NEW YORK, March 17, 2016 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the fourth quarter and year-ended Dec. 31, 2015.
"The highlight of the fourth quarter of 2015 was our very successful series of trade shows in Hong Kong, which included Global Sources Electronics - the world's largest electronics sourcing trade show," stated Merle A. Hinrich, Global Sources' executive chairman. "During the year, we advanced the integration of our online and trade show services and increased our focus on helping buyers identify new, important and innovative products from among the millions of products online. Key initiatives include our Analyst's Choice product sections and Startup Launchpad, a pavilion and conference within our electronics trade shows. Looking ahead, we remain focused on growing our core business by leveraging our differentiated offering that integrates the best of online with the best of trade shows."
Financial highlights - Fourth quarter: 2015 compared to 2014
Global Sources' CFO, Connie Lai, said: "During the fourth quarter of 2015, we completed the sale of our Shenzhen investment property, recording a net profit of $7.6 million, net of transaction costs and related tax expenses. We continue to drive efficiencies throughout the organization, while remaining committed to creating shareholder value, maintaining a strong balance sheet, a solid cash position and no debt."
"As announced on March 15, CEO Spenser Au will retire at the end of 2016 following 39 years of service to Global Sources," continued Mr. Hinrich. "In his role as CEO for the past five years, Spenser was essential to the development of our fully integrated offering of online marketplaces and trade shows. Our strong and experienced management team will continue to build on his contributions as we transition to a successor."
Financial highlights - Full year ended Dec. 31: 2015 compared to 2014
Financial expectations for the first half of 2016 under IFRS
Recent Corporate Highlights
Conference call for Global Sources fourth 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 March 17, 2016 (8:00 p.m. on March 17, 2016 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (877) 502-9276, and non-Hong Kong international participants may dial (1-913) 312-6693. Investors in Hong Kong may participate by dialing (852) 3008-0382. The conference ID is 9464808 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 March 25, 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 9464808. For those in the Hong Kong area, the replay dial-in number is (800) 901-108, and the pass code is 9464808.
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 December 31, |
As at December 31, |
|||
2015 |
2014 |
|||
(Unaudited) |
||||
ASSETS |
||||
Current assets |
||||
Cash and cash equivalents |
$ |
70,356 |
$ |
90,223 |
Term deposits with banks |
9,097 |
4,285 |
||
Financial assets, available-for-sale |
- |
3,952 |
||
Accounts receivables, net |
849 |
2,269 |
||
Receivables from sales representatives |
8,802 |
7,900 |
||
Inventories |
176 |
154 |
||
Prepaid expenses and other current assets |
16,268 |
17,027 |
||
105,548 |
125,810 |
|||
Non-current assets |
||||
Property and equipment |
59,064 |
63,519 |
||
Investment properties |
69,726 |
85,546 |
||
Intangible assets |
26,309 |
37,732 |
||
Long term investment |
100 |
100 |
||
Deferred income tax assets |
389 |
196 |
||
Other non-current assets |
951 |
1,108 |
||
156,539 |
188,201 |
|||
Total assets |
$ |
262,087 |
$ |
314,011 |
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||
Current liabilities |
||||
Accounts payable |
$ |
7,383 |
$ |
9,418 |
Deferred income and customer prepayments |
75,265 |
84,869 |
||
Accrued liabilities |
15,183 |
19,100 |
||
Income tax liabilities |
2,990 |
3,848 |
||
100,821 |
117,235 |
|||
Non-current liabilities |
||||
Accounts payable |
289 |
889 |
||
Deferred income and customer prepayments |
2,917 |
3,971 |
||
Deferred income tax liabilities |
4,493 |
6,842 |
||
7,699 |
11,702 |
|||
Total liabilities |
108,520 |
128,937 |
||
Equity attributable to Company's shareholders |
||||
Common shares |
533 |
529 |
||
Treasury shares |
(250,089) |
(200,089) |
||
Other reserves |
157,562 |
161,242 |
||
Retained earnings |
239,812 |
209,924 |
||
Total Company shareholders' equity |
147,818 |
171,606 |
||
Non-controlling interests |
5,749 |
13,468 |
||
Total equity |
$ |
153,567 |
$ |
185,074 |
Total liabilities and equity |
$ |
262,087 |
$ |
314,011 |
GLOBAL SOURCES LTD. AND SUBSIDIARIES |
||||||||||||
Three months ended December 31, |
Year ended December 31, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||
Revenue: |
||||||||||||
Exhibitions |
$ |
41,629 |
$ |
38,157 |
$ |
91,854 |
$ |
88,941 |
||||
Online and other media services (Note 2) |
17,295 |
19,738 |
70,242 |
82,430 |
||||||||
Miscellaneous |
2,693 |
2,210 |
8,929 |
7,911 |
||||||||
61,617 |
60,105 |
171,025 |
179,282 |
|||||||||
Operating Expenses: |
||||||||||||
Sales (Note 3) |
17,898 |
19,906 |
50,231 |
56,095 |
||||||||
Event production |
10,871 |
9,751 |
24,533 |
23,333 |
||||||||
Community and content (Note 3) |
5,879 |
6,753 |
20,535 |
22,267 |
||||||||
General and administrative (Note 3 & 4) |
11,625 |
11,603 |
43,697 |
48,004 |
||||||||
Information and technology (Note 3) |
3,495 |
3,075 |
13,348 |
12,126 |
||||||||
Total Operating Expenses |
49,768 |
51,088 |
152,344 |
161,825 |
||||||||
Profit on sale of property |
9,791 |
- |
9,791 |
- |
||||||||
Profit from Operations |
21,640 |
9,017 |
28,472 |
17,457 |
||||||||
Interest income |
103 |
244 |
792 |
1,223 |
||||||||
Gain on sale of available-for-sale securities |
39 |
- |
188 |
11 |
||||||||
Interest expenses |
(12) |
(47) |
(83) |
(186) |
||||||||
Profit before Income Taxes |
21,770 |
9,214 |
29,369 |
18,505 |
||||||||
Income tax expense |
(2,187) |
(534) |
(4,609) |
(1,646) |
||||||||
Net Profit from continuing operations |
$ |
19,583 |
$ |
8,680 |
$ |
24,760 |
$ |
16,859 |
||||
Net Profit / (loss) from discontinued operations, net of |
- |
(40) |
5,629 |
1,982 |
||||||||
Net profit |
$ |
19,583 |
$ |
8,640 |
$ |
30,389 |
$ |
18,841 |
||||
Net (profit)/loss attributable to non-controlling interests |
||||||||||||
Continuing operations |
434 |
499 |
(765) |
548 |
||||||||
Discontinued operations |
- |
142 |
264 |
(1,059) |
||||||||
Total |
434 |
641 |
(501) |
(511) |
||||||||
Net profit attributable to the Company's |
||||||||||||
Continuing operations |
$ |
20,017 |
$ |
9,179 |
$ |
23,995 |
$ |
17,407 |
||||
Discontinued operations |
- |
102 |
5,893 |
923 |
||||||||
Total |
$ |
20,017 |
$ |
9,281 |
$ |
29,888 |
$ |
18,330 |
||||
Diluted net profit per share attributable to the |
||||||||||||
Continuing operations |
$ |
0.79 |
$ |
0.29 |
$ |
0.83 |
$ |
0.52 |
||||
Discontinued operations |
- |
* |
0.20 |
0.03 |
||||||||
Total |
$ |
0.79 |
$ |
0.29 |
$ |
1.03 |
$ |
0.55 |
||||
Shares used in diluted net profit per share |
25,185,321 |
31,516,581 |
28,820,976 |
33,482,371 |
||||||||
* Diluted net profit 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 year ended December 31, 2015 and 2014 was as follows: |
||||||||||||
Three months ended December 31, |
Year ended December 31, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||
Continuing operations |
$ |
61,617 |
$ |
60,105 |
$ |
171,025 |
$ |
179,282 |
||||
Discontinued operations |
- |
2,762 |
4,776 |
18,930 |
||||||||
$ |
61,617 |
$ |
62,867 |
$ |
175,801 |
$ |
198,212 |
|||||
Note: 2. Online and other media services consists of: |
||||||||||||
Three months ended December 31, |
Year ended December 31, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||
Online services |
$ |
15,296 |
$ |
17,983 |
$ |
64,421 |
$ |
75,895 |
||||
Print services |
1,999 |
1,755 |
5,821 |
6,535 |
||||||||
$ |
17,295 |
$ |
19,738 |
$ |
70,242 |
$ |
82,430 |
|||||
Note: 3. 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, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||
Sales |
$ |
116 |
$ |
123 |
$ |
418 |
$ |
409 |
||||
Community and content |
23 |
21 |
88 |
16 |
||||||||
General and administrative |
316 |
319 |
1,418 |
1,215 |
||||||||
Information and technology |
44 |
45 |
225 |
217 |
||||||||
$ |
499 |
$ |
508 |
$ |
2,149 |
$ |
1,857 |
|||||
Note: 4. General and administrative expenses consist of: |
||||||||||||
Three months ended December 31, |
Year ended December 31, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||
General and administrative expenses before |
$ |
9,890 |
$ |
9,345 |
$ |
37,290 |
$ |
36,343 |
||||
Amortization of intangible assets |
1,250 |
994 |
4,314 |
6,873 |
||||||||
Impairment charge on intangible assets |
- |
4 |
- |
2,242 |
||||||||
Foreign exchange losses |
485 |
1,260 |
2,093 |
2,546 |
||||||||
$ |
11,625 |
$ |
11,603 |
$ |
43,697 |
$ |
48,004 |
|||||
Note: 5. Net Profit from discontinued operations, net of income tax consist of: |
||||||||||||
Three months ended December 31, |
Year ended December 31, |
|||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||
Profit on sale of subsidiary |
$ |
- |
$ |
- |
$ |
6,382 |
$ |
- |
||||
Income tax expense |
- |
- |
(361) |
- |
||||||||
Profit on sale of subsidiary, net of income tax |
- |
- |
6,021 |
- |
||||||||
Profit /(loss) from discontinued operations, net of income tax |
- |
(40) |
(392) |
1,982 |
||||||||
$ |
- |
$ |
(40) |
$ |
5,629 |
$ |
1,982 |
|||||
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, |
|||||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||||
IFRS diluted net profit per share |
$ |
0.79 |
$ |
0.29 |
$ |
1.03 |
$ |
0.55 |
||||||
IFRS Net Profit |
$ |
20,017 |
$ |
9,281 |
$ |
29,888 |
$ |
18,330 |
||||||
Non-cash stock based compensation expense (Note 1) |
499 |
508 |
2,149 |
1,857 |
||||||||||
Amortization of intangibles (Note 2) |
34 |
86 |
381 |
594 |
||||||||||
Impairment of goodwill and intangibles (Note 3) |
- |
4 |
- |
1,682 |
||||||||||
Profit on sale of subsidiary (Note 4) |
- |
- |
(6,021) |
- |
||||||||||
Profit on sale of property, net of transaction costs & related tax expenses |
(7,550) |
- |
(7,550) |
- |
||||||||||
Non-IFRS Net Profit |
$ |
13,000 |
$ |
9,879 |
$ |
18,847 |
$ |
22,463 |
||||||
Non-IFRS diluted net profit per share |
$ |
0.52 |
$ |
0.31 |
$ |
0.65 |
$ |
0.67 |
||||||
Total shares used in non-IFRS diluted net profit |
||||||||||||||
per share calculations |
25,185,321 |
31,516,581 |
28,820,976 |
33,482,371 |
||||||||||
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. |
||||||||||||||
(4) Profit on sale of subsidiary is net of related tax. |
||||||||||||||
GLOBAL SOURCES LTD. AND SUBSIDIARIES |
||||||||||||||
ADJUSTED EBITDA RECONCILIATION |
||||||||||||||
(In U.S. Dollars Thousands) |
||||||||||||||
Three months ended December 31, |
Year ended December 31, |
|||||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||||
IFRS profit from operations including discontinued operations |
$ |
21,640 |
$ |
9,044 |
$ |
27,804 |
$ |
20,170 |
||||||
Depreciation and amortization including discontinued operations |
2,623 |
2,614 |
10,326 |
13,061 |
||||||||||
EBITDA |
24,263 |
11,658 |
38,130 |
33,231 |
||||||||||
Non-cash stock based compensation expense |
499 |
508 |
2,149 |
1,857 |
||||||||||
Impairment of goodwill and intangibles |
- |
4 |
- |
2,242 |
||||||||||
Profit on sale of property, net of transaction costs |
(9,791) |
- |
(9,791) |
- |
||||||||||
Adjusted EBITDA including discontinued operations |
$ |
14,971 |
$ |
12,170 |
$ |
30,488 |
$ |
37,330 |
||||||
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, |
|||||
2016 |
2015 |
|||||
Revenue from continuing operations |
$78.0 |
to |
$80.0 |
$85.9 |
||
IFRS EPS from continuing operations |
$0.13 |
to |
$0.17 |
$0.28 |
||
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 |
|||
Non-IFRS diluted net income per share from continuing operations |
$0.18 |
to |
$0.22 |
$0.32 |
||
Total shares used in non-IFRS diluted net income |
||||||
per share calculations |
25,400,000 |
25,400,000 |
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. |
||||||
For financial matrix, please visit: http://photos.prnasia.com/prnk/20160317/8521601731
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 |
Logo - http://photos.prnewswire.com/prnh/20030303/LNM011LOGO-b
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