omniture

GigaMedia Announces Third-Quarter 2018 Financial Results

2018-10-31 21:00 389

TAIPEI, , Oct. 31, 2018 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today announced its third-quarter 2018 unaudited financial results.

Comments from Management

In the third quarter of 2018, total revenues maintained at approximately $1.7 million, comparable to last quarter.

"In this quarter, new games have been added in our female-oriented product line to provide diversity and satisfaction, but nonetheless, it is the proven success in existing games like Yume 100 that we laid stress on enhancing and replicating," said GigaMedia Limited CEO James Huang.

"Meanwhile, we continued carrying out the plan of renovating the legacy casual games as well as re-activating our own vast customer base, and we expect favorable results to exhibit in the coming quarters," continued CEO James Huang. "To our goal of achieving a long-term balanced growth, it is very essential to re-invigorate our legacy self-developed games."

Third Quarter Overview

  • Revenues maintained at approximately $1.7 million, comparable to the second quarter of this year.
  • Consolidated loss from operations for the third quarter of 2018 amounted to $1.5 million, an increase in loss by 10.6% from a loss of $1.3 million last quarter.
  • The net asset value was around $5.28 per share.

Unaudited Consolidated Financial Results

GigaMedia Limited is a diversified provider of digital entertainment services. GigaMedia's digital entertainment service business FunTown develops and operates a suite of digital entertainments in Taiwan and Hong Kong, with focus on browser/mobile games and casual games.

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

For the third Quarter

GIGAMEDIA 3Q18 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

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


3Q18


2Q18


Change

(%)


3Q18


3Q17


Change

(%)

Revenues



1,662



1,659



0.18%



1,662



2,304



-27.86%

Gross Profit



694



728



-4.67%



694



1,457



-52.37%

Loss from Operations



(1,484)



(1,342)



NM



(1,484)



(315)



NM

Net Loss Attributable to GigaMedia



(1,083)



(755)



NM



(1,083)



(129)



NM

Loss Per Share Attributable to GigaMedia, Diluted



(0.10)



(0.07)



NM



(0.10)



(0.01)



NM

EBITDA (A)



(1,393)



(1,056)



NM



(1,393)



(305)



NM

Cash and Marketable Securities-Current



59,924



60,733



-1.33%



59,924



63,770



-6.03%




















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.) 

 

Third-Quarter Financial Results

  • Consolidated revenues for the third quarter of 2018 maintained at $1.7 million approximately the same as in prior quarter and decreased year-over-year from $2.3 million to $1.7 million. While revenues from Akaseka and the legacy casual games declined, the increases in the newly launched Sengoku, and the long-lived Yume 100 and Tales Runner made up for the decreases.
  • Consolidated gross profit decreased 4.67% quarter-on-quarter from $0.73 million to $0.70 million and decreased 52.37% year-over-year from $1.5 million to $0.7 million.
  • Consolidated operating expenses were $2.2 million in the third quarter of 2018. An increase of $0.1 million which is about 5.2% from the second quarter of 2018. The increase was mainly due to the increase in marketing expenses for the launch of Sengoku and the third anniversary of Yume 100.
  • Consolidated loss from operation of the third quarter of 2018 was $1.5 million, an increase in loss by 10.6% from a loss of $1.3 million in last quarter.
  • Consolidated net loss of the third quarter of 2018 was $1.1 million compared to $0.8 million in last quarter.
  • Cash and marketable securities-current as of the end of the third quarter of 2018 accounted for $59.9 million, decreasing by 1.33% from $60.7 million at the end of the second quarter of 2018.

Financial Position

GigaMedia maintained its solid financial position, with cash, restricted cash and cash equivalents accounted for $60.4 million as of September 30, 2018, or $5.5 per share.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as of October 31, 2018. 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 2017 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

GigaMedia CEO James Huang said: "In the following quarters, we will put more efforts on improving productivity in operating of existing games, and especially on in-house developing and revitalizing our self-developed games."

"While we continue seeking suitable strategic investment and acquisition targets to increase corporate growth and maximize shareholders' value, considering recent fluctuations in world equity market, any opportunities will be approached very cautiously. Meanwhile, we believe a profitable entertainment business of ours would certainly give us more leverage and present more possibilities of synergies when we are entering into a strategic cooperation and acquisition," stated CEO James Huang.

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 third quarter 2018 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 digital entertainment services in Taiwan and Hong Kong. GigaMedia's digital entertainment service business is an innovative leader in Asia with growing capabilities of development, distribution and operation of digital entertainments, as well as platform services for games with a focus on mobile games and casual games. More information on GigaMedia can be obtained from www.gigamedia.com.tw.

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 2018 and its other filings with the United States Securities and Exchange Commission.

(Tables to follow)

GIGAMEDIA LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS




Three months ended



9/30/2018


6/30/2018


9/30/2017



unaudited


unaudited


unaudited



USD


USD


USD

Operating revenues










Digital entertainment service revenues



1,662,324



1,658,914



2,304,287

Other revenues



--



--



--




1,662,324



1,658,914



2,304,287

Operating costs










Cost of Digital entertainment service revenues



968,442



930,421



846,905

Cost of other revenues



--



--



--




968,442



930,421



846,905

Gross profit



693,882



728,493



1,457,382

Operating expenses










Product development and engineering expenses



286,015



300,635



269,539

Selling and marketing expenses



963,444



760,185



601,638

General and administrative expenses



923,288



1,003,359



896,398

Other



5,514



6,555



4,515




2,178,261



2,070,734



1,772,090

Loss from operations



(1,484,379)



(1,342,241)



(314,708)

Non-operating income (expense)










Interest income



351,262



338,602



208,696

Interest expense



--



--



(9,985)

Foreign exchange (loss) gain - net



49,285



246,830



(13,239)

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



--



31



(2)

Equity in net loss on equity method investments



--



--



(105)

Impairment loss on marketable securities and investments



--



--



(233)

Other - net



728



2,122



860




401,275



587,585



185,992

(Loss) Income from continuing operations before income taxes



(1,083,104)



(754,656)



(128,716)

Income tax benefit (expense)



--



0



(7)

(Loss) Income from continuing operations



(1,083,104



(754,656)



(128,723)

Net (loss) income



(1,083,104



(754,656)



(128,723)

Less: Net loss attributable to noncontrolling interest



--



--



--

Net (loss) income attributable to shareholders of GigaMedia



(1,083,104)



(754,656)



(128,723)

(Loss) Earnings per share attributable to GigaMedia










Basic:










Earnings (loss) from continuing operations



(0.10)



(0.07)



(0.01

Loss from discontinued operations



0.00



0.00



0.00




(0.10)



(0.07)



(0.01

Diluted:










Earnings (loss) from continuing operations



(0.10)



(0.07)



(0.01)

Loss from discontinued operations



0.00



0.00



0.00




(0.10)



(0.07)



(0.01)

Weighted average shares outstanding:










Basic



11,052,235



11,052,235



11,052,235

Diluted



11,052,235



11,052,235



11,052,235

 

 

 

GIGAMEDIA LIMITED

CONSOLIDATED BALANCE SHEETS




9/30/2018


6/30/2018


9/30/2017



unaudited


unaudited


unaudited



USD


USD


USD

Assets










Current assets










Cash and cash equivalents



59,923,784



60,732,757



63,767,004

Marketable securities - current



--



--



2,617

Accounts receivable - net



835,013



672,143



699,407

Prepaid expenses



237,635



309,952



310,286

Restricted cash



514,770



511,710



503,640

Other receivables



316,540



335,119



495,685

Other current assets



129,114



121,693



155,240

Total current assets



61,956,856



62,683,374



65,933,879











Property, plant & equipment - net



147,600



173,051



135,287

Intangible assets - net



41,109



48,473



2,812

Prepaid licensing and royalty fees



1,097,911



1,043,823



516,477

Other assets



278,356



279,616



325,763

Total assets



63,521,832



64,228,337



66,914,218











Liabilities and equity










Short-term borrowings



--



--



--

Accounts payable



279,485



244,240



269,316

Accrued compensation



606,547



405,416



565,446

Accrued expenses



2,066,188



2,098,418



2,037,396

Unearned revenue



1,971,039



1,756,877



2,068,262

Other current liabilities



196,516



176,174



223,173

Total current liabilities



5,119,775



4,681,125



5,163,593

Other liabilities



--



--



1,671,511

Total liabilities



5,119,775



4,681,125



6,835,104

GigaMedia's shareholders' equity



58,402,057



59,547,212



60,079,114

Noncontrolling interest



--



--



--

Total equity



58,402,057



59,547,212



60,079,114

Total liabilities and equity



63,521,832



64,228,337



66,914,218

 

 

GIGAMEDIA LIMITED

RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS




Three months ended



9/30/2018


6/30/2018


9/30/2017



unaudited


unaudited


unaudited



USD


USD


USD

Reconciliation of Net Income (Loss) to EBITDA










Net income (loss) attributable to GigaMedia



(1,083,104)



(754,656)



(128,723)

Depreciation



25,318



25,563



18,929

Amortization



16,516



11,532



3,302

Interest income



(351,262)



(338,602)



(208,696)

Interest expense



--



--



9,985

Income tax (benefit) expense



--



--



7

EBITDA



(1,392,532)



(1,056,163)



(305,196)

 

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Source: GigaMedia Limited
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