GigaMedia Announces Fourth-Quarter and Full Year 2019 Financial Results

TAIPEI, April 7, 2020 /PRNewswire/ -- GigaMedia Limited GIGM 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, 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 2018 Annual Report on Form 20-F filed 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 View original content:http://www.prnewswire.com/news-releases/gigamedia-announces-fourth-quarter-and-full-year-2019-financial-results-301036584.html

SOURCE GigaMedia Limited

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