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Global Sources Announces Second Quarter 2005 Results; Revenue Grew 10% to $31.7 Million Compared to 2004; Annual 2005 Earnings Guidance Increases to $0.30 to $0.33 per Diluted Share

New York, August 11, 2005 – Global Sources Ltd. (NASDAQ: GSOL) today reported financial results for the second quarter and six-month period ended June 30, 2005.

Highlights: second quarter 2005 compared to second quarter 2004
 • Revenue was $31.7 million, compared to $29.0 million.
 • Revenue from China accounted for $15.4 million, compared to $14.6 million.
 • Short- and long-term deferred income and customer prepayments, all received in cash, were $37.8 million, up from $24.9 million.

2005 second quarter revenue included $3.1 million in revenue from the 10th Annual International IC-China Conference & Exhibition (IIC-China) held in April. In 2004, the 9th IIC-China was held in March and the corresponding revenue of $1.5 million was recorded in the first quarter of 2004. Operating expenses for the second quarter of 2005 were $26.9 million, compared to $24.0 million in the prior year's quarter. The expected increase was due mainly to higher sales and community expenses, which were both primarily related to supporting the trade shows in this quarter and new China Sourcing Fairs scheduled for 2006 in Hong Kong. Net income was $4.5 million, or $0.13 per diluted share, compared to $5.1 million, or $0.16 per diluted share.

For the six-month period ended June 30, 2005, revenue was $54.5 million, compared to $52.6 million in the six-month period ended June 30, 2004. Net income for the six months ended June 30, 2005 was $6.5 million, or $0.19 per diluted share, compared to $7.7 million, or $0.24 per diluted share in the prior year's period.

Chairman and chief executive officer Merle A. Hinrich said: "This quarter we made significant progress on new business initiatives, expanding the sales channels we offer suppliers and increasing the number of vertical markets that we serve. Our eBay strategic alliance adds a direct sales component to the company's online marketplace, magazine and trade show channels. Under this alliance, suppliers can now post on eBay China, and soon will be able to post to eBay's Reseller Marketplace. Later this year, Global Sources Direct will be offering warehousing, customer service, and payment services to assist suppliers with selling on eBay China, the Reseller Marketplace, and other eBay properties."

In addition to this new online channel, Global Sources is expanding the number of vertical markets it serves by launching new monthly magazines and online marketplaces. From its Fashion Accessories & Supplies vertical, the company created two, more specialized verticals, entitled Garments & Textiles and Fashion Accessories. This initiative positions the company to more effectively serve the huge garments and textiles industry, where China is expected to become the leading global producer for many categories.

Similarly, in early August Global Sources launched the Auto Parts & Accessories and Hardware & DIY (Do-It-Yourself) websites, which were created from the broader Hardwares vertical. The first issues of the magazines for these verticals are scheduled for publication in October. The company expects the increased specialization to attract more buyers and suppliers, in particular within the auto parts sector where China has stated the objective of capturing 10 percent of global exports, or approximately $120 billion per year, by 2015.

Chief financial officer Eddie Heng said: "Global Sources has a highly leveragable operating model, and second quarter earnings per share were positively and significantly impacted by three main factors. Revenue was $700,000 higher than expected, the IIC-China show was more profitable than originally anticipated, and $900,000 of expected technology spending has been re-budgeted for the second half."

Financial outlook
Global Sources typically does not conduct any major trade shows during the third quarter and will not this year, as well. Accordingly, third quarter 2005 revenue is expected to be in the range of $23.5 million to $24.0 million, with earnings per diluted share expected to be between $0.04 and $0.05. Revenue guidance for the full-year 2005 has been narrowed and is now expected to be between $110 million and $111 million. 2005 annual earnings per diluted share guidance has been increased from a range of $0.20 to $0.25 to a range of $0.30 to $0.33. This increase reflects the second quarter's greater than expected profitability and a slight increase in the profitability projected for the second half of 2005. This financial guidance also accounts for the recent reevaluation of the Chinese yuan, which, at the adjusted exchange rate of 8.11 yuan per U.S. dollar on July 21, 2005, will positively impact the company's earnings in 2005 by less than one percent.

Recent corporate highlights
 • Formed a strategic alliance with eBay to launch a new service, Global Sources Direct, through eBay's marketplaces. This will create more international selling opportunities for Global Sources' supplier customers, especially with eBay's PowerSellers.
 • Held two China Sourcing Fairs: Electronics & Components and Gifts & Home Products in Shanghai. Combined, the April shows generated $4.4 million in revenue, featured nearly 1,600 booths and were attended by over 38,000 buyers from 117 countries and territories.
 • Held the 10th Annual International IC-China Conference & Exhibition in Shenzhen, Beijing, and Shanghai in April. IIC-China generated $3.1 million in revenue, featured over 700 booths and was attended by over 24,000 engineers and technical managers from China.
 • Published the inaugural issues of Garments & Textiles and Fashion Accessories monthly magazines on May 5th and May 13th, respectively.
 • Announced the inaugural China Sourcing Fair: Fashion Accessories, which is scheduled to be held April 15-18, 2006 at the AsiaWorld-Expo in Hong Kong.
 • Formed a strategic alliance with Koëlnmesse to co-locate its International Hardware Fair/Practical World Hong Kong with Global Sources' China Sourcing Fair: Gifts & Home Products. The events are scheduled to be held at the AsiaWorld-Expo every April and October beginning in 2006.
 • Announced a new service "Global Sources FreePhone," allowing overseas buyers to make free telephone calls to suppliers through the Global Sources Online website.
 • Achieved the circulation audit target of 165,000 readers in June for Chief Executive China, the largest audited international business magazine in China. The circulation goal is to reach 180,000 readers by year end.
 • Announced a circulation increase for Electronic Engineering Times-Asia with the plan to reach a circulation of 76,000 readers in December, which would represent an increase of over 15 percent from June 2005. This Asia-wide circulation would include more than 48,000 readers in China.
 • Increased the number of Global Sources' independently certified community of active buyers to more than 434,700 at the end of the second quarter, a 5 percent increase compared to the second quarter of 2004.
 • Received over 4.7 million Requests-For-Information (RFIs) from buyers to suppliers through Global Sources Online for the twelve-month period ending June 30, 2005, up by more than 19 percent compared to the same period in 2004.

Conference call
Global Sources will conduct a conference call at 8:00 a.m. EDT on August 11, 2005 (8:00 p.m. on August 11 in Hong Kong) to review these results in more detail. Investors in the United States may participate in the call by dialing (800) 218-0204, and international participants may dial (1-303) 262-2130. For investors in Hong Kong, a local dial-in number, (852) 3009-3050, has also been established. A live webcast of the conference call will be available on Global Sources' corporate site at For those who cannot listen to the live broadcast, a webcast replay of the call will be available on the company's corporate site for at least 30 days. There will also be a telephone replay of the call available through August 13. To listen to the telephone replay, dial (800) 405-2236, or dial (1-303) 590-3000 outside the United States, and enter pass code 11033495#. For those in the Hong Kong area, the replay dial-in number is (852) 2287-4304, and the pass code is 847110#.

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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