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Global Sources reports fourth quarter and year-end 2012 results

- Reported fourth quarter revenue of $66.9 million -

- Reported full year 2012 revenue of $231.7 million -

- Posted IFRS EPS of $0.31 and Non-IFRS EPS of $0.37 for the fourth quarter of 2012 -

- Posted full year 2012 IFRS EPS of $0.90 and Non-IFRS EPS of $1.04 -

- Provides guidance for first half of 2013, expects revenue of $87.0 million to $89.0 million and IFRS EPS to range from $0.49 to $0.53 -

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NEW YORK, March 13, 2013 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the fourth quarter and year-ended Dec. 31, 2012.

(Logo: http://photos.prnewswire.com/prnh/20030303/LNM011LOGO-b )

Global Sources' executive chairman, Merle A. Hinrichs, said: "Our fourth quarter results were in line with our expectations and completed a solid year in a challenging market environment.

"Our focus remains on helping our buyer and supplier customers develop profitable and successful relationships. We help them find potential business partners through our various media and then meet them at our shows around the world. The attendees at our shows are a key business advantage, as we give all of our advertisers access to a highly qualified, influential and exclusive buyer community.

"Looking ahead, we expect market conditions to continue impacting our core business well into 2013. We are committed to maintaining profitability, and we have a very strong balance sheet with a solid cash position and no debt. With strong products and services, and a large and influential customer base, we are well-positioned to rebound as market conditions improve."

Financial highlights - Fourth quarter: 2012 compared to 2011

  • Revenue was $66.9 million, as compared to $74.0 million.
    • Online revenue was $28.1 million, as compared to $30.5 million.
    • Exhibitions revenue was $32.7 million, as compared to $35.5 million.
    • Print revenue was $4.2 million, as compared to $6.4 million.
  • IFRS net income was $11.2 million, or $0.31 per diluted share, as compared to fourth quarter 2011 IFRS net income of $11.9 million, or $0.33 per diluted share.
  • Non-IFRS net income was $13.3 million, or $0.37 per diluted share, as compared to $13.6 million, or $0.38 per diluted share, for the fourth quarter of 2011. 
  • Adjusted EBITDA was $14.4 million, as compared to $15.2 million for the fourth quarter of 2011.
  • Total deferred income and customer prepayments were $93.6 million as at Dec. 31, 2012, as compared to $110.1 million as at Dec.  31, 2011.

Financial highlights - Full year 2012 ended Dec. 31: 2012 compared to 2011

  • Revenue was $231.7 million, as compared to $225.1 million.
  • IFRS net income was $32.2 million, or $0.90 per diluted share, as compared to $29.5 million, or $0.83 per diluted share.  
  • Non-IFRS net income was $37.1 million, or $1.04 per diluted share, as compared to $33.7 million, or $0.95 per diluted share, for 2011. 
  • Adjusted EBITDA was $47.9 million, as compared to $42.0 million for 2011. 

Global Sources' CFO, Connie Lai, said:  "The Mumbai show moved to the third quarter of 2012 from the fourth quarter last year, which had a slight impact on this quarter's revenue. Our balance sheet remains strong as we closed the quarter with a cash and securities position of $116.3 million, as compared to $110.8 million at the end of September 2012. Our objective remains to balance cost controls with our investments in future growth.

"We expect the revenue mix for the first half to range between 50% and 51% for online, 36% and 37% for exhibitions, 7% and 8% for print, and approximately 4% for miscellaneous. This compares to a first half of 2012 revenue mix of approximately 58% for online, 31% for exhibitions, 8% for print, and 3% for miscellaneous."

Financial expectations for the first half of 2013 under IFRS

  • For the first half of 2013 ending June 30, 2013:
    • Revenue is expected to be in the range of $87.0 million to $89.0 million, representing a decrease of 16% to 18%, as compared to $105.7 million for the first half of 2012.
    • IFRS EPS is expected to be in the range of $0.49 to $0.53, as compared to $0.36 per diluted share in the first half of 2012. SBC and the amortization of intangibles as it relates to certain equity compensation plans and gain on sale of investment property, net of transaction costs and related tax expenses are estimated to be a credit of $0.36 per diluted share for the first half of 2013.
    • Non-IFRS EPS is expected to be in the range of $0.18 to $0.22, as compared to $0.41 per diluted share for the same period in 2012. 
    • Adjusted EBITDA is expected to be between $10.7 million and $12.9 million, as compared to $18.2 million in the first half of 2012.

Recent Corporate Highlights   

  • Signed agreements for the sale of two real estate properties:
    • Signed a letter of intent to sell the 46th floor of the Excellence Times Square building in Shenzhen, China, for approximately $19.3 million. The transaction is expected to close on or before May 7, 2013.
    • Signed a provisional sale and purchase agreement to sell 10 units on the 26th floor and three car parking spaces on the first floor of the Southmark building in Hong Kong, China, for approximately $9.0 million.  The transaction is expected to close on or before March 28, 2013.
  • Signed a provisional sale and purchase agreement to acquire the 21st, 22nd and 23rd floors of the Vita Tower building in Hong Kong, China, for approximately $23.6 million. The transaction is expected to close on or before March 28, 2013.
  • Private Sourcing Events were held from October 2012 through January 2013 for more than 100 sourcing teams from very large buying organizations including Amazon.com, Auchan, EI Corte Ingles, Embraco, Forever 21, Future Group, Home Retail Group, Kmart, LPP, Meijer, Monster, OfficeMax, OSRAM, Panasonic, Quiksilver, Targus, The Source, TJX, William E. Connor and Woolworths. These events created more than 600 high-quality, one-on-one selling opportunities for Global Sources suppliers.
  • Held 14 Sourcing Fairs with more than 7,100 booths in October 2012 at Hong Kong's AsiaWorld-Expo. Total attendance exceeded 61,200, and included buyers from 153 countries and territories.
  • Held its third annual China Sourcing Fairs in Johannesburg in November 2012, with 815 exhibitor booths.
  • Held Global Sourcing Fairs in Shanghai in December 2012 with more than 600 booths. Show categories included Gifts & Home Products and Fashion Accessories.
  • Received the Gold award in the December 2012 issue of The Asset's Corporate Awards for excellence in investor relations and social responsibility. The company received The Asset's Gold award in 2011 and the Titanium corporate award in 2009 and 2010.

Conference call for Global Sources fourth quarter 2012 earnings

Executive Chairman Merle A. Hinrichs and CFO Connie Lai are scheduled to conduct a conference call at 8:00 a.m. ET on March 13, 2013 (8:00 p.m. on March 13, 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 4593683 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 March 21, 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 4593683. For those in the Hong Kong area, the replay dial-in number is (852) 3056-2777, and the pass code is 4593683.

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.

More than 1 million international buyers, including 90 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 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, gains 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 and impairment of goodwill and intangible assets.

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 December 31,


As at December 31,



2012


2011



(Unaudited)



ASSETS







Current assets







Cash and cash equivalents


$

104,631


$

81,903

Term deposits with banks



4,184



2,764

Financial assets, available-for-sale



7,472



13,250

Accounts receivables, net



4,242



4,711

Receivables from sales representatives



7,773



6,523

Inventories



410



230

Prepaid expenses and other current assets



18,396



20,895




147,108



130,276

Non-current assets







Property and equipment



30,442



55,761

Investment properties



97,377



75,370

Intangible assets



33,136



11,946

Long term investment



100



100

Deferred income tax assets



244



325

Other non-current assets



2,762



2,552




164,061



146,054

Total assets


$

311,169


$

276,330








LIABILITIES AND SHAREHOLDERS' EQUITY





Current liabilities







Accounts payable


$

12,531


$

7,698

Deferred income and customer prepayments



84,540



101,841

Accrued liabilities



20,409



17,723

Income tax liabilities



1,225



714




118,705



127,976

Non-current liabilities







Deferred income and customer prepayments



9,062



8,290

Deferred income tax liabilities



6,090



1,510




15,152



9,800

Total liabilities



133,857



137,776








Equity attributable to Company's shareholders







Common shares



521



518

Treasury shares



(150,089)



(150,089)

Other reserves



156,629



152,591

Retained earnings



158,859



126,653

Total Company shareholders' equity



165,920



129,673

Non-controlling interests



11,392



8,881

Total equity


$

177,312


$

138,554

Total liabilities and equity


$

311,169


$

276,330
















 


GLOBAL SOURCES LTD. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

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












Three months ended December 31,


Year ended December 31,



2012


2011


2012


2011



(Unaudited)


(Unaudited)


(Unaudited)



Revenue:













    Online and other media services (Note 1)


$

32,353


$

36,863


$

136,101


$

141,475

    Exhibitions



32,716



35,475



88,782



77,973

    Miscellaneous



1,873



1,669



6,857



5,617



$

66,942


$

74,007


$

231,740


$

225,065

Operating Expenses:













    Sales (Note 2)



23,102



26,305



80,354



81,363

    Event production



9,716



11,273



26,250



24,637

    Community and content (Note 2)



8,628



9,430



32,696



34,078

    General and administrative (Note 2)



12,056



11,721



44,281



40,660

    Information and technology (Note 2)



3,223



3,070



13,188



12,607

Total Operating Expenses


$

56,725


$

61,799


$

196,769


$

193,345

Profit from Operations


$

10,217


$

12,208


$

34,971


$

31,720

    Interest income



312



161



1,044



360

    Share of loss of associate 



-



-



(24)



-

    Impairment loss on investment in associate



-



-



(302)



-

Profit before Income Taxes


$

10,529


$

12,369


$

35,689


$

32,080

Income tax expense



(694)



(456)



(2,744)



(1,613)

Net Profit


$

9,835


$

11,913


$

32,945


$

30,467

Net profit attributable to non-controlling
        interests



1,342



(24)



(739)



(991)

Net profit attributable to the Company's 

   shareholders


$

11,177


$

11,889


$

32,206


$

29,476

Diluted net profit per share attributable

   to the Company's shareholders


$

0.31


$

0.33


$

0.90


$

0.83

Shares used in diluted net profit per share

   calculations



35,870,511



35,501,296



35,742,495



35,385,218









Note:    1.     

Online and other media services consists of:
















Three months ended December 31,


Year ended December 31,



2012


2011


2012


2011



(Unaudited)


(Unaudited)


(Unaudited)



Online services


$

28,114


$

30,466


$

119,011


$

117,946

Print services



4,239



6,397



17,090



23,529



$

32,353


$

36,863


$

136,101


$

141,475














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 December 31,


Year ended December 31,



2012


2011


2012


2011



(Unaudited)


(Unaudited)


(Unaudited)



 Sales


$

153


$

207


$

565


$

737

 Community and content



31



61



70



234

 General and administrative



365



475



1,524



1,528

 Information and technology



53



71



250



278



$

602


$

814


$

2,409


$

2,777

 















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 December 31,


Year ended December 31,




2012


2011


2012


2011















IFRS EPS


$

0.31


$

0.33


$

0.90


$

0.83















IFRS Net Profit


$

11,177


$

11,889


$

32,206


$

29,476















Non-cash stock based compensation expense (Note 1)



602



814



2,409



2,777















Amortization of intangibles (Note 2)



148



191



751



763















Impairment loss on investment in associate                      



-



-



302



-















Impairment of goodwill and intangibles



1,390



670



1,390



670















Non-IFRS Net Profit


$

13,317


$

13,564


$

37,058


$

33,686















Non-IFRS diluted net profit per share


$

0.37


$

0.38


$

1.04


$

0.95





























 

Total shares used in non-IFRS diluted net profit

  per share calculations



35,870,511



35,501,296



35,742,495



35,385,218















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 December 31,


Year ended December 31,




2012


2011


2012


2011















IFRS profit from operations


$

10,217


$

12,208


$

34,971


$

31,720















Depreciation and amortization



2,184



1,464



9,112



6,785















EBITDA



12,401



13,672



44,083



38,505















Non-cash stock based compensation expense



602



814



2,409



2,777















Impairment of goodwill and intangibles



1,390



670



1,390



670















Adjusted EBITDA


$

14,393


$

15,156


$

47,882


$

41,952

























































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 June 30,


ended June 30,




2013


2012










Revenue


$87.0

to

$89.0


$105.7










IFRS EPS


$0.49

to

$0.53


$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


$0.01










Impairment loss on investment in associate


-


-


$0.01










Gain on sale of investment property, net of transaction costs & 

 related tax expenses


($0.36)


($0.36)


-










Non-IFRS diluted net income per share


$0.18

to

$0.22


$0.41










Total shares used in non-IFRS diluted net income








 per share calculations


36,130,000


36,130,000


35,716,189


















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/2013/03/20130313095937293701.pdf  


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



SOURCE Global Sources



RELATED LINKS
http://www.globalsources.com/
http://www.investor.globalsources.com
http://www.prnasia.com/sa/attachment/2013/03/20130313095937293701.pdf

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