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GigaMedia Announces Second-Quarter 2018 Financial Results

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GigaMedia Announces Second-Quarter 2018 Financial Results

PR Newswire

TAIPEI, Taiwan, Aug. 1, 2018 /PRNewswire/ -- GigaMedia Limited (NASDAQ:GIGM) today announced its second-quarter 2018 unaudited financial results.

Comments from Management

In the past one year, the Company has steadfastly implemented a prudent strategy in selecting, publishing and operating licensed games as well as developing its own digital entertainment services. While the second quarter saw a decrease in the Company's revenues, the components of the revenues were more robust than a year ago when the CEO James Huang was newly appointed.

"In online games, we continue to make progress in shifting our product mix, terminating products that are short-lived or nonperforming, and devoting to product line that comprises of long-lifespan games," said GigaMedia Limited CEO James Huang. "Games like Dragon indeed had brought surges in revenues in the prior quarters, but their short lifecycle made the initial investment in them highly risky when their revenues began dwindling a few months soon after launch.

"In executing the new strategic stability initiatives, we now made it essential to consider a product's long-term sustainability before investing in it," continued CEO James Huang, "In this manner, we launched in last December 'Akaseka', a romance-based game in which players assume the role of a sacred shrine maiden; and another new title 'Sengoku Night Blood' in July 2018, featuring werewolf/vampire romances in Japan Warring States period. In following quarters, we expect to launch one or two more licensed games that are with high customer stickiness. Meanwhile, we are also endeavoring to cultivate and build a stronger customer base, and to enhance the suite of our self-developed casual games, aiming for more balanced growth for GigaMedia."

"And no large amount of licensing, marketing or development expenditures is to be committed now before a product's profitability is proven. While launching a new title in the increasingly competitive game industry is more and more risky and expensive, we elect to adopt such an approach that mitigates the risks significantly," continued CEO James Huang.

"And while our business strategies always include expanding through mergers and acquisitions, the recent rapid developments in world economy certainly caution against any haste.

"Overall, we are confident that we are on the right track to deliver solid financial performance and balanced growth, starting 2018 and on," stated GigaMedia Limited CEO James Huang.

Second Quarter Overview

  • Operating revenues decreased by approximately 23.2% quarter-on-quarter, to $1.7 million from $2.2 million last quarter, and 46.8% year-over-year from $3.1 million the same period last year. The decrease was mainly attributable to Dragon. This title was launched at the end of 2016 and brought revenue surges in the first half of 2017, but has entered the end of its lifecycle, and efforts to reviving it would not be cost-effective.
  • Gross profit decreased by approximately 40.0% to $0.7 million from $1.2 million in the first quarter of 2018. The gross margin rate appeared to be lower as certain costs for new games were incurred in this quarter.
  • Operating expenses decreased slightly by 5.4% from prior quarter and by 16.7% comparing to the same period of last year.
  • Consolidated loss from operations for the second quarter of 2018 amounted to $1.3 million, an increase in loss by 37.6% from a loss of $1.0 million last quarter.
  • Current assets decreased $1.4 million comparing to the last quarter of 2018, and the total assets amounted to $64.2 million, decreasing from $65.6 million at the end of the first quarter of 2018.
  • The net asset value was $5.39 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

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GIGAMEDIA 2Q18 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

(unaudited, all figures in US$ thousands, except
per share amounts)


2Q18


1Q18


Change

    (%)


2Q18


2Q17


Change

    (%)

Revenues


1,659


2,160


-23.19%


1,659


3,117


-46.78%

Gross Profit


728


1,214


-40.03%


728


1,751


-58.42%

Loss from Operations


(1,342)


(975)


NM


(1,342)


(734)


NM

Net (Loss) income Attributable to
GigaMedia


(755)


(853)


NM


(755)


904


NM

Earnings (Loss) Per Share Attributable
to GigaMedia, Diluted


(0.07)


(0.08)


NM


(0.07)


0.08


NM

EBITDA (A)


(1,056)


(1,104)


NM


(1,056)


812


NM

Cash, Restricted Cash and Cash
Equivalents


61,244


62,618


-2.19%


61,244


66,953


-8.53%














NM= Not Meaningful





















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