NEW YORK, August 14, 2014 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the second quarter ended June 30, 2014.
Global Sources' executive chairman, Merle A. Hinrich, said: "In the second quarter, our export trade shows in Hong Kong performed very well and featured our largest-ever electronics series, including the inaugural Mobile Electronics show. Our fully integrated offering of online marketplaces and trade shows provides a broad multi-channel platform for cross border B2B trade. We are encouraged by the strength of our exhibition business as we continue to specialize and address the markets we believe offer the greatest opportunity for growth."
Financial highlights -- Second quarter: 2014 compared to 2013
Financial highlights -- Six Months Ended June 30: 2014 compared to 2013
Global Sources' CFO, Connie Lai, stated: "While our second quarter 2014 results reflect the strong performance of our electronics shows in Hong Kong, exhibition revenues were negatively impacted by the slower performance of our shows outside of Hong Kong. We also recorded a write down of approximately $1.7 million in consideration of impairment charges net of related taxes related to the China International Fashion Brand Fair -- Shenzhen (FashionSZshow). In addition, we successfully completed a cash tender offer that resulted in a cash outflow of $50.0 million. We continue to maintain a strong balance sheet with no short- or long-term debt."
Financial expectations for the second half of 2014 under IFRS
"For the second half of 2014, we expect the revenue mix to range between 36% and 37% for online, 53% and 54% for exhibitions, 5% and 6% for print, and approximately 3% for miscellaneous. This compares to a second half 2013 revenue mix of approximately 42% for online, 49% for exhibitions, 6% for print and 3% for miscellaneous," Lai concluded.
Recent Corporate Highlights
Conference call for Global Sources second 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 Aug. 14, 2014 (8:00 p.m. on Aug. 14, 2014 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (888) 438-5525, and non-Hong Kong international participants may dial (1-719) 325-2469. Investors in Hong Kong may participate by dialing (852) 3008-0380. The conference ID is 7673309 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. 21, 2014. To listen to the telephone replay dial (888) 203-1112 or dial (1-719) 457-0820 outside the United States, and enter pass code 7673309. For those in the Hong Kong area, the replay dial-in number is (800) 901-108 and the pass code is 7673309.
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 June 30, | As at December 31, | ||||||
2014 | 2013 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 87,026 | $ | 137,359 | |||
Term deposits with banks | 4,100 | 106 | |||||
Financial assets, available-for-sale | 1,377 | 6,367 | |||||
Accounts receivables, net | 2,781 | 3,122 | |||||
Receivables from sales representatives | 8,579 | 10,630 | |||||
Inventories | 293 | 266 | |||||
Prepaid expenses and other current assets | 18,271 | 18,544 | |||||
122,427 | 176,394 | ||||||
Non-current assets | |||||||
Property and equipment | 63,882 | 49,701 | |||||
Investment properties | 86,639 | 89,615 | |||||
Intangible assets | 38,546 | 21,423 | |||||
Long term investment | 100 | 100 | |||||
Deferred income tax assets | 38 | 98 | |||||
Other non-current assets | 1,592 | 1,766 | |||||
190,797 | 162,703 | ||||||
Total assets | $ | 313,224 | $ | 339,097 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 9,937 | $ | 8,779 | |||
Deferred income and customer prepayments | 93,540 | 84,704 | |||||
Accrued liabilities | 19,467 | 19,166 | |||||
Income tax liabilities | 4,221 | 2,635 | |||||
127,165 | 115,284 | ||||||
Non-current liabilities | |||||||
Accounts payable | 864 | - | |||||
Deferred income and customer prepayments | 5,467 | 5,660 | |||||
Deferred income tax liabilities | 6,389 | 4,591 | |||||
12,720 | 10,251 | ||||||
Total liabilities | 139,885 | 125,535 | |||||
Equity attributable to Company's shareholders | |||||||
Common shares | 528 | 525 | |||||
Treasury shares | (200,089) | (150,089) | |||||
Other reserves | 160,521 | 161,950 | |||||
Retained earnings | 198,726 | 191,594 | |||||
Total Company shareholders' equity | 159,686 | 203,980 | |||||
Non-controlling interests | 13,653 | 9,582 | |||||
Total equity | $ | 173,339 | $ | 213,562 | |||
Total liabilities and equity | $ | 313,224 | $ | 339,097 | |||
GLOBAL SOURCES LTD. AND SUBSIDIARIES | ||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Revenue: | ||||||||||||
Online and other media services (Note 1) | $ | 23,864 | $ | 26,217 | $ | 47,706 | $ | 54,176 | ||||
Exhibitions | 32,412 | 33,274 | 41,272 | 34,775 | ||||||||
Miscellaneous | 2,061 | 1,948 | 3,829 | 3,740 | ||||||||
58,337 | 61,439 | 92,807 | 92,691 | |||||||||
Operating Expenses: | ||||||||||||
Sales (Note 2) | 19,244 | 19,272 | 28,290 | 30,265 | ||||||||
Event production | 9,015 | 10,254 | 10,819 | 10,650 | ||||||||
Community and content (Note 2) | 6,955 | 7,547 | 12,398 | 13,732 | ||||||||
General and administrative (Note 2 & 3) | 13,825 | 13,364 | 27,953 | 23,156 | ||||||||
Information and technology (Note 2) | 3,095 | 3,161 | 6,286 | 6,475 | ||||||||
Total Operating Expenses | 52,134 | 53,598 | 85,746 | 84,278 | ||||||||
Profit on sale of property | - | 10,953 | - | 15,410 | ||||||||
Profit from Operations | 6,203 | 18,794 | 7,061 | 23,823 | ||||||||
Interest income | 333 | 347 | 750 | 621 | ||||||||
Gain on sale of available-for-sale securities | - | - | 10 | - | ||||||||
Interest expenses | (45) | - | (92) | - | ||||||||
Profit before Income Taxes | 6,491 | 19,141 | 7,729 | 24,444 | ||||||||
Income tax expense | (411) | (2,643) | (766) | (2,669) | ||||||||
Net Profit | $ | 6,080 | $ | 16,498 | $ | 6,963 | $ | 21,775 | ||||
Net (profit) / loss attributable to non-controlling interests | 907 | 276 | 169 | 620 | ||||||||
Net profit attributable to the Company's | $ | 6,987 | $ | 16,774 | $ | 7,132 | $ | 22,395 | ||||
Diluted net profit per share attributable to the | $ | 0.20 | $ | 0.46 | $ | 0.20 | $ | 0.62 | ||||
Shares used in diluted net profit per share | 35,183,171 | 36,200,567 | 35,672,551 | 36,048,346 | ||||||||
Note: 1. Online and other media services consists of: | ||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Online services | $ | 20,844 | $ | 22,689 | $ | 42,096 | $ | 47,664 | ||||
Print services | 3,020 | 3,528 | 5,610 | 6,512 | ||||||||
$ | 23,864 | $ | 26,217 | $ | 47,706 | $ | 54,176 | |||||
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 June 30, | Six months ended June 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Sales | $ | 139 | $ | 159 | $ | 146 | $ | 227 | ||||
Community and content | 27 | 25 | (32) | (16) | ||||||||
General and administrative | 347 | 374 | 530 | 603 | ||||||||
Information and technology | 50 | 54 | 120 | 139 | ||||||||
$ | 563 | $ | 612 | $ | 764 | $ | 953 | |||||
Note: 3. General and administrative expenses consist of: | ||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
General and administrative expenses before | $ | 10,241 | $ | 10,818 | $ | 19,267 | $ | 19,590 | ||||
Amortization of intangible assets | 1,510 | 694 | 4,971 | 1,470 | ||||||||
Impairment charge on intangible assets | 2,238 | 2,531 | 2,238 | 2,531 | ||||||||
Foreign exchange losses (gains) | (164) | (679) | 1,477 | (435) | ||||||||
$ | 13,825 | $ | 13,364 | $ | 27,953 | $ | 23,156 | |||||
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, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
IFRS EPS | $ | 0.20 | $ | 0.46 | $ | 0.20 | $ | 0.62 | ||||||
IFRS Net Profit | $ | 6,987 | $ | 16,774 | $ | 7,132 | $ | 22,395 | ||||||
Non-cash stock based compensation expense (Note 1) | 563 | 612 | 764 | 953 | ||||||||||
Amortization of intangibles (Note 2) | 151 | 172 | 404 | 426 | ||||||||||
Impairment of goodwill and intangibles (Note 3) | 1,678 | 2,531 | 1,678 | 2,531 | ||||||||||
Profit on sale of property, net of transaction costs & related tax expenses | - | (8,667) | - | (13,124) | ||||||||||
Non-IFRS Net Profit | $ | 9,379 | $ | 11,422 | $ | 9,978 | $ | 13,181 | ||||||
Non-IFRS diluted net profit per share | $ | 0.27 | $ | 0.32 | $ | 0.28 | $ | 0.37 | ||||||
Total shares used in non-IFRS diluted net profit | 35,183,171 | 36,200,567 | 35,672,551 | 36,048,346 | ||||||||||
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, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
IFRS profit from operations | $ | 6,203 | $ | 18,794 | $ | 7,061 | $ | 23,823 | |||||
Depreciation and amortization | 2,819 | 2,179 | 7,665 | 4,449 | |||||||||
EBITDA | 9,022 | 20,973 | 14,726 | 28,272 | |||||||||
Non-cash stock based compensation expense | 563 | 612 | 764 | 953 | |||||||||
Impairment of goodwill and intangibles | 2,238 | 2,531 | 2,238 | 2,531 | |||||||||
Profit on sale of property, net of transaction costs | - | (10,953) | - | (15,410) | |||||||||
Adjusted EBITDA | $ | 11,823 | $ | 13,163 | $ | 17,728 | $ | 16,346 | |||||
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, | |||||
2014 | 2013 | |||||
Revenue | $102.0 | to | $104.0 | $104.8 | ||
IFRS EPS | $0.13 | to | $0.17 | $0.29 | ||
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 | |||
Impairment of goodwill and intangibles | - | - | $0.14 | |||
Non-IFRS diluted net income per share | $0.18 | to | $0.22 | $0.47 | ||
Total shares used in non-IFRS diluted net income per share calculations | 31,600,000 | 31,600,000 | 36,181,032 | |||
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/20140814/8521404554-a
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 |
Logo - http://photos.prnewswire.com/prnh/20030303/LNM011LOGO-b
