omniture

Global Sources reports third quarter 2011 results

2011-11-17 15:42 1351

NEW YORK, November 17, 2011 /PRNewswire-Asia/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the third quarter ended September 30, 2011.

"We had a solid quarter, driven by 22% growth in our online business and 17% growth in exhibitions revenue," said Global Sources' executive chairman, Merle A. Hinrichs. "At the end of October, we wrapped up our fall series of shows in Hong Kong. We had more than 7,400 booths and buyer attendance exceeded 62,000, representing 158 countries and territories.

"While buyers in the developed markets are showing some caution, we continue to expand our initiatives to help exporters increase their sales to emerging markets. Over the past few years, we have led the market by taking exhibitors to key sourcing hubs in Africa, India, the Middle East and Latin America. In the third quarter, we launched a very successful show in Miami focused on the Latin American market. Most recently, we have announced plans to launch China Sourcing Fairs in Brazil during 2012. As a result of all of these initiatives, we have expanded the quality and quantity of our buyer communities in those regions to the benefit of all of our advertisers and exhibitors."

Financial highlights -- Third quarter: 2011 compared to 2010 -- in accordance with IFRS

  • Revenue was $47.0 million, as compared to $39.5 million.
    • Online revenue was $30.4 million, as compared to $24.8 million.
    • Exhibitions revenue was $9.0 million, as compared to $7.7 million.
    • Print revenue was $6.3 million, as compared to $5.8 million.
    • Revenue from mainland China was $37.5 million, as compared to $30.7 million.
  • IFRS net income, including a non-cash stock based compensation (SBC) expense of $740,000, and amortization of intangibles as it relates to certain equity compensation plans of $191,000, was $4.0 million, or $0.11 per diluted share, as compared to third quarter 2010 IFRS net income of $2.1 million, or $0.05 per diluted share, which included a non-cash SBC expense of $695,000, and amortization of intangibles as it relates to certain equity compensation plans of $154,000.
  • Non-IFRS net income was $4.9 million, or $0.14 per diluted share, as compared to $2.9 million, or $0.07 per diluted share.
  • Adjusted EBITDA was $8.4 million, as compared to $5.8 million.
  • Total deferred income and customer prepayments were $126.7 million, as compared to $97.8 million.

Financial highlights -- Nine Months Ended September 30: 2011 compared to 2010 -- in accordance with IFRS

  • Revenue was $151.1 million, as compared to $133.6 million.
  • IFRS net income was $17.6 million, or $0.50 per diluted share, as compared to $13.9 million, or $0.32 per diluted share.
  • Non-IFRS net income was $20.1 million, or $0.57 per diluted share, as compared to $16.2 million, or $0.37 per diluted share.
  • Adjusted EBITDA was $26.8 million, as compared to $22.3 million.

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, gains or losses on acquisitions and investments, and/or impairment charges, 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 and impairment of goodwill and intangible assets.

Global Sources' CFO, Connie Lai, said: "We are reiterating our guidance for the second half of 2011 representing topline growth of 12% to 14%. Our balance sheet remains strong as we closed the third quarter with a healthy cash balance of $89.1 million following the August purchase of our new Shanghai office space."

Financial expectations for the second half of 2011 under IFRS

  • For the second half of 2011 ending December 31, 2011:
    • Revenue is expected to be in the range of $115 million to $117 million, representing an increase of 12% to 14%, as compared to $102.5 million for the second half of 2010.
    • IFRS EPS is expected to be in the range of $0.36 to $0.39, as compared to $0.36 per diluted share in the second half of 2010. SBC and the amortization of intangibles as it relates to certain equity compensation plans are estimated to be an expense of $0.05 per diluted share for the second half of 2011.
    • Non-IFRS EPS is expected to be in the range of $0.41 to $0.44, as compared to $0.39 per diluted share for the same period in 2010.
    • Adjusted EBITDA is expected to be $20.8 million, as compared to $17.9 million in the second half of 2010.

Recent Corporate Highlights

  • Organized its series of fall shows with more than 7,400 booths, representing an increase of 7% from the previous year. Total buyer attendance was up by 3% year-on-year, with 62,800 buyers participating in the 14 trade shows held in October at Hong Kong's AsiaWorld-Expo. This was also the company's first, full-scale roll out of Online Sourcing Fairs, with all the face-to-face shows now online.
  • Received two investor relations awards from IR Global Rankings for its investor relations website. This is the sixth consecutive year Global Sources has been recognized by IR Global Rankings.
  • Held Private Sourcing Events for more than 117 sourcing teams from very large buying organizations including C&A, Cencosud, Coppel, Elektra, Falabella, Groupe Zannier, Liverpool, Metro, Mothercare Group, Next, Redcats, Sears, Target Australia and TJX. These events created 775 high quality one-on-one selling opportunities for Global Sources suppliers.

Third Quarter 2011 Highlights

  • The China International Optoelectronic Expo (CIOE) was held from September 6-9 at the Shenzhen Convention and Exhibition Center, featuring more than 3,000 exhibitors. The total exhibition space was expanded to 90,000 square meters, a 20% increase from 2010.
  • Announced CEO Merle A. Hinrichs transitioned into his new role as Executive Chairman of the Board, and Deputy CEO Spenser Au assumed the role of CEO.
  • Purchased office space in Shanghai for approximately $52.7 million to provide for continuing expansion of operations in mainland China.
  • Held the first China Sourcing Fairs in Miami in July for buyers in the U.S.A. and Latin America. More than 7,600 buyers attended and viewed over 550 exhibitor booths.

Conference call for Global Sources third quarter 2011 earnings

Executive Chairman Merle A. Hinrichs and CFO Connie Lai are scheduled to conduct a conference call at 8:00 a.m. ET on November 17, 2011 (9:00 p.m. on November 17, 2011 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (877) 941-1427, and non-Hong Kong international participants may dial (1-480) 629-9664. Investors in Hong Kong may participate by dialing (852) 3009-5027. The conference ID is 4476730 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 November 24, 2011. To listen to the telephone replay dial (800) 406-7325 or dial (1-303) 590-3030 outside the United States, and enter pass code 4476730. For those in the Hong Kong area, the replay dial-in number is (852) 3056-2777, and the pass code is 4476730.

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 (http://www.globalsources.com), print and digital magazines, sourcing research reports, private sourcing events, trade shows, and online sourcing fairs.

Over 1 million international buyers, including 85 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 provides 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 40 office locations and a community of over 3 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.

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 follows-




GLOBAL SOURCES LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)








As at September 30,


As at December 31,



2011


2010



(Unaudited)



ASSETS





Current assets





Cash and cash equivalents


$ 77,110


$ 101,298

Term deposits with banks


1,786


1,411

Financial assets, available-for-sale


10,250


-

Accounts receivables


4,382


3,919

Receivables from sales representatives


7,253


8,248

Inventories


301


435

Prepaid expenses and other current assets


25,967


20,269



127,049


135,580

Non-current assets





Property and equipment


130,498


76,514

Intangible assets


12,953


10,449

Long term investment


100


100

Deferred income tax assets


314


504

Other non-current assets


3,941


2,556



147,806


90,123

Total assets


$ 274,855


$ 225,703






LIABILITIES AND SHAREHOLDERS' EQUITY



Current liabilities





Accounts payable


$ 6,776


$ 9,600

Deferred income and customer prepayments


112,221


90,617

Accrued liabilities


13,629


14,269

Income tax liabilities


1,458


650



134,084


115,136

Non-current liabilities





Deferred income and customer prepayments


14,438


6,710

Deferred income tax liabilities


1,877


1,397



16,315


8,107

Total liabilities


150,399


123,243






Equity attributable to Company's shareholders





Common shares


518


516

Treasury shares


(150,089)


(150,089)

Other reserves


150,426


146,691

Retained earnings


114,764


97,177

Total Company shareholders' equity


115,619


94,295

Non-controlling interests


8,837


8,165

Total equity


$ 124,456


$ 102,460

Total liabilities and equity


$ 274,855


$ 225,703










GLOBAL SOURCES LTD. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)








Three months ended September 30,


Nine months ended September 30,



2011


2010


2011


2010



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Revenue:









Online and other media services (Note 1)


$ 36,669


$ 30,584


$ 104,612


$ 90,489

Exhibitions


9,006


7,674


42,498


39,554

Miscellaneous


1,305


1,203


3,948


3,597



$ 46,980


$ 39,461


$ 151,058


$ 133,640

Operating Expenses:









Sales (Note 2)


17,249


15,522


55,058


48,516

Event production


2,616


2,635


13,364


13,576

Community and content (Note 2)


7,859


6,769


24,648


23,194

General and administrative (Note 2)


10,315


8,182


28,939


24,174

Information and technology (Note 2)


3,294


3,087


9,537


8,897

Total Operating Expenses


$ 41,333


$ 36,195


$ 131,546


$ 118,357

Profit from Operations


$ 5,647


$ 3,266


$ 19,512


$ 15,283

Interest income


83


67


199


425

Profit before Income Taxes


$ 5,730


$ 3,333


$ 19,711


$ 15,708

Income Tax Expense


(633)


(407)


(1,157)


(636)

Net Profit


$ 5,097


$ 2,926


$ 18,554


$ 15,072

Net profit attributable to non-controlling
interests


(1,134)


(841)


(967)


(1,127)

Net profit attributable to the Company's
shareholders


$ 3,963


$ 2,085


$ 17,587


$ 13,945

Diluted net profit per share attributable to
the Company's shareholders


$ 0.11


$ 0.05


$ 0.50


$ 0.32

Shares used in diluted net profit per share
calculations


35,482,592


39,873,952


35,387,418


43,919,109


Note: 1.

Online and other media services consists of:



Three months ended September 30,


Nine months ended September 30,



2011


2010


2011


2010



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Online services


$ 30,378


$ 24,817


$ 87,480


$ 70,659

Print services


6,291


5,767


17,132


19,830



$ 36,669


$ 30,584


$ 104,612


$ 90,489


Note: 2.

Non-cash compensation expenses associated with the several employee equity compensation plans and Global Sources Directors Share Grant Award Plan included under various categories of expenses are as follows:



Three months ended September 30,


Nine months ended September 30,



2011


2010


2011


2010



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Sales


$ 186


$ 192


$ 530


$ 351

Community and content


56


79


173


211

General and administrative


434


367


1,053


1,096

Information and technology


64


57


207


196



$ 740


$ 695


$ 1,963


$ 1,854




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 September 30,


Nine months ended September 30,




2011


2010


2011


2010











IFRS EPS


$ 0.11


$ 0.05


$ 0.50


$ 0.32











IFRS Net Profit


$ 3,963


$ 2,085


$ 17,587


$ 13,945











Non-cash stock based compensation expense (Note 1)


740


695


1,963


1,854











Amortization of intangibles (Note 2)


191


154


572


371











Non-IFRS Net Profit


$ 4,894


$ 2,934


$ 20,122


$ 16,170











Non-IFRS diluted net profit per share


$ 0.14


$ 0.07


$ 0.57


$ 0.37





















Total shares used in non-IFRS diluted net profit
per share calculations


35,482,592


39,873,952


35,387,418


43,919,109











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.



GLOBAL SOURCES LTD. AND SUBSIDIARIES
ADJUSTED EBITDA RECONCILIATION
(In U.S. Dollars Thousands)
























Three months ended September 30,


Nine months ended September 30,




2011


2010


2011


2010











IFRS profit from operations


$ 5,647


$ 3,266


$ 19,512


$ 15,283











Depreciation and amortization


1,984


1,840


5,321


5,197











EBITDA


7,631


5,106


24,833


20,480











Non-cash stock based compensation expense


740


695


1,963


1,854











Adjusted EBITDA


$ 8,371


$ 5,801


$ 26,796


$ 22,334



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,



2011


2010








Revenue


$115.0

to

$117.0


$102.5








IFRS EPS


$0.36

to

$0.39


$0.36








Non-cash stock based compensation expense (Note 1)


$0.04


$0.04


$0.03








Amortization of intangibles (Note 2)


$0.01


$0.01


$0.00








Non-IFRS diluted net income per share


$0.41

to

$0.44


$0.39








Total shares used in non-IFRS diluted net income per
share calculations


35,500,000


35,500,000


37,490,314















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://www.prnasia.com/sa/attachment/2011/11/20111117094001330857.pdf

GLOBAL SOURCES LTD. AND SUBSIDIARIES
ACTUAL GAAP TO IFRS RECONCILIATION
(In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)






















Three months


Nine months






ended September 30,


ended September 30,






2010


2010









GAAP diluted EPS




$ 0.06


$ 0.28

Shares used in GAAP diluted net income per share calculations

39,873,952


44,010,618









GAAP Net Income




$ 2,282


$ 12,121









IFRS conversion adjustments:






Revenue





43


1,847









Exhibition promotion costs



(267)


(641)









Non-cash stock based compensation expense


27


618

















IFRS Net Profit




$ 2,085


$ 13,945









IFRS diluted EPS




$ 0.05


$ 0.32

Shares used in IFRS diluted net income per share
calculations

39,873,952


43,919,109



Global Sources Press Contact in Asia

Global Sources Investor Contact in Asia

Camellia So

Suzanne Wang

Tel: +852-2555-5021

Tel: +852-2555-4747

e-mail: cso@globalsources.com

e-mail: investor@globalsources.com



Global Sources Press Contact in U.S.

Global Sources Investor Contact in U.S.

James W.W. Strachan

Mary Magnani & Cathy Mattison

Tel: +1-480-664-8309

LHA

e-mail: strachan@globalsources.com

Tel: +1-415-433-3777


e-mail: mmagnani@lhai.com



Source: Global Sources
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