Global Sources Announces Third Quarter 2007 Results
Quarterly Revenue Up 15% Compared to the Third Quarter 2006
EPS up 20% Compared to the Third Quarter 2006
NEW YORK, November 15, 2007 – Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the third quarter and nine months ended Sept. 30, 2007.
Highlights: Third Quarter 2007 Compared to Third Quarter 2006
Chairman and CEO Merle A. Hinrichs said: "Our strong third quarter results reflect the growth of our online services and increased revenues from mainland China. Early in the fourth quarter, we launched Global Sources Online 2.0, which provides buyers with the leading search experience in our industry, delivering comprehensive search results, plus the capability to identify verified suppliers. Global Sources Online 2.0 is also very important to our future online growth, as it should enable us to generate revenue from new services and pricing programs we expect to begin rolling out in 2008.
"We are extremely pleased with our position in the market, with our prospects for long-term growth and success, and with our clear differentiation. Our supplier customers have three primary objectives: lead generation, branding and differentiation from their competitors, and opportunities to get face-to-face with buyers to negotiate and win orders. With our integrated offering of online marketplaces, magazines and trade shows, we are able to deliver all three, in sharp contrast to our online-only competitors who really only provide lead generation.
"In addition, it is increasingly recognized by suppliers that we have the leadership position serving the larger and more professional buyers, who account for the majority of import volume, in contrast with competitors who focus more on the SME part of the market."
Highlights: Nine Months Ended Sept. 30, 2007
For the nine-month period ended Sept. 30, 2007, revenue was $121.3 million, compared to $104.2 million for the nine-month period ended Sept. 30, 2006. GAAP net income for the period was $15.8 million and included an impairment charge of $1.8 million on the company's HC International, Inc. investment taken during the second quarter of 2007. GAAP EPS was $0.37 per diluted share. Non-GAAP net income excluding this charge was $17.7 million, or $0.41 per diluted share. This is as compared to net income for the nine months ended Sept. 30, 2006, GAAP and Non-GAAP, of $12.6 million or $0.30 per diluted share.
CFO Eddie Heng, said: "We had a solid third quarter, with revenue of $33.8 million and EPS of $0.12 within guidance. Cash from operations for the quarter totaled $15.5 million, bringing our nine months ended Sept. 30th figure to $45.0 million. We are beginning to see increasing leverage from our China Sourcing Fairs, which were profitable in Hong Kong for the first time this past October, and we anticipate this to continue. In addition, we are reaffirming our guidance for 2007 full year revenue of 16 to 17% growth over 2006."
Financial Expectations: Fourth Quarter Revenue Increase – Up 17 to 19%
Fourth quarter 2007 revenue is expected to grow by 17 to 19% to be in the range of $61 million to $62 million, as compared to $52.3 million for the same period in 2006. Fourth quarter 2007 earnings per diluted share are expected to be in the range of $0.25 to $0.28, as compared to $0.36 in the fourth quarter of 2006, when the company recorded an extraordinary gain of $7.9 million. Excluding this extraordinary gain, Non-GAAP earnings per diluted share were $0.19.
For the full year 2007, management still expects revenue to be up 16 to 17% as compared to 2006, and is narrowing the full year revenue range to now be in the range of $182.3 million to $183.5 million. GAAP earnings per diluted share for the year are expected to be in the range of $0.62 to $0.65. Non-GAAP earnings per diluted share for the full year 2007, which exclude an impairment charge recorded in the second quarter of 2007 of $1.8 million on the HC International, Inc. investment, are expected to be in the range of $0.66 to $0.69. This range represents growth of between 35 and 41% as compared to Non-GAAP earnings of $0.49 in 2006, which excluded the aforementioned extraordinary gain recorded in the fourth quarter of 2006.
Recent Corporate Highlights
Conference Call for Global Sources Third Quarter 2007 Earnings
Global Sources is scheduled to conduct a conference call at 8:00 a.m. ET on Nov. 15, 2007 (9:00 p.m. on Nov. 15, 2007 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (888) 212-8315, and international participants may dial (1-706) 643-0144. Investors in Hong Kong may call (852) 3011-4522. A live webcast of the conference call is scheduled to be available on Global Sources' corporate site at 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 (http://www.corporate.globalsources.com) for at least 30 days. A telephone replay of the call is also scheduled to be available through Nov.19, 2007. To listen to the telephone replay, dial (800) 642-1687, or dial (1-706) 645-9291 outside the United States, and enter pass code 20130665#. For those in the Hong Kong area, the replay dial-in number is (852) 3011-4541 and enter pass code 20130665#.
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.
Download consolidated balance sheets, consolidated statements of income, consolidated statements of cash flows and financial matrix