |
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