Global Sources reports fourth quarter and year-end 2015 results

- Reported fourth quarter revenue of $61.6 million -

- Reported full year 2015 revenue of $171.0 million -

- Posted IFRS EPS of $0.79 and Non-IFRS EPS of $0.52 for the fourth quarter of 2015 -

- Posted full year 2015 IFRS EPS of $1.03 and Non-IFRS EPS of $0.65 -

- Provides guidance for first half of 2016, expects revenue of $78.0 million to $80.0 million and IFRS EPS to range from $0.13 to $0.17 -

Mar 17, 2016, 02:00 ET from Global Sources

NEW YORK, March 17, 2016 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the fourth quarter and year-ended Dec. 31, 2015.

"The highlight of the fourth quarter of 2015 was our very successful series of trade shows in Hong Kong, which included Global Sources Electronics - the world's largest electronics sourcing trade show," stated Merle A. Hinrich, Global Sources' executive chairman. "During the year, we advanced the integration of our online and trade show services and increased our focus on helping buyers identify new, important and innovative products from among the millions of products online. Key initiatives include our Analyst's Choice product sections and Startup Launchpad, a pavilion and conference within our electronics trade shows.  Looking ahead, we remain focused on growing our core business by leveraging our differentiated offering that integrates the best of online with the best of trade shows."

Financial highlights - Fourth quarter: 2015 compared to 2014

  • Revenue from continuing operations was $61.6 million, as compared to $60.1 million.
    • Exhibitions revenue was $41.6 million, as compared to $38.2 million.
    • Online revenue was $15.3 million, as compared to $18.0 million.
    • Print revenue was $2.0 million, as compared to $1.8 million.
  • IFRS net profit was $20.0 million, or $0.79 per diluted share, as compared to $9.3 million, or $0.29 per diluted share.
  • Non-IFRS net profit was $13.0 million, or $0.52 per diluted share, as compared to $9.9 million, or $0.31 per diluted share, for the fourth quarter of 2014.
  • Adjusted EBITDA was $15.0 million, as compared to $12.2 million for the fourth quarter of 2014.
  • Total deferred income and customer prepayments were $78.2 million as at Dec. 31, 2015, as compared to $88.8 million as at Dec. 31, 2014.

Global Sources' CFO, Connie Lai, said: "During the fourth quarter of 2015, we completed the sale of our Shenzhen investment property, recording a net profit of $7.6 million, net of transaction costs and related tax expenses. We continue to drive efficiencies throughout the organization, while remaining committed to creating shareholder value, maintaining a strong balance sheet, a solid cash position and no debt."

"As announced on March 15, CEO Spenser Au will retire at the end of 2016 following 39 years of service to Global Sources," continued Mr. Hinrich. "In his role as CEO for the past five years, Spenser was essential to the development of our fully integrated offering of online marketplaces and trade shows.  Our strong and experienced management team will continue to build on his contributions as we transition to a successor."

Financial highlights - Full year ended Dec. 31: 2015 compared to 2014

  • Revenue from continuing operations was $171.0 million, as compared to $179.3 million.
  • IFRS net profit was $29.9 million, or $1.03 per diluted share, as compared to $18.3 million, or $0.55 per diluted share.
  • Non-IFRS net profit was $18.8 million, or $0.65 per diluted share, as compared to $22.5 million, or $0.67 per diluted share, for 2014.
  • Adjusted EBITDA was $30.5 million, as compared to $37.3 million for 2014.

Financial expectations for the first half of 2016 under IFRS

  • For the first half of 2016 ending June 30, 2016:
    • Revenue from continuing operations is expected to be in the range of $78.0 million to $80.0 million, as compared to $85.9 million from continuing operations for the first half of 2015.
    • IFRS EPS from continuing operations is expected to be in the range of $0.13 to $0.17, as compared to $0.28 per diluted share from continuing operations in the first half of 2015. 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 first half of 2016.
    • Non-IFRS EPS from continuing operations is expected to be in the range of $0.18 to $0.22, as compared to $0.32 per diluted share from continuing operations for the same period in 2015.
    • Adjusted EBITDA from continuing operations is expected to be between $12.5 million and $13.4 million, as compared to $18.1 million from continuing operations in the first half of 2015.

Recent Corporate Highlights   

  • Announced CEO Spenser Au plans to retire after 39 years of service to the company. He will remain engaged until the end of 2016 to assist in the transition to a successor.
  • Closed the sale of investment property on the 50th floor of the Shenzhen International Chamber of Commerce Tower in Shenzhen, China for a total consideration of approximately $21.1 million.
  • Global Sources Exhibitions were held in Johannesburg in November 2015.
  • Global Sources series of fall trade shows were held in October 2015 at Hong Kong's AsiaWorld-Expo, including Global Sources Electronics, the world's largest electronics sourcing trade show.
    • In total, the fall trade shows had more than 8,000 booths.
    • Total attendance exceeded 84,600 and included buyers from more than 150 countries and territories.
  • Launched three new industry specialized websites: Drones & Robotics, Machinery & Parts and Auto Parts & Accessories.
  • Received the Gold corporate award for excellence in corporate governance and investor relations in The Asset's December 2015 issue. The company received The Asset's Gold and Titanium corporate award for the previous six years.

Conference call for Global Sources fourth quarter 2015 earnings

Executive chairman Merle A. Hinrich and CFO Connie Lai are scheduled to conduct a conference call at 8:00 a.m. ET on March 17, 2016 (8:00 p.m. on March 17, 2016 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (877) 502-9276, and non-Hong Kong international participants may dial (1-913) 312-6693. Investors in Hong Kong may participate by dialing (852) 3008-0382. The conference ID is 9464808 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 25, 2016. To listen to the telephone replay dial (888) 203-1112 or dial (1-719) 457-0820 outside the United States, and enter pass code 9464808. For those in the Hong Kong area, the replay dial-in number is (800) 901-108, and the pass code is 9464808.

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), trade shows, magazines and apps.

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.

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 profit as IFRS net profit excluding non-cash stock based compensation expense or credit, amortization of intangibles assets as it relates to certain equity compensation plans, profits or losses on acquisitions and disposals of 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 diluted net profit per share is defined as non-IFRS net profit divided by the weighted average of diluted common shares outstanding. Adjusted EBITDA is defined as profit before interest, taxes, depreciation, amortization, non-cash stock based compensation expense or credit, profits or losses on acquisitions and disposals of investments, net of transaction costs 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,

2015

2014

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$

70,356

$

90,223

Term deposits with banks

9,097

4,285

Financial assets, available-for-sale

-

3,952

Accounts receivables, net

849

2,269

Receivables from sales representatives

8,802

7,900

Inventories

176

154

Prepaid expenses and other current assets

16,268

17,027

105,548

125,810

Non-current assets

Property and equipment

59,064

63,519

Investment properties

69,726

85,546

Intangible assets

26,309

37,732

Long term investment

100

100

Deferred income tax assets

389

196

Other non-current assets

951

1,108

156,539

188,201

Total assets

$

262,087

$

314,011

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable

$

7,383

$

9,418

Deferred income and customer prepayments

75,265

84,869

Accrued liabilities

15,183

19,100

Income tax liabilities

2,990

3,848

100,821

117,235

Non-current liabilities

Accounts payable

289

889

Deferred income and customer prepayments

2,917

3,971

Deferred income tax liabilities

4,493

6,842

7,699

11,702

Total liabilities

108,520

128,937

Equity attributable to Company's shareholders

Common shares

533

529

Treasury shares

(250,089)

(200,089)

Other reserves

157,562

161,242

Retained earnings

239,812

209,924

Total Company shareholders' equity

147,818

171,606

Non-controlling interests

5,749

13,468

Total equity

$

153,567

$

185,074

Total liabilities and equity

$

262,087

$

314,011

 

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,

2015

2014

2015

2014

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Revenue:

    Exhibitions

$

41,629

$

38,157

$

91,854

$

88,941

    Online and other media services (Note 2)

17,295

19,738

70,242

82,430

    Miscellaneous

2,693

2,210

8,929

7,911

61,617

60,105

171,025

179,282

Operating Expenses:

    Sales (Note 3)

17,898

19,906

50,231

56,095

    Event production

10,871

9,751

24,533

23,333

    Community and content (Note 3)

5,879

6,753

20,535

22,267

    General and administrative (Note 3 & 4)

11,625

11,603

43,697

48,004

    Information and technology (Note 3)

3,495

3,075

13,348

12,126

Total Operating Expenses

49,768

51,088

152,344

161,825

Profit on sale of property

9,791

-

9,791

-

Profit from Operations

21,640

9,017

28,472

17,457

    Interest income

103

244

792

1,223

    Gain on sale of available-for-sale securities

39

-

188

11

    Interest expenses

(12)

(47)

(83)

(186)

Profit before Income Taxes

21,770

9,214

29,369

18,505

Income tax expense

(2,187)

(534)

(4,609)

(1,646)

Net Profit from continuing operations

$

19,583

$

8,680

$

24,760

$

16,859

Net Profit / (loss) from discontinued operations, net of  income tax (Note 5)

-

(40)

5,629

1,982

Net profit

$

19,583

$

8,640

$

30,389

$

18,841

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

 Continuing operations

434

499

(765)

548

  Discontinued operations

-

142

264

(1,059)

  Total

434

641

(501)

(511)

Net profit attributable to the Company's  shareholders from:

  Continuing operations

$

20,017

$

9,179

$

23,995

$

17,407

  Discontinued operations

-

102

5,893

923

  Total

$

20,017

$

9,281

$

29,888

$

18,330

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

  Continuing operations

$

0.79

$

0.29

$

0.83

$

0.52

  Discontinued operations

-

*

0.20

0.03

  Total

$

0.79

$

0.29

$

1.03

$

0.55

Shares used in diluted net profit per share  calculations

25,185,321

31,516,581

28,820,976

33,482,371

* Diluted net profit per share attributable to the Company's shareholders from discontinued operations is less than $0.01

Note: 1. Total revenue from both the continuing operations and discontinued operations during the three months and year ended December 31, 2015 and 2014 was as follows:

Three months ended December 31,

Year ended December 31,

2015

2014

2015

2014

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Continuing operations

$

61,617

$

60,105

$

171,025

$

179,282

Discontinued operations

-

2,762

4,776

18,930

$

61,617

$

62,867

$

175,801

$

198,212

Note: 2. Online and other media services consists of:

Three months ended December 31,

Year ended December 31,

2015

2014

2015

2014

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Online services

$

15,296

$

17,983

$

64,421

$

75,895

Print services

1,999

1,755

5,821

6,535

$

17,295

$

19,738

$

70,242

$

82,430

Note: 3. 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 December 31,

Year ended December 31,

2015

2014

2015

2014

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Sales

$

116

$

123

$

418

$

409

Community and content

23

21

88

16

General and administrative

316

319

1,418

1,215

Information and technology

44

45

225

217

$

499

$

508

$

2,149

$

1,857

Note: 4. General and administrative expenses consist of:

Three months ended December 31,

Year ended December 31,

2015

2014

2015

2014

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

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

$

9,890

$

9,345

$

37,290

$

36,343

Amortization of intangible assets

1,250

994

4,314

6,873

Impairment charge on intangible assets

-

4

-

2,242

Foreign exchange losses

485

1,260

2,093

2,546

$

11,625

$

11,603

$

43,697

$

48,004

Note: 5. Net Profit from discontinued operations, net of income tax consist of:

Three months ended December 31,

Year ended December 31,

2015

2014

2015

2014

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Profit on sale of subsidiary

$

-

$

-

$

6,382

$

-

Income tax expense

-

-

(361)

-

Profit on sale of subsidiary, net of income tax

-

-

6,021

-

Profit /(loss) from discontinued operations, net of income tax

-

(40)

(392)

1,982

$

-

$

(40)

$

5,629

$

1,982

 

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,

2015

2014

2015

2014

IFRS diluted net profit per share

$

0.79

$

0.29

$

1.03

$

0.55

IFRS Net Profit

$

20,017

$

9,281

$

29,888

$

18,330

Non-cash stock based compensation expense (Note 1)

499

508

2,149

1,857

Amortization of intangibles (Note 2)

34

86

381

594

Impairment of goodwill and intangibles (Note 3)

-

4

-

1,682

Profit on sale of subsidiary (Note 4)

-

-

(6,021)

-

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

(7,550)

-

(7,550)

-

Non-IFRS Net Profit

$

13,000

$

9,879

$

18,847

$

22,463

Non-IFRS diluted net profit per share

$

0.52

$

0.31

$

0.65

$

0.67

Total shares used in non-IFRS diluted net profit

 per share calculations

25,185,321

31,516,581

28,820,976

33,482,371

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.

(4) Profit on sale of subsidiary is net of related tax.

 

 

GLOBAL SOURCES LTD. AND SUBSIDIARIES

ADJUSTED EBITDA RECONCILIATION 

(In U.S. Dollars Thousands)

Three months ended December 31,

Year ended December 31,

2015

2014

2015

2014

IFRS profit from operations including discontinued operations

$

21,640

$

9,044

$

27,804

$

20,170

Depreciation and amortization including discontinued operations

2,623

2,614

10,326

13,061

EBITDA

24,263

11,658

38,130

33,231

Non-cash stock based compensation expense

499

508

2,149

1,857

Impairment of goodwill and intangibles

-

4

-

2,242

Profit on sale of property, net of transaction costs

(9,791)

-

(9,791)

-

Adjusted EBITDA including discontinued operations

$

14,971

$

12,170

$

30,488

$

37,330

 

 

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,

2016

2015

Revenue from continuing operations                                                           

$78.0

to

$80.0

$85.9

IFRS EPS from continuing operations

$0.13

to

$0.17

$0.28

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

Non-IFRS diluted net income per share from continuing operations

$0.18

to

$0.22

$0.32

Total shares used in non-IFRS diluted net income

  per share calculations

25,400,000

25,400,000

31,534,448

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/20160317/8521601731

Press Contact

Investor Contact in Asia

Camellia So

Connie Lai

Tel: (852) 2555-5021

Tel: (852) 2555-4747    

e-mail: GSpress@globalsources.com 

e-mail: investor@globalsources.com  

Investor Contact in U.S.

Cathy Mattison

LHA

Tel: (1-415) 433-3777

e-mail: cmattison@lhai.com

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

SOURCE Global Sources