Global Sources reports fourth quarter and year-end 2014 results

NEW YORK, March 26, 2015 /PRNewswire/ -- Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the fourth quarter and year-ended Dec. 31, 2014.

"Our fourth quarter results were driven by the strong performance of our China Sourcing Fairs in Hong Kong and effective cost management," stated Merle A. Hinrich, Global Sources' executive chairman. "I am pleased with our overall results for the year, during which we launched several new trade shows and enhanced the value of our fully integrated offering of online marketplaces and exhibitions. Looking ahead, we intend to continue focusing on improving our competitive position with specialized vertical offerings of online and trade show services for our buyer and supplier communities."

Financial highlights -- Fourth quarter: 2014 compared to 2013

• Revenue was $62.9 million, as compared to $60.1 million.
  • Online revenue was $19.5 million, as compared to $21.7 million.
  • Exhibitions revenue was $38.2 million, as compared to $33.2 million.
  • Print revenue was $2.9 million, as compared to $3.3 million.
• The company recorded a foreign exchange loss of $1.3 million due to the devaluation of the yuan during the fourth quarter of 2014.
• IFRS net income was $9.3 million, or $0.29 per diluted share, as compared to fourth quarter 2013 IFRS net income of $5.0 million, or $0.14 per diluted share.
• Non-IFRS net income was $9.9 million, or $0.31 per diluted share, as compared to $10.9 million, or $0.30 per diluted share, for the fourth quarter of 2013. 
• Adjusted EBITDA was $12.2 million, as compared to $13.1 million for the fourth quarter of 2013.
• Total deferred income and customer prepayments were $88.8 million as at Dec. 31, 2014, as compared to $90.4 million as at Dec. 31, 2013.

Financial highlights -- Full year 2014 ended Dec. 31: 2014 compared to 2013

• Revenue was $198.2 million, as compared to $197.5 million.
• IFRS net income was $18.3 million, or $0.55 per diluted share, as compared to $32.7 million, or $0.91 per diluted share. 
• Non-IFRS net income was $22.5 million, or $0.67 per diluted share, as compared to $30.2 million, or $0.84 per diluted share, for 2013. 
• Adjusted EBITDA was $37.3 million, as compared to $40.4 million for 2013.   

Global Sources' CFO, Connie Lai, stated: "For the fourth quarter, we delivered strong bottom line results. We reported a 15 percent increase in exhibition revenue, which was partially offset by a 10 percent decline in online services, and we closely managed costs.  Our balance sheet remains strong with a cash balance of $98.5 million and no debt."

Financial expectations for the first half of 2015 under IFRS

• For the first half of 2015 ending June 30, 2015:
  • Revenue is expected to be in the 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.

"We expect the revenue mix for the first half of 2015 to range between 50% and 51% for exhibitions, 38% and 39% for online, 5% and 6% for print, and approximately 4% for miscellaneous, which reflects the growing contribution of our specialized vertical trade show offerings. This compares to a first half of 2014 revenue mix of approximately 45% for online, 45% for exhibitions, 6% for print, and 4% for miscellaneous," Lai added.

Recent Corporate Highlights   

• In February, launched an enhanced version of Mobile Electronics plus three new vertically specialized websites for consumer electronics, security products and electronic components.
  • Consumer Electronics http://www.consumerelectronics.globalsources.com/   
  • Security Products http://www.security.globalsources.com/
  • Electronic Components http://www.electroniccomponents.globalsources.com/
• China Sourcing Fairs were held in Johannesburg in November 2014.
• China Sourcing Fairs were held in October 2014 at Hong Kong's AsiaWorld-Expo. The fall shows had more than 7,500 booths. Total attendance exceeded 75,000 and included buyers from more than 148 countries and territories.
• Held the China Sourcing Fair: Electronics & Components in Hong Kong, which featured more than 3,700 booths.  
• Held the inaugural Mobile Electronics Fair in Hong Kong, which featured more than 1,500 booths and fully launched its suite of services for the mobile electronics industry.
• Received the Gold corporate award for excellence in corporate governance and investor relations in The Asset's December 2014 issue. The company received The Asset's Gold and Titanium corporate award for the previous five years.
• Private Sourcing Events were held from October 2014 through January 2015 for more than 110 sourcing teams from very large buying organizations including Canadian Tire, Clas Ohlson, Dick Smith, Groupe Beaumanoir, Halfords, Mophie, O'STIN, Sears, Skyworth and others. These events created more than 420 high-quality, one-on-one selling opportunities for Global Sources suppliers.

Conference call for Global Sources fourth quarter 2014 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 26, 2015 (8:00 p.m. on March 26, 2015 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (888) 765-5574, and non-Hong Kong international participants may dial (1-913) 312-1269. Investors in Hong Kong may participate by dialing (852) 3008-0382. The conference ID is 9303522 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 April 2, 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 9303522. For those in the Hong Kong area, the replay dial-in number is (800) 901-108, and the pass code is 9303522.

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.

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SOURCE Global Sources