Global Sources - Press Release

NEW YORK, May 11, 2011 – Global Sources Ltd. (NASDAQ: GSOL) reported financial results for the first quarter ended March 31, 2011.

"Our first quarter revenue was driven by online revenue growth of 17%," said Global Sources' chairman and CEO, Merle A. Hinrich. "Since the beginning of the year, we made three particularly noteworthy announcements. Last month, we launched the industry's first online sourcing fairs, which we expect to enhance the value and market position of our face-to-face shows. We also closed an acquisition extending our leadership position in Asia's electronics industry and announced a new trade show in India, which represents our entry into India's domestic B2B market."

Financial highlights – First quarter: 2011 compared to 2010

As disclosed in the fourth quarter 2010 earnings press release, the company has commenced reporting its financial results in accordance with the International Financial Reporting Standards (IFRS) in all financial communications, including reports to the Securities and Exchange Commission of the United States (SEC).

Revenue was $37.5 million, as compared to $35.5 million.

Online revenue was $27.2 million, as compared to $23.2 million.
Exhibitions revenue was $4.4 million, as compared to $4.5 million.
Print revenue was $4.7 million, as compared to $6.7 million.
Revenue from mainland China was $27.9 million, as compared to $25.3 million.

IFRS net income, including a non-cash stock based compensation (SBC) expense of $370,000, and amortization of intangibles as it relates to certain equity compensation plans of $190,000, was $3.5 million, or $0.10 per diluted share, as compared to first quarter 2010 IFRS net income of $3.7 million, or $0.08 per diluted share, which included a non-cash SBC expense of $366,000, and amortization of intangibles as it relates to certain equity compensation plans of $115,000.
Non-IFRS net income was $4.1 million, or $0.12 per diluted share, as compared to $4.2 million, or $0.09 per diluted share, for the first quarter of 2010.
Adjusted EBITDA was $5.5 million, as compared to $5.9 million for the first quarter of 2010.
Total deferred income and customer prepayments were $124.0 million as at March 31, 2011, as compared to $89.8 million as at March 31, 2010.

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 income as net income excluding non-cash, SBC expense or credit, amortization of intangibles as it relates to certain equity compensation plans, gains or losses on acquisitions and investments, and/or impairment charges, for all historical and future references to non-IFRS metrics. Non-IFRS EPS is defined as non-IFRS net income divided by the weighted average of diluted common shares outstanding. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation and impairment of goodwill and intangible assets.

Global Sources' CFO, Connie Lai, said: "We reiterate our guidance for the first half of 2011, and expect revenue growth to range between 9% and 10%, compared to the same period a year ago. This would represent 11% to 12% revenue growth in the second quarter of 2011, which we expect to be driven by continued healthy growth in both online and trade show revenue.

"We expect the following revenue mix in the first half of 2011: 54% to 55% for online; 32% to 33% for exhibitions; and 10% to 11% for print; and approximately 2% for miscellaneous. This is compared to the revenue mix in the first half of 2010 of approximately 49% for online, 34% for exhibitions, 15% for print and 2% for miscellaneous."

Financial expectations for the first half of 2011 under IFRS

For the first half of 2011 ending June 30, 2011:

Revenue is expected to be in the range of $102.5 million to $103.5 million, representing an increase of 9% to 10%, as compared to $94.2 million for the first half of 2010.
IFRS EPS is expected to be in the range of $0.33 to $0.35, as compared to $0.26 per diluted share in the first half of 2010. 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 2011.
Non-IFRS EPS is expected to be in the range of $0.38 to $0.40, as compared to $0.29 per diluted share for the same period in 2010.
Adjusted EBITDA is expected to be $17.6 million, as compared to $16.5 million in the first half of 2010.

Recent Corporate Highlights

Held 10 China Sourcing Fairs, two India Sourcing Fairs and two Korea Sourcing Fairs in Hong Kong featuring approximately 6,500 booths from 14 countries and regions. Total attendance exceeded 60,200, and included buyers from more than 178 countries and territories.
Through its eMedia Asia Limited joint venture between Global Sources (60.1%) and United Business Media (39.9%), acquired EDN-China, EDN-Asia and certain associated titles, from Canon Communications LLC, a subsidiary of United Business Media Limited (LSE: UBM.L), for a cash consideration of US$4 million.
Announced the scheduled launch of the Global Sources Machinery & Industrial Supplies Fair, Nov. 23 through 25 in Mumbai, India.
The 16thInternational IC-China Conference & Exhibition spring edition was held in Shenzhen. Exhibitors included mainland China's top semiconductor companies, as well as international vendors, including ADI, Element 14, Freescale, Fujitsu, Intel, NXP, RS Components and STMicroelectronics.
Launched the industry's first online sourcing fairs for security products, and garments and textiles in conjunction with the China Sourcing Fairs held in Hong Kong in April. Numerous additional online shows are scheduled to launch throughout the year.
Announced the cooperative joint venture with C&D Tourism and Hotels, a subsidiary of Xiamen C&D Corp., to launch Global Sourcing Fair: Sports & Leisure for the mainland China domestic B2B market, in Xiamen in November 2011.
Expanded the Global Sourcing Fairs in Shanghai in January 2011 from three to five shows, which featured over 960 booths.
Private Sourcing Events were held from Jan. 1, 2011, through the end of April 2011 for more than 150 sourcing teams from very large buying organizations including AEON, Fujitsu, J.C. Penney, RadioShack, Sears and Target. These events created more than 940 high quality, one-on-one selling opportunities for Global Sources suppliers.

Conference call for Global Sources first quarter 2011 earnings

Chairman and CEO Merle A. Hinrich and CFO Connie Lai are scheduled to conduct a conference call at 8:00 a.m. ET on May 11, 2011 (8:00 p.m. on May 11, 2011 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 the start time. Investors in the United States may participate by dialing (877) 941-2321, and international participants may dial (1-480) 629-9714. Investors in Hong Kong are required to provide the conference ID 4434773; 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) 3009-5027. 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 May 18, 2011. To listen to the telephone replay, please dial (800) 406-7325, or (1-303) 590-3030 outside the United States, and enter pass code 4434773. For those in Hong Kong, the replay dial-in number is (852) 3056 2777, and the pass code is 4434773.

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