Global Sources reports first quarter 2015 results

-- Posted revenue of $22.2 million for the first quarter of 2015 --

May 21, 2015, 02:00 ET from Global Sources

NEW YORK, May 21, 2015 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the first quarter ended March 31, 2015.

Global Sources' executive chairman, Merle A. Hinrich, said, "Our first quarter results reflect the shift in timing of our SIMM machinery shows for the mainland China domestic market from the first quarter of 2014 to the second quarter of 2015. In April, we held our export-focused shows, including Global Sources Electronics, the world's largest electronics sourcing trade show featuring a total of more than 5,500 booths. The first phase included a wide range of electronics for home, office, auto and security products as well as electronic components. The second phase, Mobile Electronics, featured smartphones, tablets, drones, wearables and accessories and was an even greater success than its inaugural event in October 2014, with growth in both booths and attendance.

"Over the past 10 years, we have focused on attracting quality-focused, innovative electronics suppliers from mainland China and across Asia and this has drawn the world's top buyers to our events. As a result, our electronics show has gained a reputation as a place to discover the most cutting-edge electronics products coming out of the region."

Financial highlights -- First quarter: 2015 compared to 2014

  • Revenue was $22.2 million, as compared to $34.5 million.
    • Online revenue was $17.9 million, as compared to $21.3 million.
    • Exhibitions revenue was $0.3 million, as compared to $8.9 million.
    • Print revenue was $2.1 million, as compared to $2.6 million.
  • The company recorded a foreign exchange loss of $0.3 million due to the devaluation of the yuan during the first quarter of 2015.
  • IFRS net loss was $2.1 million, or $0.07 per diluted share, as compared to first quarter 2014 IFRS net income of $0.1 million, or $0.00 per diluted share.
  • Non-IFRS net loss was $1.4 million, or $0.05 per diluted share, as compared to Non-IFRS net income of $0.6 million, or $0.02 per diluted share, for the first quarter of 2014.
  • Adjusted EBITDA was $0.02 million, as compared to $5.9 million for the first quarter of 2014.
  • Total deferred income and customer prepayments were $114.8 million as at March 31, 2015, as compared to $113.5 million as at March 31, 2014.

Global Sources' CFO, Connie Lai, stated: "The financial reporting timeframe for our SIMM machinery shows moved from the first quarter of 2015 to the second quarter of 2015 given the show's end date of April 2. The company maintains a strong balance sheet with positive cash flow, a cash balance of $103.6 million and no debt."

Financial expectations for the first half of 2015 under IFRS

The company's guidance for the first half of 2015 ending June 30, 2015 follows.

  • Revenue is now expected to be at the low-end of the previously guided range of $90.0 million to $92.0 million, as compared to $92.8 million for the first half of 2014.
  • IFRS EPS is expected to be in the range of $0.15 to $0.19, as compared to $0.20 per diluted share in the first half of 2014. SBC and the amortization of intangibles as it relates to certain equity compensation plans are estimated to be an expense of $0.04 per diluted share for the first half of 2015.
  • Non-IFRS EPS is expected to be in the range of $0.19 to $0.23, as compared to $0.28 per diluted share for the same period in 2014.
  • Adjusted EBITDA is expected to be between $12.9 million and $14.1 million, as compared to $17.7 million in the first half of 2014.

Recent Corporate Highlights   

  • Launched five new vertically specialized websites: Fashion Accessories & Footwear; Fashion Apparel & Fabrics; Gifts & Premiums; Hardware; and Home Products.
  • China Sourcing Fairs were held in April 2015 at Hong Kong's AsiaWorld-Expo. The spring shows had more than 7,600 booths. Total attendance exceeded 77,300 and included buyers from more than 150 countries and territories.
  • Held the Shenzhen International Machinery Manufacturing Industry Exhibition and its related shows, known as the SIMM machinery shows, March 30-April 2, 2015.
  • Launched an enhanced version of Mobile Electronics plus three new vertically specialized websites for Consumer Electronics, Security Products and Electronic Components.
  • Private Sourcing Events were held from January 2015 through March 2015 for more than 60 sourcing teams from very large buying organizations including Carrefour, Coppel, Dick Smith, El Corte Ingles, Gloria Jeans, LPP, Max Mara, Shop Direct, The Source, William E. Connor & Associates and others. These events created more than 370 high-quality, one-on-one selling opportunities for Global Sources suppliers.

Conference call for Global Sources first 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 May 21, 2015 (8:00 p.m. on May 21, 2015 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (888) 221-3881, and non-Hong Kong international participants may dial (1-913) 312-1476. Investors in Hong Kong may participate by dialing (852) 3008-0382. The conference ID is 8963600 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 May 28, 2015. To listen to the telephone replay dial (888) 203-1112 or dial (1-719) 457-0820 outside the United States, and enter pass code 8963600. For those in the Hong Kong area, the replay dial-in number is (800) 901-108, and the pass code is 8963600.

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 March 31,

As at December 31,

2015

2014

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$

92,802

$

90,223

Term deposits with banks

6,676

4,285

Financial assets, available-for-sale

4,155

3,952

Accounts receivables, net

1,868

2,269

Receivables from sales representatives

13,568

7,900

Inventories

180

154

Prepaid expenses and other current assets

25,597

17,027

144,846

125,810

Non-current assets

Property and equipment

62,316

63,519

Investment properties

85,091

85,546

Intangible assets

36,750

37,732

Long term investment

100

100

Deferred income tax assets

253

196

Other non-current assets

1,611

1,108

186,121

188,201

Total assets

$

330,967

$

314,011

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable

$

9,373

$

9,418

Deferred income and customer prepayments

108,713

84,869

Accrued liabilities

16,262

19,100

Income tax liabilities

784

3,848

135,132

117,235

Non-current liabilities

Accounts payable

290

889

Deferred income and customer prepayments

6,116

3,971

Deferred income tax liabilities

6,583

6,842

12,989

11,702

Total liabilities

148,121

128,937

Equity attributable to Company's shareholders

Common shares

532

529

Treasury shares

(200,089)

(200,089)

Other reserves

161,676

161,242

Retained earnings

207,797

209,924

Total Company shareholders' equity

169,916

171,606

Non-controlling interests

12,930

13,468

Total equity

$

182,846

$

185,074

Total liabilities and equity

$

330,967

$

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 March 31,

2015

2014

(Unaudited)

(Unaudited)

Revenue

  Online and other media services (Note 1)

$

20,054

$

23,842

  Exhibitions

260

8,860

  Miscellaneous

1,889

1,768

22,203

34,470

Operating Expenses:

  Sales (Note 2)

6,456

9,046

  Event production

98

1,804

  Community and content (Note 2)

4,562

5,443

  General and administrative (Note 2 & 3)

11,002

14,128

  Information and technology (Note 2)

3,297

3,191

Total Operating Expenses

25,415

33,612

Profit / (loss) from Operations

(3,212)

858

  Interest income

312

417

  Gain on sale of available-for-sale securities

188

10

  Interest expenses

(46)

(47)

Profit / (loss) before income taxes

(2,758)

1,238

Income tax credit / (expense)

171

(355)

Net profit / (loss)

$

(2,587)

$

883

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

460

(738)

Net profit / (loss) attributable to the Company's shareholders

$

(2,127)

$

145

Diluted net profit / (loss) per share attributable to the    Company's shareholders

$

(0.07)

*

Shares used in diluted net profit / (loss) per share

   calculations

31,361,130

36,174,507

* Basic and diluted net profit per share attributable to the Company's shareholders is less than $0.01

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

Three months ended March 31,

2015

2014

(Unaudited)

(Unaudited)

  Online services

$

17,917

$

21,252

  Print services

2,137

2,590

$

20,054

$

23,842

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 March 31,

2015

2014

(Unaudited)

(Unaudited)

  Sales

$

37

$

7

  Community and content

10

(59)

  General and administrative

364

183

  Information and technology

77

70

$

488

$

201

Note: 3. General and administrative expenses consist of:

Three months ended March 31,

2015

2014

(Unaudited)

(Unaudited)

  General and administrative expenses before amortization of     intangible assets and foreign exchange losses

$

9,412

$

9,026

  Amortization of intangible assets

1,273

3,461

  Foreign exchange losses

317

1,641

$

11,002

$

14,128

 

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 March 31,

2015

2014

IFRS diluted net profit / (loss) per share                            

$

(0.07)

*

IFRS Net Profit / (Loss)

$

(2,127)

$

145

Non-cash stock based compensation expense (Note 1)

488

201

Amortization of intangibles (Note 2)

211

253

Non-IFRS Net Profit / (Loss)

$

(1,428)

$

599

Non-IFRS diluted net profit / (loss) per share

$

(0.05)

$

0.02

Total shares used in non-IFRS diluted net profit / (loss)    per share calculations

31,361,130

36,174,507

* Basic and diluted net profit per share attributable to the Company's shareholders is less than $0.01

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 March 31,

2015

2014

IFRS profit / (loss) from operations

$

(3,212)

$

858

Depreciation and amortization

2,745

4,846

EBITDA

(467)

5,704

Non-cash stock based compensation expense

488

201

Adjusted EBITDA

$

21

$

5,905

 

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 ended June 30,

Six months ended June 30,

2015

2014

Revenue

$90.0

to

$92.0

$92.8

IFRS EPS

$0.15

to

$0.19

$0.20

Non-cash stock based compensation expense (Note 1)

$0.03

$0.03

$0.02

Amortization of intangibles (Note 2)

$0.01

$0.01

$0.01

Impairment of goodwill and intangibles

-

-

$0.05

Non-IFRS diluted net income per share

$0.19

to

$0.23

$0.28

Total shares used in non-IFRS diluted net income   per share calculations

31,740,000

31,740,000

35,672,551

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/20150521/8521503262

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



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