GigaMedia Announces Second-Quarter 2019 Financial Results

TAIPEI, Taiwan, Aug. 2, 2019 /PRNewswire/ -- GigaMedia Limited GIGM today announced its second-quarter 2019 unaudited financial results.

Comments from Management

In the first half of year 2019, we continued devoting efforts to optimizing our product portfolio, building up brand strength and enhancing operational efficiency. For our business in licensed games, the successful launch of Senran Kagura: New Link in April has brought us a satisfactory amount of revenues in its introductory stage, while two underperforming games were terminated.

For in-house offerings, besides improving the existing self-developed games, we also have made progress in developing a new casual games platform, aiming to launch it in the second half of 2019. "As discussed in previous release guidance, we put emphasis on enhancing our in-house products. The direct investment into in-house product development was over $600 thousand in the first half of 2019, which was 9.5% higher than in the same period last year," said GigaMedia CEO James Huang.

We were also developing a customer platform, which will contribute to our operations in establishing relationships, saving marketing costs, and creating capacity for providing augmented products and services. "The customer platform is currently under small-scale test-run, but we believe the growing interaction of the customer platform and our wide range of diverse game offerings will generate synergistic effect for one another in the future," said CEO James Huang.

"The numbers might look similar as in prior quarters," stated CEO James Huang, "but the robustness is now exhibited in our operations, and momentums have gradually accumulated."

Second Quarter Overview

  • Operating revenues increased by approximately 18% quarter-on-quarter, to $1.8 million from $1.5 million last quarter, and 5.49% year-over-year from $1.7 million the same period last year. The increase was mainly attributable to Senran Kagura, a new game launched in April.
  • Gross profit increased slightly to $0.8 million from $0.7 million in the first quarter of 2019.
  • The net asset value was $5.15 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 Second Quarter

GIGAMEDIA 2Q19 UNAUDITED CONSOLIDATED FINANCIAL RESULTS



(unaudited, all figures in US$ thousands, except

per share amounts)



2Q19



1Q19



Change

(%)





2Q19



2Q18



Change

(%)



Revenues



1,750



1,483



18.00

%



1,750



1,659



5.49

%

Gross Profit



769



738



4.20

%



769



728



5.63

%

Loss from Operations



(1,122)



(949)



NM





(1,122)



(1,342)



NM



Net Loss Attributable to GigaMedia



(614)



(532)



NM





(614)



(755)



NM



Net Loss Per Share Attributable to

GigaMedia, Diluted



(0.06)



(0.05)



NM





 

(0.06)



 

(0.07)



NM



EBITDA (A)



(1,000)



(876)



NM





(1,000)



(1,056)



NM



Cash, Restricted Cash and Cash

Equivalents



58,015



 

58,494



-0.82

%



 

58,015



 

61,244



 

-5.27

%































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.) 

Second-Quarter Financial Results

  • Consolidated revenues for the second quarter of 2019 increased by 18% quarter-on-quarter to $1.8 million from $1.5 million in last quarter, and by 5.49% year-over-year from $1.7 million the same period last year, due to a boost from Senran Kagura, a new game launched in April that generated cash revenues of $1.0 million, where $0.4 million were deferred to next quarter in accordance with accounting requirements. Revenues from other games decreased mainly due to seasonality.
  • Consolidated gross profit was $0.8 million, slightly increased quarter-on-quarter and year-over-year. The gross margin rate was slightly lower due to initial costs incurred for the launch of a new game.
  • Consolidated operating expenses were $1.9 million, or increased by 12.1% the second quarter of 2019, comparable to that in last quarter, and decreased by 8.7% if compared to that in the same period last year, reflecting an increase marketing expenses for the launch of Senran Kagura, and certain general expenses incurred in this quarter.
  • Consolidated loss from operation of the second quarter of 2019 was $1.1million, an increase of $0.2 million loss from the first quarter of 2019.
  • Net loss in the second quarter of 2019 was $0.6 million, comparable to a net loss of $0.5 million in the first quarter this year, and slightly improved from a net loss of $0.8 million in the second quarter of 2018.  
  • Cash, restricted cash and cash equivalents at the end of the second quarter of 2019 amounted to $58.0 million, slightly decreased by 0.8% from $58.5 million as of the end of the first quarter of this year.

Financial Position

GigaMedia maintained its solid financial position, with cash, restricted cash and cash equivalents amounted to $58.0 million, or $5.25 per share, as of June 30, 2019.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as of August 2, 2019. 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 2018 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

In the second half of 2019, we will continue to improve productivities of the existing games, in which the newly launched Senran Kagura and our female-oriented games are expected to contribute soundly to our revenues. We are also optimistic with the renovations of our in-house casual game offerings with customer platform, which will gradually accumulate to an upward trend for us.

"We are leveraging our deep expertise in self-developed games and creating an advanced framework for promoting customer relationships. We believe that loyal customer base will eventually help to boost in revenues and profits," stated CEO James Huang.

Meanwhile, our business strategies always include expanding through mergers and acquisitions. "We will also continue reviewing potential targets that would enable us 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 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 second quarter 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 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 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



Six months ended







06/30/2019



03/31/2019



06/30/2018



06/30/2019



06/30/2018







unaudited



unaudited



unaudited



unaudited



unaudited







USD



USD



USD



USD



USD



Operating revenues































Digital entertainment service revenues



1,749,583





1,483,233





1,658,914





3,232,816





3,819,380



Other revenues

























1,749,583





1,483,233





1,658,914





3,232,816





3,819,380



Operating costs































Cost of Digital entertainment service

revenues



980,448





744,901





930,421





1,725,350





1,877,109



Cost of other revenues

























980,448





744,901





930,421





1,725,350





1,877,109



Gross profit



769,135





738,332





728,493





1,507,466





1,942,271



Operating expenses































Product development and engineering

expenses



325,144





320,494





300,635





645,638





589,806



Selling and marketing expenses



580,539





526,003





760,185





1,106,542





1,756,936



General and administrative expenses



974,648





835,987





1,003,359





1,810,634





1,899,863



Other



11,165





5,214





6,555





16,380





13,049







1,891,496





1,687,698





2,070,734





3,579,194





4,259,654



Income (loss) from operations



(1,122,361)





(949,366)





(1,342,241)





(2,071,728)





(2,317,383)



Non-operating income (expense)































Interest income



414,450





381,799





338,602





796,250





617,546



Foreign exchange (loss) gain - net



90,922





(11,402)





246,830





79,520





87,917



(Loss) Gain on disposal of property, plant

and equipment











31









31



Other - net



3,416





46,912





2,122





50,328





4,468







508,788





417,309





587,585





926,098





709,962



(Loss) Income from continuing operations

before income taxes



(613,573)





(532,057)





(754,656)





(1,145,630)





(1,607,421)



Income tax benefit (expense)





















(Loss) Income from continuing operations



(613,573)





(532,057)





(754,656)





(1,145,630)





(1,607,421)



Net (loss) income



(613,573)





(532,057)





(754,656)





(1,145,630)





(1,607,421)



Less: Net loss attributable to

noncontrolling interest





























Net (loss) income attributable to

shareholders of GigaMedia



(613,573)





(532,057)





(754,656)





(1,145,630)





(1,607,421)



(Loss) Earnings per share attributable to

GigaMedia































Basic:































(Loss) Earnings from continuing

operations



(0.06)





(0.05)





(0.07)





(0.10)





(0.15)



Loss from discontinued operations



0.00





0.00





0.00





0.00





0.00







(0.06)





(0.05)





(0.07)





(0.10)





(0.15)



Diluted:































(Loss) Earnings from continuing

operations



(0.06)





(0.05)





(0.07)





(0.10)





(0.15)



Loss from discontinued operations



0.00





0.00





0.00





0.00





0.00







(0.06)





(0.05)





(0.07)





(0.10)





(0.15)



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









06/30/2019



03/31/2019



06/30/2018







unaudited



unaudited



unaudited







USD



USD



USD



Assets





















Current assets





















Cash and cash equivalents





57,489,563





57,976,503





60,732,757



Marketable securities - current















Accounts receivable - net





591,905





589,520





672,143



Prepaid expenses





275,551





208,919





309,952



Restricted cash





525,354





517,815





511,710



Other receivables





458,383





375,192





335,119



Other current assets





131,150





127,377





121,693



Total current assets





59,471,906





59,795,326





62,683,374

























Property, plant & equipment - net





92,580





100,148





173,051



Intangible assets - net





23,545





32,492





48,473



Prepaid licensing and royalty fees





574,274





383,681





1,043,823



Other assets





1,035,529





1,034,278





279,616



Total assets





61,197,834





61,345,925





64,228,337

























Liabilities and equity





















Short-term borrowings















Accounts payable





119,597





98,921





244,240



Accrued compensation





253,262





134,243





405,416



Accrued expenses





1,340,539





1,228,483





2,098,418



Unearned revenue





1,617,881





1,290,792





1,756,877



Other current liabilities





197,776





177,073





176,174



Total current liabilities





3,529,055





2,929,512





4,681,125



Other liabilities





781,187





779,919







Total liabilities





4,310,242





3,709,431





4,681,125



GigaMedia's shareholders' equity





56,887,592





57,636,494





59,547,212



Noncontrolling interest















Total equity





56,887,592





57,636,494





59,547,212



Total liabilities and equity





61,197,834





61,345,925





64,228,337



 

GIGAMEDIA LIMITED

RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS

















Three months ended



Six months ended







06/30/2019



03/31/2019



06/30/2018



06/30/2019



06/30/2018







unaudited



unaudited



unaudited



unaudited



unaudited







USD



USD



USD



USD



USD



Reconciliation of Net Income (Loss) to

EBITDA

































Net income (loss) attributable to GigaMedia





(613,573)





(532,057)





(754,656)





(1,145,630)





(1,607,421)



Depreciation





14,769





25,388





25,563





40,156





49,017



Amortization





12,830





12,899





11,532





25,729





15,360



Interest income





(414,450)





(381,799)





(338,602)





(796,250)





(617,546)



Interest expense























Income tax (benefit) expense























EBITDA





(1,000,424)





(875,569)





(1,056,163)





(1,875,995)





(2,160,590)



 

Cision View original content:http://www.prnewswire.com/news-releases/gigamedia-announces-second-quarter-2019-financial-results-300895598.html

SOURCE GigaMedia Limited

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