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