Global Sources LTD /bermuda 6-K Global Sources LTD. - Form 6-K

EXHIBIT 2

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
	2010			2009
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	85,292		$	91,553
Term deposits with banks		1,467			60,357
Available-for-sale securities		6,763			6,423
Accounts receivable, net		4,646			3,438
Receivables from sales representatives		6,511			5,607
Inventory		425			600
Prepaid expenses and other current assets		19,805			13,603
Deferred tax assets		96			13
Total Current Assets		125,005			181,594
Property and equipment, net		76,305			77,815
Goodwill		2,497			—
Intangible assets, net		7,572			8,770
Long term investments		100			100
Deferred tax assets		445			446
Other noncurrent assets		2,967			1,667
Total Assets	$	214,891		$	270,392
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	8,528		$	10,901
Deferred income and customer prepayments		95,721			73,841
Accrued liabilities		14,892			11,585
Income taxes payable		880			435
Total Current Liabilities		120,021			96,762
Deferred income and customer prepayments		4,819			2,516
Deferred tax liability		1,432			141
Total Liabilities		126,272			99,419
Shareholders’ equity:
Common shares, US$0.01 par value; 75,000,000 shares authorized; 51,565,725 (2009: 51,427,642) shares issued and 33,569,725 (2009: 44,552,642) outstanding		516			514
Additional paid in capital		142,038			138,468
Treasury shares, at cost — 17,996,000 (2009: 6,875,000) shares		(150,089	)		(50,000	)
Retained earnings		83,490			71,369
Accumulated other comprehensive income		4,363			2,859
Total Company Shareholders’ Equity		80,318			163,210
Non-controlling interests		8,301			7,763
Total Equity	$	88,619		$	170,973
Total Liabilities and Equity	$	214,891		$	270,392

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,
	2010			2009			2010			2009
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue:
Online and other media services (Note 1)	$	30,541		$	28,780		$	88,641		$	87,431
Exhibitions		7,674			901			39,554			29,372
Miscellaneous		1,202			931			3,597			2,817
		39,417			30,612			131,792			119,620
Operating Expenses:
Sales (Note 2)		15,492			12,087			48,840			45,820
Event production		2,635			319			13,576			10,032
Community (Note 2)		4,069			4,796			15,533			17,885
General and administrative (Note 2)		11,810			11,057			35,201			33,975
Online services development (Note 2)		1,440			1,408			4,078			4,172
Amortization of intangibles and software costs		492			26			1,079			106
Total Operating Expenses		35,938			29,693			118,307			111,990
Income from Operations		3,479			919			13,485			7,630
Interest and dividend income		66			312			425			725
Foreign exchange gains (losses), net		(14	)		85			(26	)		58
Income before Income Taxes	$	3,531		$	1,316		$	13,884		$	8,413
Income Tax Expense		(407	)		(96	)		(636	)		(270	)
Net Income	$	3,124		$	1,220		$	13,248		$	8,143
Net income attributable to non-controlling interests		(842	)		(35	)		(1,127	)		(669	)
Net Income Attributable to the Company	$	2,282		$	1,185		$	12,121		$	7,474
Basic net income per share attributable to the Company’s shareholders	$	0.06		$	0.03		$	0.28		$	0.17
Diluted net income per share attributable to the Company’s shareholders	$	0.06		$	0.03		$	0.28		$	0.16
Shares used in basic net income per share calculations		38,401,239			44,544,540			42,544,789			44,543,207
Shares used in diluted net income per share calculations		39,873,952			45,877,214			44,010,618			45,759,320

Note:   1.   Online and other media services consists of:

	Three months ended				Nine months ended
	September 30,				September 30,
	2010		2009		2010		2009
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Online services	$	24,811	$	20,904	$	68,985	$	64,928
Print services		5,730		7,876		19,656		22,503
	$	30,541	$	28,780	$	88,641	$	87,431

Note:    2.  Non-cash compensation expenses associated with the employee and team member equity compensation plans and Global Sources Directors Share Grant Award Plan included under various categories of expenses are as follows:

	Three months ended				Nine months ended
	September 30,				September 30,
	2010		2009		2010		2009
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Sales	$	163	$	213	$	675	$	1,053
Community		60		155		221		304
General and administrative		431		493		1,354		1,569
Online services development		68		79		222		255
	$	722	$	940	$	2,472	$	3,181