omniture

Global Sources reports fourth quarter and year-end 2014 results

- Reported fourth quarter revenue of $62.9 million -
- Reported full year 2014 revenue of $198.2 million -
- Posted IFRS EPS of $0.29 and Non-IFRS EPS of $0.31 for the fourth quarter of 2014 -
- Posted full year 2014 IFRS EPS of $0.55 and Non-IFRS EPS of $0.67 -
- Provides guidance for first half of 2015, expects revenue of $90.0 million to $92.0 million and IFRS EPS to range from $0.15 to $0.19 -
2015-03-26 14:00 1399

NEW YORK, March 26, 2015 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the fourth quarter and year-ended Dec. 31, 2014.

"Our fourth quarter results were driven by the strong performance of our China Sourcing Fairs in Hong Kong and effective cost management," stated Merle A. Hinrich, Global Sources' executive chairman. "I am pleased with our overall results for the year, during which we launched several new trade shows and enhanced the value of our fully integrated offering of online marketplaces and exhibitions. Looking ahead, we intend to continue focusing on improving our competitive position with specialized vertical offerings of online and trade show services for our buyer and supplier communities."

Financial highlights -- Fourth quarter: 2014 compared to 2013

  • Revenue was $62.9 million, as compared to $60.1 million.
    • Online revenue was $19.5 million, as compared to $21.7 million.
    • Exhibitions revenue was $38.2 million, as compared to $33.2 million.
    • Print revenue was $2.9 million, as compared to $3.3 million.
  • The company recorded a foreign exchange loss of $1.3 million due to the devaluation of the yuan during the fourth quarter of 2014.
  • IFRS net income was $9.3 million, or $0.29 per diluted share, as compared to fourth quarter 2013 IFRS net income of $5.0 million, or $0.14 per diluted share.
  • Non-IFRS net income was $9.9 million, or $0.31 per diluted share, as compared to $10.9 million, or $0.30 per diluted share, for the fourth quarter of 2013.
  • Adjusted EBITDA was $12.2 million, as compared to $13.1 million for the fourth quarter of 2013.
  • Total deferred income and customer prepayments were $88.8 million as at Dec. 31, 2014, as compared to $90.4 million as at Dec. 31, 2013.

Financial highlights -- Full year 2014 ended Dec. 31: 2014 compared to 2013

  • Revenue was $198.2 million, as compared to $197.5 million.
  • IFRS net income was $18.3 million, or $0.55 per diluted share, as compared to $32.7 million, or $0.91 per diluted share.
  • Non-IFRS net income was $22.5 million, or $0.67 per diluted share, as compared to $30.2 million, or $0.84 per diluted share, for 2013.
  • Adjusted EBITDA was $37.3 million, as compared to $40.4 million for 2013.

Global Sources' CFO, Connie Lai, stated: "For the fourth quarter, we delivered strong bottom line results. We reported a 15 percent increase in exhibition revenue, which was partially offset by a 10 percent decline in online services, and we closely managed costs. Our balance sheet remains strong with a cash balance of $98.5 million and no debt."

Financial expectations for the first half of 2015 under IFRS

  • For the first half of 2015 ending June 30, 2015:
    • Revenue is expected to be in the range of $90.0 million to $92.0 million, as compared to $92.8 million for the first half of 2014.
    • IFRS EPS is expected to be in the range of $0.15 to $0.19, as compared to $0.20 per diluted share in the first half of 2014. SBC and the amortization of intangibles as it relates to certain equity compensation plans are estimated to be an expense of $0.04 per diluted share for the first half of 2015.
    • Non-IFRS EPS is expected to be in the range of $0.19 to $0.23, as compared to $0.28 per diluted share for the same period in 2014.
    • Adjusted EBITDA is expected to be between $12.9 million and $14.1 million, as compared to $17.7 million in the first half of 2014.

"We expect the revenue mix for the first half of 2015 to range between 50% and 51% for exhibitions, 38% and 39% for online, 5% and 6% for print, and approximately 4% for miscellaneous, which reflects the growing contribution of our specialized vertical trade show offerings. This compares to a first half of 2014 revenue mix of approximately 45% for online, 45% for exhibitions, 6% for print, and 4% for miscellaneous," Lai added.

Recent Corporate Highlights

  • In February, launched an enhanced version of Mobile Electronics plus three new vertically specialized websites for consumer electronics, security products and electronic components.
  • China Sourcing Fairs were held in Johannesburg in November 2014.
  • China Sourcing Fairs were held in October 2014 at Hong Kong's AsiaWorld-Expo. The fall shows had more than 7,500 booths. Total attendance exceeded 75,000 and included buyers from more than 148 countries and territories.
  • Held the China Sourcing Fair: Electronics & Components in Hong Kong, which featured more than 3,700 booths.
  • Held the inaugural Mobile Electronics Fair in Hong Kong, which featured more than 1,500 booths and fully launched its suite of services for the mobile electronics industry.
  • Received the Gold corporate award for excellence in corporate governance and investor relations in The Asset's December 2014 issue. The company received The Asset's Gold and Titanium corporate award for the previous five years.
  • Private Sourcing Events were held from October 2014 through January 2015 for more than 110 sourcing teams from very large buying organizations including Canadian Tire, Clas Ohlson, Dick Smith, Groupe Beaumanoir, Halfords, Mophie, O'STIN, Sears, Skyworth and others. These events created more than 420 high-quality, one-on-one selling opportunities for Global Sources suppliers.

Conference call for Global Sources fourth quarter 2014 earnings

Executive chairman Merle A. Hinrich and CFO Connie Lai are scheduled to conduct a conference call at 8:00 a.m. ET on March 26, 2015 (8:00 p.m. on March 26, 2015 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (888) 765-5574, and non-Hong Kong international participants may dial (1-913) 312-1269. Investors in Hong Kong may participate by dialing (852) 3008-0382. The conference ID is 9303522 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 April 2, 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 9303522. For those in the Hong Kong area, the replay dial-in number is (800) 901-108, and the pass code is 9303522.

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, sourcing research reports, 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.

Global Sources' other businesses provide Chinese-language media to companies selling to and within Greater China. These services include online web sites, print and digital magazines, seminars and trade shows. In mainland China, Global Sources has a network of more than 30 office locations and a community of more than 5 million registered online users and magazine readers of its Chinese-language media.

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 and 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 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 and investments 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 December 31,

As at December 31,



2014


2013



(Unaudited)



ASSETS





Current assets





Cash and cash equivalents


$ 90,223


$ 137,359

Term deposits with banks


4,285


106

Financial assets, available-for-sale


3,952


6,367

Accounts receivables, net


2,269


3,122

Receivables from sales representatives


7,900


10,630

Inventories


154


266

Prepaid expenses and other current assets


17,027


18,544



125,810


176,394

Non-current assets





Property and equipment


63,519


49,701

Investment properties


85,546


89,615

Intangible assets


37,732


21,423

Long term investment


100


100

Deferred income tax assets


196


98

Other non-current assets


1,108


1,766



188,201


162,703

Total assets


$ 314,011


$ 339,097






LIABILITIES AND SHAREHOLDERS' EQUITY





Current liabilities





Accounts payable


$ 9,418


$ 8,779

Deferred income and customer prepayments


84,869


84,704

Accrued liabilities


19,100


19,166

Income tax liabilities


3,848


2,635



117,235


115,284

Non-current liabilities





Accounts payable


889


-

Deferred income and customer prepayments


3,971


5,660

Deferred income tax liabilities


6,842


4,591



11,702


10,251

Total liabilities


128,937


125,535






Equity attributable to Company's shareholders





Common shares


529


525

Treasury shares


(200,089)


(150,089)

Other reserves


161,242


161,950

Retained earnings


209,924


191,594

Total Company shareholders' equity


171,606


203,980

Non-controlling interests


13,468


9,582

Total equity


$ 185,074


$ 213,562

Total liabilities and equity


$ 314,011


$ 339,097






GLOBAL SOURCES LTD. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

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








Three months ended December 31,


Year ended December 31,



2014


2013


2014


2013



(Unaudited)


(Unaudited)


(Unaudited)



Revenue:









Online and other media services (Note 1)

$ 22,465


$ 25,036


$ 93,252


$ 104,629

Exhibitions


38,183


33,237


97,017


85,636

Miscellaneous


2,219


1,791


7,943


7,257



62,867


60,064


198,212


197,522

Operating Expenses:









Sales (Note 2)


20,749


20,540


60,805


61,958

Event production


9,728


9,322


25,080


24,403

Community and content (Note 2)


7,800


7,079


26,843


27,481

General and administrative (Note 2 & 3)


12,375


16,126


52,631


50,272

Information and technology (Note 2)


3,171


3,090


12,683


12,729

Total Operating Expenses


53,823


56,157


178,042


176,843

Profit on sale of property


-


-


-


15,410

Profit from Operations


9,044


3,907


20,170


36,089

Interest income


268


384


1,314


1,472

Gain on sale of available-for-sale securities


-


64


11


64

Interest expenses


(47)


-


(186)


-

Profit before Income Taxes


9,265


4,355


21,309


37,625

Income tax expense


(625)


(427)


(2,468)


(4,753)

Net Profit


$ 8,640


$ 3,928


$ 18,841


$ 32,872

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


641


1,056


(511)


(137)

Net profit attributable to the Company's









shareholders


$ 9,281


$ 4,984


$ 18,330


$ 32,735

Diluted net profit per share attributable to









the Company's shareholders


$ 0.29


$ 0.14


$ 0.55


$ 0.91

Shares used in diluted net profit per share









calculations


31,516,581


36,196,122


33,482,371


36,068,326










Note: 1. Online and other media services consists of:








Three months ended December 31,


Year ended December 31,



2014


2013


2014


2013



(Unaudited)


(Unaudited)


(Unaudited)



Online services


$ 19,525


$ 21,712


$ 81,873


$ 91,422

Print services


2,940


3,324


11,379


13,207



$ 22,465


$ 25,036


$ 93,252


$ 104,629










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:








Three months ended December 31,


Year ended December 31,



2014


2013


2014


2013



(Unaudited)


(Unaudited)


(Unaudited)



Sales


$ 123


$ 153


$ 409


$ 539

Community and content


21


31


16


43

General and administrative

319


369


1,215


1,340

Information and technology


45


55


217


248



$ 508


$ 608


$ 1,857


$ 2,170










Note: 3. General and administrative expenses consist of:








Three months ended December 31,


Year ended December 31,



2014


2013


2014


2013



(Unaudited)


(Unaudited)


(Unaudited)



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


$ 9,957


$ 9,814


$ 40,307


$ 39,960

Amortization of intangible assets


1,149


1,138


7,496


3,235

Impairment charge on intangible assets


4


5,994


2,242


8,525

Foreign exchange losses (gains)


1,265


(820)


2,586


(1,448)



$ 12,375


$ 16,126


$ 52,631


$ 50,272


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 December 31,


Year ended December 31,




2014


2013


2014


2013











IFRS EPS


$ 0.29


$ 0.14


$ 0.55


$ 0.91











IFRS Net Profit


$ 9,281


$ 4,984


$ 18,330


$ 32,735











Non-cash stock based compensation expense (Note 1)


508


608


1,857


2,170











Amortization of intangibles (Note 2)


86


154


594


748











Impairment of goodwill and intangibles (Note 3)


4


5,109


1,682


7,640











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


-


-


-


(13,124)











Non-IFRS Net Profit


$ 9,879


$ 10,855


$ 22,463


$ 30,169











Non-IFRS diluted net profit per share


$ 0.31


$ 0.30


$ 0.67


$ 0.84





















Total shares used in non-IFRS diluted net profit









per share calculations


31,516,581


36,196,122


33,482,371


36,068,326











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 December 31,


Year ended December 31,




2014


2013


2014


2013











IFRS profit from operations


$

9,044


$

3,907


$

20,170


$

36,089











Depreciation and amortization


2,614


2,542


13,061


9,029











EBITDA


11,658


6,449


33,231


45,118











Non-cash stock based compensation expense


508


608


1,857


2,170











Impairment of goodwill and intangibles


4


5,994


2,242


8,525











Profit on sale of property, net of transaction costs


-


-


-


(15,410)











Adjusted EBITDA


$

12,170


$

13,051


$

37,330


$

40,403











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 June 30,


ended June 30,



2015


2014








Revenue


$90.0

to

$92.0


$92.8








IFRS EPS


$0.15

to

$0.19


$0.20








Non-cash stock based compensation expense (Note 1)


$0.03


$0.03


$0.02








Amortization of intangibles (Note 2)


$0.01


$0.01


$0.01








Impairment of goodwill and intangibles


-


-


$0.05








Non-IFRS diluted net income per share


$0.19

to

$0.23


$0.28








Total shares used in non-IFRS diluted net income







per share calculations


31,740,000


31,740,000


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.

For financial matrix, please visit: http://photos.prnasia.com/prnk/20150326/8521501903

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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Source: Global Sources
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