Global Sources reports third quarter 2013 results

NEW YORK, November 14, 2013 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the third quarter ended Sept. 30, 2013.

"While the current global retail environment remains challenged, our focus is to enhance the value we provide to our customers by helping them buy or sell more effectively," said Global Sources' executive chairman, Merle A. Hinrich. "In our core export business, we just celebrated the 10^th anniversary of our China Sourcing Fairs. We were pleased with the overall performance of our series of fall shows, which was led by our electronics show.

"China Sourcing Fair: Electronics & Components featured more than 4,100 booths and drew record attendance. Particularly strong was our Mobile and Wireless pavilion, which is scheduled to be spun off as an independent show along with a dedicated online vertical and magazine in 2014."

Global Sources' CFO, Connie Lai, said: "The China Sourcing Fairs in Miami and in Mumbai, India moved from the third quarter last year to the second quarter and the fourth quarter of 2013, respectively. This shift in timing of our trade shows, combined with the disappointing financial performance of the FashionSZshow in July, impacted third quarter revenues and does not reflect the long-term positive trend of our exhibitions business, and the success of our initiatives to combine the best of online with trade shows."

Financial highlights - Third quarter: 2013 compared to 2012

• Revenue was $44.8 million, as compared to $59.1 million.
  • Online revenue was $22.0 million, as compared to $30.0 million.
  • Exhibitions revenue was $17.6 million, as compared to $23.3 million
  • Print revenue was $3.4 million, as compared to $4.1 million.
• IFRS net income was $5.4 million, or $0.15 per diluted share, as compared to third quarter 2012 IFRS net income of $8.2 million, or $0.23 per diluted share.
• Non-IFRS net income was $6.1 million, or $0.17 per diluted share, as compared to $9.1 million, or $0.25 per diluted share, for the third quarter of 2012.
• Adjusted EBITDA was $11.0 million, as compared to $15.3 million for the third quarter of 2012.
• Total deferred income and customer prepayments were $105.1 million as at Sept. 30, 2013, as compared to $115.4 million as at Sept. 30, 2012.

Financial highlights - Nine Months Ended Sept. 30: 2013 compared to 2012 - in accordance with IFRS

• Revenue was $137.5 million, as compared to $164.8 million.
• IFRS net income was $27.8 million, or $0.77 per diluted share, as compared to $21.0 million, or $0.59 per diluted share.
• Non-IFRS net income was $19.3 million, or $0.54 per diluted share, as compared to $23.7 million, or $0.66 per diluted share, for the nine months ended Sept. 30, 2012.
• Adjusted EBITDA was $27.4 million, as compared to $33.5 million for the nine months ended Sept. 30, 2012.

Lai added, "We continue to generate cash and our balance sheet remains strong. We closed the quarter with a cash and securities position of $145.9 million, as compared to $110.8 million at the end of September 2012, and we continue to have no debt.

"We are reaffirming our guidance. For the second half of 2013, we expect the revenue mix to range between 40% and 41% for online, 50% and 51% for exhibitions, 5% and 6% for print, and approximately 3% for miscellaneous. This compares to a second half 2012 revenue mix of approximately 46% for online, 44% for exhibitions, 7% for print and 3% for miscellaneous."

Financial expectations for the second half of 2013 under IFRS

• For the second half of 2013 ending Dec. 31, 2013:
  • Revenue is expected to be in the range of $101.0 million to $103.0 million, as compared to $126.0 million for the second half of 2012.
  • IFRS EPS is expected to be in the range of $0.32 to $0.36, as compared to $0.54 per diluted share in the second half of 2012. SBC and the amortization of intangibles as it relates to certain equity compensation plans are estimated to be an expense of $0.04 per diluted share for the second half of 2013.
  • Non-IFRS EPS is expected to be in the range of $0.36 to $0.40, as compared to $0.63 per diluted share for the same period in 2012.
  • Adjusted EBITDA is expected to be between $19.7 million and $20.9 million, as compared to $29.7 million in the second half of 2012.

Recent Corporate Highlights

• Organized its series of fall shows with more than 6,800 booths in October at Hong Kong's AsiaWorld-Expo. Total attendance exceeded 63,000 and included buyers from more than 150 countries and territories.
• China Sourcing Fair: Electronics & Components featured more than 4,100 booths and drew record attendance.
• Held the China International Optoelectronic Expo (CIOE) in September featuring more than 3,200 exhibitors.
• The second annual China Sourcing Fairs in Sao Paulo, Brazil were held in September. The Fairs were the largest expositions of China-made products in Brazil, featuring more than 950 booths. Total attendance exceeded 5,400 and included buyers from 24 countries. The Fairs are managed by Milton Exhibits under license from Global Sources.
• The 13^th China International Fashion Brand Fair - Shenzhen (FashionSZshow), the largest and most influential fashion exhibition in southern China, was held in Shenzhen in July.
• Private Sourcing Events were held from July through October for more than 120 sourcing teams from very large buying organizations including Auchan, Brookstone, El Corte Ingles, Falabella, Future Group, Home Retail Group, IKEA, Intelbras, Kesa Electricals, Kingfisher, the METRO GROUP and others. These events created more than 700 high quality, one-on-one selling opportunities for Global Sources suppliers.

Conference call for Global Sources third quarter 2013 earnings

Executive Chairman Merle A. Hinrich and CFO Connie Lai are scheduled to conduct a conference call at 8:00 a.m. ET on Nov. 14, 2013 (9:00 p.m. on Nov. 14, 2013 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 4644710 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 Nov. 22, 2013. To listen to the telephone replay dial (800) 406-7325 or dial (1-303) 590-3030 outside the United States, and enter pass code 4644710. For those in the Hong Kong area, the replay dial-in number is (852) 3056-2777, and the pass code is 4644710.

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 4 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, 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.

For financial matrix, please visit: http://www.prnasia.com/sa/attachment/2013/11/20131114113835308323.pdf