Global Sources' chairman and CEO, Merle A. Hinrichs, said: "We are very pleased with our first quarter performance. Our online services grew 27% and our exhibitions grew 24%, compared to the same period last year. The acceleration of online growth demonstrates the progress we are making with our new Global Sources Online 2.0 website, Six-Star supplier ranking system, new service packages and our expanding sales representation. Underlying all of this is our market leadership in helping buyers to distinguish between verified and unverified suppliers.

"Regarding exhibitions, during the first quarter, the largest-ever International IC-China Conference & Exhibition was held. More than 1,400 booths were sold, up 37% compared to last year. In addition, our April China Sourcing Fairs in Hong Kong featured over 6,700 booths, up approximately 6% from April 2007."

Financial Highlights: First Quarter 2008 Compared to First Quarter 2007

• Revenue was $40.6 million, up 16% from $34.9 million.
  • Online revenue was $21.9 million, up 27% from $17.3 million. 
  • Exhibitions revenue was $6.0 million, up 24% from $4.8 million. 
  • Print revenue was $11.6 million, down 1% from $11.8 million.  Revenue from mainland China was $24.1 million, up 30% from $18.4 million.
• Total deferred income and customer prepayments were $96.1 million as at March 31, 2008, up 26% from $76.1 million as at March 31, 2007.

In accordance with generally accepted accounting principles (GAAP), first quarter 2008 net income was $8.2 million, or $0.17 per diluted share, which included a credit of $1.6 million, or $0.03 per share, to non-cash stock based compensation expense (SBC) based on a stock price of $14.85 on March 31, 2008. For the first quarter of 2007, GAAP net income was $6.5 million, or $0.14 per diluted share. Non-GAAP net income for the first quarter of 2008 was $6.6 million, compared to $7.1 million for the first quarter of 2007. Non-GAAP EPS for the first quarter of 2008 was $0.14, compared to $0.15 for the first quarter of 2007.

Non-GAAP Metrics

Management believes non-GAAP metrics are useful measures of operations and provides GAAP to non-GAAP reconciliation tables at the end of this press release. Global Sources defines non-GAAP net income as net income excluding non-cash stock based compensation (SBC) expense or credit, gains or losses on acquisitions and investments, and/or impairment charges, for all historical and future references to non-GAAP metrics. Non-GAAP EPS is defined as non-GAAP net income divided by the weighted average of diluted common shares outstanding.

Global Sources' CFO, Eddie Heng, said: "Our first quarter was stronger than expected, primarily due to strong online revenue growth, which included 38% revenue growth from China. Deferred income and customer prepayments were also healthy, up 26% compared to the same time last year, and up 16% compared to the end of the fourth quarter of 2007, resulting in positive cash flow from operations of $15.7 million in the first quarter of 2008. For the rest of 2008, we expect online and trade shows to continue to serve as the main growth drivers, and we anticipate revenue from China to continue growing faster than overall revenue. We also expect a positive impact from expanding sales representation for all of our products."

Financial Expectations for Second Quarter and First Half 2008

Due primarily to online revenue growth, guidance for both revenue and earnings is being increased for the second quarter 2008 and first half 2008.

• Second Quarter 2008 Ending June 30, 2008:
  • Guidance for revenue has been increased to be between $62.0 million and $63.0 million, representing growth of 18% to 20% over the second quarter of 2007. Based on the stock price of $15.04 on May 12, 2008, SBC is estimated to be $0.02 per diluted share. 
  • GAAP EPS is expected to be between $0.17 and $0.19. 
  • Non-GAAP EPS is expected to be between $0.19 and $0.21, compared to $0.19 per diluted share in the second quarter of 2007.
• First Half 2008 Ending June 30, 2008:
  • Revenue is expected to be in the range of $102.6 million to $103.6 million. Compared to $87.5 million for the first six months of 2007, this represents an increase of 17% to 18%. Using the stock price of $15.04 on May 12, 2008, SBC is estimated to be a credit of $0.01 per diluted share. 
  • GAAP EPS is expected to be in the range of $0.34 to $0.36, as compared to $0.23 per diluted share in the first half of 2007.
  • Non-GAAP EPS is expected to be in the range of $0.33 to $0.35, compared to $0.34 per diluted share for the same period in 2007.

Recent Corporate Highlights

• The largest ever International IC-China Conference & Exhibition was held in March, featuring more than 1,400 booths. Expansion plans for 2009 include additional locations and time slots in the fall.
• Held 5 China Sourcing Fairs in Hong Kong in April featuring over 6,700 booths.
• Achieved record lead generation, which is measured as requests for information (RFIs) from buyers to suppliers through Global Sources Online. There were 32.6 million RFIs for the 12 months ended March 31, 2008, up more than 137% compared to the same period last year.
• Increased Global Sources' independently certified community of active buyers to more than 700,000 at the end of the first quarter, 16% higher than the same time last year.
• The Private Sourcing Events were expanded to India and to the United States, where an event ran concurrently with the Consumer Electronics Show in Las Vegas.
• Honored by Investor Relations Global Rankings (IRGR) for best IR website, corporate governance section and financial disclosure procedures in the small/mid cap category.

Conference Call for Global Sources First Quarter 2008 Earnings

Chairman and CEO, Merle A. Hinrichs, and Eddie Heng, CFO, are scheduled to conduct a conference call at 8:00 a.m. ET on May 22, 2008 (8:00 p.m. on May 22, 2008 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 (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 ttp://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 at least 30 days. A telephone replay of the call is also scheduled to be available through May 26, 2008. To listen to the telephone replay, dial (800) 642-1687, or dial (706) 645-9291 outside the United States, and enter pass code 43874234#. For those in the Hong Kong area, the replay dial-in number is (852) 3011-4541, and the pass code is 43874234#.

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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