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Global Sources reports fourth quarter and year-end 2013 results

- Reported fourth quarter revenue of $60.1 million -




NEW YORK, March 13, 2014 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the fourth quarter and year-ended Dec. 31, 2013.

Global Sources Ltd. Logo

Global Sources' executive chairman, Merle A. Hinrich, said: "Our fourth quarter 2013 operating results were in line with expectations given the business challenges we continue to experience. Our China Sourcing Fairs in Hong Kong performed well. We began to see our online business improve late in the fourth quarter and we are encouraged with its performance so far in 2014.

"We have a valuable market position serving the larger professional buyers and suppliers that account for the majority of trade. With a strong balance sheet, a solid cash position and no debt, we are well-positioned and have a strong foundation on which to build our competitive position."

Financial highlights - Fourth quarter: 2013 compared to 2012

  • Revenue was $60.1 million, as compared to $66.9 million.
    • Online revenue was $21.7 million, as compared to $28.1 million.
    • Exhibitions revenue was $33.2 million, as compared to $32.7 million
    • Print revenue was $3.3 million, as compared to $4.2 million.
  • IFRS net income was $5.0 million, or $0.14 per diluted share, as compared to fourth quarter 2012 IFRS net income of $11.2 million, or $0.31 per diluted share. This includes a write-down net of related taxes of approximately $5.1 million related to the FashionSZshow.
  • Non-IFRS net income was $10.9 million, or $0.30 per diluted share, as compared to $13.3 million, or $0.37 per diluted share, for the fourth quarter of 2012. 
  • Adjusted EBITDA was $13.1 million, as compared to $14.4 million for the fourth quarter of 2012.
  • Total deferred income and customer prepayments were $90.4 million as at Dec. 31, 2013, as compared to $93.6 million as at Dec. 31, 2012.

Financial highlights - Full year 2013 ended Dec. 31: 2013 compared to 2012

  • Revenue was $197.5 million, as compared to $231.7 million.
  • IFRS net income was $32.7 million, or $0.91 per diluted share, as compared to $32.2 million, or $0.90 per diluted share. 
  • Non-IFRS net income was $30.2 million, or $0.84 per diluted share, as compared to $37.1 million, or $1.04 per diluted share, for 2012. 
  • Adjusted EBITDA was $40.4 million, as compared to $47.9 million for 2012. 

Global Sources' CFO, Connie Lai, said: "We expect the revenue mix for the first half of 2014 to range between 44% and 45% for online, 44% and 45% for exhibitions, 5% and 6% for print, and approximately 4% for miscellaneous. This compares to a first half of 2013 revenue mix of approximately 51% for online, 38% for exhibitions, 7% for print, and 4% for miscellaneous."

Financial expectations for the first half of 2014 under IFRS

"It is important to note our first half of 2014 guidance takes into consideration the purchase of our Singapore office property and the acquisition of an interest in the Shenzhen International Machinery Manufacturing Industry Exhibition and its related shows, known as SIMM," Lai stated.

  • For the first half of 2014 ending June 30, 2014:
    • Revenue is expected to be in the range of $88.0 million to $90.0 million, representing a decrease of 3% to 5%, as compared to $92.7 million for the first half of 2013.
    • IFRS EPS is expected to be in the range of $0.14 to $0.18, as compared to $0.62 per diluted share in the first half of 2013. 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 2014.
    • Non-IFRS EPS is expected to be in the range of $0.18 to $0.22, as compared to $0.37 per diluted share for the same period in 2013. 
    • Adjusted EBITDA is expected to be between $12.6 million and $13.8 million, as compared to $16.3 million in the first half of 2013.

Recent Corporate Highlights   

  • Announced intentions to commence an issuer tender offer before the end of April 2014, with an expected completion before the end of May 2014, for approximately 5 million shares, or approximately 14.4% of its outstanding common shares as of Feb. 28, 2014, at a purchase price of $10.00 per share in cash.
  • Purchased one floor of office space property in Singapore for Global Sources' continued operational use.
  • China Sourcing Fairs were held in New Delhi in December 2013.
  • China Sourcing Fairs were held in Johannesburg in November 2013.
  • China Sourcing Fairs were held in October 2013 at Hong Kong's AsiaWorld-Expo. The series of fall shows had more than 6,800 booths. Total attendance exceeded 63,000 and included buyers from more than 150 countries and territories.
  • Received the Gold award in the December 2013 issue of The Asset's Corporate Awards for excellence in management and corporate governance. The company received The Asset's Gold award in 2011 and 2012 and its Titanium corporate award in 2009 and 2010.
  • Private Sourcing Events were held from October 2013 through January 2014 for more than 100 sourcing teams from very large buying organizations including Bossini, Carrefour, Casino, El Corte Ingles, Falabella, Future Group, Home Retail Group, Intelbras, Kmart Australia, the METRO GROUP and others. These events created more than 500 high-quality, one-on-one selling opportunities for Global Sources suppliers.

Conference call for Global Sources fourth 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 March 13, 2014 (8:00 p.m. on March 13, 2014 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 4666662 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 20, 2014. To listen to the telephone replay dial (800) 406-7325 or dial (1-303) 590-3030 outside the United States, and enter pass code 4666662. For those in the Hong Kong area, the replay dial-in number is (852) 3056-2777, and the pass code is 4666662.

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 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 December 31,


As at December 31,



2013


2012



(Unaudited)



ASSETS







Current assets







Cash and cash equivalents


$

137,359


$

104,631

Term deposits with banks



106



4,184

Financial assets, available-for-sale



6,367



7,472

Accounts receivables



3,122



4,242

Receivables from sales representatives



10,630



7,773

Inventories



266



410

Prepaid expenses and other current assets



18,544



18,396




176,394



147,108

Non-current assets







Property and equipment



49,701



30,442

Investment properties



89,615



97,377

Intangible assets



21,423



33,136

Long term investment



100



100

Deferred income tax assets



98



244

Other non-current assets



1,766



2,762




162,703



164,061

Total assets


$

339,097


$

311,169








LIABILITIES AND SHAREHOLDERS' EQUITY







Current liabilities







Accounts payable


$

8,779


$

12,531

Deferred income and customer prepayments



84,704



84,540

Accrued liabilities



19,166



20,409

Income tax liabilities



2,635



1,225




115,284



118,705

Non-current liabilities







Deferred income and customer prepayments



5,660



9,062

Deferred income tax liabilities



4,591



6,090




10,251



15,152

Total liabilities



125,535



133,857








Equity attributable to Company's shareholders







Common shares



525



521

Treasury shares



(150,089)



(150,089)

Other reserves



161,950



156,629

Retained earnings



191,594



158,859

Total Company shareholders' equity



203,980



165,920

Non-controlling interests



9,582



11,392

Total equity


$

213,562


$

177,312

Total liabilities and equity


$

339,097


$

311,169















 

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,



2013


2012


2013


2012



(Unaudited)


(Unaudited)


(Unaudited)



Revenue:













    Online and other media services (Note 1)


$

25,036


$

32,353


$

104,629


$

136,101

    Exhibitions



33,237



32,716



85,636



88,782

    Miscellaneous



1,791



1,873



7,257



6,857



$

60,064


$

66,942


$

197,522


$

231,740

Operating Expenses:













    Sales (Note 2)



20,540



23,102



61,958



80,354

    Event production



9,322



9,716



24,403



26,250

    Community and content (Note 2)



7,079



8,628



27,481



32,696

    General and administrative (Note 2)



16,126



12,056



50,272



44,281

    Information and technology (Note 2)



3,090



3,223



12,729



13,188

Total Operating Expenses


$

56,157


$

56,725


$

176,843


$

196,769

    Profit on sale of property



-



-



15,410



-

Profit from Operations


$

3,907


$

10,217


$

36,089


$

34,971

    Interest income



384



312



1,472



1,044

    Gain on sale of available-for-sale securities



64



-



64



-

    Share of loss of associate



-



-



-



(24)

    Impairment loss on investment in associate



-



-



-



(302)

Profit before Income Taxes


$

4,355


$

10,529


$

37,625


$

35,689

Income tax expense



(427)



(694)



(4,753)



(2,744)

Net Profit


$

3,928


$

9,835


$

32,872


$

32,945

Net profit attributable to non-controlling interests



1,056



1,342



(137)



(739)

Net profit attributable to the Company's

   shareholders


$

4,984


$

11,177


$

32,735


$

32,206

Diluted net profit per share attributable to the

   Company's shareholders


$

0.14


$

0.31


$

0.91


$

0.90

Shares used in diluted net profit per share

   calculations



36,196,122



35,870,511



36,068,326



35,742,495














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
















Three months ended December 31,


Year ended December 31,



2013


2012


2013


2012



(Unaudited)


(Unaudited)


(Unaudited)



Online services


$

21,712


$

28,114


$

91,422


$

119,011

Print services



3,324



4,239



13,207



17,090



$

25,036


$

32,353


$

104,629


$

136,101














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 December 31,


Year ended December 31,



2013


2012


2013


2012



(Unaudited)


(Unaudited)


(Unaudited)



Sales


$

153


$

153


$

539


$

565

Community and content



31



31



43



70

General and administrative



369



365



1,340



1,524

Information and technology



55



53



248



250



$

608


$

602


$

2,170


$

2,409

 

 

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,




2013


2012


2013


2012















IFRS EPS


$

0.14


$

0.31


$

0.91


$

0.90















IFRS Net Profit


$

4,984


$

11,177


$

32,735


$

32,206















Non-cash stock based compensation expense (Note 1)



608



602



2,170



2,409















Amortization of intangibles (Note 2)



154



148



748



751















Impairment loss on investment in associate



-



-



-



302















Impairment of goodwill and intangibles (Note 3)



5,109



1,389



7,640



1,389















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



-



-



(13,124)



-















Non-IFRS Net Profit


$

10,855


$

13,316


$

30,169


$

37,057















Non-IFRS diluted net profit per share


$

0.30


$

0.37


$

0.84


$

1.04





























Total shares used in non-IFRS diluted net profit

 per share calculations



36,196,122



35,870,511



36,068,326



35,742,495















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.

 

 

GLOBAL SOURCES LTD. AND SUBSIDIARIES

ADJUSTED EBITDA RECONCILIATION

(In U.S. Dollars Thousands)
















Three months ended December 31,


Year ended December 31,



2013


2012


2013


2012














IFRS profit from operations


$

3,907


$

10,217


$

36,089


$

34,971














Depreciation and amortization



2,542



2,184



9,029



9,112














EBITDA



6,449



12,401



45,118



44,083














Non-cash stock based compensation expense



608



602



2,170



2,409














Impairment of goodwill and intangibles



5,994



1,389



8,525



1,389














Profit on sale of property, net of transaction costs



-



-



(15,410)



-














Adjusted EBITDA


$

13,051


$

14,392


$

40,403


$

47,881














 

 

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,



2014


2013








Revenue


$88.0

to

$90.0


$92.7








IFRS EPS


$0.14

to

$0.18


$0.62








Non-cash stock based compensation expense (Note 1)


$0.03


$0.03


$0.03








Amortization of intangibles (Note 2)


$0.01


$0.01


$0.01








Impairment of goodwill and intangibles


-


-


$0.07








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


-


-


($0.36)








Non-IFRS diluted net income per share


$0.18

to

$0.22


$0.37








Total shares used in non-IFRS diluted net income 

 per share calculations


36,400,000


36,400,000


36,048,346















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/20140313/8521401421  

Press Contact in Asia

Investor Contact in Asia

Camellia So

Connie Lai

Tel: (852) 2555-5021

Tel: (852) 2555-4747

e-mail: [email protected]

e-mail: [email protected]



Press Contact in U.S.

Investor Contact in U.S.

Brendon Ouimette

Cathy Mattison

Tel: (1-480) 664-8309

LHA

e-mail: [email protected]

Tel: (1-415) 433-3777


e-mail: [email protected]

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

SOURCE Global Sources

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