- Posted GAAP EPS of $0.11 and Non-GAAP EPS of $0.15 -
- Increased cash and securities to $143.7 million with no debt -
NEW YORK, Aug. 17 /PRNewswire-Asia-FirstCall/ -- Global Sources Ltd. (Nasdaq: GSOL) ( http://www.globalsources.com ) reported financial results for the second quarter ended June 30, 2009.
(Logo: http://www.prnasia.com/sa/200708071747.jpg )
Global Sources' chairman and CEO, Merle A. Hinrichs, said: "As anticipated, during the quarter Global Sources' business continued to be affected by the slowdown in exports from mainland China and the rest of Asia. As such, we managed the business prudently, delivering profit of $5.1 million on revenue of $54.2 million as well as improving our already robust balance sheet.
"We continue to focus on addressing our customers' core needs by providing a complete product offering of online, trade shows and print that addresses all stages of the buying process. Although we are carefully managing our costs, we are also focused on enhancing our overall market position to achieve top and bottom line growth when the economic environment improves," concluded Hinrichs.
Financial highlights -- Second quarter: 2009 compared to 2008
-- Revenue was $54.2 million, compared to $63.7 million.
-- Online revenue was $22.0 million, compared to $24.1 million.
-- Exhibitions revenue was $24.0 million, compared to $25.3 million.
-- Print revenue was $7.1 million, compared to $12.8 million.
-- Revenue from mainland China was $39.3 million, compared to
$42.0 million.
-- GAAP net income was $5.1 million, or $0.11 per diluted share, which
included a non-cash stock based compensation (SBC) expense of $1.7
million based on the June 30, 2009 stock price of $7.21. For the second
quarter of 2008, GAAP net income was $8.4 million, or $0.16 per diluted
share, which included a $1.5 million in non-cash SBC expense based on
the June 30, 2008 stock price of $15.18.
-- Non-GAAP net income was $6.8 million, or $0.15 per diluted share,
compared to $9.9 million, or $0.19 per diluted share, for the second
quarter of 2008.
-- Total deferred income and customer prepayments were $72.8 million as at
June 30, 2009, compared to $86.8 million as at June 30, 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.
Financial highlights -- Six Months Ended June 30: 2009 compared to 2008
-- Revenue was $89.0 million, compared to $104.3 million.
-- GAAP net income was $6.3 million, or $0.14 per diluted share, compared
to $16.6 million, or $0.32 per diluted share.
-- Non-GAAP net income was $8.5 million, or $0.19 per diluted share,
compared to $16.5 million, or $0.32 per diluted share, for the six
months ended June 30, 2008.
Global Sources' CFO, David Gillan, said: "Although revenue continues to be challenged, we are managing the business through this cycle with the objective of continued profitability. Regarding costs, we reduced discretionary spending and delayed infrastructure investments. As a result, total operating expenses declined by 9% in the second quarter, as compared to the same period last year.
"In the second quarter, we grew our cash position to $143.7 million and continued to benefit from a strong balance sheet that includes no short-term or long-term bank debt. In the third quarter of 2009, we anticipate revenue and earnings to continue to be impacted by the difficult economic situation, and those results will be compared to a very strong third quarter in 2008."
Recent Corporate Highlights
-- Held China Sourcing Fairs in Dubai in June. The event featured over
1,100 booths, representing 40% growth compared to last year.
-- Held six China Sourcing Fairs and an India Sourcing Fair in April and
early May at the AsiaWorld-Expo in Hong Kong. Many of the world's top
buying organizations attended including Carrefour, Coles Group, Dollar
General, LG Sourcing, Li & Fung, Marks & Spencer, Otto International,
Samsung, Sears, Staples and The Home Depot.
-- Twenty-four group and custom Private Sourcing Events were held in June
and July in mainland China, India, Russia and Vietnam. Participating
buyers included A.R.E.N.A., Atico, Auto Audio Center, BTK, Casino,
Groupe Adeo, El Corte Ingles, ICA, M. Video, LPP, Lowe's, Pacific
Brands, RadioShack, Rolsen, Sears, Test Rite, The Home Depot and
ThreeSixty Sourcing.
-- Appointed David Gillan as Chief Financial Officer effective July 1,
following the retirement of Eddie Heng. Mr. Heng remains on the board
as a director.
-- Achieved record lead generation, which is measured as requests for
information (RFIs) from buyers to suppliers through Global Sources
Online. There were more than 81 million RFIs during the 12 months ended
June 30, 2009, up by 124% compared to the same period last year.
-- Increased Global Sources' independently certified community of active
buyers to more than 829,000 at the end of the second quarter, 14%
higher than the same time last year.
Conference call for Global Sources second quarter 2009 earnings
Chairman and CEO Merle A. Hinrichs and CFO David Gillan are scheduled to conduct a conference call at 8:00 a.m. ET on August 17, 2009 (8:00 p.m. on August 17, 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 16846155; 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 August 24, 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 16846155#. For those in the Hong Kong area, the replay dial-in number is (852) 3011-4541, and the pass code is 16846155#.
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 829,000 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 81 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 60 cities worldwide. In mainland China, Global Sources has over 2,500 team members in more than 40 locations, and a community of over 1 million registered online users and magazine readers for its 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
June 30, December 31,
2009 2008
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $86,799 $70,225
Term deposits with banks 50,961 --
Available-for-sale securities 5,927 60,786
Accounts receivable, net 3,600 6,025
Receivables from sales representatives 5,531 5,574
Inventory 769 1,306
Prepaid expenses and other current assets 13,405 16,513
Deferred tax assets 149 28
Total Current Assets 167,141 160,457
Property and equipment, net 80,326 82,657
Long term investments 100 100
Deferred tax assets 273 323
Other noncurrent assets 2,559 1,561
Total Assets $250,399 $245,098
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $8,622 $10,117
Deferred income and customer prepayments 67,482 73,636
Accrued liabilities 12,774 11,579
Income taxes payable 424 261
Total Current Liabilities 89,302 95,593
Deferred income and customer prepayments 5,278 3,044
Deferred tax liability 210 318
Total Liabilities 94,790 98,955
Shareholders' equity:
Common shares, US$0.01 par value;
75,000,000 shares authorized;
51,418,330 (2008: 51,376,335) shares
issued and 44,543,330
(2008: 44,501,335) outstanding 514 514
Additional paid in capital 136,163 133,922
Treasury shares, at cost -- 6,875,000
(2008: 6,875,000) shares (50,000) (50,000)
Retained earnings 61,548 55,259
Accumulated other comprehensive income 2,527 2,225
Total Company Shareholders' Equity 150,752 141,920
Non-controlling interest 4,857 4,223
Total Equity 155,609 146,143
Total Liabilities and Equity $250,399 $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 Six months ended
June 30, June 30,
2009 2008 2009 2008
(Unaudited) (Unaudited)(Unaudited) (Unaudited)
Revenue:
Online and other media
services (Note 1) $29,156 $36,884 $58,651 $70,416
Exhibitions 23,983 25,259 28,471 31,220
Miscellaneous 1,081 1,517 1,886 2,638
54,220 63,660 89,008 104,274
Operating Expenses:
Sales (Note 2) 19,995 20,557 33,733 32,873
Event production 8,892 10,074 9,713 11,079
Community (Note 2) 7,892 9,406 13,089 15,449
General and
administrative
(Note 2) 11,323 12,839 22,918 24,067
Online services
development
(Note 2) 1,353 1,502 2,764 2,981
Amortization of
software costs 38 57 80 97
Total Operating Expenses 49,493 54,435 82,297 86,546
Income from Operations 4,727 9,225 6,711 17,728
Interest and dividend
income 348 649 413 1,946
Foreign exchange gains
(losses), net 66 (1,039) (27) (1,295)
Income before Income Taxes 5,141 8,835 7,097 18,379
Income Tax Expense (36) (188) (174) (421)
Net Income $5,105 $8,647 $6,923 $17,958
Net income attributable to
non-controlling interest (13) (227) (634) (1,333)
Net Income Attributable to
the Company $5,092 $8,420 $6,289 $16,625
Diluted net income per
share attributable to the
Company's shareholders $0.11 $0.16 $0.14 $0.32
Shares used in diluted net
income per share
calculations 45,729,535 52,298,597 45,700,362 52,181,571
Note: 1. Online and other media services consists of:
Three months ended Six months ended
June 30, June 30,
2009 2008 2009 2008
(Unaudited) (Unaudited)(Unaudited) (Unaudited)
Online services $22,054 $24,104 $44,024 $46,034
Print services 7,102 12,780 14,627 24,382
$29,156 $36,884 $58,651 $70,416
Note: 2. Non-cash compensation expenses associated with the employee
equity compensation plans, Global Sources Directors Share
Grant Award Plan and Directors Purchase Plan included under
various categories of expenses are as follows:
Three months ended Six months ended
June 30, June 30,
2009 2008 2009 2008
(Unaudited) (Unaudited)(Unaudited) (Unaudited)
Sales $831 $585 $840 $(808)
Community 142 165 149 180
General administrative 640 647 1,076 400
Online services development 102 77 176 125
$1,715 $1,474 $2,241 $(103)
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 ended Six months ended
June 30, June 30,
2009 2008 2009 2008
GAAP diluted EPS $0.11 $0.16 $0.14 $0.32
GAAP Net Income $5,092 $8,420 $6,289 $16,625
Non-cash stock based
compensation expense /
(credit) (Note 1) 1,715 1,474 2,241 (103)
Non-GAAP Net Income $6,807 $9,894 $8,530 $16,522
Non-GAAP diluted net
income per share $0.15 $0.19 $0.19 $0.32
Total shares used in non-
GAAP diluted net income
per share calculations 45,729,535 52,298,597 45,700,362 52,181,571
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/20090817/Matrix.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
