omniture

GigaMedia Announces Fourth-Quarter and Full-Year 2015 Financial Results

2016-03-24 20:30 2328

TAIPEI, March 24, 2016 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today announced its fourth-quarter and full-year 2015 unaudited financial results.

Message from Management

Fourth quarter was crucial for our company as we completed the restructuring of the organization. Both the management and the board agreed to remain the Company in good financial health. Therefore, in 2015, the Company endeavored to clean up the underperforming business and investment assets, and streamline the mobile game business.

In the fourth quarter, the operating revenues generated from the online and mobile game business were $2.2 million, and its gross profit was $1.1 million and gross margin accounted for about 50%, of which improved adequately compared with 28% of gross margin in 1Q15.

In 2015, the annual operating revenues were $10.3 million, up by 4.8% from $9.8 million of 2014. However, the Company recognized $4.3 million of impairment losses in 2015 mainly for prepaid license and royalty fees of ArcheAge as a result of an evaluation of its possible profitability upon release. The short-term borrowings decreased from $18.6 million in 2014 to $6.1 million in 2015; besides, given the market volatility, the Company disposed most of its marketable securities and realized a capital gain at the amount of approximately $20 million.

At the end of September last year, the Company launched a new mobile game namely "Yume100" licensed from Japan. With this game, the Company started to find a niche market, targeting female players in the age range of 20 to 40. Up to now, it's been six months upon its release in Taiwan and its revenue generation continues to be consistent. As of the end of 2015, the sales revenues generated by Yume100 were about $1 million. Due to the success of Yume100 launch in Taiwan, more and more well-known developers get to approach us for cooperation.

Looking forward to 2016, the Company plans to penetrate the female niche market and meanwhile, expects for collaboration with more renowned game developers aiming at publishing more popular games with good quality and good monetization. Besides, while the Company continues to look for investment opportunities, the management still remains conservative views on the global economic outlook, and carefully evaluates the investment potential.

Consolidated Financial Results

GigaMedia Limited is a diversified provider of online games and cloud computing services. GigaMedia's online game business, FunTown, develops and operates a suite of games in Taiwan and Hong Kong, with focus on browser/mobile games and social casino games. GigaMedia's cloud computing business, GigaCloud, was launched in early April 2013 and is focused on providing small and medium-sized enterprises in Greater China with critical communications services and IT solutions that increase flexibility, efficiency and competitiveness.

Unaudited consolidated results of GigaMedia are summarized in the table below.

For the Fourth Quarter

GIGAMEDIA 4Q15 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

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

4Q15

3Q15

Change (%)

4Q15

4Q14

Change (%)

Revenues

2,356

2,006

17.4%

2,356

2,660

-11.4%

Gross Profit

1,005

-598

268.1%

1,005

-94

1169.1%

Loss from Operations

-5,478

-5,240

-4.5%

-5,478

-4,330

-26.5%

Net Income
(Loss)
Attributable to
GigaMedia

-8,903

-301

-2857.8%

-8,903

5,437

-263.8%

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

-0.81

-0.03

-2600.0%

-0.81

0.49

-265.3%

EBITDA (A)

-8,815

-207

-4258.5%

-8,815

5,675

-255.3%

Cash and
Marketable
Securities-
Current

71,436

74,824

-4.5%

71,436

79,980

-10.7%








(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.)

Fourth-Quarter Financial Results

  • Consolidated revenues were $2.4 million, grew by 17.4% quarter-on-quarter primarily due to the growth of mobile gaming business with the revenues of $2.2 million in 4Q15, up from $1.7 million in 3Q15. The revenues were down by 11.4% quarter-over-quarter as the Company was restructuring its cloud computing business in 4Q15 and its contribution dwindled.
  • Consolidated operating expenses were $6.5 million, up from $4.6 million in 3Q15 (+39.7% quarter-on-quarter) mainly resulting from the impairment losses of $3.1 million.
  • Impairment losses were approximately $3.1 million recognized mainly for the prepaid license and royalty fees of ArcheAge, for which the game license agreement was signed in October 2010.
  • Net loss was $8.9 million in 4Q15 mostly due to $2 million consideration paid to Strawberry Cosmetics for the termination of the proposed acquisition and the impairment losses recognized for ArcheAge and the investment of other games.

Financial Position

GigaMedia maintained its solid financial position with cash and cash equivalents, marketable securities-current and restricted cash accounted for $72.4 million as of December 31, 2015, or approximately $6.55 per share. In consideration of short-term borrowings, its net cash was estimated at $66.3 million as of December 31, 2015, or approximately $5.91 per share.

For the Full Year 2015

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

FY15 (unaudited)

FY14 (audited)

Change (%)

Revenues

10,251

9,779

4.8%

Gross Profit

1,362

1,944

-29.9%

Loss from Operations

-17,935

-13,473

-33.1%

Net Loss Attributable
to GigaMedia

-2,588

-5,155

49.8%

Net Loss Per Share
Attributable to
GigaMedia, Diluted

-0.23

-0.48

52.1%

EBITDA (A)

-2,223

-4,168

46.7%

Consolidated revenues increased to $10.3 million in 2015 from $9.8 million in 2014, up by 4.8% mainly due to the growth of overall business.

Consolidated gross profit decreased to $1.4 million in 2015 from $1.9 million in 2014 (-29.9% year-over-year) attributable to an increase in operating costs and lowered operating leverage. The gross margin dropped to 13.3% in 2015, down from 19.9% in 2014.

Consolidated loss from operations for 2015 was $17.9 million, up from $13.5 million in 2014 as a result of the impairment losses for ArcheAge and the expenses accrued for the restructuring of the Company's underperforming business units in 4Q15.

Consolidated net loss attributable to the shareholders of the Company amounts to $2.6 million in 2015 compared to a loss of $5.2 million in 2014.

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

Full-year and quarterly results

All 2015 quarterly and full-year figures and all 2014 quarterly results referred to in the text, tables and attachments to this release are unaudited; all full-year 2014 amounts are audited. 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.

Webcast

Management will not hold an investor conference call and webcast for a discussion about the financial results of the fourth quarter and full year 2015 as the release dates of the financial results of the first quarter 2016 and the 2015 annual report are close. However, investors may still send the questions via email to IR@gigamedia.com.tw, and the responses will be replied individually.

An announcement for the next webcast will be made along with the release of the financial results of the first quarter of 2016.

About GigaMedia

Headquartered in Taipei, Taiwan, GigaMedia Limited (Singapore registration number: 199905474H) is a diversified provider of online games and cloud computing services. 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. The company's cloud computing business is focused on providing SMEs in Greater China with critical communications services and IT solutions that increase flexibility, efficiency and competitiveness. 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 2015 and its other filings with the United States Securities and Exchange Commission.

(Tables to follow)

GIGAMEDIA LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS




Three months ended


Twelve months ended



12/31/2015


9/30/2015


12/31/2014


12/31/2015


12/31/2014



unaudited


unaudited


unaudited


unaudited


audited



USD


USD


USD


USD


USD

Operating revenues











Asian online game and service revenues


2,151,598


1,660,013


1,739,623


8,544,926


8,199,393

Other revenues


204,215


345,516


920,732


1,706,069


1,579,551



2,355,813


2,005,529


2,660,355


10,250,995


9,778,944












Operating costs











Cost of Asian online game and service revenues


1,043,327


2,230,148


1,833,963


7,017,451


6,010,149

Cost of other revenues


307,688


373,245


920,471


1,871,227


1,824,573



1,351,015


2,603,393


2,754,434


8,888,678


7,834,722












Gross profit (loss)


1,004,798


(597,864)


(94,079)


1,362,317


1,944,222












Operating expenses











Product development and engineering expenses


190,547


151,621


220,748


687,961


892,331

Selling and marketing expenses


2,057,035


1,649,356


1,697,665


8,655,713


6,707,346

General and administrative expenses


1,152,772


1,997,787


915,407


5,701,793


6,415,549

Impairment losses


3,446,056


805,746


1,401,667


4,251,803


1,401,667

Other


(363,885)


37,291


0


0


0



6,482,525


4,641,801


4,235,487


19,297,270


15,416,893












Loss from operations


(5,477,727)


(5,239,665)


(4,329,566)


(17,934,953)


(13,472,671)












Non-operating income (expense)











Interest income


62,201


62,153


146,579


333,207


682,163

(Loss) gain on sales of marketable securities


(812)


5,844,306


6,011,518


20,020,057


8,620,875

Interest expense


(27,413)


(24,142)


(80,344)


(181,892)


(243,037)

Foreign exchange loss - net


(17,113)


(346,248)


(244,306)


(397,259)


(556,061)

Equity in net (loss) earnings on equity method investments


(52,011)


(615,990)


3,538,522


(604,947)


(530,801)

Changes in the fair value of an instrument recognized at fair value


699


637


74,213


(70,853)


74,213

(Loss) gain on disposal of investments


(365)


37,364


0


37,000


0

Impairment loss on marketable securities and investments


(1,289,779)


0


0


(1,289,779)


0

Other


(2,100,315)


33,477


263,660


(2,557,390)


362,055



(3,424,908)


4,991,557


9,709,842


15,288,144


8,409,407












(Loss) Income from continuing operations before income taxes


(8,902,635)


(248,108)


5,380,276


(2,646,809)


(5,063,264)

Income tax benefit (expense)


429


(125)


13,005


13,824


73,258












(Loss) Income from continuing operations


(8,902,206)


(248,233)


5,393,281


(2,632,985)


(4,990,006)












Net (loss) income


(8,902,206)


(248,233)


5,393,281


(2,632,985)


(4,990,006)

Less: Net (income) loss attributable to noncontrolling interest


(445)


(53,111)


43,639


45,100


(164,780)












Net (loss) income attributable to shareholders of GigaMedia


(8,902,651)


(301,344)


5,436,920


(2,587,885)


(5,154,786)























(Loss) earnings per share attributable to GigaMedia











Basic:











(Loss) income from continuing operations


(0.81)


(0.03)


0.49


(0.23)


(0.48)

Loss from discontinued operations


0.00


0.00


0.00


0.00


0.00



(0.81)


(0.03)


0.49


(0.23)


(0.48)

Diluted:











(Loss) income from continuing operations


(0.81)


(0.03)


0.49


(0.23)


(0.48)

Loss from discontinued operations


0.00


0.00


0.00


0.00


0.00



(0.81)


(0.03)


0.49


(0.23)


(0.48)












Weighted average shares outstanding:











Basic


11,052,332


11,052,332


11,052,332


11,052,332


10,785,393

Diluted


11,052,332


11,052,332


11,056,966


11,052,332


10,785,393

GIGAMEDIA LIMITED

CONSOLIDATED BALANCE SHEETS




12/31/2015


9/30/2015


12/31/2014



unaudited


unaudited


audited



USD


USD


USD

Assets







Current assets







Cash and cash equivalents


71,432,293


74,818,341


50,640,355

Marketable securities - current


3,830


5,307


29,339,926

Accounts receivable - net


1,246,371


982,186


1,297,785

Prepaid expenses


545,200


420,918


564,080

Restricted cash


1,000,000


1,000,000


8,990,666

Other receivables


112,993


74,327


129,126

Other current assets


225,086


258,117


195,998

Total current assets


74,565,773


77,559,196


91,157,936








Marketable securities - noncurrent


0


0


4,744,000

Investments


4,519,147


5,798,904


5,780,778

Property, plant & equipment - net


1,390,711


1,502,697


1,663,424

Intangible assets - net


87,710


137,532


221,630

Prepaid licensing and royalty fees


238,611


3,150,519


4,382,772

Other assets


388,193


333,006


353,258

Total assets


81,190,145


88,481,854


108,303,798








Liabilities and equity







Short-term borrowings


6,092,917


5,780,347


18,641,390

Accounts payable


319,601


280,738


770,965

Accrued compensation


759,260


672,966


795,431

Accrued expenses


2,978,563


2,233,313


3,464,652

Unearned revenue


1,750,253


1,591,386


1,945,945

Other current liabilities


1,701,754


1,632,963


1,718,709

Total current liabilities


13,602,348


12,191,713


27,337,092

Other liabilities


1,937,878


1,937,864


1,938,256

Total liabilities


15,540,226


14,129,577


29,275,348

GigaMedia's shareholders' equity


65,649,919


74,352,277


79,017,995

Noncontrolling interest


0


0


10,455

Total equity


65,649,919


74,352,277


79,028,450








Total liabilities and equity


81,190,145


88,481,854


108,303,798

GIGAMEDIA LIMITED

Reconciliations of Non-GAAP Results of Operations




Three months ended


Twelve months ended



12/31/2015


9/30/2015


12/31/2014


12/31/2015


12/31/2014



unaudited


unaudited


audited


unaudited


audited



USD


USD


USD


USD


USD

Reconciliation of Net (Loss) Income to EBITDA






















Net (loss) income attributable to GigaMedia


(8,902,651)


(301,344)


5,436,920


(2,587,885)


(5,154,786)

Depreciation


66,455


73,079


76,309


294,042


305,779

Amortization


56,793


59,838


241,060


236,076


1,192,629

Interest income


(62,201)


(62,153)


(146,450)


(333,186)


(681,833)

Interest expense


27,418


23,934


80,344


181,429


243,037

Income tax (benefit) expense


(429)


125


(13,005)


(13,824)


(73,258)

EBITDA


(8,814,615)


(206,521)


5,675,178


(2,223,348)


(4,168,432)


For further information contact:

Annie Sun
Investor Relations Services
Country/City Code 8862 Tel: 2656-8096
IR@gigamedia.com.tw

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/gigamedia-announces-fourth-quarter-and-full-year-2015-financial-results-300241011.html

Source: GigaMedia
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