TAIPEI, Oct. 30,
2020 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM)
today announced its third-quarter 2020 unaudited financial
results.
Comments from Management
In the third quarter of 2020, GigaMedia reported revenues of
$2.03 million, with a gross profit of
$1.20 million, an operating loss of
$0.36 million and a net loss of
$0.25 million. Total revenues
increased by 11.1% if compared to last quarter, and gross profit
margin improved to 59.0% from 53.6% last quarter.
"It became clear that our efforts accumulated in past quarters
are gradually paying off, and our improvement in profitability is
gathering pace," said GigaMedia CEO James
Huang.
Meanwhile, GigaMedia has entered and executed a convertible note
purchase agreement to acquire ownership of $10 million principal amount of convertible
promissory note issued by Aeolus Robotics Corporation ("Aeolus"),
an R&D company engaged in developing AI-enabled service robots.
An announcement for this agreement has been made on August 31, 2020, immediately after the closing of
the agreement. The issuance of this convertible note provided
Aeolus its much-needed working capital, and through this funding,
GigaMedia will explore possibilities of further strategic
cooperation with Aeolus.
Third Quarter Overview
- Revenues increased by 11.1% quarter-on-quarter to approximately
$2.03 million from $1.83 million last quarter, and by 6.3% if
compared to the same period last year. The increase was mainly due
to our efforts in revitalizing Tales Runner, a 14-year-old
game we have been licensed to operate in Hong Kong, where students have just
experienced a prolonged summer vacation.
- Consolidated loss from operations for the third quarter of 2020
amounted to $0.36 million, a
reduction of loss from a loss of $0.55
million last quarter.
- The net asset value was around $4.94 per share.
Unaudited Consolidated Financial Results
GigaMedia Limited is a diversified provider of digital
entertainment services. GigaMedia's digital entertainment service
business FunTown develops and operates a suite of digital
entertainments in Taiwan and
Hong Kong, with focus on
browser/mobile games and casual games.
Unaudited consolidated results of GigaMedia are summarized in
the table below.
For the Third Quarter
GIGAMEDIA3Q20
UNAUDITED CONSOLIDATED FINANCIAL RESULTS
|
(unaudited, all
figures in US$ thousands, except per share amounts)
|
|
3Q20
|
|
2Q20
|
|
Change
(%)
|
|
3Q20
|
|
3Q19
|
|
Change
(%)
|
Revenues
|
|
|
2,028
|
|
|
1,826
|
|
|
11.06%
|
|
|
2,028
|
|
|
1,908
|
|
|
6.29%
|
Gross
Profit
|
|
|
1,196
|
|
|
978
|
|
|
22.29%
|
|
|
1,196
|
|
|
1,049
|
|
|
14.01%
|
Loss from
Operations
|
|
|
(357)
|
|
|
(549)
|
|
NM
|
|
|
(357)
|
|
|
(544)
|
|
NM
|
Net (Loss) income
Attributable to GigaMedia
|
|
|
(248)
|
|
|
(419)
|
|
NM
|
|
|
(248)
|
|
|
(242)
|
|
NM
|
Earnings (Loss)
Per Share Attributable to GigaMedia,
Diluted
|
|
|
(0.02)
|
|
|
(0.04)
|
|
NM
|
|
|
(0.02)
|
|
|
(0.02)
|
|
NM
|
EBITDA
(A)
|
|
|
(317)
|
|
|
(634)
|
|
NM
|
|
|
(317)
|
|
|
(585)
|
|
NM
|
Cash, Cash
Equivalents and Restricted Cash
|
|
|
46,869
|
|
|
56,783
|
|
|
-17.46%
|
|
|
46,869
|
|
|
58,164
|
|
|
-19.42%
|
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 third quarter of 2020 were
$2.03 million, representing an
increase of 11.1% compared to $1.83
million in the prior quarter, and 6.3% year-over-year from
$1.91 million the same quarter last
year.
- Consolidated gross profit increased by 22.3%
quarter-on-quarter to $1.20 million
from $0.98 million last quarter, or
14.0% year-over-year from $1.05
million in the third quarter last year.
- Consolidated loss from operation of the third quarter of
2020 was $0.36 million, a decrease in
loss by approximately $0.19 million
from a loss of $0.55 million in last
quarter.
- Consolidated net loss of the third quarter of 2020 was
$0.25 million compared to
$0.42 million in last quarter.
- Cash, cash equivalents and restricted cash as of the end
of the third quarter of 2020 accounted for $46.9 million, decreasing by 17.46% from
$56.8 million at the end of the
second quarter of 2020. The decrease was mainly due to the
strategic investment in Aeolus' $10
million convertible note.
Financial Position
GigaMedia maintained its solid financial position, with cash,
cash equivalents and restricted cash accounted for $46.9 million as of September 30, 2020, or $4.24 per share.
Business Outlook
The following forward-looking statements reflect GigaMedia's
expectations as of October
30, 2020. 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 2019 Annual
Report on Form 20-F
filed with the U.S. Securities and Exchange
Commission as referenced below, actual results may
differ materially.
"Up to now, we have laid a solid groundwork for FunTown
M, our own mobile platform for casual games," said GigaMedia
CEO James Huang, "and from here we
will actively pursue a steady expansion of customer base, as well
as an organic growth in revenues and profitability."
"Meanwhile, we will also continue exploring prudently
possibilities of expanding our business through strategic
investments, including the one we have already made in Aeolus. We
believe they would present opportunities to strengthen our business
and maximize shareholders' value," 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 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 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 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
|
|
Nine months
ended
|
|
|
9/30/2020
|
|
6/30/2020
|
|
9/30/2019
|
|
9/30/2020
|
|
9/30/2019
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital entertainment
service revenues
|
|
|
2,028,138
|
|
|
1,825,547
|
|
|
1,908,261
|
|
|
5,457,589
|
|
|
5,141,077
|
Other
revenues
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2,028,138
|
|
|
1,825,547
|
|
|
1,908,261
|
|
|
5,457,589
|
|
|
5,141,077
|
Operating
costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Digital
entertainment service revenues
|
|
|
831,732
|
|
|
847,906
|
|
|
859,511
|
|
|
2,356,831
|
|
|
2,584,861
|
Cost of other
revenues
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
831,732
|
|
|
847,906
|
|
|
859,511
|
|
|
2,356,831
|
|
|
2,584,861
|
Gross
profit
|
|
|
1,196,406
|
|
|
977,641
|
|
|
1,048,750
|
|
|
3,100,758
|
|
|
2,556,216
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product development
and engineering expenses
|
|
|
341,023
|
|
|
332,745
|
|
|
326,419
|
|
|
1,002,584
|
|
|
972,057
|
Selling and marketing
expenses
|
|
|
374,462
|
|
|
367,529
|
|
|
461,653
|
|
|
1,152,466
|
|
|
1,568,194
|
General and
administrative expenses
|
|
|
836,107
|
|
|
825,998
|
|
|
800,015
|
|
|
2,486,547
|
|
|
2,610,650
|
Other
|
|
|
2,157
|
|
|
(42)
|
|
|
4,723
|
|
|
5,099
|
|
|
21,103
|
|
|
|
1,553,749
|
|
|
1,526,230
|
|
|
1,592,810
|
|
|
4,646,696
|
|
|
5,172,004
|
Loss from
operations
|
|
|
(357,343)
|
|
|
(548,589)
|
|
|
(544,060)
|
|
|
(1,545,938)
|
|
|
(2,615,788)
|
Non-operating
income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
71,014
|
|
|
212,881
|
|
|
364,539
|
|
|
539,613
|
|
|
1,160,788
|
Foreign exchange
(loss) gain - net
|
|
|
39,214
|
|
|
(82,357)
|
|
|
(62,487)
|
|
|
55,744
|
|
|
17,033
|
Other -
net
|
|
|
(1,132)
|
|
|
(1,404)
|
|
|
119
|
|
|
(2,834)
|
|
|
50,448
|
|
|
|
109,096
|
|
|
129,120
|
|
|
302,171
|
|
|
592,523
|
|
|
1,228,269
|
Loss before income
taxes
|
|
|
(248,247)
|
|
|
(419,469)
|
|
|
(241,889)
|
|
|
(953,415)
|
|
|
(1,387,519)
|
Income tax benefit
(expense)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Net loss attributable
to shareholders of GigaMedia
|
|
|
(248,247)
|
|
|
(419,469)
|
|
|
(241,889)
|
|
|
(953,415)
|
|
|
(1,387,519)
|
Loss per share
attributable to GigaMedia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
(0.02)
|
|
|
(0.04)
|
|
|
(0.02)
|
|
|
(0.09)
|
|
|
(0.13)
|
Diluted
|
|
|
(0.02)
|
|
|
(0.04)
|
|
|
(0.02)
|
|
|
(0.09)
|
|
|
(0.13)
|
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
|
|
|
|
9/30/2020
|
|
6/30/2020
|
|
9/30/2019
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
USD
|
|
USD
|
|
USD
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
46,333,621
|
|
|
56,247,678
|
|
|
57,635,576
|
Marketable securities
- current
|
|
|
—
|
|
|
—
|
|
|
—
|
Accounts receivable -
net
|
|
|
322,000
|
|
|
349,450
|
|
|
591,302
|
Prepaid
expenses
|
|
|
155,357
|
|
|
228,794
|
|
|
142,819
|
Restricted
cash
|
|
|
535,605
|
|
|
535,153
|
|
|
528,387
|
Other
receivables
|
|
|
36,450
|
|
|
203,671
|
|
|
457,168
|
Other current
assets
|
|
|
165,411
|
|
|
142,230
|
|
|
165,295
|
Total current
assets
|
|
|
47,548,444
|
|
|
57,706,976
|
|
|
59,520,547
|
|
|
|
|
|
|
|
|
|
|
Marketable securities
- noncurrent
|
|
|
10,000,000
|
|
|
—
|
|
|
—
|
Property, plant &
equipment - net
|
|
|
22,580
|
|
|
7,740
|
|
|
101,998
|
Intangible assets -
net
|
|
|
16,186
|
|
|
17,111
|
|
|
78,828
|
Prepaid licensing and
royalty fees
|
|
|
142,860
|
|
|
184,365
|
|
|
468,722
|
Other
assets
|
|
|
312,013
|
|
|
290,687
|
|
|
918,556
|
Total
assets
|
|
|
58,042,083
|
|
|
58,206,879
|
|
|
61,088,651
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
|
—
|
|
|
—
|
|
|
—
|
Accounts
payable
|
|
|
74,138
|
|
|
69,147
|
|
|
140,676
|
Accrued
compensation
|
|
|
403,753
|
|
|
278,622
|
|
|
371,212
|
Accrued
expenses
|
|
|
1,397,399
|
|
|
1,321,262
|
|
|
1,470,179
|
Unearned
revenue
|
|
|
1,041,862
|
|
|
1,058,940
|
|
|
1,504,176
|
Other current
liabilities
|
|
|
545,974
|
|
|
627,162
|
|
|
241,789
|
Total current
liabilities
|
|
|
3,463,126
|
|
|
3,355,133
|
|
|
3,728,032
|
Other
liabilities
|
|
|
3,379
|
|
|
3,653
|
|
|
662,530
|
Total
liabilities
|
|
|
3,466,505
|
|
|
3,358,786
|
|
|
4,390,562
|
GigaMedia's
shareholders' equity
|
|
|
54,575,578
|
|
|
54,848,093
|
|
|
56,698,089
|
Total liabilities and
equity
|
|
|
58,042,083
|
|
|
58,206,879
|
|
|
61,088,651
|
GIGAMEDIA
LIMITED
|
RECONCILIATIONS OF
NON-GAAP RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
9/30/2020
|
|
6/30/2020
|
|
9/30/2019
|
|
9/30/2020
|
|
9/30/2019
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
Reconciliation of
Net Income (Loss) to EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to GigaMedia
|
|
|
(248,247)
|
|
|
(419,469)
|
|
|
(241,889)
|
|
|
(953,415)
|
|
|
(1,387,519)
|
Depreciation
|
|
|
752
|
|
|
535
|
|
|
9,919
|
|
|
1,641
|
|
|
50,076
|
Amortization
|
|
|
1,224
|
|
|
(2,257)
|
|
|
11,126
|
|
|
3,624
|
|
|
36,854
|
Interest
income
|
|
|
(71,014)
|
|
|
(212,881)
|
|
|
(364,539)
|
|
|
(539,613)
|
|
|
(1,160,788)
|
Interest
expense
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Income tax (benefit)
expense
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
EBITDA
|
|
|
(317,285)
|
|
|
(634,072)
|
|
|
(585,383)
|
|
|
(1,487,763)
|
|
|
(2,461,377)
|
View original
content:http://www.prnewswire.com/news-releases/gigamedia-announces-third-quarter-2020-financial-results-301163886.html
SOURCE GigaMedia