Global Sources IR Reports Q2 2009 Results

Posted GAAP EPS of $0.11 and Non-GAAP EPS of $0.15
Increased cash and securities to $143.7 million with no debt

NEW YORK, Aug. 17 Global Sources Ltd., one of the largest b2b marketplaces reported financial results for the second quarter ended June 30, 2009.

Chairman and CEO for Global Sources, Merle A. Hinrichs, said: "As anticipated, during the quarter 2 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.
 
Global Sources Q2: 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.

Global Sources Q2: 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."

Global Sources Q2: Recent Corporate Highlights

• GlobalSources 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 independently certified community of Global Sources activebuyers 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