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Global Sources reports second half and year-end 2016 financial results
Posted second half of 2016 revenue of $75.8 million
Reported second half of 2016 IFRS EPS of $0.38 and Non-IFRS EPS of $0.51
Reported full year 2016 revenue of $157.7 million
Posted full year 2016 IFRS EPS of $0.73 and Non-IFRS EPS of $0.96
Provides guidance for first half of 2017, expects revenue to be between Provides guidance for first half of 2017, expects revenue to be between $76.0 million and $78.0 million and IFRS EPS to range from $0.12 to $0.16

NEW YORK, March 16, 2017Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the six-month period July 1, 2016 through Dec. 31, 2016 and year-end 2016.

Merle A. Hinrich, Global Sources’ executive chairman stated: “In the second half of 2016, we had a successful fall series of trade shows in Hong Kong with growth in both booth sales and attendance. With Global Sources Electronics, the world’s largest electronics sourcing trade show showcasing consumer and mobile electronics, we are in a strong position to capture the continued growth of mainland China’s electronics export industry. Our Startup Launchpad initiative is Asia’s largest gathering of consumer electronics startups. Consisting of a conference track and pavilion within each phase of the show, it lets buyers see the latest innovations and be first to market with shelf-ready products. Also, we added a Smart Living website, magazine and trade show pavilion covering smart security, energy management, entertainment, appliances, and gadgets for the fast-growing smart home market. We continue to focus on enhancing value for customers through further integration of our online and trade show services in our core business of connecting buyers worldwide with suppliers in mainland China and Asia.”

Financial highlights – Second half: 2016 compared to 2015

  • Revenue from continuing operations was $75.8 million, as compared to $85.1 million.
    • Exhibitions revenue was $45.0 million, as compared to $45.7 million.
    • Online and other media services revenue was $27.6 million, as compared to $34.5 million.
  • IFRS net profit from continuing operations was $9.5 million, or $0.38 per diluted share, as compared to $15.2 million, or $0.58 per diluted share from continuing operations.
  • Non-IFRS net profit from continuing operations was $12.8 million, or $0.51 per diluted share, as compared to $8.7 million, or $0.33 per diluted share from continuing operations.
  • Adjusted EBITDA from continuing operations was $15.6 million, as compared to $13.1 million from continuing operations for the second half of 2015.
  • Total deferred income and customer prepayments were $81.5 million as at Dec. 31, 2016, as compared to $78.2 million as at Dec. 31, 2015.
  • Cash and cash equivalents at Dec. 31, 2016 was $110.2 million and the company remains debt free.

Global Sources’ CFO, Connie Lai, said: “Our 2016 second half revenue reflects the success of our export trade shows in Hong Kong as well as the continued challenges in our online business. We fully impaired the carrying amount of $2.2 million, net of associated taxes, in relation to the China International Fashion Brand Fair – Shenzhen. Also, our bottom line benefitted from our cost control efforts combined with the recognition of deferred tax assets.”

Financial highlights – Full year ended Dec. 31: 2016 compared to 2015

  • Revenue from continuing operations was $157.7 million, as compared to $171.0 million.
  • IFRS net profit from continuing operations was $18.4 million, or $0.73 per diluted share, as compared to $24.0 million, or $0.83 per diluted share from continuing operations.
  • Non-IFRS net profit from continuing operations was $24.2 million, or $0.96 per diluted share, as compared to $19.0 million, or $0.66 per diluted share from continuing operations, for 2015.
  • Adjusted EBITDA from continuing operations was $32.0 million, as compared to $30.8 million from continuing operations for 2015.

Financial expectations for the first half of 2017 under IFRS

  • For the first half of 2017 ending June 30, 2017:
    • Revenue is expected to be in the range of $76.0 million to $78.0 million, as compared to $81.8 million for the first half of 2016.
    • IFRS EPS is expected to be in the range of $0.12 to $0.16, as compared to $0.35 per diluted share in the first half of 2016. SBC and the amortization of intangibles as it relates to certain equity compensation plans are estimated to be an expense of $0.05 per diluted share for the first half of 2017.
    • Non-IFRS EPS is expected to be in the range of $0.17 to $0.21, as compared to $0.45 per diluted share for the same period in 2016.
    • Adjusted EBITDA is expected to be between $11.1 million and $11.9 million, as compared to $16.3 million in the first half of 2016.

Recent Corporate Highlights

  • Announced plans to partner with Shenzhen Globex e-Services Inc., an integrated e-commerce service provider, to co-develop a fully integrated electronic solution to facilitate more efficient cross-border trade between mainland China-based exporters and overseas buyers.
  • Announced retirement of board member James Watkins effective Jan. 1, 2017.
  • Appointed Craig Pepples as Global Sources’ CEO effective Jan. 1, 2017.
  • Received the Gold corporate award for excellence in corporate governance and investor relations in The Asset’s December 2016 issue.
  • Held Global Sources series of fall trade shows in October 2016 at Hong Kong’s AsiaWorld-Expo, including Global Sources Electronics, the world’s largest electronics sourcing trade show.
    • In total, the fall trade shows had more than 8,500 booths.
    • Total attendance exceeded 79,000 and included buyers from 153 countries and territories.
  • Appointed Fumbi Chima and Michael Scown as new members to Global Sources’ Board of Directors effective Sept.12, 2016.

Conference call for Global Sources second half and year-end 2016 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 16, 2017 (8:00 p.m. on March 16, 2017 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (888) 256-1014, and non-Hong Kong international participants may dial (1-913) 312-1296. Investors in Hong Kong may participate by dialing (852) 3008-0382. The conference ID is 3765441 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 23, 2017. To listen to the telephone replay dial (888) 203-1112 or dial (1-719) 457-0820 outside the United States, and enter pass code 3765441. For those in the Hong Kong area, the replay dial-in number is (800) 901-108, and the pass code is 3765441.

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), trade shows, magazines, and apps.

More than 1.7 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.

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 profit as IFRS net profit excluding non-cash stock based compensation expense or credit, amortization of intangibles assets as it relates to certain equity compensation plans, profits or losses on acquisitions and disposals of 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 diluted net profit per share is defined as non-IFRS net profit divided by the weighted average of diluted common shares outstanding. Adjusted EBITDA is defined as profit before interest, taxes, depreciation, amortization, non-cash stock based compensation expense or credit, profits or losses on acquisitions and disposals of investments, net of transaction costs and impairment of goodwill and intangible assets.

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 income statements, actual IFRS to non-IFRS reconciliation, adjusted EBITDA reconciliation, guidance IFRS to non-IFRS reconciliation and financial matrix.

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