Global Sources reports second quarter 2010 results
- Grew revenue 8% to $58.4 million, as compared to the same period a year ago -
- Posted GAAP EPS of $0.16 and Non-GAAP EPS of $0.18 -
- Expects 13% to 15% revenue growth in the second half of 2010 -
NEW YORK, Aug. 19 /PRNewswire-Asia/ -- Global Sources Ltd. (Nasdaq: GSOL) (http://www.globalsources.com ) reported financial results for the second quarter ended June 30, 2010.
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Global Sources' chairman and CEO, Merle A. Hinrichs, said: "Revenue grew by 8% for the second quarter, and we expect higher growth in the second half, as compared to the same respective periods a year ago. Our performance is being driven by the positive market reaction to our increasingly integrated offering of online, exhibitions and magazines, and by the continued rapid expansion of our trade show business, where we now have over 60 trade shows scheduled for 2011, up from 30 in 2009.
"We believe our shows attract the top-tier of the import buying community, since virtually all of the attendees have clearly demonstrated that they are actively looking for products and suppliers. More than 100,000 buyers attended our China Sourcing Fairs in 2009, and we expect to substantially exceed that this year, to the benefit of all of our advertisers and exhibitors. In addition, our value proposition for exhibitors is increasingly 'digital', with buyers now able to search online for exhibitors, view their products and make inquiries."
Financial highlights -- Second quarter: 2010 compared to 2009
-- Revenue was $58.4 million, as compared to $54.2 million.
-- Online revenue was $22.4 million, as compared to $22.1 million.
-- Exhibitions revenue was $27.4 million, as compared to $24.0 million.
-- Print revenue was $7.4 million, as compared to $7.1 million.
-- Revenue from mainland China was $43.4 million, as compared to $39.3
million.
-- GAAP net income, including a non-cash stock based compensation (SBC)
expense of $1.1 million, and amortization of intangibles as it relates
to certain equity compensation plans of $102,000, was $7.3 million, or
$0.16 per diluted share, as compared to second quarter 2009 GAAP net
income of $5.1 million or $0.11 per diluted share, which included a
non-cash SBC expense of $1.7 million.
-- Non-GAAP net income was $8.5 million, or $0.18 per diluted share, as
compared to $6.8 million, or $0.15 per diluted share, for the second
quarter of 2009.
-- Adjusted EBITDA was $10.1 million, as compared to $8.0 million for the
second quarter of 2009.
-- Total deferred income and customer prepayments were $84.6 million as at
June 30, 2010, as compared to $72.8 million as at June 30, 2009.
Financial highlights -- Six Months Ended June 30: 2010 compared to 2009
-- Revenue was $92.4 million, as compared to $89.0 million.
-- GAAP net income was $9.8 million, or $0.21 per diluted share, as
compared to $6.3 million, or $0.14 per diluted share.
-- Non-GAAP net income was $11.8 million, or $0.26 per diluted share, as
compared to $8.5 million, or $0.19 per diluted share, for the six
months ended June 30, 2009.
-- Adjusted EBITDA was $15.1 million, as compared to $12.2 million for the
six months ended June 30, 2009.
Global Sources' non-GAAP metrics
Management believes non-GAAP metrics are useful measures of operations and provides GAAP to non-GAAP reconciliation tables at the end of this press release. Global Sources defines non-GAAP 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, and/or impairment charges, for all historical and future references to non-GAAP metrics. Non-GAAP EPS is defined as non-GAAP net income divided by the weighted average of diluted common shares outstanding. Adjusted EBITDA is defined at earnings before interest, taxes, depreciation, amortization, stock-based compensation and impairment of goodwill and intangible assets.
Global Sources' CFO, Connie Lai, said: "We expect revenue growth of 13% to 15% in the second half of 2010, as compared to the second half of 2009. However, to support our growth objectives, we are investing in marketing, technology and the expansion of our trade show business. This, along with the rising cost of doing business in China, is expected to increase operating expenses."
Financial expectations for the second half of 2010
-- For the second half of 2010 ending Dec. 31, 2010:
-- Revenue is expected to be in the range of $97.0 million to $98.0
million, representing an increase of 13% to 15%, as compared to
$85.5 million for the second half of 2009.
-- GAAP EPS is expected to be in the range of $0.23 to $0.25, as
compared to $0.21 per diluted share in the second half of 2009.
Using the stock price of $7.57 on Aug. 6, 2010, 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.
-- Non-GAAP EPS is expected to be in the range of $0.28 to $0.30, as
compared to $0.23 per diluted share for the same period in 2009.
-- Adjusted EBITDA is expected to be $16.0 million, as compared to
$13.1 million in the second half of 2009.
Recent Corporate Highlights
-- Appointed Connie Lai as Chief Financial Officer effective Aug. 1, 2010.
-- Announced planned launch of five China Sourcing Fairs in Miami in July
2011, enabling Asian exporters to meet face-to-face with American,
Canadian, and Latin American buyers.
-- Conducted a tender offer, which commenced on June 30, 2010 and expired
on July 28, 2010, for the purchase of 11,121,000 outstanding common
shares of the company at a purchase price of $9.00 per share or
$100,089,000 in total.
-- Held 14 China Sourcing Fairs and two India Sourcing Fairs:
-- In Dubai in June, the Electronics, Fashion Accessories, Gifts &
Premiums, Home Products, Baby & Children's Products and Hardware &
Building Materials shows and the India Sourcing Fair featured over
1,310 booths.
-- In Shanghai in June, the 1st Electronics show featured more than 460
booths.
-- In Hong Kong in April, the Electronics & Components and Security
Products shows featured over 2,650 booths; while the Home Products,
Gifts & Premiums, Baby & Children's Products, Fashion Accessories
and Underwear & Swimwear shows featured 3,200 booths.
-- In Hong Kong in April, the India Sourcing Fair: Home Products
featured over 110 booths.
-- In March, the 15th IIC-China Conference & Exhibition spring edition was
held in Shenzhen, Shanghai and Chengdu. Exhibitors included top China
semiconductor companies, as well as international vendors including
Fairchild Semiconductor, Fujitsu Microelectronics, Intel and Microsoft.
-- Private Sourcing Events were held from April 1 through to July 22, 2010
for more than 60 sourcing teams from very large buying organizations
including Brookstone, Carrefour, Casino, El Corte Ingles, Primark,
Kmart Australia, WHSmith, Staples and Target Australia. These events
created more than 250 high quality, one-on-one selling opportunities
for Global Sources suppliers.
-- Renewed contracts with AsiaWorld-Expo Management to host China Sourcing
Fairs in Hong Kong for 2013 and 2014. The renewal contracts represent a
total gross value of approximately US$16.7 million.
-- Generated over 192 million requests for information (RFIs) from buyers
to suppliers through Global Sources Online during the 12 months ended
June 30, 2010, up 137% compared to the same period last year.
-- Increased Global Sources' independently certified community of active
buyers to more than 967,000 at the end of the second quarter, 16.5%
higher than the same time last year.
Conference call for Global Sources second quarter 2010 earnings
Chairman and CEO, Merle A. Hinrichs, and CFO, Connie Lai, are scheduled to conduct a conference call at 8:00 a.m. ET on August 19, 2010 (8:00 p.m. on August 19, 2010 in Hong Kong) to review these results in more detail. To participate, please call at least 10 minutes in advance to ensure all callers are placed into the call at the start time. Investors in the United States may participate by dialing (877) 941-4774, and international participants may dial (1-480) 629-9760. Investors in Hong Kong are required to provide the conference ID 4330799; are encouraged to dial into the call 10 to 15 minutes prior to the call to prevent delay in joining; and may participate by dialing (852) 3009-5027. 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 at least 30 days. A telephone replay of the call is also scheduled to be available through August 26, 2010. To listen to the telephone replay, dial (800) 406-7325, or dial (303) 590-3030 outside the United States, and enter pass code 4330799. For those in the Hong Kong area, the replay dial-in number is (852) 3056-2777, and the pass code is 4330799.
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 uses English-language media to facilitate trade from Greater China to the world. The other business segment utilizes Chinese-language media to enable companies to sell to, and within Greater China.
The company provides sourcing information to volume buyers and integrated marketing services to suppliers. It helps a community of over 967,000 active buyers source more profitably from complex overseas supply markets. With the goal of providing the most effective ways possible to advertise, market and sell, Global Sources enables suppliers to sell to hard-to-reach buyers in over 240 countries.
The company offers the most extensive range of media and export marketing services in the industries it serves. It delivers information on 4.5 million products and more than 262,000 suppliers annually through 14 online marketplaces, 13 monthly print and 16 digital magazines, over 80 sourcing research reports and 20 specialized trade shows which run 57 times a year across 9 cities.
Suppliers receive more than 192 million sales leads annually from buyers through Global Sources Online (http://www.globalsources.com ) alone.
Global Sources has been facilitating global trade for nearly 40 years. Global Sources' network covers more than 60 cities worldwide. In mainland China, Global Sources has about 2,500 team members in more than 40 locations, and a community of over 2 million registered online users and magazine readers for its Chinese-language media.
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)
At At
June 30, December 31,
2010 2009
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 173,666 $ 91,553
Term deposits with banks 1,519 60,357
Available-for-sale securities 6,476 6,423
Accounts receivable, net 4,054 3,438
Receivables from sales representatives 5,795 5,607
Inventory 591 600
Prepaid expenses and other current assets 12,692 13,603
Deferred tax assets 98 13
Total Current Assets 204,891 181,594
Property and equipment, net 76,854 77,815
Goodwill 2,497 -
Intangible assets, net 6,947 8,770
Long term investments 100 100
Deferred tax assets 421 446
Other noncurrent assets 2,369 1,667
Total Assets $ 294,079 $ 270,392
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 10,192 $ 10,901
Deferred income and customer prepayments 81,661 73,841
Accrued liabilities 14,675 11,585
Income taxes payable 439 435
Total Current Liabilities 106,967 96,762
Deferred income and customer prepayments 2,935 2,516
Deferred tax liability 1,523 141
Total Liabilities 111,425 99,419
Shareholders' equity:
Common shares, US$0.01 par value;
75,000,000 shares authorized;
51,529,794 (2009: 51,427,642)
shares issued and 44,654,794
(2009: 44,552,642) outstanding 515 514
Additional paid in capital 140,225 138,468
Treasury shares, at cost -- 6,875,000
(2009: 6,875,000) shares (50,000) (50,000)
Retained earnings 81,208 71,369
Accumulated other comprehensive income 3,247 2,859
Total Company Shareholders' Equity 175,195 163,210
Non-controlling interests 7,459 7,763
Total Equity $ 182,654 $ 170,973
Total Liabilities and Equity $ 294,079 $ 270,392
GLOBAL SOURCES LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)
Three months ended Six months ended
June 30, June 30,
2010 2009 2010 2009
(Unaudited) (Unaudited)(Unaudited) (Unaudited)
Revenue:
Online and other media
services (Note 1) $ 29,786 $ 29,156 $ 58,100 $ 58,651
Exhibitions 27,375 23,983 31,880 28,471
Miscellaneous 1,284 1,081 2,395 1,886
58,445 54,220 92,375 89,008
Operating Expenses:
Sales (Note 2) 20,217 19,995 33,348 33,733
Event production 9,757 8,892 10,941 9,713
Community (Note 2) 7,127 7,892 11,464 13,089
General and administrative
(Note 2) 12,429 11,323 23,391 22,918
Online services development
(Note 2) 1,319 1,353 2,638 2,764
Amortization of intangibles
and software costs 314 38 587 80
Total Operating Expenses 51,163 49,493 82,369 82,297
Income from Operations 7,282 4,727 10,006 6,711
Interest and dividend
income 100 348 359 413
Foreign exchange gains
(losses), net (73) 66 (12) (27)
Income before Income Taxes $ 7,309 $ 5,141 $ 10,353 $ 7,097
Income Tax Expense (125) (36) (229) (174)
Net Income $ 7,184 $ 5,105 $ 10,124 $ 6,923
Net income attributable to
non-controlling interests 66 (13) (285) (634)
Net Income Attributable to
the Company $ 7,250 $ 5,092 $ 9,839 $ 6,289
Diluted net income per
share attributable to the
Company's shareholders $ 0.16 $ 0.11 $ 0.21 $ 0.14
Shares used in diluted net
income per share
calculations 46,090,605 45,729,535 46,113,290 45,700,362
Note: 1. Online and other media services consists of:
Three months ended Six months ended
June 30, June 30,
2010 2009 2010 2009
(Unaudited) (Unaudited)(Unaudited) (Unaudited)
Online services $ 22,393 $ 22,054 $ 44,174 $ 44,024
Print services 7,393 7,102 13,926 14,627
$ 29,786 $ 29,156 $ 58,100 $ 58,651
Note: 2. Non-cash compensation expenses associated with the employee and
team member equity compensation plans and Global Sources
Directors Share Grant Award Plan included under various
categories of expenses are as follows:
Three months ended Six months ended
June 30, June 30,
2010 2009 2010 2009
(Unaudited) (Unaudited)(Unaudited) (Unaudited)
Sales $ 381 $ 831 $ 512 $ 840
Community 101 142 161 149
General and administrative 568 640 923 1,076
Online services development 74 102 154 176
$ 1,124 $ 1,715 $ 1,750 $ 2,241
GLOBAL SOURCES LTD. AND SUBSIDIARIES
ACTUAL GAAP to NON-GAAP RECONCILIATION
(In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)
Three months ended Six months ended
June 30, June 30,
2010 2009 2010 2009
GAAP EPS $0.16 $0.11 $0.21 $0.14
GAAP Net Income $7,250 $5,092 $9,839 $6,289
Non-cash stock based
compensation expense
(Note 1) 1,124 1,715 1,750 2,241
Amortization of
intangibles (Note 2) 102 -- 217 --
Non-GAAP Net Income $8,476 $6,807 $11,806 $8,530
Non-GAAP diluted net
income per share $0.18 $0.15 $0.26 $0.19
Total shares used in non-
GAAP diluted net income
per share calculations 46,090,605 45,729,535 46,113,290 45,700,362
Notes:
(1) Actual SBC is calculated based on actual share price on date of the
awards for employees and revaluation based on the share price of the
last day of the quarter for consultants.
(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 Six months ended
June 30, June 30,
2010 2009 2010 2009
US GAAP Income from operations $7,282 $4,727 $10,006 $6,711
Depreciation and amortization 1,723 1,587 3,357 3,207
EBITDA 9,005 6,314 13,363 9,918
Non-cash stock based compensation
expense 1,124 1,715 1,750 2,241
Adjusted EBITDA $10,129 $8,029 $15,113 $12,159
GLOBAL SOURCES LTD. AND SUBSIDIARIES
GUIDANCE GAAP to NON-GAAP RECONCILIATION
(In U.S. Dollars Millions, Except Number of Shares and Per Share Data)
GUIDANCE ACTUAL
Six months Six months ended
ended December 31, December 31,
2010 2009
Revenue $97.0 to $98.0 $85.5
GAAP EPS $0.23 to $0.25 $0.21
Non-cash stock based compensation
expense (Note 1) $0.04 $0.04 ($0.01)
Amortization of intangibles
(Note 2) $0.01 $0.01 $0.03
Non-GAAP diluted net income per
share $0.28 to $0.30 $0.23
Total shares used in non-GAAP
diluted net income
per share calculations 37,388,141 37,388,141 45,794,197
Notes:
(1) Actual SBC is calculated based on actual share price on date of the
awards for employees and revaluation based on the share price of the
last day of the quarter for consultants.
(2) Amortization of intangible assets relating to certain non-compete
agreements.
For financial matrix, please visit:
http://www.prnasia.com/sa/attachment/2010/08/20100819226857.pdf
Global Sources Press Contact in Asia
Camellia So
Tel: +852-2555-5021
Email: [email protected]
Global Sources Press Contact in U.S.
James W.W. Strachan
Tel: +1-480-664-8309
Email: [email protected]
Global Sources Investor Contact in Asia
Suzanne Wang
Tel: +852-2555-4747
Email: [email protected]
Global Sources Investor Contact in U.S.
Kirsten Chapman & Timothy Dien
Lippert/Heilshorn & Associates, Inc.
Tel: +1-415-433-3777
Email: [email protected]
SOURCE Global Sources
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