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GigaMedia Announces First-Quarter 2017 Financial Results

2017-05-08 19:54
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TAIPEI, Taiwan, May 8, 2017 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today announced its first-quarter 2017 unaudited financial results.

Comments from Management

In the first quarter of 2017, the gaming revenue reached a 103% increase which led our gross profit to grow by 133% quarter-on-quarter. Comparing with the same quarter last year, there were also 72% and 67% increases on gaming revenue and gross profit, respectively.

The new mobile game Dragon, launched in mid-December 2016, has started to show its return in this quarter and benefit the Company significantly. Dragon's total revenue in the first quarter amounted to $2.3 million. Management is glad to see the great performance of our new licensed game, and expect to see it having a long-term profitability.

Nevertheless, Management looks forward to maintaining a stable and increasing level of profitability by introducing more quality games in the coming quarters. 

First Quarter Overview

  • Operating revenue reached a triple-digit growth rate of 103% in quarter-on-quarter comparison.
  • Gross profit over $2 million, up 133% from the fourth quarter and up 67% from the same period the year before.
  • Loss from operations decreased significantly from a loss of $4.4 million to a loss of $0.4 million quarter-on-quarter.
  • Net loss also decreased remarkably from a loss of $2.8 million to a loss of $0.8 million quarter-on-quarter.
  • Total assets remained $70 million quarter-on-quarter.

Unaudited Consolidated Financial Results

GigaMedia Limited is a diversified provider of online games. GigaMedia's online games business FunTown develops and operates a suite of games in Taiwan and Hong Kong, with focus on browser/mobile games and social casino games. Unaudited consolidated results of GigaMedia are summarized in the table below.

For the First Quarter

GIGAMEDIA 1Q17 UNAUDITED CONSOLIDATED FINANCIAL RESULTS


(unaudited, all figures in US$ thousands, except per share amounts)


1Q17



4Q16



Change

(%)



1Q17



1Q16



Change

(%)


Revenues



4,147




2,038




103.5

%



4,147




2,414




71.8

%

Gross Profit



2,282




981




132.6

%



2,282




1,370




66.6

%

Loss from Operations



(429)




(4,422)




90.3

%



(429)




(482)




11.0

%

Net Income (Loss) Attributable to GigaMedia



(760)




(2,807)




72.9

%



(760)




1,059




(171.8)

%

Net Income (Loss) Per Share Attributable to
GigaMedia, Diluted



(0.07)




(0.25)




72.0

%



(0.07)




0.10




(170.0)

%

EBITDA (A)



(821)




(3,948)




79.2

%



(821)




1,080




(176.0)

%

Cash and Marketable Securities-Current



65,354




65,713




(0.5)

%



65,354




72,506




(9.9)

%

(A)     EBITDA (earnings before interest, taxes, depreciation, and amortization) is provided as a supplement to results provided in accordance with U.S. generally accepted accounting principles ("GAAP"). (See, "Use of Non-GAAP Measures," for more details.)

First-Quarter Financial Results

  • Consolidated revenues for the first quarter of 2017 increased more than 100% quarter-on-quarter to $4.1 million from $2 million in the fourth quarter of 2016, and from $2.4 million in the first quarter of 2016, representing a 72% year-over-year. The quarter-on-quarter and year-over-year increase reflected the growth of the new licensed game launched in December 2016, and the total revenues of this quarter were mainly from licensed mobile games Dragon, Yume100 and casual games in Taiwan.
  • Consolidated gross profit increased 133% and 67% quarter-on-quarter and year-over-year respectively.
  • Consolidated operating expenses were $2.7 million in the first quarter of 2017. A decrease of 50% quarter-on-quarter and an increase of 46% year-over-over. The changes were resulting from the selling and marketing activities on licensed games.
  • Loss from operation of the first quarter of 2017 was down to $0.4 million, a decrease of approximately $4 million from last quarter. An 11% decrease of loss was also seen in year-over-year comparison.
  • Net loss of the first quarter of 2017 was of $0.8 million, a decrease of $2 million from the loss of $2.8 million of the fourth quarter of 2016.
  • Cash and marketable securities-current at the first quarter-end of 2017 accounted for $65.4 million which remains approximately the same as the fourth quarter-end of 2016.

Financial Position

As of March 31, 2017, GigaMedia had $65.9 million in cash, restricted cash and marketable securities-current, approximately $6 per share, compared to $73.5 million at the end of the first quarter of 2016. The decrease mostly reflected the net cash used in operating activities. Short-term debt was $2.6 million at the end of the first quarter of 2017.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as of May 8, 2017. Given potential changes in economic conditions and consumer spending, the evolving nature of online games, and various other risk factors, including those discussed in the Company's 2016 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

Yume 100, GigaMedia's first female-oriented game, has received favorable comments since its launch and its revenue accounted for 42% of the total revenue in 2016. More and more researches indicate that females start to game more than males and there are lots of games now aiming female leads in hopes of getting into a female market demographic. This year, we will keep looking for more female-oriented games in order to explore more potential gamers, enhance revenue growth momentum while keep a healthy and steady gross margin. With the new Chief Executive Officer James Huang's specialties in investment, GigaMedia also looks forward to potential opportunities to expand the business.

Use of Non-GAAP Measures

To supplement GigaMedia's consolidated financial statements presented in accordance with US GAAP, the company uses the following measure defined as non-GAAP by the SEC: EBITDA. Management believes that EBITDA (earnings before interest, taxes, depreciation, and amortization) is a useful supplemental measure of performance because it excludes certain non-cash items such as depreciation and amortization and that EBITDA is a measure of performance used by some investors, equity analysts and others to make informed investment decisions. EBITDA is not a recognized earnings measure under GAAP and does not have a standardized meaning. Non-GAAP measures such as EBITDA should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, other financial measures prepared in accordance with GAAP. A limitation of using EBITDA is that it does not include all items that impact the company's net income for the period. Reconciliations to the GAAP equivalents of the non-GAAP financial measures are provided on the attached unaudited financial statements.

About the Numbers in This Release

Quarterly results

All quarterly results referred to in the text, tables and attachments to this release are unaudited. The financial statements from which the financial results reported in this press release are derived have been prepared in accordance with U.S. GAAP, unless otherwise noted as "non-GAAP," and are presented in U.S. dollars.

Q&A

For Q&A regarding the first quarter 2017 performance upon the release, investors may send the questions via email to IR@gigamedia.com.tw, and the responses will be replied individually.

About GigaMedia

Headquartered in Taipei, Taiwan, GigaMedia Limited (Singapore registration number: 199905474H) is a diversified provider of online game products. GigaMedia's online games business develops and operates a suite of games in Taiwan and Hong Kong, with focus on browser/mobile games and social casino games. More information on GigaMedia can be obtained from www.gigamedia.com.

The statements included above and elsewhere in this press release that are not historical in nature are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding expected financial performance (as described without limitation in the "Business Outlook" section and in quotations from management in this press release) and GigaMedia's strategic and operational plans. These statements are based on management's current expectations and are subject to risks and uncertainties and changes in circumstances. There are important factors that could cause actual results to differ materially from those anticipated in the forward looking statements, including but not limited to, our ability to license, develop or acquire additional online games that are appealing to users, our ability to retain existing online game players and attract new players, and our ability to launch online games in a timely manner and pursuant to our anticipated schedule. Further information on risks or other factors that could cause results to differ is detailed in GigaMedia's Annual Report on Form 20-F filed in April 2017 and its other filings with the United States Securities and Exchange Commission.

 

For further information contact:

Annie Sun

Investor Relations Department

Country/City Code 8862 Tel: 2656-8096

annie.sun@gigamedia.com.tw

 

(Tables to follow)

 

GIGAMEDIA LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS






Three months ended



3/31/2017



12/31/2016



3/31/2016



unaudited



unaudited



unaudited



USD



USD



USD

Operating revenues












Asian online game and service revenues



4,147,068




2,038,051




2,387,356

Other revenues



-




137




26,619




4,147,068




2,038,188




2,413,975

Operating costs












Cost of Asian online game and service revenues



1,864,588




1,057,020




1,015,753

Cost of other revenues



-




143




27,815




1,864,588




1,057,163




1,043,568

Gross profit



2,282,480




981,025




1,370,407

Operating expenses












Product development and engineering expenses



276,697




330,895




127,976

Selling and marketing expenses



1,470,628




2,311,585




789,082

General and administrative expenses



964,524




846,013




935,803

Other



-




1,914,565




-




2,711,849




5,403,058




1,852,861

Loss from operations



(429,369)




(4,422,033)




(482,454)

Non-operating income (expense)












Interest income



77,174




84,383




67,383

Interest expense



(11,730)




(11,831)




(27,589)

Foreign exchange (loss) gain - net



(377,450)




56,878




(69,819)

(Loss) Gain on disposal of property, plant and equipment



-




(39,709)




773,981

Equity in net earnings (loss) on equity method investments



(23,265)




264,979




(20,141)

Gain on disposal of investments



-




25,894




805,043

Other



5,501




88,655




13,122




(329,770)




469,249




1,541,980

(Loss) Income from continuing operations before income taxes



(759,139)




(3,952,784)




1,059,526

Income tax benefit (expense)



(456)




1,146,193




(456)

(Loss) Income from continuing operations



(759,595)




(2,806,591)




1,059,070

Net (loss) income



(759,595)




(2,806,591)




1,509,070

Less: Net loss attributable to noncontrolling interest



-




-




-

Net (loss) income attributable to shareholders of GigaMedia



(759,595)




(2,806,591)




1,509,070

(Loss) Earnings per share attributable to GigaMedia












Basic:












(Loss) Income from continuing operations



(0.07)




(0.25)




0.10

Loss from discontinued operations



0.00




0.00




0.00




(0.07)




(0.25)




0.10

Diluted:












(Loss) Income from continuing operations



(0.07)




(0.25)




0.10

Loss from discontinued operations



0.00




0.00




0.00




(0.07)




(0.25)




0.10

Weighted average shares outstanding:












Basic



11,052,235




11,052,235




11,052,332

Diluted



11,052,235




11,052,235




11,052,235

 

 

GIGAMEDIA LIMITED

CONSOLIDATED BALANCE SHEETS












3/31/2017



12/31/2016



3/31/2016



unaudited



audited



unaudited



USD



USD



USD

Assets












Current assets












Cash and cash equivalents



65,351,207




65,710,816




72,502,287

Marketable securities - current



2,617




2,617




3,830

Accounts receivable - net



1,247,420




870,785




1,021,785

Prepaid expenses



493,229




547,818




519,294

Restricted cash



500,000




500,000




1,004,110

Other receivables



949,225




1,099,183




130,566

Other current assets



176,686




151,358




256,534

Total current assets



68,720,384




68,882,577




75,438,406













Marketable securities - noncurrent












Investments



52,790




72,052




4,505,271

Property, plant & equipment - net



22,434




6,605




221,564

Intangible assets - net



4,824




-




78,163

Prepaid licensing and royalty fees



904,404




1,020,034




548,512

Other assets



367,749




346,072




340,926

Total assets



70,072,585




70,327,340




81,132,842













Liabilities and equity












Short-term borrowings



2,637,652




2,480,620




6,214,075

Accounts payable



434,631




265,966




349,997

Accrued compensation



225,287




210,083




250,009

Accrued expenses



3,332,207




3,827,905




2,187,903

Unearned revenue



2,150,001




1,867,623




1,740,838

Other current liabilities



404,262




346,036




1,747,669

Total current liabilities



9,184,040




8,998,233




12,490,491

Other liabilities



1,671,511




1,671,511




1,927,703

Total liabilities



10,855,551




10,669,744




14,418,194

GigaMedia's shareholders' equity



59,217,034




59,657,596




66,714,648

Noncontrolling interest



-




-




-

Total equity



59,217,034




59,657,596




66,714,648

Total liabilities and equity



70,072,585




70,327,340




81,132,842

 

 

GIGAMEDIA LIMITED

Reconciliations of Non-GAAP Results of Operations






Three months ended



3/31/2017



12/31/2016



3/31/2016



unaudited



unaudited



unaudited



USD



USD



USD

Reconciliation of Net Income (Loss) to EBITDA












Net income (loss) attributable to GigaMedia



(759,595)




(2,806,591)




1,059,070

Depreciation



953




50,414




37,711

Amortization



2,798




26,967




22,860

Interest income



(77,174)




(84,383)




(67,383)

Interest expense



11,730




11,831




27,589

Income tax (benefit) expense



456




(1,146,193)




456

EBITDA



(820,832)




(3,947,955)




1,080,303

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/gigamedia-announces-first-quarter-2017-financial-results-300453055.html

Source: GigaMedia

Related stocks: NASDAQ-SMALL:GIGM

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