GIGM GigaMedia Ltd

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May, 2015

Commission File Number: 000-30540

 

 

GIGAMEDIA LIMITED

 

 

8F, No. 22, Lane 407, Section 2, Tiding Boulevard

Neihu District

Taipei, Taiwan (R.O.C.)

 

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F  x            Form 40-F  ¨

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes  ¨            No   x

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b) :82-            .)

 

 

 

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GIGAMEDIA LIMITED is submitting under cover of Form 6-K:

 

1.

GigaMedia Announces First-Quarter 2015 Financial Results (attached hereto as Exhibit 99.1)

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

				GigaMedia Limited
				(Registrant)
Date: May 8, 2015				By: /s/ HUANG, SHIH-CHIN
				(Signature)
				Name:		HUANG, SHIH-CHIN
				Title:		Head of Finance Department

Exhibit 99.1

 

FOR IMMEDIATE RELEASE				For further information contact:
				Amanda Chang
				Investor Relations Department
				Country/City Code 8862 Tel: 2656-8080
				amanda.chang@gigamedia.com.tw

GigaMedia Announces First-Quarter 2015

Financial Results

TAIPEI, Taiwan, May 8, 2015 – GigaMedia Limited (NASDAQ: GIGM) today announced its first-quarter 2015 unaudited financial results.

Message from Management

In 2014, the Company initiated the collaboration with Korean gaming studios for co-developing new games and acquired licenses of the new games from other Asian developers.

In the first quarter of 2015, the Company benefited from five mobile games released in late December 2014 and also a RPG mobile game published in February this year, and the contribution made by the mobile games accounted for about 59.0% of the total operating revenues. The contribution made by the social casino games and the cloud computing business accounted for about 27.0% and 14.0% respectively of the operating revenues. The operating revenues were US$3.2 million, grew by about 18.9% quarter-on-quarter. In addition, the Company continued to dispose partial marketable securities in the first quarter of 2015.

However, the margin and the life cycle of gaming business continue to decrease while the expenses continue to increase. The revenue of cloud computing business compared with the same period of 2014 improved significantly yet still remains big room to grow, and so does the social casino game business.

Management expects the Company’s mobile gaming business to maintain stable, and its social casino game and cloud computing businesses to expand in 2015, and meanwhile, considers possible strategic investments or partnership to be an alternative as an injection of business synergies to the Company in order to support its future revenue growth.

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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 First Quarter

GIGAMEDIA 1Q15 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

 

(unaudited, all figures in US$ thousands, except per share amounts)		1Q15				4Q14				Change (%)				1Q15				1Q14				Change (%)
Revenues			3,162				2,660				18.9	%			3,162				2,175				45.4	%
Gross Profit			738				(94	)			885.1	%			738				1,015				-27.3	%
Loss from Operations			(3,416	)			(4,330	)			21.1	%			(3,416	)			(2,567	)			-33.1	%
Net Income (Loss) Attributable to GigaMedia			5,239				5,437				-3.6	%			5,239				(3,076	)			270.3	%
Net Income (Loss) Per Share Attributable to GigaMedia, Diluted			0.09				0.10				-10.0	%			0.09				(0.06	)			250.0	%
EBITDA (A)			5,335				5,675				-6.0	%			5,335				(2,806	)			290.1	%
Cash and Marketable Securities-Current			75,575				79,980				-5.5	%			75,575				78,821				-4.1	%

 

(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.)

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First-Quarter Financial Results

 

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Consolidated revenues were $3.2 million, grew by 18.9% quarter-on-quarter and 45.4% quarter-over-quarter thanks to the contribution of gaming business with the revenues of $2.7 million in 1Q15, up by 58.8% from $1.7 million in 4Q14 and 35.0% from $2.0 million in 1Q14.

 

•

Consolidated operating expenses were $4.2 million in 1Q15, which made no significant change from 4Q14, but increased by 16% from $3.6 million quarter-over-quarter, resulting from an increase of selling and marketing expenses for the new games.

 

•

Consolidated non-operating income was $8.6 million thanks to the capital gain on disposal of marketable securities.

 

•

Net income was $5.2 million attributable to the gain on sales of marketable securities and an increase on the operating revenues. It was down by 3.6% quarter-on-quarter mainly due to the market price valuation on investment.

 

•

Cash and marketable securities-current in 1Q15 accounted for $75.6 million, slightly decreased by 5.5% from $80.0 million in 4Q14 resulting from the market price valuation on the securities investment.

Financial Position

GigaMedia maintained its solid financial position with cash and cash equivalents, marketable securities-current and restricted cash accounted for $84.6 million as of March 31, 2015, or approximately $1.53 per share.

Business Outlook

The following forward-looking statements reflect GigaMedia’s expectations as of May 7, 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 2015, the Company has started to attend the overseas gaming events in order to attract worldwide publishers and expand the Company’s brand exposure. In this way, management expects the co-developed games to be ready by the third quarter this year and license them to the overseas publishers.

For social casino game platform, the Company aims at increasing the marketing campaigns, including but not limited to joint-sponsor the related international tournaments or attend the events.

With regard to cloud computing business, the Company will provide more open source alternatives and integrated services to the corporate customers. Management expects it to increase its revenues and also improve its margin.

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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 first quarter 2015 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 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.

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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.

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(Tables to follow)

 

 

 

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GIGAMEDIA LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

 

		Three months ended
		3/31/2015				12/31/2014				3/31/2014
		unaudited				unaudited				unaudited
		USD				USD				USD
Operating revenues
Asian online game and service revenues			2,718,393				1,739,623				2,042,102
Other revenues			443,692				920,732				133,204
			3,162,085				2,660,355				2,175,306
Operating costs
Cost of Asian online game and service revenues			1,966,164				1,833,963				912,002
Cost of other revenues			457,520				920,471				248,772
			2,423,684				2,754,434				1,160,774
Gross profit			738,401				(94,079	)			1,014,532
Operating expenses
Product development and engineering expenses			181,708				220,748				246,328
Selling and marketing expenses			2,687,116				1,697,665				1,572,235
General and administrative expenses			1,285,835				915,407				1,762,613
Impairment losses			0				1,401,667				0
			4,154,659				4,235,487				3,581,176
Loss from operations			(3,416,258	)			(4,329,566	)			(2,566,644	)
Non-operating income (expense)
Interest income			102,529				146,579				173,830
Gain on sales of marketable securities			9,473,063				6,011,518				241
Interest expense			(82,113	)			(80,344	)			(15,580	)
Foreign exchange loss - net			(16,242	)			(244,306	)			(447,252	)
Equity in net earnings on equity method investments			40,100				3,538,522				23,501
Changes in the fair value of an instrument recognized at fair value			(951,660	)			74,213				0
Other			18,373				263,660				57,443
			8,584,050				9,709,842				(207,817	)
Income (loss) from continuing operations before income taxes			5,167,792				5,380,276				(2,774,461	)
Income tax benefit (expense)			13,351				13,005				(721	)
Income (loss) from continuing operations			5,181,143				5,393,281				(2,775,182	)
Net income (loss)			5,181,143				5,393,281				(2,775,182	)
Less: Net loss (income) attributable to noncontrolling interest			58,130				43,639				(300,921	)
Net income (loss) attributable to shareholders of GigaMedia			5,239,273				5,436,920				(3,076,103	)
(Loss) earnings per share attributable to GigaMedia
Basic:
Income (loss) from continuing operations			0.09				0.10				(0.06	)
Loss from discontinued operations			0.00				0.00				0.00
			0.09				0.10				(0.06	)
Diluted:
Income (loss) from continuing operations			0.09				0.10				(0.06	)
Loss from discontinued operations			0.00				0.00				0.00
			0.09				0.10				(0.06	)
Weighted average shares outstanding:
Basic			55,261,661				55,261,661				51,224,134
Diluted			55,261,926				55,284,832				51,224,134

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GIGAMEDIA LIMITED

CONSOLIDATED BALANCE SHEETS

 

		3/31/2015				12/31/2014				3/31/2014
		unaudited				unaudited				unaudited
		USD				USD				USD
Assets
Current assets
Cash and cash equivalents			53,856,429				50,640,355				49,667,405
Marketable securities - current			21,718,274				29,339,926				29,153,315
Accounts receivable - net			2,031,966				1,297,785				1,159,243
Prepaid expenses			671,116				564,080				681,611
Restricted cash			9,034,062				8,990,666				1,491,139
Other receivables			3,105,223				129,126				208,249
Other current assets			490,835				195,998				145,424
Total current assets			90,907,905				91,157,936				82,506,386
Marketable securities - noncurrent			4,744,000				4,744,000				10,178,480
Investments			5,724,346				5,780,778				5,279,776
Property, plant & equipment - net			1,719,799				1,663,424				1,663,286
Intangible assets - net			263,811				221,630				1,151,311
Prepaid licensing and royalty fees			5,144,947				4,382,772				4,629,954
Other assets			356,274				353,258				301,240
Total assets			108,861,082				108,303,798				105,710,433
Liabilities and equity
Short-term borrowings			19,808,307				18,641,390				4,266,492
Accounts payable			652,708				770,965				297,595
Accrued compensation			363,480				795,431				572,948
Accrued expenses			3,439,764				3,464,652				2,262,425
Unearned revenue			1,947,176				1,945,945				2,351,164
Other current liabilities			1,985,012				1,718,709				3,731,110
Total current liabilities			28,196,447				27,337,092				13,481,734
Other liabilities			1,935,620				1,938,256				177,449
Total liabilities			30,132,067				29,275,348				13,659,183
GigaMedia’s shareholders’ equity			78,776,989				79,017,995				91,904,862
Noncontrolling interest			-47,974				10,455				146,388
Total equity			78,729,015				79,028,450				92,051,250
Total liabilities and equity			108,861,082				108,303,798				105,710,433
Loss from discontinued operations, net of tax

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GIGAMEDIA LIMITED

Reconciliations of Non-GAAP Results of Operations

 

		Three months ended
		3/31/2015				12/31/2014				3/31/2014
		unaudited				unaudited				unaudited
		USD				USD				USD
Reconciliation of Net Income (Loss) to EBITDA
Net income (loss) attributable to GigaMedia			5,239,273				5,436,920				(3,076,103	)
Depreciation			74,212				76,309				77,689
Amortization			55,316				241,060				349,771
Interest income			(102,529	)			(146,450	)			(173,826	)
Interest expense			82,102				80,344				15,580
Income tax (benefit) expense			(13,351	)			(13,005	)			721
EBITDA			5,335,023				5,675,178				(2,806,168	)