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GigaMedia Announces Fourth-Quarter and Full Year 2019 Financial Results

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TAIPEI, April 7, 2020 /PRNewswire/ -- GigaMedia Limited (NASDAQ: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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