omniture

Global Sources reports financial results for the first half of 2016

- Posted revenue of $81.8 million for the six months ended June 30, 2016 -
- Posted IFRS EPS of $0.35 and Non-IFRS EPS of $0.45 for the first half of 2016 -
- Provides guidance for second half of 2016, expects revenue to be between $74.0 million and $76.0 million and IFRS EPS to range from $0.24 to $0.29 -
2016-09-15 14:00 1876

NEW YORK, September 15, 2016 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the six-month period Jan. 1, 2016 through June 30, 2016.

Photo - http://photos.prnewswire.com/prnh/20030303/LNM011LOGO-b

Merle A. Hinrich, Global Sources' executive chairman stated: "In the first half of 2016, our April series of trade shows in Hong Kong performed very well, delivering growth in attendance and revenue. Global Sources Electronics, our flagship show, featured 5,500 booths from Greater China, Korea and across Asia, with the second phase, Mobile Electronics, growing by more than 100 percent in just two years to become the world's largest mobile electronics sourcing show. Now in its second year, Startup Launchpad is a conference track and pavilion integrated within both phases of the Global Sources Electronics show. Startup Launchpad is also the largest collection of consumer electronics startups in Asia.

"Global Sources is focused on connecting buyers worldwide with suppliers in mainland China and Asia. We continue to evolve our offering to address the significant changes that both buyers and suppliers are experiencing. Key initiatives in our continuing integration of the trade show and online experience include our buyer and supplier apps, and Analyst's Choice, the industry's only curated product content."

Financial highlights -- First half: 2016 compared to 2015

  • Revenue from continuing operations was $81.8 million, as compared to $85.9 million.
    • Exhibitions revenue was $47.4 million, as compared to $46.2 million.
    • Online and other media services revenue was $30.7 million, as compared to $35.7 million.
  • IFRS net profit from continuing operations was $8.8 million, or $0.35 per diluted share, as compared to $8.8 million, or $0.28 per diluted share from continuing operations.
  • Non-IFRS net profit from continuing operations was $11.3 million, or $0.45 per diluted share, as compared to $10.2 million, or $0.32 per diluted share from continuing operations.
  • Adjusted EBITDA from continuing operations was $16.3 million, as compared to $17.8 million from continuing operations for the first half of 2015.
  • Total deferred income and customer prepayments were $79.5 million as at June 30, 2016, as compared to $86.2 million as at June 30, 2015.
  • Cash and cash equivalents at June 30, 2016 was $87.9 million and the company remains debt free.

Global Sources' CFO, Connie Lai, said: "During the first half of 2016, our April series of trade shows in Hong Kong delivered stronger than expected revenue. While the performance of our Shenzhen International Machinery Manufacturing Industry Exhibition (SIMM) for the domestic market was in line with expectations, we recorded a write-down of approximately $1.4 million in consideration of impairment charges net of associated taxes related to the China International Fashion Brand Fair - Shenzhen (FashionSZshow). Our efforts to drive efficiencies throughout the organization, combined with the recognition of deferred tax assets, drove our better-than-anticipated bottom line performance."

Financial expectations for the second half of 2016 under IFRS

  • For the second half of 2016 ending Dec. 31, 2016:
    • Revenue from continuing operations is expected to be in the range of $74.0 million to $76.0 million, as compared to $85.1 million from continuing operations for the second half of 2015.
    • IFRS EPS from continuing operations is expected to be in the range of $0.24 to $0.29, as compared to $0.58 per diluted share from continuing operations in the second half of 2015. SBC and the amortization of intangibles as it relates to certain equity compensation plans are estimated to be an expense of $0.05 per diluted share for the second half of 2016.
    • Non-IFRS EPS from continuing operations is expected to be in the range of $0.29 to $0.34, as compared to $0.33 per diluted share from continuing operations for the same period in 2015.
    • Adjusted EBITDA from continuing operations is expected to be between $10.7 million and $11.9 million, as compared to $13.1 million from continuing operations in the second half of 2015.

Recent Corporate Highlights

  • Appointed Ms. Fumbi Chima and Mr. Michael Scown as new members to its Board of Directors effective Sept. 12, 2016.
  • The 16th China International Fashion Brand Fair - Shenzhen (FashionSZshow) was held in Shenzhen in July 2016.
  • Joined the Russell Global Index and the broad-market Russell 3000® Index in June 2016.
  • Global Sources series of spring trade shows were held in April 2016 at Hong Kong's AsiaWorld-Expo, including Global Sources Electronics, the world's largest electronics sourcing trade show.
    • In total, the spring trade shows had more than 7,500 booths.
    • Total attendance exceeded 88,400 and included buyers from 150 countries and territories.
  • Launched Smart Living, a new industry specialized website.
  • Launched Global Sources Startup Tech Investments to focus on consumer electronics startups.
  • The Shenzhen International Machinery Manufacturing Industry Exhibition and its related shows, known as the SIMM machinery shows, were held on March 29-April 1, 2016.
  • Announced retirement of board members Messrs. Roderick Chalmers and Peter Yam effective March 31, 2016.
  • Announced CEO Spenser Au plans to retire after 39 years of service to the Company. He will remain engaged until the end of 2016 to assist in the transition to a successor.

Conference call for Global Sources first half 2016 earnings

Executive chairman Merle A. Hinrich and CFO Connie Lai are scheduled to conduct a conference call at 8:00 a.m. ET on Sept. 15, 2016 (8:00 p.m. on Sept. 15, 2016 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (866) 293-8970, and non-Hong Kong international participants may dial (1-913) 312-0702. Investors in Hong Kong may participate by dialing (800) 903-317. The conference ID is 5438015 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 Sept. 23, 2016. To listen to the telephone replay dial (888) 203-1112 or dial (1-719) 457-0820 outside the United States, and enter pass code 5438015. For those in the Hong Kong area, the replay dial-in number is (800) 901-108, and the pass code is 5438015.

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), trade shows, magazines and apps.

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 profit as IFRS net profit excluding non-cash stock based compensation expense or credit, amortization of intangibles assets as it relates to certain equity compensation plans, profits or losses on acquisitions and disposals of investments, 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 diluted net profit per share is defined as non-IFRS net profit divided by the weighted average of diluted common shares outstanding. Adjusted EBITDA is defined as profit before interest, taxes, depreciation, amortization, non-cash stock based compensation expense or credit, profits or losses on acquisitions and disposals of investments, net of transaction costs and impairment of goodwill and intangible assets.

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,



2016


2015



(Unaudited)



ASSETS





Current assets





Cash and cash equivalents

$

79,476

$

70,356

Term deposits with banks


8,462


9,097

Accounts receivables, net


710


849

Receivables from sales representatives


14,018


8,802

Inventories


102


176

Prepaid expenses and other current assets


16,188


16,268



118,956


105,548

Non-current assets





Property and equipment


64,084


59,064

Investment properties


60,585


69,726

Intangible assets


22,023


26,309

Long term investment


-


100

Deferred income tax assets


2,035


389

Other non-current assets


1,322


951



150,049


156,539

Total assets

$

269,005

$

262,087






LIABILITIES AND SHAREHOLDERS' EQUITY





Current liabilities





Accounts payable

$

5,924

$

7,383

Deferred income and customer prepayments


75,257


75,265

Accrued liabilities


16,880


15,183

Income tax liabilities


2,692


2,990



100,753


100,821

Non-current liabilities





Accounts payable


-


289

Deferred income and customer prepayments


4,269


2,917

Deferred income tax liabilities


3,512


4,493



7,781


7,699

Total liabilities


108,534


108,520






Equity attributable to Company's shareholders





Common shares


536


533

Treasury shares


(250,089)


(250,089)

Other reserves


156,252


157,562

Retained earnings


248,637


239,812

Total Company shareholders' equity


155,336


147,818

Non-controlling interests


5,135


5,749

Total equity

$

160,471

$

153,567

Total liabilities and equity

$

269,005

$

262,087

GLOBAL SOURCES LTD. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)












Six months ended June 30,




2016


2015




(Unaudited)


(Unaudited)

Revenue:







Exhibitions


$

47,413


$

46,171

Online and other media services (Note 1)



30,694



35,730

Miscellaneous



3,711



4,015




81,818



85,916

Operating Expenses:







Sales (Note 2)



22,909



24,693

Event production



13,066



12,224

Community and content (Note 2)



9,011



10,203

General and administrative (Note 2 & 3)



22,334



20,752

Information and technology (Note 2)



5,774



6,452

Total Operating Expenses



73,094



74,324

Profit from Operations



8,724



11,592

Interest income



293



566

Gain on sale of available-for-sale securities



67



136

Profit on sale of investment



43



-

Interest expenses



(16)



(59)

Profit before Income Taxes



9,111



12,235

Income tax credit / (expense)



576



(2,188)

Net Profit from continuing operations


$

9,687


$

10,047

Net Profit from discontinued operations, net of
income tax (Note 4)



-



5,406

Net profit


$

9,687


$

15,453

Net (profit)/loss attributable to non-controlling interests
from:







Continuing operations



(862)



(1,222)

Discontinued operations



-



264

Total



(862)



(958)

Net profit attributable to the Company's
shareholders from:







Continuing operations


$

8,825


$

8,825

Discontinued operations



-



5,670

Total


$

8,825


$

14,495

Diluted net profit per share attributable to the
Company's shareholders from:







Continuing operations


$

0.35


$

0.28

Discontinued operations



-



0.18

Total


$

0.35


$

0.46

Shares used in diluted net profit per share
calculations



25,358,358



31,534,448















Note:

1. Online and other media services consists of:












Six months ended June 30,




2016


2015




(Unaudited)


(Unaudited)


Online services


$

27,686


$

33,201


Print services



3,008



2,529




$

30,694


$

35,730









Note:

2. Non-cash compensation expenses associated with the several equity compensation plans and Global
Sources Directors Share Grant Award Plan included under various categories of expenses are as follows:












Six months ended June 30,




2016


2015




(Unaudited)


(Unaudited)


Sales


$

73


$

178


Community and content



18



41


General and administrative



736



768


Information and technology



119



133




$

946


$

1,120









Note:

3. General and administrative expenses consist of:












Six months ended June 30,




2016


2015




(Unaudited)


(Unaudited)


General and administrative expenses before
amortization of intangible assets, impairment
charge on intangible assets and foreign
exchange losses


$

17,979


$

18,305


Amortization of intangible assets



2,042



2,107


Impairment charge on intangible assets



1,902



-


Foreign exchange losses



411



340




$

22,334


$

20,752









Note:

4. Net Profit from discontinued operations, net of income tax consist of:












Six months ended June 30,




2016


2015




(Unaudited)


(Unaudited)


Profit on sale of subsidiary


$

-


$

6,159


Income tax expense



-



(361)


Profit on sale of subsidiary, net of income tax



-



5,798


Loss from discontinued operations, net of income tax



-



(392)




$

-


$

5,406

GLOBAL SOURCES LTD. AND SUBSIDIARIES

ACTUAL IFRS to NON-IFRS RECONCILIATION

(In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)
























Six months ended June 30,



2016


2015








IFRS diluted net profit per share from continuing operations


$

0.35


$

0.28








IFRS Net Profit from continuing operations


$

8,825


$

8,825








Non-cash stock based compensation expense (Note 1)



946



1,120








Amortization of intangibles (Note 2)



184



293








Profit on sale of investment



(43)



-








Impairment of goodwill and intangibles (Note 3)



1,426



-








Non-IFRS Net Profit continuing operations


$

11,338


$

10,238








Non-IFRS diluted net profit per share from continuing operations


$

0.45


$

0.32















Total shares used in non-IFRS diluted net profit
per share calculations



25,358,358



31,534,448















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)
























Six months ended June 30,



2016


2015








IFRS profit from continuing operations


$

8,724


$

11,592








Depreciation and amortization from continuing operations



4,767



5,038








EBITDA



13,491



16,630








Non-cash stock based compensation expense



946



1,120








Impairment of goodwill and intangibles



1,902



-








Adjusted EBITDA from continuing operations


$

16,339


$

17,750

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,



2016


2015








Revenue from continuing operations


$74.0

to

$76.0


$85.1








IFRS EPS from continuing operations


$0.24

to

$0.29


$0.58








Non-cash stock based compensation expense (Note 1)


$0.04


$0.04


$0.04








Amortization of intangibles (Note 2)


$0.01


$0.01


$0.00








Profit on sale of property, net of transaction costs & related tax expenses


$0.00


$0.00


($0.29)








Non-IFRS diluted net income per share from continuing operations


$0.29

to

$0.34


$0.33








Total shares used in non-IFRS diluted net income
per share calculations


25,536,000


25,536,000


26,249,657















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/20160915/8521605826

Press Contact

Investor Contact in Asia

Camellia So

Connie Lai

Tel: (852) 2555-5021

Tel: (852) 2555-4747

e-mail: GSpress@globalsources.com

e-mail: investor@globalsources.com




Investor Contact in U.S.


Cathy Mattison


LHA


Tel: (1-415) 433-3777


e-mail: cmattison@lhai.com

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Source: Global Sources
collection