Global Sources - Press Release

NEW YORK, August 17, 2009 – Global Sources Ltd. (NASDAQ: GSOL) (http://www.globalsources.com) reported financial results for the second quarter ended June 30, 2009.

Global Sources’ chairman and CEO, Merle A. Hinrichs, said: "As anticipated, during the quarter Global Sources' business continued to be affected by the slowdown in exports from mainland China and the rest of Asia. As such, we managed the business prudently, delivering profit of $5.1 million on revenue of $54.2 million as well as improving our already robust balance sheet.

"We continue to focus on addressing our customers' core needs by providing a complete product offering of online, trade shows and print that addresses all stages of the buying process. Although we are carefully managing our costs, we are also focused on enhancing our overall market position to achieve top and bottom line growth when the economic environment improves," concluded Hinrichs.

Financial highlights - Second quarter: 2009 compared to 2008

Revenue was $54.2 million, compared to $63.7 million.
- Online revenue was $22.0 million, compared to $24.1 million.
- Exhibitions revenue was $24.0 million, compared to $25.3 million.
- Print revenue was $7.1 million, compared to $12.8 million.
- Revenue from mainland China was $39.3 million, compared to $42.0 million.
GAAP net income was $5.1 million, or $0.11 per diluted share, which included a non-cash stock based compensation (SBC) expense of $1.7 million based on the June 30, 2009 stock price of $7.21. For the second quarter of 2008, GAAP net income was $8.4 million, or $0.16 per diluted share, which included a $1.5 million in non-cash SBC expense based on the June 30, 2008 stock price of $15.18.
Non-GAAP net income was $6.8 million, or $0.15 per diluted share, compared to $9.9 million, or $0.19 per diluted share, for the second quarter of 2008.
Total deferred income and customer prepayments were $72.8 million as at June 30, 2009, compared to $86.8 million as at June 30, 2008.

Global Sources' 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.

Financial highlights – Six Months Ended June 30: 2009 compared to 2008

Revenue was $89.0 million, compared to $104.3 million.
GAAP net income was $6.3 million, or $0.14 per diluted share, compared to $16.6 million, or $0.32 per diluted share.
Non-GAAP net income was $8.5 million, or $0.19 per diluted share, compared to $16.5 million, or $0.32 per diluted share, for the six months ended June 30, 2008.

Global Sources' CFO, David Gillan, said: "Although revenue continues to be challenged, we are managing the business through this cycle with the objective of continued profitability. Regarding costs, we reduced discretionary spending and delayed infrastructure investments. As a result, total operating expenses declined by 9% in the second quarter, as compared to the same period last year.

"In the second quarter, we grew our cash position to $143.7 million and continued to benefit from a strong balance sheet that includes no short-term or long-term bank debt. In the third quarter of 2009, we anticipate revenue and earnings to continue to be impacted by the difficult economic situation, and those results will be compared to a very strong third quarter in 2008."

Recent Corporate Highlights

Held China Sourcing Fairs in Dubai in June. The event featured over 1,100 booths, representing 40% growth compared to last year.
Held six China Sourcing Fairs and an India Sourcing Fair in April and early May at the AsiaWorld-Expo in Hong Kong. Many of the world's top buying organizations attended including Carrefour, Coles Group, Dollar General, LG Sourcing, Li & Fung, Marks & Spencer, Otto International, Samsung, Sears, Staples and The Home Depot.
Twenty-four group and custom Private Sourcing Events were held in June and July in mainland China, India, Russia and Vietnam. Participating buyers included A.R.E.N.A., Atico, Auto Audio Center, BTK, Casino, Groupe Adeo, El Corte Ingles, ICA, M. Video, LPP, Lowe’s, Pacific Brands, RadioShack, Rolsen, Sears, Test Rite, The Home Depot and ThreeSixty Sourcing.
Appointed David Gillan as Chief Financial Officer effective July 1, following the retirement of Eddie Heng. Mr. Heng remains on the board as a director.
Achieved record lead generation, which is measured as requests for information (RFIs) from buyers to suppliers through Global Sources Online. There were more than 81 million RFIs during the 12 months ended June 30, 2009, up by 124% compared to the same period last year.
Increased Global Sources’ independently certified community of active buyers to more than 829,000 at the end of the second quarter, 14% higher than the same time last year.

Conference call for Global Sources second quarter 2009 earnings

Chairman and CEO Merle A. Hinrichs and CFO David Gillan are scheduled to conduct a conference call at 8:00 a.m. ET on August 17, 2009 (8:00 p.m. on August 17, 2009 in Hong Kong) to review these results in more detail. To participate please call at least 10 minutes in advance to ensure all callers are placed into the call at start time. 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 are required to provide the conference ID 16846155; are encouraged to dial into the call 10 to 15 minutes prior to the call to prevent delay in joining; and may participate by dialing (852) 3011-4522. 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 at least 30 days. A telephone replay of the call is also scheduled to be available through August 24, 2009. To listen to the telephone replay, dial (800) 642-1687, or dial (1-706) 645-9291 outside the United States, and enter pass code 16846155#. For those in the Hong Kong area, the replay dial-in number is (852) 3011-4541, and the pass code is 16846155#.