omniture

GigaMedia Announces Second-Quarter 2015 Financial Results

2015-08-05 21:00 1794

TAIPEI, August 5, 2015 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today announced its second-quarter 2015 unaudited financial results.

Message from Management

For the second quarter of 2015, the sales revenues were $2.7 million. The contribution made by the mobile games, the social casino games and the cloud computing business accounted for about 45.7%, 28.2% and 26.5% respectively.

The mobile gaming market is getting more competitive. Started from the second quarter of 2015, the Company began to scrutinize current performance of the mobile gaming business and try to integrate the resources of the operations in Taiwan and Hong Kong in order to streamline the business and then hopefully improve its margin by the end of this year.

In June 2015, the Company entered into partnership with World Mahjong Ltd. to organize the World Series of Mahjong 2015 and also became their exclusive online mahjong game provider; furthermore, will host the online qualifying tournaments of the World Series of Mahjong 2015 on "ClubOne" platform. "ClubOne", the Company's in-house developed social casino platform, is designed also to enable the land-based operators to consolidate resources for seizing more opportunities that navigate both online and offline markets.

Besides, in the second quarter of 2015, the Company continued to dispose partial marketable securities and repaid the short-term borrowings for lowering its leverage ratio and meanwhile, increasing its cash position.

Management considers 2015 a turnaround year for the Company. In addition to current mobile gaming business to be streamlined and newly launched platform, management also pursues an acquisitive growth and expects it to bring in more business value to the Company and also support its future revenue growth.

Consolidated Financial Results

GigaMedia Limited is a diversified provider of online games and cloud computing services. 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. 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 Second Quarter

GIGAMEDIA 2Q15UNAUDITED CONSOLIDATED FINANCIAL RESULTS

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

2Q15

1Q15

Change (%)

2Q15

2Q14

Change (%)

Revenues

2,728

3,162

-13.7%

2,728

2,471

10.4%

Gross Profit

217

738

-70.6%

217

819

-73.5%

Loss from Operations

-3,801

-3,416

-11.3%

-3,801

-2,945

-29.1%

Net Income (Loss) Attributable to GigaMedia

1,377

5,239

-73.7%

1,377

-2,677

151.4%

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

0.02

0.09

-77.8%

0.02

-0.05

140.0%

EBITDA (A)

1,463

5,335

-72.6%

1,463

-2,448

159.8%

Cash and Marketable Securities-Current

68,305

75,575

-9.6%

68,305

63,009

8.4%

(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.)

Second-Quarter Financial Results

  • Consolidated revenues were $2.7 million, dropped by 13.7% quarter-on-quarter mainly due to the decrease of the new game releases, but increased by 10.4% quarter-over-quarter due to the growth of the cloud computing business.
  • Consolidated operating expenses were $4.0 million in 2Q15, down by 3.3% quarter-on-quarter due to an slight decrease on selling and marketing expenses, but increased by 6.7% from $3.8 million quarter-over-quarter, resulting from an increase of selling and marketing expenses for the new games.
  • Consolidated non-operating income was $5.1 million attributable to the capital gain on disposal of marketable securities-current.
  • Net income was $1.4 million, up by 151.4% quarter-over-quarter mainly attributable to the gain on sales of marketable securities.
  • Cash and marketable securities-current in 2Q15 accounted for $68.3 million, decreased by 9.6% from $75.6 million in 1Q15 resulting from a disposal of marketable securities-current and the repayment of short-term borrowings.
  • Investments were $6.7 million in 2Q2015, increased approximately $1.0 million quarter-on-quarter, resulting from an investment in SportsPlus Inc. ( www.sportsplus.me ), a new app for daily fantasy sports and newly launched in the second quarter this year. Investments were decreased from $25.5 million in 2Q2014 to $6.7 million in 2Q2015 mainly due to a disposal of securities investment in April 2015.

Financial Position

GigaMedia maintained its solid financial position with cash and cash equivalents, marketable securities-current and restricted cash accounted for $69.3 million as of June 30, 2015, or approximately $1.25 per share.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as of August 5, 2015. 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 2014 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

In the third quarter of 2015, the Company will continue to attend the gaming events in order to promote the co-developed new games and attract overseas publishers to license them in various countries. Meanwhile, for mobile gaming operation, the Company currently seeks for cooperation with overseas online platforms in order to better the monetization of the games.

With regard to social casino game platform, the Company continues the cooperation talk with overseas operators in order to license "ClubOne" not only in China but also in South East Asia by the end of 2015.

As for cloud computing business, the Company will continue to provide customized and integrated services to the corporate customers. Management also expects it to improve its margin while the sales revenues are increasing.

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.

Webcast Schedule

For Q&A regarding the second quarter 2015 performance upon the release, investors may send the questions via email to IR@gigamedia.com.tw by August 10th, and the responses will be replied in the webcast. Webcast will be available on the company's official website www.gigamedia.com on August 14th.

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 2013 and its other filings with the United States Securities and Exchange Commission.

For further information contact:
Amanda Chang
Investor Relations Department
+886-2-2656-8080
amanda.chang@gigamedia.com.tw

(Tables to follow)

GIGAMEDIA LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS












Three months ended




6/30/2015


3/31/2015


6/30/2014




unaudited


unaudited


unaudited




USD


USD


USD

Operating revenues








Asian online game and service revenues



2,014,922


2,718,393


2,180,171

Other revenues



712,646


443,692


290,627




2,727,568


3,162,085


2,470,798









Operating costs








Cost of Asian online game and service revenues



1,777,811


1,966,164


1,291,889

Cost of other revenues



732,775


457,520


360,349




2,510,586


2,423,684


1,652,238









Gross profit



216,982


738,401


818,560









Operating expenses








Product development and engineering expenses



164,085


181,708


227,509

Selling and marketing expenses



2,262,207


2,687,116


1,677,455

General and administrative expenses



1,265,399


1,285,835


1,858,949

Other



326,594


0


0




4,018,285


4,154,659


3,763,913









Loss from operations



(3,801,303)


(3,416,258)


(2,945,353)









Non-operating income (expense)








Interest income



106,324


102,529


174,559

Gain on sales of marketable securities



4,703,500


9,473,063


162,051

Interest expense



(48,224)


(82,113)


(68,399)

Foreign exchange (loss) gain - net



(17,655)


(16,242)


115,438

Equity in net earnings (loss) on equity method investments



22,954


40,100


(244,775)

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



879,472


(951,660)


0

Other



(508,926)


18,373


18,402




5,137,445


8,584,050


157,276









Income (loss) from continuing operations before income taxes



1,336,142


5,167,792


(2,788,077)

Income tax benefit



170


13,351


60,849









Income (loss) from continuing operations



1,336,312


5,181,143


(2,727,228)









Net income (loss)



1,336,312


5,181,143


(2,727,228)

Less: Net loss attributable to noncontrolling interest



40,525


58,130


50,537









Net income (loss) attributable to shareholders of GigaMedia



1,376,837


5,239,273


(2,676,691)

















(Loss) earnings per share attributable to GigaMedia








Basic:








Income (loss) from continuing operations



0.02


0.09


(0.05)

Loss from discontinued operations



0.00


0.00


0.00




0.02


0.09


(0.05)

Diluted:








Income (loss) from continuing operations



0.02


0.09


(0.05)

Loss from discontinued operations



0.00


0.00


0.00




0.02


0.09


(0.05)









Weighted average shares outstanding:








Basic



55,261,661


55,261,661


53,901,371

Diluted



55,262,036


55,261,926


53,901,371

GIGAMEDIA LIMITED

CONSOLIDATED BALANCE SHEETS












6/30/2015


3/31/2015


6/30/2014




unaudited


unaudited


unaudited




USD


USD


USD

Assets








Current assets








Cash and cash equivalents


68,299,828


53,856,429


40,660,576

Marketable securities - current


5,307


21,718,274


22,348,693

Accounts receivable - net


1,675,561


2,031,966


1,352,875

Prepaid expenses


1,019,249


671,116


648,190

Restricted cash



1,000,000


9,034,062


8,924,513

Other receivables


186,994


3,105,223


273,032

Other current assets


273,500


490,835


143,465

Total current assets


72,460,439


90,907,905


74,351,344









Marketable securities - noncurrent


4,744,000


4,744,000


9,214,270

Investments



6,740,252


5,724,346


25,476,917

Property, plant & equipment - net


1,675,312


1,719,799


1,695,953

Intangible assets - net


206,780


263,811


884,979

Prepaid licensing and royalty fees


5,026,779


5,144,947


4,843,848

Other assets



369,685


356,274


329,422

Total assets



91,223,247


108,861,082


116,796,733









Liabilities and equity







Short-term borrowings


4,536,617


19,808,307


19,755,567

Accounts payable


557,599


652,708


332,166

Accrued compensation


464,384


363,480


785,562

Accrued expenses


3,739,583


3,439,764


2,717,972

Unearned revenue


1,673,170


1,947,176


2,289,599

Other current liabilities


1,800,582


1,985,012


3,810,015

Total current liabilities


12,771,935


28,196,447


29,690,881

Other liabilities



1,933,173


1,935,620


182,150

Total liabilities



14,705,108


30,132,067


29,873,031

GigaMedia's shareholders' equity


76,607,057


78,776,989


86,825,311

Noncontrolling interest


(88,918)


(47,974)


98,391

Total equity



76,518,139


78,729,015


86,923,702









Total liabilities and equity


91,223,247


108,861,082


116,796,733

GIGAMEDIA LIMITED

Reconciliations of Non-GAAP Results of Operations










Three months ended



6/30/2015


3/31/2015


6/30/2014



unaudited


unaudited


unaudited



USD


USD


USD

Reconciliation of Net Income (Loss) to EBITDA














Net income (loss) attributable to GigaMedia


1,376,837


5,239,273


(2,676,691)

Depreciation


80,296


74,212


75,599

Amortization


64,129


55,316


319,683

Interest income


(106,302)


(102,529)


(174,362)

Interest expense


47,975


82,102


68,399

Income tax (benefit) expense


(170)


(13,351)


(60,849)

EBITDA


1,462,765


5,335,023


(2,448,221)

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/gigamedia-announces-second-quarter-2015-financial-results-300123934.html

Source: GigaMedia Limited
collection