TAIPEI, April 10, 2015 /PRNewswire/ -- GigaMedia Limited
(NASDAQ: GIGM) today announced its fourth-quarter and full-year
2014 unaudited financial results.
Message from Management
In 2014, the Company launched one social casino game, one
PC-based MMO game and five RPG mobile games mainly in Taiwan, Hong
Kong and Macau; meanwhile,
self-developed and collaborated with Korean game studios to have
its own games to publish. In addition, its cloud computing business
launched an integrated cloud service in combination of business
card management and virtual platform solution for Taiwanese
corporate customers.
The revenues generated in 2014 were mainly attributable to the
existing games and cloud computing business. Most of the games were
released in late December 2014 and
therefore, these new released games are expected to make a
contribution on the revenues in the first quarter of 2015.
Nevertheless, based on the Company's unaudited financial results,
its current stock price is considered much discounted compared with
its cash value per share.
Management believes that the year of 2014 was the downturn of
the Company's restructuring as the cloud computing business just
started to take off, the new games continued to release on the
market in late December 2014 and both
collaborated and in-house developed games are ready for marketing,
and same as the casino game platform. Besides, compared with the
third quarter of 2014, the Company's financial position continues
to increase due to the gain on disposal of partial marketable
securities in the fourth quarter.
Looking forward, the Company expects to expand the South East
Asian market for more market presence for its online game business,
and its cloud computing business plans to penetrate further the
Taiwanese SME customers. As regards the casino game platform, the
Company hopes to leverage on partnership with overseas operators in
order to generate more earnings.
Management is confident of the prospects in 2015 and is certain
that the Company will be able to benefit from the efforts made in
2014.
Consolidated Financial Results
GigaMedia Limited is a diversified provider of online games and
cloud computing services. GigaMedia's online games business FunTown
develops and operates a suite of games in Taiwan and Hong
Kong, with focus on browser/mobile games and social casino
games. GigaMedia's cloud computing business GigaCloud was launched
in early April 2013 and is focused on
providing small and medium-sized enterprises in Greater China with critical communications
services and IT solutions that increase flexibility, efficiency and
competitiveness.
Unaudited consolidated results of GigaMedia are summarized in
the table below.
For the Fourth
Quarter
|
GIGAMEDIA
4Q14 UNAUDITED
CONSOLIDATED FINANCIAL RESULTS
|
|
(unaudited,
all figures
in US$ thousands,
except per share
amounts)
|
4Q14
|
3Q14
|
Change (%)
|
4Q14
|
4Q13
|
Change (%)
|
|
|
|
|
|
|
|
Revenues
|
2,660
|
2,472
|
7.6%
|
2,660
|
3,381
|
-21.3%
|
Gross
Profit
|
(96)
|
205
|
-146.8%
|
(96)
|
1,157
|
-108.3%
|
Loss from Operations
|
(4,332)
|
(3,631)
|
-19.3%
|
(4,332)
|
(31,338)
|
86.2%
|
Net Income (Loss)
Attributable to
GigaMedia
|
5,435
|
(4,839)
|
212.3%
|
5,435
|
(30,363)
|
117.9%
|
Net Income (Loss) Per Share
Attributable to GigaMedia,
Diluted
|
0.10
|
(0.09)
|
211.1%
|
0.10
|
(0.60)
|
116.7%
|
EBITDA (A)
|
5,673
|
(4,589)
|
223.6%
|
5,673
|
(29,840)
|
119.0%
|
Cash and Marketable
Securities-Current
|
62,089
|
56,940
|
9.1%
|
62,089
|
80,262
|
-22.6%
|
(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 were $2.7
million, grew by 7.6% quarter-on-quarter due to the growth
of cloud computing business with the revenues of $0.9 million in 4Q14, up from $0.2 million in 3Q14 as the contribution from
online game business was $1.7
million, down from $2.2
million in 3Q14 (-22% quarter-on-quarter) and $2.5 million in 4Q13 (-29% quarter-over-quarter)
respectively.
- Consolidated operating expenses were $4.2 million, up from $3.8
million in 3Q14 (+10.4% quarter-on-quarter) resulting from
the impairment losses of $1.4
million.
- Impairment losses were $1.4
million recognized mainly for the prepaid license fee of
ArcheAge, which the game license agreement was signed in
October 2010.
- Consolidated non-operating income was $9.7 million in 4Q14 compared to expense of
$1.2 million in 3Q14 and income of
$1.2 million in 4Q13.
- Net income was $5.4 million
thanks to the capital gain on disposal of marketable securities and
market price valuation on investment.
- Cash and marketable securities-current in 4Q14 accounted for
$62.1 million, increased by 9.1%
quarter-on-quarter due to the gain on sale of marketable
securities.
Financial Position
GigaMedia maintained its solid financial position with cash and
cash equivalents, marketable securities-current and restricted cash
accounted for $71.1 million as of
December 31, 2014, or approximately
$1.29 per share.
For the Full
Year 2014
|
|
|
|
|
( all figures
in US$ thousands,
except per share amounts)
|
FY14
(unaudited)
|
FY13
(audited)
|
Change
(%)
|
Revenues
|
9,779
|
15,032
|
-34.9%
|
Gross
Profit
|
1,942
|
7,448
|
-73.9%
|
Loss from
Operations
|
(13,475)
|
(38,487)
|
65.0%
|
Net Loss Attributable to
GigaMedia
|
(5,157)
|
(34,780)
|
85.2%
|
Net Loss Per Share
Attributable to GigaMedia,
Diluted
|
(0.10)
|
(0.69)
|
85.5%
|
EBITDA (A)
|
(4,170)
|
(32,599)
|
87.2%
|
Consolidated revenues declined to $9.8
million in 2014 from $15.0
million in 2013. The decrease was primarily driven by the
contraction in online game business.
Consolidated gross profit decreased to $1.9 million in 2014 from $7.4 million in 2013 (-73.9% year-over-year)
attributable to a decline in operating revenues and lowered
operating leverage. The gross margin dropped to 19.9% in 2014, down
from 49.5% in 2013.
Consolidated loss from operations for 2014 was $13.5 million, down from $38.5 million in 2013. In 2013, loss from
operations, excluding impairment losses of $30.3 million related to FunTown goodwill and
intangible assets, was $8.2 million.
The operating expenses compared to that in 2013, excluding
impairment losses related to FunTown goodwill and intangible
assets, diminished slightly in 2014 due to a decrease in impairment
losses related to prepaid license fee.
Consolidated net loss attributable to the shareholders of the
company amounts to $5.2 million in
2014 compared to a loss of $34.8
million in 2013.
Business Outlook
The following forward-looking statements reflect GigaMedia's
expectations as of April
10, 2015. Given potential changes in
economic conditions and consumer spending, the evolving nature of
online games, and various other risk factors, including those
discussed in the company's 2014 Annual Report
on Form 20-F filed with the U.S. Securities
and Exchange Commission as referenced below, actual
results may differ materially.
For the first quarter of 2015, GigaMedia expects total revenues
to increase by double-digit growth rate compared with the fourth
quarter of 2014, primarily contributed by the five new games
released in late December 2014 and
one new game in February 2015.
Looking ahead of 2015, management expects:
- Co-developed and self-developed games to be ready by the third
quarter and hopes to license to the overseas gaming
publishers;
- New licensed mobile games to acquire more players in order to
increase economic scale;
- For cloud computing business, it is expected to enlarge its
Taiwanese SME customer portfolio and also its market presence;
- Club One, a self-developed social casino platform, to start to
license to the overseas operators in April.
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
Full-year and quarterly results
All 2014 quarterly and full-year figures and all 2013 quarterly
results referred to in the text, tables and attachments to this
release are unaudited; all full-year 2013 amounts are audited. 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.
Conference Call and Webcast
Management will not hold an investor conference call and webcast
for a discussion about the financial results of the fourth quarter
and full year 2014 as the release dates of the financial results of
the first quarter 2015 and the 2014 annual report are close. An
announcement will be made along with the release of the financial
results of the first quarter of 2015.
About GigaMedia
Headquartered in Taipei,
Taiwan, GigaMedia Limited (Singapore registration number: 199905474H) is
a diversified provider of online games and cloud computing
services. GigaMedia's online games business develops and operates a
suite of games in Taiwan and
Hong Kong, with focus on
browser/mobile games and social casino games. The company's cloud
computing business is focused on providing SMEs in Greater China with critical communications
services and IT solutions that increase flexibility, efficiency and
competitiveness. More information on GigaMedia can be obtained from
www.gigamedia.com.
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 2013 and its
other filings with the United States Securities and Exchange
Commission.
For further information contact:
Amanda Chang
Investor Relations Department
Country/City Code 8862 Tel: 2656-8080
amanda.chang@gigamedia.com.tw
(Tables to follow)
GIGAMEDIA
LIMITED
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
|
12/31/2014
|
|
9/30/2014
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2013
|
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
audited
|
|
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
Asian online game and
service revenues
|
|
|
1,739,623
|
|
2,237,498
|
|
2,463,125
|
|
8,199,393
|
|
14,106,052
|
Other
revenues
|
|
|
920,732
|
|
234,987
|
|
917,736
|
|
1,579,551
|
|
925,607
|
|
|
|
2,660,355
|
|
2,472,485
|
|
3,380,861
|
|
9,778,944
|
|
15,031,659
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Asian online
game and service revenues
|
|
|
1,835,944
|
|
1,972,295
|
|
1,231,969
|
|
6,012,130
|
|
6,425,263
|
Cost of other
revenues
|
|
|
920,471
|
|
294,982
|
|
991,980
|
|
1,824,573
|
|
1,158,371
|
|
|
|
2,756,415
|
|
2,267,277
|
|
2,223,949
|
|
7,836,703
|
|
7,583,634
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
(96,060)
|
|
205,208
|
|
1,156,912
|
|
1,942,241
|
|
7,448,025
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
Product development
and engineering expenses
|
|
|
220,748
|
|
197,745
|
|
497,083
|
|
892,331
|
|
1,697,806
|
Selling and marketing
expenses
|
|
|
1,697,665
|
|
1,759,991
|
|
934,726
|
|
6,707,346
|
|
4,815,560
|
General and
administrative expenses
|
|
|
915,407
|
|
1,878,580
|
|
1,145,613
|
|
6,415,549
|
|
6,364,876
|
Impairment
losses
|
|
|
1,401,667
|
|
0
|
|
29,917,344
|
|
1,401,667
|
|
33,057,342
|
|
|
|
4,235,487
|
|
3,836,316
|
|
32,494,766
|
|
15,416,893
|
|
45,935,584
|
Loss from
operations
|
|
|
(4,331,547)
|
|
(3,631,108)
|
|
(31,337,854)
|
|
(13,474,652)
|
|
(38,487,559)
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
146,579
|
|
187,194
|
|
85,717
|
|
682,163
|
|
237,733
|
Gain on sales of
marketable securities
|
|
|
6,011,518
|
|
2,447,065
|
|
1,199,533
|
|
8,620,875
|
|
1,739,373
|
Interest
expense
|
|
|
(80,344)
|
|
(78,714)
|
|
(7,549)
|
|
(243,037)
|
|
(48,537)
|
Foreign exchange
(loss) gain - net
|
|
|
(244,306)
|
|
20,058
|
|
24,262
|
|
(556,061)
|
|
44,686
|
Equity in net
earnings (losses) on equity method investments
|
|
|
3,860,112
|
|
(3,848,048)
|
|
(59,304)
|
|
(209,211)
|
|
525,907
|
Gain on disposal of
investments
|
|
|
0
|
|
0
|
|
(0)
|
|
0
|
|
1,219,712
|
Other
|
|
|
16,283
|
|
22,550
|
|
(40,901)
|
|
114,678
|
|
86,167
|
|
|
|
9,709,842
|
|
(1,249,895)
|
|
1,201,758
|
|
8,409,407
|
|
3,805,041
|
Income (loss) from
continuing operations before income taxes
|
|
|
5,378,295
|
|
(4,881,003)
|
|
(30,136,096)
|
|
(5,065,245)
|
|
(34,682,518)
|
Income tax benefit
(expense)
|
|
|
13,005
|
|
125
|
|
(76,099)
|
|
73,258
|
|
(61,086)
|
Income (loss) from
continuing operations
|
|
|
5,391,300
|
|
(4,880,878)
|
|
(30,212,195)
|
|
(4,991,987)
|
|
(34,743,604)
|
Loss from
discontinued operations, net of tax
|
|
|
0
|
|
0
|
|
(431,910)
|
|
0
|
|
(317,920)
|
Net income
(loss)
|
|
|
5,391,300
|
|
(4,880,878)
|
|
(30,644,105)
|
|
(4,991,987)
|
|
(35,061,524)
|
Less: Net loss
(income) attributable to noncontrolling interest
|
|
|
43,639
|
|
41,966
|
|
281,157
|
|
(164,780)
|
|
281,242
|
Net income (loss)
attributable to shareholders of GigaMedia
|
|
|
5,434,939
|
|
(4,838,912)
|
|
(30,362,948)
|
|
(5,156,767)
|
|
(34,780,282)
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
share attributable to GigaMedia
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
|
0.10
|
|
(0.09)
|
|
(0.59)
|
|
(0.10)
|
|
(0.68)
|
Loss from
discontinued operations
|
|
|
0.00
|
|
0.00
|
|
(0.01)
|
|
0.00
|
|
(0.01)
|
|
|
|
0.10
|
|
(0.09)
|
|
(0.60)
|
|
(0.10)
|
|
(0.69)
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
|
0.10
|
|
(0.09)
|
|
(0.59)
|
|
(0.10)
|
|
(0.68)
|
Loss from
discontinued operations
|
|
|
0.00
|
|
0.00
|
|
(0.01)
|
|
0.00
|
|
(0.01)
|
|
|
|
0.10
|
|
(0.09)
|
|
(0.60)
|
|
(0.10)
|
|
(0.69)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
55,261,661
|
|
55,261,661
|
|
50,720,498
|
|
53,926,966
|
|
50,720,108
|
Diluted
|
|
|
55,284,832
|
|
55,261,661
|
|
50,720,498
|
|
53,926,966
|
|
50,720,108
|
GIGAMEDIA
LIMITED
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2014
|
|
9/30/2014
|
|
12/31/2013
|
|
|
|
unaudited
|
|
unaudited
|
|
audited
|
|
|
|
USD
|
|
USD
|
|
USD
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
50,640,355
|
|
38,899,281
|
|
58,801,533
|
Marketable securities
- current
|
|
11,448,930
|
|
18,041,022
|
|
21,460,119
|
Accounts receivable -
net
|
|
1,297,785
|
|
1,327,883
|
|
2,026,891
|
Prepaid
expenses
|
|
566,965
|
|
534,534
|
|
749,598
|
Restricted
cash
|
|
|
8,990,666
|
|
9,006,571
|
|
0
|
Other
receivables
|
|
|
124,344
|
|
2,739,712
|
|
211,006
|
Other current
assets
|
|
195,998
|
|
166,917
|
|
82,244
|
Total current
assets
|
|
73,265,043
|
|
70,715,920
|
|
83,331,391
|
|
|
|
|
|
|
|
|
Marketable securities
- noncurrent
|
|
4,744,000
|
|
9,073,630
|
|
6,048,080
|
Investments
|
|
|
23,671,773
|
|
20,775,344
|
|
5,822,332
|
Property, plant &
equipment - net
|
|
1,663,424
|
|
1,753,309
|
|
1,676,772
|
Intangible assets -
net
|
|
221,630
|
|
592,482
|
|
1,461,304
|
Prepaid licensing and
royalty fees
|
|
4,382,772
|
|
5,061,593
|
|
4,665,992
|
Other
assets
|
|
|
353,258
|
|
309,549
|
|
315,327
|
Total
assets
|
|
|
108,301,900
|
|
108,281,827
|
|
103,321,198
|
Liabilities and
equity
|
|
|
|
|
|
|
Short-term
borrowings
|
|
18,641,390
|
|
19,395,135
|
|
4,360,953
|
Accounts
payable
|
|
|
770,965
|
|
453,885
|
|
1,178,357
|
Accrued
compensation
|
|
795,431
|
|
1,144,451
|
|
379,905
|
Accrued
expenses
|
|
3,464,652
|
|
2,508,376
|
|
2,616,623
|
Unearned
revenue
|
|
1,945,945
|
|
2,172,611
|
|
2,440,916
|
Other current
liabilities
|
|
3,646,412
|
|
3,781,432
|
|
3,861,931
|
Total current
liabilities
|
|
29,264,795
|
|
29,455,890
|
|
14,838,685
|
Other
liabilities
|
|
|
10,553
|
|
181,193
|
|
181,485
|
Total
liabilities
|
|
|
29,275,348
|
|
29,637,083
|
|
15,020,170
|
GigaMedia's
shareholders' equity
|
|
79,016,097
|
|
78,589,516
|
|
88,447,894
|
Noncontrolling
interest
|
|
10,455
|
|
55,228
|
|
(146,866)
|
Total
equity
|
|
|
79,026,552
|
|
78,644,744
|
|
88,301,028
|
Total liabilities and
equity
|
|
108,301,900
|
|
108,281,827
|
|
103,321,198
|
|
|
|
|
|
|
|
|
GIGAMEDIA
LIMITED
|
|
|
|
|
|
Reconciliations of
Non-GAAP Results of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
|
12/31/2014
|
|
9/30/2014
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2013
|
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
Reconciliation of
Net Income (Loss) to EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to GigaMedia
|
|
5,434,939
|
|
(4,838,912)
|
|
(30,362,948)
|
|
(5,156,767)
|
|
(34,780,282)
|
|
Depreciation
|
|
76,309
|
|
76,182
|
|
89,778
|
|
305,779
|
|
407,669
|
|
Amortization
|
|
241,060
|
|
282,115
|
|
434,343
|
|
1,192,629
|
|
1,902,764
|
|
Interest
income
|
|
(146,450)
|
|
(187,194)
|
|
(85,652)
|
|
(681,833)
|
|
(238,608)
|
|
Interest
expense
|
|
80,344
|
|
78,714
|
|
7,549
|
|
243,037
|
|
48,537
|
|
Income tax (benefit)
expense
|
|
(13,005)
|
|
(125)
|
|
76,099
|
|
(73,258)
|
|
61,086
|
|
EBITDA
|
|
5,673,197
|
|
(4,589,220)
|
|
(29,840,831)
|
|
(4,170,413)
|
|
(32,598,834)
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/gigamedia-announces-fourth-quarter-and-full-year-2014-financial-results-300063992.html
SOURCE GigaMedia Limited