omniture

Global Sources reports third quarter 2014 results

-- Reported third quarter revenue of $42.5 million --
-- Posted IFRS EPS of $0.06 and non-IFRS EPS of $0.08 --
-- Reaffirms guidance for the second half of 2014 --
2014-11-13 14:00 1452

NEW YORK, November 13, 2014 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the third quarter ended Sept. 30, 2014.

Global Sources Logo

"In the third quarter, our exhibitions business featured a mix of shows serving the international and mainland China domestic buying communities, including our inaugural China Sourcing Fairs in Jakarta, Indonesia in August," stated Merle A. Hinrich, Global Sources' executive chairman. "Several key events for the mainland China domestic market were held in the third quarter, which included: IIC-China; the China International Optoelectronic Expo (CIOE); the Global Sourcing Fair: Mobile & Wireless; and the FashionSZshow in Shenzhen.

"In October, we completed our fall China Sourcing Fairs for the international export market. Attendance totaled 75,000 and the events featured more than 7,500 booths. Opening the series was our Electronics & Components show, focused on electronics for the home, automotive and office, and our new Mobile Electronics show, which featured all the latest personal electronics products: smartphones, tablets, wireless products, wearables and accessories. This comprehensive offering for buyers was a tremendous success, with the two shows combined featuring some 5,200 booths and more than 52,000 buyers from 148 countries, an increase of more than 25 percent in booths and more than 36 percent in traffic compared to the spring shows. The second phase encompassed gifts and home products while the third phase was focused on fashion accessories and apparel. Overall, we are pleased with the long-term positive trend of our exhibitions business."

Financial highlights -- Third quarter: 2014 compared to 2013

  • Revenue was $42.5 million, as compared to $44.8 million.
    • Online revenue was $20.3 million, as compared to $22.0 million.
    • Exhibitions revenue was $17.6 million for both periods.
    • Print revenue was $2.8 million, as compared to $3.4 million.
  • IFRS net income was $1.9 million, or $0.06 per diluted share, as compared to third quarter 2013 IFRS net income of $5.4 million, or $0.15 per diluted share.
  • Non-IFRS net income was $2.6 million, or $0.08 per diluted share, as compared to $6.1 million, or $0.17 per diluted share, for the third quarter of 2013.
  • Adjusted EBITDA was $7.4 million, as compared to $11.0 million for the third quarter of 2013.
  • Total deferred income and customer prepayments were $106.8 million as at Sept. 30, 2014, as compared to $105.1 million as at Sept. 30, 2013.

Financial highlights -- Nine Months Ended Sept. 30: 2014 compared to 2013

  • Revenue was $135.3 million, as compared to $137.5 million.
  • IFRS net income was $9.0 million, or $0.26 per diluted share, as compared to $27.8 million, or $0.77 per diluted share.
  • Non-IFRS net income was $12.6 million, or $0.37 per diluted share, as compared to $19.3 million, or $0.54 per diluted share, for the nine months ended Sept. 30, 2013.
  • Adjusted EBITDA was $25.2 million, as compared to $27.4 million for the nine months ended Sept. 30, 2013.

Global Sources' CFO, Connie Lai, stated: "We are reaffirming our guidance 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."

Financial expectations for the second half of 2014 under IFRS

  • For the second half of 2014 ending Dec. 31, 2014:
    • Revenue is expected to be in the range of $102.0 million to $104.0 million, as compared to $104.8 million for the second half of 2013.
    • IFRS EPS is expected to be in the range of $0.13 to $0.17, as compared to $0.29 per diluted share in the second half of 2013. 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 2014.
    • Non-IFRS EPS is expected to be in the range of $0.18 to $0.22, as compared to $0.47 per diluted share for the same period in 2013.
    • Adjusted EBITDA is expected to be between $13.0 million and $14.2 million, as compared to $24.1 million in the second half of 2013.

Recent Corporate Highlights

  • Organized its series of fall shows with more than 7,500 booths in October at Hong Kong's AsiaWorld-Expo. Total attendance exceeded 75,000 and included buyers from more than 148 countries and territories.
  • Held the China Sourcing Fair: Electronics & Components, which featured more than 3,700 booths.
  • Held the inaugural Mobile Electronics Fair, which featured more than 1,500 booths, up 43 percent from spring, and fully launched its suite of services for the mobile electronics industry, which also include an online marketplace, a magazine, alerts and an app.
  • The China International Optoelectronic Expo (CIOE) was held in Shenzhen in September.
  • The third annual China Sourcing Fairs in Sao Paulo, Brazil were held in August.
  • Launched China Sourcing Fairs in Jakarta, Indonesia in August.
  • The 14th 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 August through the end of October for 70 sourcing teams from very large buying organizations including Auchan, Blade Group, Groupe Adeo, Kering Global Sourcing, Lojas Renner, Philips, Top Toy, etc. These events created more than 350 high-quality, one-on-one selling opportunities for Global Sources suppliers.

Conference call for Global Sources third 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 Nov. 13, 2014 (9:00 p.m. on Nov. 13, 2014 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (888) 819-8018, and non-Hong Kong international participants may dial (1-913) 312-1412. Investors in Hong Kong may participate by dialing (852) 3008-0382. The conference ID is 1137202 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. 20, 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 1137202. For those in the Hong Kong area, the replay dial-in number is (800) 901-108, and the pass code is 1137202.

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 September 30,



As at December 31,




2014



2013




(Unaudited)




ASSETS







Current assets







Cash and cash equivalents


$

87,757


$

137,359

Term deposits with banks



3,954



106

Financial assets, available-for-sale



3,954



6,367

Accounts receivables, net



2,714



3,122

Receivables from sales representatives



13,505



10,630

Inventories



214



266

Prepaid expenses and other current assets



24,108



18,544




136,206



176,394

Non-current assets







Property and equipment



64,516



49,701

Investment properties



86,924



89,615

Intangible assets



38,396



21,423

Long term investment



100



100

Deferred income tax assets



246



98

Other non-current assets



2,109



1,766




192,291



162,703

Total assets


$

328,497


$

339,097








LIABILITIES AND SHAREHOLDERS' EQUITY







Current liabilities







Accounts payable


$

10,408


$

8,779

Deferred income and customer prepayments



99,060



84,704

Accrued liabilities



21,150



19,166

Income tax liabilities



4,473



2,635




135,091



115,284

Non-current liabilities







Accounts Payable



886



-

Deferred income and customer prepayments



7,709



5,660

Deferred income tax liabilities



6,942



4,591




15,537



10,251

Total liabilities



150,628



125,535








Equity attributable to Company's shareholders







Common shares



529



525

Treasury shares



(200,089)



(150,089)

Other reserves



162,050



161,950

Retained earnings



200,643



191,594

Total Company shareholders' equity



163,133



203,980

Non-controlling interests



14,736



9,582

Total equity


$

177,869


$

213,562

Total liabilities and equity


$

328,497


$

339,097

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,





2014



2013



2014



2013





(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)


Revenue:














Online and other media services (Note 1)


$

23,081


$

25,417


$

70,787


$

79,593


Exhibitions



17,562



17,624



58,834



52,399


Miscellaneous



1,895



1,726



5,724



5,466





42,538



44,767



135,345



137,458


Operating Expenses:














Sales (Note 2)



11,766



11,153



40,056



41,418


Event production



4,533



4,431



15,352



15,081


Community and content (Note 2)



6,645



6,670



19,043



20,402


General and administrative (Note 2 & 3)



12,303



10,990



40,256



34,146


Information and technology (Note 2)



3,226



3,164



9,512



9,639


Total Operating Expenses



38,473



36,408



124,219



120,686


Profit on sale of property



-



-



-



15,410


Profit from Operations



4,065



8,359



11,126



32,182


Interest income



296



467



1,046



1,088


Gain on sale of available-for -sale securities



1



-



11



-


Interest expenses



(47)



-



(139)



-


Profit before Income Taxes



4,315



8,826



12,044



33,270


Income tax expense



(1,077)



(1,657)



(1,843)



(4,326)


Net Profit


$

3,238


$

7,169


$

10,201


$

28,944


Net (profit)/loss attributable to non-controlling
interests



(1,321)



(1,813)



(1,152)



(1,193)


Net profit attributable to the Company's
shareholders


$

1,917


$

5,356


$

9,049


$

27,751


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


$

0.06


$

0.15


$

0.26


$

0.77


Shares used in diluted net profit per share
calculations



31,487,766



36,186,254



34,166,224



36,045,545
















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




Three months ended September 30,


Nine months ended September 30,





2014



2013



2014



2013





(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)


Online services


$

20,252


$

22,046


$

62,348


$

69,710


Print services



2,829



3,371



8,439



9,883




$

23,081


$

25,417


$

70,787


$

79,593
















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 September 30,


Nine months ended September 30,





2014



2013



2014



2013





(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)


Sales


$

140


$

159


$

286


$

386


Community and content



27



28



(5)



12


General and administrative



366



368



896



971


Information and technology



52



54



172



193




$

585


$

609


$

1,349


$

1,562
















Note: 3. General and administrative expenses consist of:














Three months ended September 30,


Nine months ended September 30,





2014



2013



2014



2013





(Unaudited)



(Unaudited)



(Unaudited)



(Unaudited)


General and administrative expenses before
amortization of intangible assets, impairment
charge on intangible assets and foreign
exchange losses (gains)


$

11,083


$

10,556


$

30,350


$

30,146


Amortization of intangible assets



1,376



627



6,347



2,097


Impairment charge on intangible assets



-



-



2,238



2,531


Foreign exchange losses (gains)



(156)



(193)



1,321



(628)




$

12,303


$

10,990


$

40,256


$

34,146


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,






2014



2013



2014



2013

















IFRS EPS


$

0.06


$

0.15


$

0.26


$

0.77

















IFRS Net Profit


$

1,917


$

5,356


$

9,049


$

27,751

















Non-cash stock based compensation expense (Note 1)



585



609



1,349



1,562

















Amortization of intangibles (Note 2)



104



167



508



594

















Impairment of goodwill and intangibles (Note 3)



-



-



1,678



2,531

















Profit on sale of property, net of transaction costs & related tax expenses



-



-



-



(13,124)

















Non-IFRS Net Profit


$

2,606


$

6,132


$

12,584


$

19,314

















Non-IFRS diluted net profit per share


$

0.08


$

0.17


$

0.37


$

0.54
































Total shares used in non-IFRS diluted net profit














per share calculations



31,487,766



36,186,254



34,166,224



36,045,545

















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 September 30,


Nine months ended September 30,




2014


2013


2014


2013















IFRS profit from operations


$

4,065


$

8,359


$

11,126


$

32,182















Depreciation and amortization



2,782



2,038



10,447



6,487















EBITDA



6,847



10,397



21,573



38,669















Non-cash stock based compensation expense



585



609



1,349



1,562















Impairment of goodwill and intangibles



-



-



2,238



2,531















Profit on sale of property, net of transaction costs



-



-



-



(15,410)















Adjusted EBITDA


$

7,432


$

11,006


$

25,160


$

27,352

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/20141112/8521406752

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



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Source: Global Sources
collection