TAIPEI, , 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 $2.3 million. Management is glad to see the great performance of our new licensed game, and expect to see it having a long-term profitability.
Nevertheless, Management looks forward to maintaining a stable and increasing level of profitability by introducing more quality games in the coming quarters.
First Quarter Overview
Unaudited Consolidated Financial Results
GigaMedia Limited is a diversified provider of online games. GigaMedia's online games business FunTown develops and operates a suite of games in Taiwan and Hong Kong, with focus on browser/mobile games and social casino games. Unaudited consolidated results of GigaMedia are summarized in the table below.
For the First Quarter
| GIGAMEDIA 1Q17 UNAUDITED CONSOLIDATED FINANCIAL RESULTS |
||||||||||||||||||||||||
| (unaudited, all figures in US$ 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 |
(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
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 |
(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 |
|||||||||
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