Market Overview

GigaMedia Announces Fourth-Quarter and Full Year 2018 Financial Results

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TAIPEI, Taiwan, April 3, 2019 /PRNewswire/ -- GigaMedia Limited (NASDAQ:GIGM) today announced its unaudited financial results for the fourth quarter and full year of 2018.

Highlights for Year Ended December 31, 2018

Besides continuing our efforts in improving productivity, in formulating GigaMedia's 2018 business plan, we conducted a comprehensive strategic business review. And it became clear that:

  • Compared to our in-house offerings, the operations of licensed games bear an uncompetitive cost structure where licensing costs and channel costs usually take a huge bite out of earnings, leaving little room for any marketing strategies.
  • The operations of licensed games are inherently dependent on the licensors and hard to take the initiative, and therefore often slow in responding to a fad, a market trend or even a permanent change in customers' preference.

Accordingly, in 2018 GigaMedia moved boldly forward to executing the strategy of optimizing our product portfolio by trimming off or terminating products or services that were below requirements, and introducing license game more selectively. On the other hand, we set in motion consolidating substantial resources for developing our own offerings, into which direct investment was more than $1 million during 2018.

"With the high margin of our in-house products, we are allowed latitude to act proactively for a flexible combination of marketing and promotional means to boost productivities," stated GigaMedia Limited CEO James Huang, "and for our own offerings, it is all the more essential and valuable to develop long-term customer relationships."

In 2018, we invested further to enhance CRM system, which will contribute to our operations in building up relationships, saving marketing costs, and creating capacity for providing augmented products and services. The cultivation of a loyal customer base will eventually further boost customer value and create revenues and profits.

Fourth Quarter and Full Year Overview

  • Consolidated 4Q revenues decreased 2.59% quarter-over-quarter and 20.17% year-over-year. Full year revenues decreased 38.77% to $7.1 million from $11.6 million in 2017.
  • Income from operations for 4Q was a loss of $1.0 million, representing a loss reduction from $1.5 million in 3Q, mainly due to a decrease in advertising expenses. Full year operating loss, if excluding impairment losses and gain on termination of agreement, was a loss of $4.6 million for 2018, representing a loss increase of $2.4 million from approximately $2.2 million for 2017.
  • The net asset value was approximately $5.26 per share as of the end of 2018.

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 Fourth Quarter

GIGAMEDIA 4Q18 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

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


4Q18


3Q18


Change

(%)


4Q18


4Q17


Change

(%)

Revenues


1,619


1,662


-2.59%


1,619


2,028


-20.17%

Gross Profit


880


694


26.80%


880


1,007


-12.61%

Loss from Operations


(1,021)


(1,484)


NM


(1,021)


988


NM

Net Income (Loss) Attributable to GigaMedia


(503)


(1,083)


NM


(503)


1,070


NM

Net Income (Loss) Per Share Attributable to GigaMedia, Diluted


(0.05)


(0.10)


NM


(0.05)


0.10


NM

EBITDA (A)


(806)


(1,393)


NM


(806)


(785)


NM

Cash, Restricted Cash and Cash Equivalents


59,826


60,439


-1.01%


59,826


64,177


-6.78%


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 2018 slightly decreased by 2.59% quarter-on-quarter from $1.7 million to $1.6 million, and decreased by 20.17% year-over-year.
  • Consolidated loss from operation of the fourth quarter of 2018 was a loss of $1.0 million, compared to a loss of $ 1.5 million in the last quarter.
  • Consolidated net income of the fourth quarter of 2018 was a net loss of $0.5 million, with a loss reduction of $0.6 million from a net loss of $1.1 million in the last quarter.
  • Cash, restricted cash and cash equivalents at the end the fourth quarter of 2018 amounted to $59.8 million, which slightly decreased from $60.4 million at the end the third quarter of 2018.
  • Consolidated EBITDA for the fourth quarter of 2018 was a loss of $0.8 million compared to a loss of $1.4 million in the third quarter of 2018.

Financial Position

GigaMedia maintained its solid financial position. Cash, restricted cash and cash equivalents amounted to $59.8 million, or approximately $5.4 per share, along with zero bank loan and $58.2M of shareholders' equity, as of December 31, 2018.

 For the Full Year 2018

GIGAMEDIA FY18UNAUDITED CONSOLIDATED FINANCIAL RESULTS

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


FY18


FY17


Change

(%)

Revenues


7,101


11,596


-38.76%

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