omniture

Global Sources reports third quarter 2009 results

2009-11-12 13:55 789

- Posted GAAP EPS of $0.03 and Non-GAAP EPS of $0.05 -

- Increased cash and securities to $155.2 million with no debt -

NEW YORK, Nov. 12 /PRNewswire-Asia-FirstCall/ -- Global Sources Ltd. (Nasdaq: GSOL) ( http://www.globalsources.com ) reported financial results for the third quarter ended September 30, 2009.

(Logo: http://www.prnasia.com/sa/200708071747.jpg )

Global Sources' chairman and CEO, Merle A. Hinrichs, said: "As we expected, third quarter revenue was impacted by the difficult global trade environment. However, we are encouraged by an increase in sourcing and marketing activity, most particularly at our recently completed China Sourcing Fairs in Hong Kong. Accordingly, we are confident that our strong balance sheet, enhanced efficiencies, and an experienced and extensive sales representation network have us well positioned for the anticipated improvement in trade in 2010."

Financial highlights -- Third quarter: 2009 compared to 2008

-- Revenue was $30.6 million, compared to $37.6 million.

* Online revenue was $20.9 million, compared to $23.5 million.

* Exhibitions revenue was $901,000, compared to $511,000.

* Print revenue was $7.9 million, compared to $11.9 million.

* Revenue from mainland China was $21.8 million, compared to $24.3

million.

-- GAAP net income, including a non-cash stock based compensation (SBC)

expense of $940,000, was $1.2 million, or $0.03 per diluted share,

compared to third quarter 2008 GAAP net income of $2.3 million or $0.04

per diluted share, which included a non-cash SBC credit of $379,000.

-- Non-GAAP net income was $2.1 million, or $0.05 per diluted share,

compared to $1.9 million, or $0.04 per diluted share, for the third

quarter of 2008.

-- Total deferred income and customer prepayments were $89.3 million as

at September 30, 2009, compared to $99.2 million as at September 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, 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 -- Nine Months Ended September 30: 2009 compared to 2008

-- Revenue was $119.6 million, compared to $141.9 million.

-- GAAP net income, including a non-cash SBC expense of $3.2 million, was

$7.5 million, or $0.16 per diluted share, compared to third quarter

2008 GAAP net income of $18.9 million or $0.36 per diluted share, which

included a non-cash SBC credit of $482,000.

-- Non-GAAP net income was $10.7 million, or $0.23 per diluted share,

compared to $18.4 million, or $0.35 per diluted share.

Global Sources' CFO, David Gillan, said: "We have managed our costs effectively and continued to grow our cash position, which reached $155.2 million at the end of the third quarter. Our fourth quarter revenue is expected to be impacted by the very difficult selling environment that existed between the fourth quarter of 2008 and the third quarter of 2009. Looking ahead, while visibility on our revenue remains low, business conditions appear to have stabilized. We are hopeful this should translate into improved financial performance in 2010."

Recent Corporate Highlights

-- Appointed Spenser Au as Deputy Chief Executive Officer effective

October 15th. Over his 30 years with Global Sources, Au has held

various senior positions and was most recently President of Asian

Sales.

-- Conducted seven China Sourcing Fairs and one India Sourcing Fair in

October in Hong Kong, with over 6,620 booths from 15 countries and

regions.

-- Private Sourcing Events were held from July 1st through October 31st

for 118 sourcing teams from very large buying organizations including

Sears, RadioShack, Staples, Carrefour, LG Sourcing, Li & Fung and The

Home Depot.

-- Announced the scheduled launch of China Sourcing Fairs in Johannesburg,

South Africa in December 2010. Also, the upcoming shows in Mumbai have

sold out and are expected to feature more than 800 booths, an increase

of 120% compared to 2008.

-- Held the 14th IIC-China Conference & Exhibition fall edition for the

first time in Dongguan and Wuhan, and for the second time in Chengdu.

There were nearly 300 booths including Analog Devices, Linear

Technology and Texas Instruments.

-- Signed a cooperation agreement with the Vietnam Chamber of Commerce

and Industry to promote Vietnam-made home product exports.

-- Generated 96 million requests for information (RFIs) from buyers to

suppliers through Global Sources Online during the 12 months ended

September 30, 2009, up by 120% compared to the same period last year.

-- Increased Global Sources' independently certified community of active

buyers to more than 854,000 at the end of the third quarter, 14% higher

than the same time last year.

Conference call for Global Sources third 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 November 12, 2009 (9:00 p.m. on November 12, 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 the 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 36252532; 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 November 19, 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 36252532#. For those in the Hong Kong area, the replay dial-in number is (852) 3011-4541, and the pass code is 36252532#.

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 854,000 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 4.5 million products and more than 247,000 suppliers annually through 14 online marketplaces, 13 monthly magazines, over 100 sourcing research reports and 12 specialized trade shows which run 30 times a year across 10 cities.

Suppliers receive more than 96 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 about 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 to Follow --

GLOBAL SOURCES LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

At At

September 30, December 31,

2009 2008

(Unaudited)

ASSETS

Current Assets:

Cash and cash equivalents $88,821 $70,225

Term deposits with banks 60,088 --

Available-for-sale securities 6,337 60,786

Accounts receivable, net 3,870 6,025

Receivables from sales representatives 8,076 5,574

Inventory 650 1,306

Prepaid expenses and other current assets 18,592 16,513

Deferred tax assets 165 28

Total Current Assets 186,599 160,457

Property and equipment, net 78,888 82,657

Long term investments 100 100

Deferred tax assets 277 323

Other noncurrent assets 2,809 1,561

Total Assets $268,673 $245,098

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Accounts payable $7,734 $10,117

Deferred income and customer prepayments 85,208 73,636

Accrued liabilities 12,836 11,579

Income taxes payable 524 261

Total Current Liabilities 106,302 95,593

Deferred income and customer prepayments 4,135 3,044

Deferred tax liability 169 318

Total Liabilities 110,606 98,955

Shareholders' equity:

Common shares, US$0.01 par value; 75,000,000

shares authorized; 51,419,540 (2008: 51,376,335)

shares issued and 44,544,540 (2008: 44,501,335)

outstanding 514 514

Additional paid in capital 136,969 133,922

Treasury shares, at cost - 6,875,000 (2008:

6,875,000) shares (50,000) (50,000)

Retained earnings 62,733 55,259

Accumulated other comprehensive income 2,959 2,225

Total Company Shareholders' Equity 153,175 141,920

Non-controlling interest 4,892 4,223

Total Equity 158,067 146,143

Total Liabilities and Equity $268,673 $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 Nine months ended

September 30, September 30,

2009 2008 2009 2008

(Unaudited) (Unaudited) (Unaudited) (Unaudited)

Revenue:

Online and other media

services (Note 1) $28,780 $35,350 $87,431 $105,766

Exhibitions 901 511 29,372 31,731

Miscellaneous 931 1,716 2,817 4,354

30,612 37,577 119,620 141,851

Operating Expenses:

Sales (Note 2) 12,087 16,036 45,820 48,909

Event production 319 280 10,032 11,359

Community (Note 2) 4,796 5,976 17,885 21,425

General and administrative

(Note 2) 11,057 11,742 33,975 35,809

Online services development

(Note 2) 1,408 1,549 4,172 4,530

Amortization of software

costs 26 50 106 147

Total Operating Expenses 29,693 35,633 111,990 122,179

Income from Operations 919 1,944 7,630 19,672

Interest and dividend

income 312 670 725 2,616

Foreign exchange gains

(losses), net 85 (24) 58 (1,319)

Income before Income Taxes 1,316 2,590 8,413 20,969

Income Tax Expense (96) (140) (270) (561)

Net Income $1,220 $2,450 $8,143 $20,408

Net income attributable to

non-controlling interest (35) (175) (669) (1,508)

Net Income Attributable to

the Company $1,185 $2,275 $7,474 $18,900

Diluted net income per share

attributable to the

Company's shareholders $0.03 $0.04 $0.16 $0.36

Shares used in diluted net

income per share

calculations 45,877,214 52,284,014 45,759,320 52,215,890

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

Three months ended Nine months ended

September 30, September 30,

2009 2008 2009 2008

(Unaudited) (Unaudited) (Unaudited) (Unaudited)

Online services $20,904 $23,480 $64,928 $69,514

Print services 7,876 11,870 22,503 36,252

$28,780 $35,350 $87,431 $105,766

Note: 2. Non-cash compensation expenses associated with the employee

and team member 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 Nine months ended

September 30, September 30,

2009 2008 2009 2008

(Unaudited) (Unaudited) (Unaudited) Unaudited)

Sales $213 $(582) $1,053 $(1,390)

Community 155 14 304 194

General administrative 493 136 1,569 536

Online services development 79 53 255 178

$940 $(379) $3,181 $(482)

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 Nine months ended

September 30, September 30,

2009 2008 2009 2008

GAAP EPS $0.03 $0.04 $0.16 $0.36

GAAP Net Income $1,185 $2,275 $7,474 $18,900

Non-cash stock based

compensation expense /

(credit) (Note 1) 940 (379) 3,181 (482)

Non-GAAP Net Income $2,125 $1,896 $10,655 $18,418

Non-GAAP diluted net

income per share $0.05 $0.04 $0.23 $0.35

Total shares used in non-

GAAP diluted net income

per share calculations 45,877,214 52,284,014 45,759,320 52,215,890

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/sa/attachment/2009/11/20091112752046.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

Source: Global Sources
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