TAIPEI, , July 31, 2017 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today announced its second-quarter 2017 unaudited financial results.
Comments from Management
In the second quarter, the Company went through the transition to a new CEO and the Management has been reviewing the business strategies.
"In the past years, we could see some big fluctuation in traffic for social games. In order not to make our business seems like it's on the roller coaster, we now focus on seeking licensed games which have the potentials to be long-term hits instead of the ones live shortly like a flash in the pan.
GigaMedia will launch a new game this year and we are looking forward to improving performance and delivering positive operating income from mobile games which have long lifespan." said GigaMedia Limited Chief Executive Officer James Huang.
Second 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.
| GIGAMEDIA2Q17 UNAUDITED CONSOLIDATED FINANCIAL RESULTS |
||||||||||||
| (unaudited, all figures in US$ thousands, except per share amounts) |
2Q17 |
1Q17 |
Change |
2Q17 |
2Q16 |
Change |
||||||
| Revenues |
3,117 |
4,147 |
-24.84% |
3,117 |
2,062 |
51.16% |
||||||
| Gross Profit |
1,751 |
2,282 |
-23.27% |
1,751 |
1,058 |
65.50% |
||||||
| Loss from Operations |
734 |
429 |
NM |
734 |
1,283 |
NM |
||||||
| Net Income (Loss) Attributable to GigaMedia |
904 |
(760) |
NM |
904 |
(2,146) |
NM |
||||||
| Net Income (Loss) Per Share Attributable to GigaMedia, Diluted |
0.08 |
(0.07) |
NM |
0.08 |
(0.19) |
NM |
||||||
| EBITDA (A) |
812 |
(821) |
NM |
812 |
(2,144) |
NM |
||||||
| Cash and Marketable Securities-Current |
66,452 |
65,354 |
1.68% |
66,452 |
70,585 |
-5.86% |
||||||
| NM= Not Meaningful |
||||||||||||
| (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
Financial Position
GigaMedia maintained its solid financial position with cash and cash equivalents, marketable securities-current and restricted cash accounted for $67 million as of June 30, 2017, or $6 per share.
Business Outlook
The following forward-looking statements reflect GigaMedia's expectations as of July 31, 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.
Online Games Business
GigaMedia is repositioning its online games business to align itself with steady growth in licensed games. The Company is focusing on licensing in long-lifecycle games which allow us to build up communities, network our customers and accumulate games awareness; hence we will be able to maintain the stability in revenues. Management also targets to launch a new licensed game this year.
As for social games, the Company continues upgrading game server system and integrating the game development environment to enhance efficiencies and strengthen operations. One new slot game is targeted to launch in the third quarter.
Investment
The Company continues seeking suitable strategic investment and acquisition targets with sustainable business models worldwide to increase corporate growth and maximize shareholder value.
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 second 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 games. 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.
| GIGAMEDIA LIMITED |
||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||
| Three months ended |
||||||
| 6/30/2017 |
03/31/2017 |
6/30/2016 |
||||
| unaudited |
unaudited |
unaudited |
||||
| USD |
USD |
USD |
||||
| Operating revenues |
||||||
| Asian online game and service revenues |
3,117,035 |
4,147,068 |
2,061,392 |
|||
| Other revenues |
- |
- |
283 |
|||
| 3,117,035 |
4,147,068 |
2,061,675 |
||||
| Operating costs |
||||||
| Cost of Asian online game and service revenues |
1,366,009 |
1,864,588 |
1,003,828 |
|||
| Cost of other revenues |
- |
- |
296 |
|||
| 1,366,009 |
1,864,588 |
1,004,124 |
||||
| Gross profit |
1,751,026 |
2,282,480 |
1,057,551 |
|||
| Operating expenses |
||||||
| Product development and engineering expenses |
288,371 |
276,697 |
167,563 |
|||
| Selling and marketing expenses |
1,174,915 |
1,470,628 |
1,426,594 |
|||
| General and administrative expenses |
1,021,624 |
964,524 |
746,910 |
|||
| Other |
- |
- |
- |
|||
| 2,484,910 |
2,711,849 |
2,341,067 |
||||
| Loss from operations |
(733,884) |
(429,369) |
(1,283,516) |
|||
| Non-operating income (expense) |
||||||
| Interest income |
108,580 |
77,174 |
80,925 |
|||
| Interest expense |
(11,717) |
(11,730) |
(25,981) |
|||
| Foreign exchange (loss) gain - net |
(74,523) |
(377,450) |
(94,062) |
|||
| (Loss) Gain on disposal of property, plant and equipment |
965 |
- |
8,090 |
|||
| Equity in net loss on equity method investments |
(311) |
(23,265) |
(858,492) |
|||
| Gain on disposal of investments |
- |
- |
8,567 |
|||
| Impairment loss on marketable securities and investments |
(52,242) |
- |
- |
|||
| Other - net |
1,667,257 |
5,501 |
15,237 |
|||
| 1,638,009 |
(329,770) |
(865,716) |
||||
| (Loss) Income from continuing operations before income taxes |
904,125 |
(759,139) |
(2,149,232) |
|||
| Income tax benefit (expense) |
- |
(456) |
2,961 |
|||
| (Loss) Income from continuing operations |
904,125 |
(759,595) |
(2,146,271) |
|||
| Net (loss) income |
904,125 |
(759,595) |
(2,149,271) |
|||
| Less: Net loss attributable to noncontrolling interest |
- |
- |
||||
| Net (loss) income attributable to shareholders of GigaMedia |
904,125 |
(759,595) |
(2,149,271) |
|||
| (Loss) Earnings per share attributable to GigaMedia |
||||||
| Basic: |
||||||
| (Loss) Income from continuing operations |
0.08 |
(0.07) |
(0.19) |
|||
| Loss from discontinued operations |
0.00 |
0.00 |
0.00 |
|||
| 0.08 |
(0.07) |
(0.19) |
||||
| Diluted: |
||||||
| (Loss) Income from continuing operations |
0.08 |
(0.07) |
(0.19) |
|||
| Loss from discontinued operations |
0.00 |
0.00 |
0.00 |
|||
| 0.08 |
(0.07) |
(0.19) |
||||
| 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 |
||||||
| 6/30/2017 |
3/31/2017 |
6/30/2016 |
||||
| unaudited |
audited |
unaudited |
||||
| USD |
USD |
USD |
||||
| Assets |
||||||
| Current assets |
||||||
| Cash and cash equivalents |
66,449,544 |
65,351,207 |
70,581,209 |
|||
| Marketable securities - current |
2,617 |
2,617 |
3,830 |
|||
| Accounts receivable - net |
724,508 |
1,247,420 |
820,603 |
|||
| Prepaid expenses |
510,432 |
493,229 |
488,851 |
|||
| Restricted cash |
503,640 |
500,000 |
1,004,110 |
|||
| Other receivables |
913,366 |
949,225 |
30,059 |
|||
| Other current assets |
146,242 |
176,686 |
192,924 |
|||
| Total current assets |
69,250,349 |
68,720,384 |
73,121,586 |
|||
| Marketable securities - noncurrent |
||||||
| Investments |
- |
52,790 |
3,720,766 |
|||
| Property, plant & equipment - net |
29,445 |
22,434 |
400,831 |
|||
| Intangible assets - net |
4,848 |
4,824 |
111,064 |
|||
| Prepaid licensing and royalty fees |
389,886 |
904,404 |
912,055 |
|||
| Other assets |
384,468 |
367,749 |
414,857 |
|||
| Total assets |
70,058,996 |
70,072,585 |
78,681,159 |
|||
| Liabilities and equity |
||||||
| Short-term borrowings |
2,629,849 |
2,637,652 |
5,577,072 |
|||
| Accounts payable |
291,215 |
434,631 |
272,203 |
|||
| Accrued compensation |
375,393 |
225,287 |
392,706 |
|||
| Accrued expenses |
2,628,643 |
3,332,207 |
2,560,114 |
|||
| Unearned revenue |
2,111,474 |
2,150,001 |
1,661,640 |
|||
| Other current liabilities |
169,352 |
404,262 |
1,614,011 |
|||
| Total current liabilities |
8,205,926 |
9,184,040 |
12,077,746 |
|||
| Other liabilities |
1,671,511 |
1,671,511 |
1,712,015 |
|||
| Total liabilities |
9,877,437 |
10,855,551 |
13,789,761 |
|||
| GigaMedia's shareholders' equity |
60,181,559 |
59,217,034 |
64,891,398 |
|||
| Noncontrolling interest |
- |
- |
- |
|||
| Total equity |
60,181,559 |
59,217,034 |
64,891,398 |
|||
| Total liabilities and equity |
70,058,996 |
70,072,585 |
78,681,159 |
|||
| GIGAMEDIA LIMITED |
||||||
| RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS |
||||||
| Three months ended |
||||||
| 6/30/2017 |
3/31/2017 |
6/30/2016 |
||||
| unaudited |
unaudited |
unaudited |
||||
| USD |
USD |
USD |
||||
| Reconciliation of Net Income (Loss) to EBITDA |
||||||
| Net income (loss) attributable to GigaMedia |
904,125 |
(759,595) |
(2,146,271) |
|||
| Depreciation |
1,657 |
953 |
29,306 |
|||
| Amortization |
3,005 |
2,798 |
30,947 |
|||
| Interest income |
(108,580) |
(77,174) |
(80,925) |
|||
| Interest expense |
11,717 |
11,730 |
25,981 |
|||
| Income tax (benefit) expense |
- |
456 |
(2,961) |
|||
| EBITDA |
811,924 |
(820,832) |
(2,143,923) |
|||
For further information contact:
Annie Sun
Investor Relations Department
Country/City Code 8862 Tel: 2656-8096
IR@gigamedia.com.tw
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