Global Sources LTD /bermuda 6-K Global Sources - 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
	December 31,			December 31,
	2010			2009
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	101,298		$	91,553
Term deposits with banks		1,411			60,357
Available-for-sale securities		-			6,423
Accounts receivable, net		3,919			3,438
Receivables from sales representatives		8,248			5,607
Inventory		435			600
Prepaid expenses and other current assets		20,269			13,603
Deferred tax assets		8			13
Total Current Assets		135,588			181,594
Property and equipment, net		76,514			77,815
Goodwill		2,497		-
Intangible assets, net		7,952			8,770
Long term investments		100			100
Deferred tax asset		496			446
Other noncurrent assets		2,556			1,667
Total Assets	$	225,703		$	270,392
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	9,600		$	10,901
Deferred income and customer prepayments		93,901			73,841
Accrued liabilities		14,269			11,585
Income taxes payable		650			435
Total Current Liabilities		118,420			96,762
Deferred income and customer prepayments		6,710			2,516
Deferred tax liability		1,397			141
Total Liabilities		126,527			99,419
Shareholders’ equity:
Common shares, US$0.01 par value; 75,000,000 shares authorized; 51,569,540 (2009: 51,427,642) shares issued and 33,573,540 (2009: 44,552,642) outstanding		516			514
Additional paid in capital		143,672			138,468
Treasury shares, at cost – 17,996,000 (2009: 6,875,000) shares		(150,089	)		(50,000	)
Retained earnings		92,940			71,369
Accumulated other comprehensive income		3,972			2,859
Total Company Shareholders’ Equity		91,011			163,210
Non-controlling interests		8,165			7,763
Total Equity		99,176			170,973
Total Liabilities and Equity	$	225,703		$	270,392

EXHIBIT 2

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				Year ended
	December 31,				December 31,
	2010		2009		2010		2009
	(Unaudited)		(Unaudited)		(Unaudited)
Revenue:
Online and other media services (Note 1)	$	31,136	$	27,950	$	119,777	$	115,381
Exhibitions		29,896		25,775		69,450		55,147
Miscellaneous		1,399		1,168		4,996		3,985
		62,431		54,893		194,223		174,513
Operating Expenses:
Sales (Note 2)		23,811		17,990		72,651		63,810
Event production		8,299		8,353		21,875		18,385
Community (Note 2)		6,883		6,879		22,416		24,764
General and administrative (Note 2)		13,112		10,885		48,313		44,860
Online services development (Note 2)		1,359		1,244		5,437		5,416
Amortization of intangible and software costs		313		1,164		1,392		1,270
Total Operating Expenses		53,777		46,515		172,084		158,505
Income from Operations		8,654		8,378		22,139		16,008
Interest and dividend income		85		256		510		981
Gain on sale of available-for-sale securities		1,223		-		1,223	-
Foreign exchange gains (losses), net		(167)		179		(193)		237
Income before Income Taxes	$	9,795	$	8,813	$	23,679	$	17,226
Income Tax Expense		(481)		(228)		(1,117)		(498)
Net Income	$	9,314	$	8,585	$	22,562	$	16,728
Net income attributable to non-controlling interests		136		51		(991)		(618)
Net Income Attributable to the Company	$	9,450	$	8,636	$	21,571	$	16,110
Basic net income per share attributable to the Company’s shareholders	$	0.28	$	0.19	$	0.54	$	0.36
Diluted net income per share attributable to the Company’s shareholders	$	0.27	$	0.19	$	0.52	$	0.35
Shares used in basic net income per share calculations		33,573,540		44,552,550		40,283,874		44,546,226
Shares used in diluted net income per share calculations		35,119,162		45,896,193		41,769,652		45,794,197

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

	Three months ended				Year ended
	December 31,				December 31,
	2010		2009		2010		2009
	(Unaudited)		(Unaudited)		(Unaudited)
Online services	$	24,959	$	20,448	$	93,944	$	85,376
Print services		6,177		7,502		25,833		30,005
	$	31,136	$	27,950	$	119,777	$	115,381

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				Year ended
	December 31,				December 31,
	2010		2009		2010		2009
	(Unaudited)		(Unaudited)		(Unaudited)
Sales	$	598	$	(291)	$	1,273	$	762
Community		128		(87)		349		217
General and administrative		158		(946)		1,512		623
Online services development		83		14		305		269
	$	967	$	(1,310)	$	3,439	$	1,871