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press release

April 7, 2020, 9:00 a.m. EDT

GigaMedia Announces Fourth-Quarter and Full Year 2019 Financial Results

TAIPEI, April 7, 2020 /PRNewswire/ -- GigaMedia Limited /zigman2/quotes/204964238/composite GIGM +2.46% today announced its unaudited financial results for the fourth quarter and full year of 2019.

Highlights for Year Ended December 31, 2019

For 2019, GigaMedia reported revenues of $6.6 million, with a gross profit of $3.6 million, an operating loss of $2.9 million and the net loss of $1.5 million.

"In spite of the mild decrease in revenues," said GigaMedia CEO James Huang, "in 2019 we continued improving our cost structure through strategic cost management, and applied effective KPIs to drive performance of departments across our Company."

Compared to the prior year, the 2019 results exhibited overall improvements. Our gross margin rate has risen by 4.4% to 53.9% from 49.5% in 2018, and consequently the gross profit was even slightly higher than $3.5 million in the prior year, in spite of the decrease in revenues. The loss from operations was also cut by 40.1% from $4.8 million in 2018, and the net loss approximately halved.

"In the past year of 2019, we kept emphasizing on developing our in-house offerings," continued GigaMedia CEO James Huang, "and in the fourth quarter, our new mobile platform of casual games passed the closed and open beta testing tracks. It is now in trial operations, through which we are establishing marketing rhythm, expanding product lines, and strengthening customer's loyalty."

As for the current coronavirus (COVID-19) pandemic, CEO James Huang said, "While the virus ravages many countries in the world, our operations in Taiwan and Hong Kong have so far not been affected severely. Nonetheless, we have implemented strict hygiene and social distancing practices in our daily operations in order to protect the safety and health of our employees. We have also drawn up a contingency plan to ensure our business continuity against the escalating coronavirus situation."

Fourth Quarter and Full Year Overview

  • Consolidated 4Q revenues decreased 21.2% quarter-on-quarter, mainly due to seasonality. The year-over-year comparison was a decrease of 7.1%, mainly in licensed games, partly offset by increase in in-house casual games. Full year revenues decreased 6.4% to $6.6 million from $7.1 million in 2018.

  • Loss from operations for 4Q was $0.3 million, representing a loss reduction from $0.5 million in 3Q, mainly due to a decrease in general and administrative expenses. Full year operating loss was $2.9 million, representing a loss reduction of $1.9 million from approximately $4.8 million for 2018.

  • The net asset value was approximately $5.04 per share as of the end of 2019.

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 mobile games and casual games.

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

For the Full Year 2019

GIGAMEDIA FY19 UNAUDITED CONSOLIDATED FINANCIAL RESULTS
(unaudited, all figures in US$ thousands, except per share amounts)
FY19
FY18
Change
Revenues

6,645

7,101
-6.4 %
Gross Profit

3,581

3,516
1.8 %
Loss from Operations

(2,891)

(4,823)
NM
Net Loss Attributable to GigaMedia

(1,535)

(3,193)
NM
Net Loss Per Share Attributable to GigaMedia, Diluted

(0.14)

(0.29)
NM
EBITDA (A)

(2,896)

(4,360)
NM
Cash, Restricted Cash and Cash Equivalents

58,274

59,826
-2.6 %
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.) 
  • Consolidated revenues for the year ended December 31, 2019 was $6.6 million, decreased from $7.1 million in the prior year. The decrease was mainly due to a decline in our licensed mobile games.

  • Consolidated loss from operations for 2019 was $2.9 million, compared to a loss of $4.8 million in the last year. The decrease of loss was due to improved cost-effectiveness across the Company.

  • Consolidated net loss for 2019 was $1.5 million, compared to a net loss of $3.2 million in the prior year. Loss per share for 2019 was $0.14 per share, compared to a loss of $0.29 per share for the prior year.

For the Fourth Quarter

GIGAMEDIA 4Q19 UNAUDITED CONSOLIDATED FINANCIAL RESULTS
(unaudited, all figures in US$ thousands, except per share amounts)
4Q19
3Q19
Change

4Q19
4Q18
Change
Revenues

1,504

1,908

-21.17 %

1,504

1,619

-7.10 %
Gross Profit

1,025

1,049

-2.29 %

1,025

880

16.48 %
Loss from Operations

(276)

(544)
NM


(276)

(1,021)
NM
Net Loss Attributable to GigaMedia

(148)

(242)
NM


(148)

(503)
NM
Net Loss Per Share Attributable to GigaMedia, Diluted

(0.01)

(0.02)
NM


(0.01)

(0.05)
NM
EBITDA (A)

(435)

(585)
NM


(435)

(806)
NM
Cash, Restricted Cash and Cash Equivalents

58,274

58,164

0.19 %

58,274

59,826

-2.59 %
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.) 

Fourth-Quarter Financial Results

  • Consolidated revenues for the fourth quarter of 2019 decreased by 21.2% quarter-on-quarter from $1.9 million to $1.5 million mainly due to seasonality, and decreased by 7.1% year-over-year mainly as revenues from certain licensed games dwindled.

  • Consolidated loss from operations of the fourth quarter of 2019 was $0.3 million, compared to a loss of $0.5 million in the last quarter.

  • Consolidated net loss of the fourth quarter of 2019 was $0.1 million, slightly improved from a net loss of $0.2 million in the last quarter.

  • Cash, restricted cash and cash equivalents at the end of the fourth quarter of 2019 amounted to $58.3 million, which slightly increased from $58.2 million at the end of the prior quarter.

  • Consolidated EBITDA for the fourth quarter of 2019 was a loss of $0.4 million compared to a loss of $0.6 million in the third quarter of 2019.

Financial Position

GigaMedia maintained its solid financial position. Cash, restricted cash and cash equivalents amounted to $58.3 million, or approximately $5.27 per share, along with zero bank loan and $55.7 million of shareholders' equity, as of December 31, 2019.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as of April  7,  20 20 . Given potential changes in economic conditions and consumer spending, the evolving nature of digital entertainments , and various other risk factors, including those discussed in the C ompany's 20 18  Annual Report on Form  20-F fi led  with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

"It is very difficult to foretell anything in current global economic turmoil, even for our digital entertainment business, which is comparatively less affected," said GigaMedia CEO James Huang, "but reassuringly, we have kept abundant financial resources to weather the storm, and we will continue to boost productivities by improving existing products and services, introducing own offerings, along with adopting strategies of promoting customer relationships."

In the meantime, the global economic downturn may exhibit good M&A chances for us, as potential targets may be available at bargain prices. Therefore, we will continue, very cautiously, seeking suitable strategic investment and acquisition targets for increasing corporate growth and maximizing shareholder value.

Use of Non-GAAP Measures

To supplement GigaMedia's consolidated financial statements presented in accordance with U.S. 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

Unaudited results

All quarterly and certain annual 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 fourth quarter and full year 2019 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 digital entertainment products or services that are appealing to users, our ability to retain existing users and attract new users, and our ability to launch digital entertainment products and services 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 2019 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


12/31/2019

09/30/2019

12/31/2018

12/31/2019

12/31/2018


unaudited

unaudited

unaudited

unaudited

audited


USD

USD

USD

USD

USD
Operating revenues



















Digital entertainment service revenues

1,503,848


1,908,261


1,618,931


6,644,924


7,100,636
Operating costs



















Cost of digital entertainment service revenues

479,341


859,511


739,324


3,064,201


3,584,875
Gross profit

1,024,507


1,048,750


879,607


3,580,723


3,515,761
Operating expenses



















Product development and engineering expenses

213,241


326,419


215,625


1,185,299


1,091,445
Selling and marketing expenses

427,090


461,653


576,256


1,995,285


3,296,636
General and administrative expenses

571,563


800,015


860,903


3,182,212


3,684,054
Impairment losses

85,199





243,966


85,199


243,966
Other

2,957


4,723


3,946


24,060


22,510



1,300,050


1,592,810


1,900,696


6,472,055


8,338,611
Loss from operations

(275,543)


(544,060)


(1,021,089)


(2,891,332)


(4,822,850)
Non-operating income (expense)



















Interest income

322,587


364,539


333,338


1,483,375


1,302,145
Interest expense

(14,866)








(14,866)



Foreign exchange (loss) gain - net

(84,774)


(62,487)


129,052


(67,741)


266,255
Gain on disposal of property, plant and equipment













31
Other - net

(95,154)


119


56,162


(44,705)


61,358



127,793


302,171


518,552


1,356,063


1,629,789
Loss before income taxes

(147,750)


(241,889)


(502,537)


(1,535,269)


(3,193,061)
Income tax benefit (expense)














Net loss attributable to shareholders of GigaMedia

(147,750)


(241,889)


(502,537)


(1,535,269)


(3,193,061)
Loss per share attributable to GigaMedia



















Basic:

(0.01)


(0.02)


(0.05)


(0.14)


(0.29)
Diluted:

(0.01)


(0.02)


(0.05)


(0.14)


(0.29)
Weighted average shares outstanding:



















Basic

11,052,235


11,052,235


11,052,235


11,052,235


11,052,235
Diluted

11,052,235


11,052,235


11,052,235


11,052,235


11,052,235

 

GIGAMEDIA LIMITED
 CONSOLIDATED BALANCE SHEETS



12/31/2019

09/30/2019

12/31/2018


unaudited

unaudited

audited


USD

USD

USD
Assets











Current assets











Cash and cash equivalents

57,742,696


57,635,576


59,307,829
Accounts receivable - net

368,445


591,302


523,004
Prepaid expenses

112,243


142,819


122,434
Restricted cash

530,984


528,387


517,815
Other receivables

261


457,168


2,998
Other current assets

138,601


165,295


120,802
Total current assets

58,893,230


59,520,547


60,594,882













Property, plant & equipment - net

111,770


101,998


121,585
Intangible assets - net

15,551


78,828


37,726
Prepaid licensing and royalty fees

43,915


468,722


435,156
Other assets

285,072


918,556


255,604
Total assets

59,349,538


61,088,651


61,444,953













Liabilities and equity











Accounts payable

64,337


140,676


104,030
Accrued compensation

200,455


371,212


170,470
Accrued expenses

1,178,363


1,470,179


1,262,707
Unearned revenue

1,364,749


1,504,176


1,369,769
Other current liabilities

775,305


241,789


366,167
Total current liabilities

3,583,209


3,728,032


3,273,143
Other liabilities

94,385


662,530



Total liabilities

3,677,594


4,390,562


3,273,143
GigaMedia's shareholders' equity

55,671,944


56,698,089


58,171,810
Total liabilities and equity

59,349,538


61,088,651


61,444,953

 

GIGAMEDIA LIMITED
RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS









Three months ended

Twelve months ended


12/31/2019

9/30/2019

12/31/2018

12/31/2019

12/31/2018


unaudited

unaudited

unaudited

unaudited

unaudited


USD

USD

USD

USD

USD
Reconciliation of Net Income (Loss) to EBITDA



















Net loss attributable to GigaMedia

(147,750)


(241,889)


(502,537)


(1,535,269)


(3,193,061)
Depreciation

10,888


9,919


25,301


60,964


99,635
Amortization

9,669


11,126


4,137


46,523


36,013
Interest income

(322,587)


(364,539)


(333,338)


(1,483,375)


(1,302,145)
Interest expense

14,866








14,866



Income tax (benefit) expense














EBITDA

(434,914)


(585,383)


(806,437)


(2,896,291)


(4,359,558)

 

Cision
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SOURCE GigaMedia Limited

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/zigman2/quotes/204964238/composite
US : U.S.: Nasdaq
$ 2.92
+0.07 +2.46%
Volume: 12,241
Aug. 7, 2020 3:59p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$32.27 million
Rev. per Employee
$49,731
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