Global Sources Announces Third Quarter 2007 Results
 
 Quarterly Revenue Up 15% Compared to the Third Quarter 2006
 
 EPS up 20% Compared to the Third Quarter 2006
  
 NEW YORK, Nov. 15 /Xinhua-PRNewswire-FirstCall/ -- Global Sources Ltd. 
(Nasdaq: GSOL) reported financial results for the third quarter and nine 
months ended Sept. 30, 2007.
 (Logo: http://www.newscom.com/cgi-bin/prnh/20030303/LNM011LOGO-b )
 
  Highlights: Third Quarter 2007 Compared to Third Quarter 2006
 
 -- Revenue was $33.8 million, up 15% from $29.3 million.
 -- Online revenue was $19.7 million, up 18% from $16.7 million.
 -- Print revenue was $12.6 million, up 6% from $11.9 million.
 -- Revenue from mainland China was $19.9 million, up 28% from
 $15.5 million.
 -- EPS was $0.12 per diluted share, up 20% from $0.10.
 -- Total deferred income and customer prepayments were $88.1 million
 as at Sept. 30, 2007, up 28% from $68.7 million as at Sept. 30, 2006.
 
 Chairman and CEO Merle A. Hinrichs said: "Our strong third quarter results 
reflect the growth of our online services and increased revenues from mainland 
China. Early in the fourth quarter, we launched Global Sources Online 2.0, 
which provides buyers with the leading search experience in our industry, 
delivering comprehensive search results, plus the capability to identify 
verified suppliers. Global Sources Online 2.0 is also very important to our 
future online growth, as it should enable us to generate revenue from new 
services and pricing programs we expect to begin rolling out in 2008.
 "We are extremely pleased with our position in the market, with our 
prospects for long-term growth and success, and with our clear 
differentiation. Our supplier customers have three primary objectives: lead 
generation, branding and differentiation from their competitors, and 
opportunities to get face-to-face with buyers to negotiate and win orders. 
With our integrated offering of online marketplaces, magazines and trade 
shows, we are able to deliver all three, in sharp contrast to our online-only 
competitors who really only provide lead generation.
 "In addition, it is increasingly recognized by suppliers that we have the 
leadership position serving the larger and more professional buyers, who 
account for the majority of import volume, in contrast with competitors who 
focus more on the SME part of the market."
 
 Highlights: Nine Months Ended Sept. 30, 2007
 For the nine-month period ended Sept. 30, 2007, revenue was $121.3 
million, compared to $104.2 million for the nine-month period ended Sept. 30, 
2006. GAAP net income for the period was $15.8 million and included an 
impairment charge of $1.8 million on the [UTF-8?]company’s HC International, Inc. 
investment taken during the second quarter of 2007. GAAP EPS was $0.37 per 
diluted share. Non-GAAP net income excluding this charge was $17.7 million, or 
$0.41 per diluted share. This is as compared to net income for the nine 
months ended Sept. 30, 2006, GAAP and Non-GAAP, of $12.6 million or $0.30 per 
diluted share.
 CFO Eddie Heng, said: "We had a solid third quarter, with revenue of $33.8 
million and EPS of $0.12 within guidance. Cash from operations for the 
quarter totaled $15.5 million, bringing our nine months ended Sept. 30th 
figure to $45.0 million. We are beginning to see increasing leverage from our 
China Sourcing Fairs, which were profitable in Hong Kong for the first time 
this past October, and we anticipate this to continue. In addition, we are 
reaffirming our guidance for 2007 full year revenue of 16 to 17% growth over 
2006."
 
 Financial Expectations: Fourth Quarter Revenue Increase -- Up 17 to 19%
 Fourth quarter 2007 revenue is expected to grow by 17 to 19% to be in the 
range of $61 million to $62 million, as compared to $52.3 million for the same 
period in 2006. Fourth quarter 2007 earnings per diluted share are expected 
to be in the range of $0.25 to $0.28, as compared to $0.36 in the fourth 
quarter of 2006, when the company recorded an extraordinary gain of $7.9 
million. Excluding this extraordinary gain, Non-GAAP earnings per diluted 
share were $0.19.
 For the full year 2007, management still expects revenue to be up 16 to 
17% as compared to 2006, and is narrowing the full year revenue range to now 
be in the range of $182.3 million to $183.5 million. GAAP earnings per 
diluted share for the year are expected to be in the range of $0.62 to $0.65. 
Non-GAAP earnings per diluted share for the full year 2007, which exclude an 
impairment charge recorded in the second quarter of 2007 of $1.8 million on 
the HC International, Inc. investment, are expected to be in the range of 
$0.66 to $0.69. This range represents growth of between 35 and 41% as compared 
to Non-GAAP earnings of $0.49 in 2006, which excluded the aforementioned 
extraordinary gain recorded in the fourth quarter of 2006.
 
 Recent Corporate Highlights
 
 -- Launched Global Sources Online 2.0 ( http://www.globalsources.com ), a
 unique new vertical search engine and marketplace, which delivers
 comprehensive search results and verified suppliers. It also provides
 new functionality and services to help buyers qualify suppliers.
 -- Scheduled the fourth quarter launch of a new Chinese-language search
 engine and online marketplace called China Global Sources Online
 ( http://www.globalsources.com.cn ). The site aims to enable both
 global and Chinese companies to market to volume buyers in mainland
 [UTF-8?]China’s domestic B2B market.
 -- Acquired the assets of Beijing-based Blue Bamboo China Ventures, or
 "Blue Bamboo," as part of Global [UTF-8?]Sources’ online expansion in China.
 Blue [UTF-8?]Bamboo’s experienced personnel also joined the Global Sources
 team.
 -- Increased Global [UTF-8?]Sources’ independently certified community of active
  buyers to more than 647,000 at the end of the third quarter, a 19%
 increase compared to the same quarter last year.
 -- Grew lead generation, which is measured as requests for information
 from buyers to suppliers through Global Sources Online, to over
 23 million for the 12 months ended Sept. 30, 2007. This is up more
 than 220% compared to the same period last year.
 -- Announced two China Sourcing Fairs in India: Electronics and
 Hardware & DIY. They are scheduled for November 2008 at
 the Bombay Exhibition Center in Mumbai and Pico Event Management has
 been licensed to manage the events.
 -- Held four successful China Sourcing Fairs in October:
 
 -- Electronics & Components, sold out with more than 2,770 booths,
 including over 1,900 from mainland China alone;
 -- Fashion Accessories, [UTF-8?]Asia’s largest specialized fashion accessories
 trade show, hosted 800 booths;
 -- Underwear & Swimwear, [UTF-8?]Asia’s only underwear and swimwear sourcing
 event, hosted 250 booths; and
 -- Gifts & Home Products, Global [UTF-8?]Sources’ single largest specialized
 fair, featured over 3,700 booths.
 
 -- Joined forces with three companies for verification and qualification-
 related services:
 
 -- Verify Limited for online credit reports;
 -- Bureau Veritas for supplier capability and related assessments; and
 -- PIERS to help exporters qualify buyers based on import activity
 reports.
 
 -- Merle A. Hinrichs, chairman and CEO of Global Sources, rang the
 NASDAQ Stock Market Opening Bell on Sept. 7, 2007.
 
 Conference Call for Global Sources Third Quarter 2007 Earnings
 Global Sources is scheduled to conduct a conference call at 8:00 a.m. ET 
on Nov. 15, 2007 (9:00 p.m. on Nov. 15, 2007 in Hong Kong) to review these 
results in more detail. 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 may call (852) 3011-4522. A live 
webcast of the conference call is scheduled to be available on Global [UTF-8?]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 [UTF-8?]company’s corporate site
( http://www.corporate.globalsources.com ) for at least 30 days. A telephone 
replay of the call is also scheduled to be available through Nov.19, 2007. To 
listen to the telephone replay, dial (800) 642-1687, or dial (1-706) 645-9291 
outside the United States, and enter pass code 20130665#. For those in the 
Hong Kong area, the replay dial-in number is (852) 3011-4541 and enter pass 
code 20130665#.
 
 About Global Sources
 Global Sources is a leading business-to-business (B2B) media company and a 
primary facilitator of two-way trade with Greater China. The core business is 
facilitating trade from Greater China to the world, using a wide range of 
English-language media. The other key business segment facilitates trade from 
the world to Greater China using Chinese-language media.
 The company provides sourcing information to volume buyers and integrated 
marketing services to suppliers. It helps a community of over 647,000 active 
buyers source more profitably from complex overseas supply markets. With the 
goal of providing the most effective ways possible to advertise, market and 
sell, Global Sources enables suppliers to sell to hard-to-reach buyers in over 
230 countries.
 The company offers the most extensive range of media and export marketing 
services in the industries it serves. It delivers information on 2 million 
products and more than 160,000 suppliers annually through 14 online 
marketplaces, 13 monthly magazines, over 100 sourcing research reports and 
nine specialized trade shows which run 22 times a year across seven cities.
 Suppliers receive more than 23 million sales leads annually from buyers 
through Global Sources Online ( http://www.globalsources.com ) alone.
 Global Sources has been facilitating global trade for 36 years. In 
mainland China it has over 2,000 team members in 44 locations, and a community 
of over 1 million registered online users and magazine readers for
Chinese-language media.
 
 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 [UTF-8?]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 [UTF-8?]company’s business, changes in 
general economic conditions, and changes in the assumptions used in making 
such forward-looking statements.
 
 -- Tables to Follow --
 
 
 GLOBAL SOURCES LTD. AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS
 (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)
 
 At At
 September 30 December 31
 2007 2006
  (Unaudited)
 ASSETS
 Current Assets:
 Cash and cash equivalents $31,393 $25,192
 Available-for-sale securities 153,475 130,603
 Accounts receivable, net 6,362 6,468
 Receivables from sales representatives 9,742 13,238
 Inventory 937 889
 Prepaid expenses and other current assets 20,433 14,174
 Total Current Assets 222,342 190,564
 
 Property and equipment, net 35,293 28,374
 Intangible assets 3,000 --
 Long term investments 100 100
 Bonds held to maturity, at amortized cost 301 289
 Other assets 3,582 1,562
 Total Assets $264,618 $220,889
 
 LIABILITIES AND [UTF-8?]SHAREHOLDERS’ EQUITY
 Current Liabilities:
 Accounts payable $6,500 $6,804
 Deferred income and customer prepayments 80,545 62,036
 Accrued liabilities 11,413 12,427
 Income taxes payable 959 751
 Total Current Liabilities 99,417  82,018
 Liabilities for incentive and bonus plans 102 102
 Deferred income and customer prepayments
 -- long term 7,554 1,802
 Deferred tax liability  293 403
 Total Liabilities 107,366 84,325
 
 Minority interest 4,583 2,913
 
 [UTF-8?]Shareholders’ equity:
 Common shares, US$0.01 par value;
  75,000,000 shares authorized;
 42,337,568 (2006: 42,271,568) shares
 issued and outstanding 423 423
 Additional paid in capital 130,460 125,832
 Retained earnings  20,681 4,830
 Accumulated other comprehensive income 1,105 2,566
 Total [UTF-8?]Shareholders’ Equity 152,669 133,651
 Total Liabilities and [UTF-8?]Shareholders’
 Equity $264,618 $220,889
 
 
 
 
 
 GLOBAL SOURCES LTD. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)
 
 
 Three months ended Nine months ended
 September 30 September 30
 2007  2006 2007 2006
 (Unaudited)(Unaudited)(Unaudited)(Unaudited)
 Revenue:
 Online and other media
 services (Note 1) $32,270 $28,594 $91,849 $82,762
 Exhibitions  454 435 26,153 20,514
 Miscellaneous 1,059 291 3,273 901
 33,783 29,320 121,275 104,177
 Operating Expenses:
 Sales (Note 2)  12,330 10,675 41,132 34,929
 Event production 163 129 10,240 9,245
 Community (Note 2) 5,051 4,423 17,759 16,654
 General and administrative
 (Note 2)  10,484 9,133 31,929 28,340
 Online services development
 (Note 2) 1,614 1,232 4,200 3,354
 Amortization of software
 costs 38 315  118 922
 Total Operating Expenses 29,680 25,907 105,378 93,444
 Income from Operations 4,103 3,413 15,897 10,733
 Interest and dividend income 1,758 1,426 4,874 3,774
  Gain on sale of
 available-for-sale securities -- 9 -- 309
 Loss on investment, net -- -- (1,846) --
 Foreign exchange gains
 (losses), net (294) (228)  (758) (456)
 Income before Income Taxes 5,567 4,620 18,167 14,360
 Income Tax Expense (89) (153) (646) (576)
 Net Income before Minority
 Interest $5,478 $4,467 $17,521 $13,784
 Minority interest (345) $(332) (1,670) $(1,465)
 Net Income before cumulative
 effect of change in
 accounting principle $5,133 $4,135 $15,851 $12,319
 Cumulative effect of change
 in accounting principle(Note3) -- -- -- 251
 Net Income $5,133 $4,135 $15,851 $12,570
 Diluted net income per share $0.12 $0.10 $0.37 $0.30
 Total shares used in
 diluted net income
 per share calculations 42,877,889 42,329,083 42,713,973 42,310,217
 
 
 
 Note: 1. Online and other media services consists of:
 
 
 
 Three months ended Nine months ended
 September 30 September 30
 2007 2006 2007 2006
 (Unaudited)(Unaudited)(Unaudited)(Unaudited)
 
 Online services  $19,656 $16,690 $55,418 $47,469
 Print services 12,614 11,904 36,431 35,293
 $32,270 $28,594 $91,849 $82,762
 
 
 Note: 2. Non-cash compensation expenses associated with the several
 employee equity compensation plans and Directors Purchase Plan
 included under various categories of expenses are as follows:
 
 
 Three months ended Nine months ended
 September 30 September 30
 2007 2006 2007 2006
 (Unaudited)(Unaudited)(Unaudited)(Unaudited)
 
 Sales  $483 $701 $1,869 $1,084
 Community 55 27 157 80
 General administrative 311 746 1,956 1,567
 Online services development 65 44 225 142
 $914 $1,518 $4,207 $2,873
 
 
 Note: 3. Represents the cumulative effect of change in accounting
 principle, resulting from the adoption of SFAS No. 123(R) with
  effect from January 1, 2006.
 
 
 
 
 GLOBAL SOURCES LTD. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)
 
 
 Nine months ended September 30
 2007 2006
  (Unaudited) (Unaudited)
 
 Cash flows from operating activities:
 Net income $15,851 $12,570
 Adjustments to reconcile net income
 to net cash provided by
 operating activities
 Depreciation and amortization 3,354 3,370
 Accretion of U.S. Treasury strips
 zero % coupons (12) (21)
 Unrealised dividend income on
 available-for-sale securities -- (19)
 Unrealised interest income on
 available-for-sale securities (961) (762)
 Impairment of investment 2,301 --
 Profit on sale of equipment -- (30)
 Bad debt expense 293 131
 Non-cash compensation expense 4,207 2,873
 Income attributable to minority
 shareholder  1,670 1,465
 Equipment written off 264 1
 Cumulative effect of change in
 accounting principle -- (251)
  26,967 19,327
 Changes in assets and liabilities:
 Accounts receivables (187) (114)
 Receivables from sales representatives 3,496 (5,107)
  Inventory (49) (85)
 Prepaid expenses and other current assets (6,259) (8,882)
 Long term assets (2,020) (1,006)
 Accounts payable  (304) 1,525
 Accrued liabilities and liabilities for
 incentive and bonus plans (1,014) 4,506
 Deferred income and customer prepayments 24,261 15,721
 Tax liability 98 204
 Net cash provided by operating activities 44,989 26,089
 
 Cash flows from investing activities:
 Purchase of property and equipment (10,537) (2,307)
 Proceeds from sale of equipment -- 30
 Purchase of intangible assets (3,000) --
 Purchase of available-for-sale securities (365,535) (403,751)
 Proceeds from sale of available-for-sale
 securities 339,862 311,412
 Net cash used in investing activities (39,210) (94,616)
 
 Cash flows from financing activities:
 Amount received towards directors
 purchase plan 422 359
 Net cash generated from financing
 activities 422 359
 
 Net increase in cash and cash equivalents 6,201  (68,168)
 Cash and cash equivalents, beginning of the
 period 25,192 94,321
 Cash and cash equivalents, end of the period $31,393 $26,153
 
 Supplemental cash flow disclosures:
  Income tax paid $548 $372
 
 
 
 
 GLOBAL SOURCES LTD. AND SUBSIDIARIES
 GAAP to NON-GAAP RECONCILIATION
 (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)
 
 
 Three months ended Nine months ended
 September 30 September 30
 2007  2006 2007 2006
 
 Net Income $5,133 $4,135 $15,851 $12,570
 
 Less:
 
 Loss on investment, net 0 0 1,846 0
 
 Non-GAAP Net Income $5,133 $4,135 $17,697 $12,570
 
 Non-GAAP diluted net
 income per share $0.12 $0.10 $0.41 $0.30
 
 Total shares used in
 non-GAAP diluted net
 income per share
 calculations 42,877,889 42,329,083 42,713,973 42,310,217
 
 
 
 Non-GAAP Net Income:
 Non-GAAP net income is defined as Net Income adjusted for the following:
 
 An impairment charge of approximately $2.3 million on the [UTF-8?]company’s HC
 International investment, net of $0.5 million received pursuant to
 indemnification obligations of the vendor under the purchase
 agreement for HC International investment.
 
 
 
 
 GLOBAL SOURCES LTD. AND SUBSIDIARIES
 GAAP to NON-GAAP RECONCILIATION
 (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)
 
 
 Three months ended Year ended
 December 31 December 31
 2006 2006
 
 Net Income $15,310 $27,880
 
 Less:
 Gain on sale of
 shares to minority
 Shareholder and interest
 income thereon (7,906) (7,906)
 
 Loss on investment 743 743
 
 Non-GAAP Net Income $8,147 $20,717
 
 Non-GAAP diluted net income
 per share $0.19 $0.49
 
 Total shares used in
 non-GAAP diluted net income
 per share calculations 42,375,913 42,326,365
 
 
 
 Non-GAAP Net Income:
 Non-GAAP net income is defined as Net Income adjusted for the following:
 
 (i) A gain of $7.9 million related to the sale 199 shares of its
 subsidiary eMedia Asia Ltd. minority shareholder and interest income
 thereon;
 (ii) An impairment charge of approximately $743,000 on the [UTF-8?]company’s HC
 International investment.
 
 
 For financial matrix, please visit:
 http://xprnnews.xfn.info/GSOL/20071115/HKTH001.pdf
 
 
 Global Sources Press Contact in Asia:
 Camellia So
 Tel: +852-2555-5021
 Email: cso@globalsources.com
 
 Global Sources Investor Contact in Asia:
 Eddie Heng
 Tel: +65-6547-2850
 Email: eheng@globalsources.com
 
 Global Sources Press Contact in U.S.:
 James W.W. Strachan
 Tel: +1-480-664-8309
 Email: strachan@globalsources.com
 
 Global Sources Investor Contact in U.S.:
 Moriah Shilton & Christiane Pelz
 Lippert/Heilshorn & Associates, Inc.
 Tel: +1-415-433-3777
 Email: cpelz@lhai.com
 
SOURCE  Global Sources Ltd.