Global Sources reports third quarter 2013 results - Reported third quarter revenue of $44.8 million - - Posted IFRS EPS of $0.15 and non-IFRS EPS of $0.17 - - Reaffirms guidance for the second half of 2013 - PR Newswire NEW YORK, Nov. 14, 2013 NEW YORK, Nov. 14, 2013 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the third quarter ended Sept. 30, 2013. (Logo: http://photos.prnewswire.com/prnh/20030303/LNM011LOGO-b ) "While the current global retail environment remains challenged, our focus is to enhance the value we provide to our customers by helping them buy or sell more effectively," said Global Sources' executive chairman, Merle A. Hinrich. "In our core export business, we just celebrated the 10^th anniversary of our China Sourcing Fairs. We were pleased with the overall performance of our series of fall shows, which was led by our electronics show. "China Sourcing Fair: Electronics & Components featured more than 4,100 booths and drew record attendance. Particularly strong was our Mobile and Wireless pavilion, which is scheduled to be spun off as an independent show along with a dedicated online vertical and magazine in 2014." Global Sources' CFO, Connie Lai, said: "The China Sourcing Fairs in Miami and in Mumbai, India moved from the third quarter last year to the second quarter and the fourth quarter of 2013, respectively. This shift in timing of our trade shows, combined with the disappointing financial performance of the FashionSZshow in July, impacted third quarter revenues and does not reflect the long-term positive trend of our exhibitions business, and the success of our initiatives to combine the best of online with trade shows." Financial highlights – Third quarter: 2013 compared to 2012 oRevenue was $44.8 million, as compared to $59.1 million. oOnline revenue was $22.0 million, as compared to $30.0 million. oExhibitions revenue was $17.6 million, as compared to $23.3 million oPrint revenue was $3.4 million, as compared to $4.1 million. oIFRS net income was $5.4 million, or $0.15 per diluted share, as compared to third quarter 2012 IFRS net income of $8.2 million, or $0.23 per diluted share. oNon-IFRS net income was $6.1 million, or $0.17 per diluted share, as compared to $9.1 million, or $0.25 per diluted share, for the third quarter of 2012. oAdjusted EBITDA was $11.0 million, as compared to $15.3 million for the third quarter of 2012. oTotal deferred income and customer prepayments were $105.1 million as at Sept. 30, 2013, as compared to $115.4 million as at Sept. 30, 2012. Financial highlights – Nine Months Ended Sept. 30: 2013 compared to 2012 – in accordance with IFRS oRevenue was $137.5 million, as compared to $164.8 million. oIFRS net income was $27.8 million, or $0.77 per diluted share, as compared to $21.0 million, or $0.59 per diluted share. oNon-IFRS net income was $19.3 million, or $0.54 per diluted share, as compared to $23.7 million, or $0.66 per diluted share, for the nine months ended Sept. 30, 2012. oAdjusted EBITDA was $27.4 million, as compared to $33.5 million for the nine months ended Sept. 30, 2012. Lai added, "We continue to generate cash and our balance sheet remains strong. We closed the quarter with a cash and securities position of $145.9 million, as compared to $110.8 million at the end of September 2012, and we continue to have no debt. "We are reaffirming our guidance. For the second half of 2013, we expect the revenue mix to range between 40% and 41% for online, 50% and 51% for exhibitions, 5% and 6% for print, and approximately 3% for miscellaneous. This compares to a second half 2012 revenue mix of approximately 46% for online, 44% for exhibitions, 7% for print and 3% for miscellaneous." Financial expectations for the second half of 2013 under IFRS oFor the second half of 2013 ending Dec. 31, 2013: oRevenue is expected to be in the range of $101.0 million to $103.0 million, as compared to $126.0 million for the second half of 2012. oIFRS EPS is expected to be in the range of $0.32 to $0.36, as compared to $0.54 per diluted share in the second half of 2012. 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 second half of 2013. oNon-IFRS EPS is expected to be in the range of $0.36 to $0.40, as compared to $0.63 per diluted share for the same period in 2012. oAdjusted EBITDA is expected to be between $19.7 million and $20.9 million, as compared to $29.7 million in the second half of 2012. Recent Corporate Highlights oOrganized its series of fall shows with more than 6,800 booths in October at Hong Kong's AsiaWorld-Expo. Total attendance exceeded 63,000 and included buyers from more than 150 countries and territories. oChina Sourcing Fair: Electronics & Components featured more than 4,100 booths and drew record attendance. oHeld the China International Optoelectronic Expo (CIOE) in September featuring more than 3,200 exhibitors. oThe second annual China Sourcing Fairs in Sao Paulo, Brazil were held in September. The Fairs were the largest expositions of China-made products in Brazil, featuring more than 950 booths. Total attendance exceeded 5,400 and included buyers from 24 countries. The Fairs are managed by Milton Exhibits under license from Global Sources. oThe 13^th China International Fashion Brand Fair – Shenzhen (FashionSZshow), the largest and most influential fashion exhibition in southern China, was held in Shenzhen in July. oPrivate Sourcing Events were held from July through October for more than 120 sourcing teams from very large buying organizations including Auchan, Brookstone, El Corte Ingles, Falabella, Future Group, Home Retail Group, IKEA, Intelbras, Kesa Electricals, Kingfisher, the METRO GROUP and others. These events created more than 700 high quality, one-on-one selling opportunities for Global Sources suppliers. Conference call for Global Sources third quarter 2013 earnings Executive Chairman Merle A. Hinrich and CFO Connie Lai are scheduled to conduct a conference call at 8:00 a.m. ET on Nov. 14, 2013 (9:00 p.m. on Nov. 14, 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 4644710 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 Nov. 22, 2013. To listen to the telephone replay dial(800) 406-7325 ordial (1-303) 590-3030 outside the United States, and enter pass code 4644710. For those in the Hong Kong area, the replay dial-in number is (852) 3056-2777, and the pass code is 4644710. 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 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, profits 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, 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 September 30, As at December 31, 2013 2012 (Unaudited) ASSETS Current assets Cash and cash equivalents $ 136,575 $ 104,631 Term deposits with banks 1,759 4,184 Financial assets, available-for-sale 7,547 7,472 Accounts receivables 3,573 4,242 Receivables from sales 8,582 7,773 representatives Inventories 327 410 Prepaid expenses and other current 26,789 18,396 assets 185,152 147,108 Non-current assets Property and equipment 49,879 30,442 Investment properties 89,321 97,377 Intangible assets 28,555 33,136 Long term investment 100 100 Deferred income tax assets 146 244 Other non-current assets 2,580 2,762 170,581 164,061 Total assets $ 355,733 $ 311,169 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 11,781 $ 12,531 Deferred income and customer 98,247 84,540 prepayments Accrued liabilities 21,141 20,409 Income tax liabilities 2,726 1,225 133,895 118,705 Non-current liabilities Deferred income and customer 6,837 9,062 prepayments Deferred income tax liabilities 5,718 6,090 12,555 15,152 Total liabilities 146,450 133,857 Equity attributable to Company's shareholders Common shares 525 521 Treasury shares (150,089) (150,089) Other reserves 160,200 156,629 Retained earnings 186,610 158,859 Total Company shareholders' equity 197,246 165,920 Non-controlling interests 12,037 11,392 Total equity $ 209,283 $ 177,312 Total liabilities and equity $ 355,733 $ 311,169 GLOBAL SOURCES LTD. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data) ThreemonthsendedSeptember30, NinemonthsendedSeptember30, 2013 2012 2013 2012 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenue: Online and other media services (Note 1) $ 25,417 $ 34,115 $ 79,593 $ 103,748 Exhibitions 17,624 23,342 52,399 56,066 Miscellaneous 1,726 1,646 5,466 4,984 44,767 59,103 137,458 164,798 Operating Expenses: Sales (Note 2) 11,153 18,686 41,418 57,252 Event production 4,431 6,548 15,081 16,534 Community and content (Note 2) 6,670 8,172 20,402 24,068 General and administrative (Note 2) 10,990 10,647 34,146 32,225 Information and technology (Note 2) 3,164 3,326 9,639 9,965 Total Operating Expenses 36,408 47,379 120,686 140,044 Profit on sale of property - - 15,410 - Profit from Operations 8,359 11,724 32,182 24,754 Interest income 467 300 1,088 732 Share of loss of associate - - - (24) Impairment loss on investment in associate - - - (302) Profit before Income Taxes 8,826 12,024 33,270 25,160 Income tax expense (1,657) (1,514) (4,326) (2,050) Net Profit $ 7,169 $ 10,510 $ 28,944 $ 23,110 Net profit attributable to non-controlling interests (1,813) (2,305) (1,193) (2,081) Net profit attributable to the Company's shareholders $ $ $ 21,029 5,356 8,205 27,751 $ Diluted net profit per share attributable to the Company's shareholders $ $ $ 0.59 0.15 0.23 0.77 $ Shares used in diluted net profit per share calculations 35,718,965 36,186,254 35,862,759 36,045,545 Note:1.Online and other media services consists of: Three months ended September 30, Nine months ended September 30, 2013 2012 2013 2012 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Online services $ 22,046 $ 29,975 $ 69,710 $ 90,897 Print services 3,371 4,140 9,883 12,851 $ 25,417 $ 34,115 $ 79,593 $ 103,748 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 September 30, Nine months ended September 30, 2013 2012 2013 2012 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Sales $ 159 $ 175 $ 386 $ 412 Community and content 28 23 12 39 General and administrative 368 424 971 1,159 Information and technology 54 61 193 197 $ 609 $ 683 $ 1,562 $ 1,807 GLOBAL SOURCES LTD. AND SUBSIDIARIES ACTUAL IFRS to NON-IFRS RECONCILIATION (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data) ThreemonthsendedSeptember30, NinemonthsendedSeptember30, 2013 2012 2013 2012 IFRSEPS $ 0.15 $ 0.23 $ 0.77 $ 0.59 IFRS Net Profit $ 5,356 $ 8,205 $ 27,751 $ 21,029 Non-cash stock based compensation expense (Note 1) 609 683 1,562 1,807 Amortization of intangibles (Note 2) 167 221 594 604 Impairment loss on investment in associate - - - 302 Impairment of goodwill and intangibles - - 2,531 - Profit on sale of property, net of transaction costs & related tax expenses - - (13,124) - Non-IFRS Net Profit $ 6,132 $ 9,109 $ 19,314 $ 23,742 Non-IFRS diluted net profit per share $ 0.17 $ 0.25 $ 0.54 $ 0.66 Total shares used in non-IFRS diluted net profit 36,186,254 35,862,759 36,045,545 35,718,965 per share calculations 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) ThreemonthsendedSeptember30, NinemonthsendedSeptember30, 2013 2012 2013 2012 IFRS profit from operations $ 8,359 $ 11,724 $ 32,182 $ 24,754 Depreciation and amortization 2,038 2,875 6,487 6,928 EBITDA 10,397 14,599 38,669 31,682 Non-cash stock based compensation expense 609 683 1,562 1,807 Impairment of goodwill and intangibles - - 2,531 - Profit on sale of property, net of transaction costs - - (15,410) - Adjusted EBITDA $ 11,006 $ 15,282 $ 27,352 $ 33,489 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 December 31, endedDecember31, 2013 2012 Revenue $101.0 to $103.0 $126.0 IFRS EPS $0.32 to $0.36 $0.54 Non-cash stock based compensation expense (Note 1) $0.03 $0.03 $0.04 Amortization of intangibles (Note 2) $0.01 $0.01 $0.01 Impairment of goodwill and intangibles - - $0.04 Non-IFRS diluted net income per share $0.36 to $0.40 $0.63 Total shares used in non-IFRS diluted net income per share calculations 36,205,000 36,205,000 35,856,577 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/2013/11/20131114113835308323.pdf Press Contact in Asia Investor Contact in Asia Camellia So Connie Lai Tel: (852) 2555-5021 Tel: (852) 2555-4747 e-mail: email@example.com e-mail: firstname.lastname@example.org Press Contact in U.S. Investor Contact in U.S. Brendon Ouimette Cathy Mattison Tel: (1-480) 664-8309 LHA e-mail: email@example.com Tel: (1-415) 433-3777 e-mail: firstname.lastname@example.org SOURCE Global Sources Website: http://www.investor.globalsources.com Website: http://www.globalsources.com
Global Sources reports third quarter 2013 results
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