TAIPEI, April 30, 2020 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today announced its first-quarter 2020 unaudited financial results.

Comments from Management

For the first quarter of 2020, GigaMedia reported revenues of $1.60 million, with a gross profit of $0.93 million, an operating loss of $0.64 million and the net loss of $0.29 million. Total revenues increased by 6.6% if compared to the previous quarter, and net loss was similar.

"The pandemic of COVID-19 only mildly affected our operations in Taiwan and Hong Kong," said GigaMedia CEO James Huang. "While it has indeed caused disruptions to our offline marketing and operating activities, we managed to mitigate its impact, and continued improving the productivity in our existing products and making progress in developing new offerings."

First Quarter Overview

  • Operating revenue increased by $0.10 million or 6.6% in quarter-on-quarter comparison, and increased by 8.2% in year-over-year comparison.
  • Loss from operations amounted to approximately $0.64 million and net loss approximately $0.29 million, comparable to the fourth quarter of 2019 and slightly improved when compared with the same quarter last year.

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 First Quarter

GIGAMEDIA 1Q20 UNAUDITED CONSOLIDATED FINANCIAL RESULTS


(unaudited, in US$ thousands, except for percentages and per
share
amounts)


1Q20



4Q19



Change

(%)



1Q20



1Q19



Change

(%)


Revenues


$

1,604



$

1,504



6.6

%


$

1,604



$

1,483



8.2

%

Gross Profit



927




1,025



(9.6)

%



927




738



25.6

%

Loss from Operations



(640)




(399)



NM




(640)




(949)



NM


Net Loss Attributable to GigaMedia



(286)




(271)



NM




(286)




(532)



NM


Loss Per Share Attributable to GigaMedia,
Diluted



(0.03)




(0.02)



NM




(0.03)




(0.05)



NM


EBITDA(A)



(536)




(574)



NM




(536)




(876)



NM


Cash, Cash Equivalents and Restricted Cash



57,311




58,274



(1.7)

%



57,311




58,494



(2.0)

%


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.)

First-Quarter Financial Results

  • Consolidated revenues for the first quarter of 2020 increased by 6.6% quarter-on-quarter to $1.60 million, from $1.50 million in the fourth quarter of 2019, or by 8.2% year-over-year from $1.48 million in the first quarter of 2019.
  • Consolidated gross profit decreased to $0.93 million from $1.03 million in last quarter but increased by 25.6% from $0.74 million in the same quarter last year.
  • Consolidated operating expenses were $1.57 million in the first quarter of 2020, representing an increase by $0.14 million quarter-on-quarter, or a decrease by $0.12 million from $1.69 million year-over-year.
  • Loss from operation for the first quarter of 2020 was approximately $0.64 million, comparable to a loss of $0.40 million last quarter and approximately a loss of $0.95 million in the first quarter of 2019.
  • Net loss for the first quarter of 2020 was $0.29 million, approximately comparable to such amount in the fourth quarter of 2019, and improved by $0.25 million when compared with the net loss of $0.53 million in the same quarter last year.
  • Cash, cash equivalents and restricted cash at the first quarter-end of 2020 accounted for $57.31 million, which decreased by $0.96 million from the end of 2019.

Financial Position

GigaMedia maintained its solid financial position, with cash, cash equivalents and restricted cash amounting to $57.31 million, or approximately $5.19 per share as of March 31, 2020.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as of April 30, 2020. 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 Company's 2019 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

In following quarters, we will continue developing new offerings to enhance the variety of our product lines, while our marketing strategies will adjust swiftly, as in the current coronavirus situation, stay-home requirement may boost sales of online business on the one hand, but prevailing economic uncertainties and weakened consumer confidence may discourage spending on entertainment on the other hand.

"In this time of uncertainty, we don't just wait out the storm. We practice frugality and adapt proactively while focusing on sharpening our core competence," stated CEO James Huang, "so that we will get well prepared when the storm is over."

Meanwhile, our business strategies always include expanding through mergers and acquisitions. "We will also continue reviewing potential targets that have strategic capacity to accelerate our growth and enhance shareholders' value," said CEO James Huang.

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

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 2020 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. GigaMedia's digital entertainment service business develops and operates a suite of digital entertainments in Taiwan and Hong Kong, with focus on browser/mobile games and casual 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 2020 and its other filings with the United States Securities and Exchange Commission.

(Tables to follow)

GIGAMEDIA LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS



Three months ended


3/31/2020


12/31/2019


3/31/2019


unaudited


unaudited


unaudited


USD


USD


USD

Operating revenues









Digital entertainment service revenues

$

1,603,904


$

1,503,848


$

1,483,233

Operating costs









Cost of digital entertainment service revenues


677,194



479,341



744,901

Gross profit


926,710



1,024,507



738,332

Operating expenses









Product development and engineering expenses


328,815



213,241



320,494

Selling and marketing expenses


410,475



427,090



526,003

General and administrative expenses


824,442



571,562



835,987

Impairment losses




208,921



Other


2,984



2,957



5,214



1,566,716



1,423,771



1,687,698

Loss from operations


(640,006)



(399,264)



(949,366)

Non-operating income (expense)









Interest income


255,719



322,587



381,799

Foreign exchange (loss) gain - net


98,887



(84,774)



(11,402)

Other - net


(298)



(110,020)



46,912



354,308



127,793



417,309

Loss before income taxes


(285,698)



(271,471)



(532,057)

Income tax benefit (expense)






Net loss attributable to shareholders of GigaMedia

$

(285,698)


$

(271,471)


$

(532,057)

Loss per share attributable to GigaMedia









Basic and Diluted:

$

(0.03)


$

(0.02)


$

(0.05)

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



3/31/2020


12/31/2019


3/31/2019


unaudited


audited


unaudited


USD


USD


USD

Assets









Current assets









Cash and cash equivalents

$

56,777,472


$

57,742,696


$

57,976,503

Accounts receivable - net


355,225



368,445



589,520

Prepaid expenses


276,010



112,243



208,919

Restricted cash


533,436



530,984



517,815

Other receivables


238,396



261



375,192

Other current assets


148,757



138,601



127,377

Total current assets


58,329,296



58,893,230



59,795,326










Property, plant & equipment - net


8,117





100,148

Intangible assets - net


17,965





32,492

Prepaid licensing and royalty fees


210,530



43,915



383,681

Other assets


285,319



285,071



1,034,278

Total assets

$

58,851,227


$

59,222,216


$

61,345,925










Liabilities and equity









Short-term borrowings

$


$


$

Accounts payable


60,405



64,337



98,921

Accrued compensation


156,948



200,455



134,243

Accrued expenses


1,449,553



1,079,234



1,228,483

Unearned revenue


1,285,399



1,364,749



1,290,792

Other current liabilities


715,877



874,434



177,073

Total current liabilities


3,668,182



3,583,209



2,929,512

Other liabilities


7,337



94,385



779,919

Total liabilities


3,675,519



3,677,594



3,709,431

Total equity


55,175,708



55,544,622



57,636,494

Total liabilities and equity

$

58,851,227


$

59,222,216


$

61,345,925

 

 

GIGAMEDIA LIMITED

Reconciliations of Non-GAAP Results of Operations



Three months ended


3/31/2020


12/31/2019


3/31/2019


unaudited


unaudited


unaudited


USD


USD


USD

Reconciliation of Net Income (Loss) to EBITDA









Net loss attributable to GigaMedia

$

(285,698)


$

(271,471)


$

(532,057)

Depreciation


354



10,888



25,388

Amortization


4,657



9,669



12,899

Interest income


(255,719)



(322,587)



(381,799)

Interest expense






Income tax (benefit) expense






EBITDA

$

(536,406)


$

(573,501)


$

(875,569)

 

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SOURCE GigaMedia Limited

Copyright 2020 PR Newswire

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