- 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
