TAIPEI, Taiwan, Nov. 4, 2015 /PRNewswire/ -- GigaMedia
Limited (NASDAQ: GIGM) today announced its third-quarter 2015
unaudited financial results.
Message from Management
For the third quarter of 2015, the sales revenues were
$2.0 million. The contribution made
by the mobile games, the social casino games and the cloud
computing business accounted for about 52.4%, 30.4% and 17.2%
respectively.
In the third quarter, the Company streamlined the mobile gaming
business. The Company reviewed all the existing games, halted the
ones with weak monetization and repackaged the ones considered
better monetization for re-launch. It is expected to see its margin
improve by the end of this year.
In addition to the social casino games platform, it has started
to hold the online qualifying tournaments of the World Series of
Mahjong 2015. It is also a good opportunity to testify the quality
and loading capacity of this in-house developed platform.
With regard to cloud computing business, for the nine months of
2015 compared with the same period of 2014, the business grew by
approximately 128% and the gross loss narrowed. For the third
quarter of 2015 compared with the previous quarter, although the
business went down, the Company believes that the cloud computing
business will outperform its last year performance.
Last but not least, due to the recent slowdown of global economy
and stock market, management decided to terminate the acquisition
of Strawberry Cosmetics. In consequence of the termination of the
acquisition, the Company had to pay $2.0
million consideration to Strawberry Cosmetics as stated in
the announcement dated October
7th, 2015 and the $2.0
million payment will impact its 4Q 2015 financial
results.
Before the market rebounds, management will remain conservative
in investment. At the present stage, management will make more
effort to streamline the current operations, continue to maintain a
healthy financial structure and meanwhile, look for other potential
investment opportunities in Asia.
Consolidated Financial Results
GigaMedia Limited is a diversified provider of online games and
cloud computing services. GigaMedia's online games business FunTown
develops and operates a suite of games in Taiwan and Hong
Kong, with focus on browser/mobile games and social casino
games. GigaMedia's cloud computing business GigaCloud was launched
in early April 2013 and is focused on
providing small and medium-sized enterprises in Greater China with critical communications
services and IT solutions that increase flexibility, efficiency and
competitiveness.
Unaudited consolidated results of GigaMedia are summarized in
the table below.
GIGAMEDIA 3Q15
UNAUDITED CONSOLIDATED FINANCIAL RESULTS
|
(unaudited, all
figures in US$ thousands, except per share amounts)
|
3Q15
|
2Q15
|
Change
(%)
|
3Q15
|
3Q14
|
Change
(%)
|
9M15
|
9M14
|
Change
(%)
|
Revenues
|
2,006
|
2,728
|
-26.5%
|
2,006
|
2,472
|
-18.9%
|
7,895
|
7,119
|
10.9%
|
Gross Profit/
Loss
|
-598
|
217
|
-375.6%
|
-598
|
205
|
-391.7%
|
358
|
2,038
|
-82.4%
|
Loss from
Operations
|
-5,240
|
-3,801
|
-37.9%
|
-5,240
|
-3,631
|
-44.3%
|
-12,457
|
-9,143
|
-36.2%
|
Net Income/ Loss
Attributable to GigaMedia
|
-301
|
1,377
|
-121.9%
|
-301
|
-4,839
|
93.8%
|
6,315
|
-10,592
|
159.6%
|
Net Income/ Loss
Per Share Attributable to GigaMedia, Diluted
|
-0.01
|
0.02
|
-150.0%
|
-0.01
|
-0.09
|
88.9%
|
0.11
|
-0.20
|
155.0%
|
EBITDA(A)
|
-207
|
1,463
|
-114.1%
|
-207
|
-4,589
|
95.5%
|
6,591
|
-9,844
|
167.0%
|
Cash and Marketable
Securities-Current
|
74,824
|
68,305
|
9.5%
|
74,824
|
56,940
|
31.4%
|
74,824
|
56,940
|
31.4%
|
(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.)
Financial Highlights
9M2015
- Operating revenues reached to $7.9
million, a 10.9% increase compared with the same period of
2014 attributable to the growth of cloud computing business.
- Operating expenses increased resulting from an increase of
selling and marketing expenses for more mobile games launched,
particularly in the first half of 2015.
- Net income was $6.3 million
primarily due to the capital gain on disposal of marketable
securities.
3Q2015
- Consolidated revenues were $ 2.0
million, dropped by 26.5% quarter-on-quarter and 18.9%
quarter-over-quarter respectively mainly due to a decline of the
overall business.
- Gross profit reported a loss of $0.6
million primarily resulting from the expenses associated
with licensing fees and outsource.
- Consolidated operating expenses were $4.6 million in 3Q15, up by 15.0%
quarter-on-quarter and 21.0% quarter-over-quarter mainly due to an
increase on general and administrative expenses, including the
expenses related to Strawberry Cosmetics Acquisition Proposal.
- Consolidated non-operating income was $5.0 million, slightly decreased by 2.8% due to
investment loss recognized under equity method and foreign exchange
loss.
- Net loss was $0.3 million mainly
due to a reduction of operating revenues and an increase of
operating expenses.
- Cash and cash equivalents in 3Q15 accounted for $74.8 million, increased by 9.5% from
$68.3 million in 2Q15 resulting from
a disposal of marketable securities-noncurrent.
Financial Position
GigaMedia maintained its solid financial position with cash and
cash equivalents, marketable securities-current and restricted cash
accounted for $75.8 million as of
September 30, 2015, or approximately
$1.37 per share. In consideration of
short-term borrowings, its net cash was estimated at $70.0 million as of September 30, 2015, or approximately $1.27 per share.
Business Outlook
The following forward-looking statements reflect GigaMedia's
expectations as of November
4, 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.
The mobile gaming business has been underperforming. In the
third quarter, we continued to work on the integration of the
resources of our gaming business in Taiwan and Hong
Kong in order to streamline the operations. We hope to see
significant effect on the cost reduction and margin improvement in
the next two quarters. Besides, the Company published a new popular
game "Yume100" from Japan
targeting teenage girls and young single women who really indulge
into fanfiction and this game has high monetization in Japan. We expect it to have the same
performance in Taiwan and
Hong Kong markets by bringing
stable revenues and creating margin. This game has been launched
for about one month in Taiwan and
Hong Kong and received a huge
response from the players; moreover, achieved to break even upon
the launch on the market.
In addition to social casino game platform, for the next quarter
it will continue to hold the online qualifying tournaments for
World Series of Mahjong 2015 until the land-based finals in
Macau.
As for cloud computing business, the Company launched a new
platform "Tesseratic" (http://www.tesseratic.com/index.php/en/) for
the container cluster management on OpenStack, which is an
integration solution with high availability, low cost on building
and good scalability. The Company will increase its marketing
events in order to have widespread promotion for this new platform
on the market.
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
Quarterly results
All quarterly 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.
Webcast Schedule
For Q&A regarding the third quarter 2015 performance upon
the release, investors may send the questions via email to
IR@gigamedia.com.tw by November 10,
and the responses will be replied in the webcast. Webcast will be
available on the company's official website www.gigamedia.com on
November 20.
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
Tel: +886-2-2656-8080
amanda.chang@gigamedia.com.tw
(Tables to follow)
GIGAMEDIA
LIMITED
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
Nine months
ended
|
|
|
|
9/30/2015
|
|
6/30/2015
|
|
9/30/2014
|
|
9/30/2015
|
|
9/30/2014
|
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
Asian online game and
service revenues
|
|
|
1,660,013
|
|
2,014,922
|
|
2,237,498
|
|
6,393,327
|
|
6,459,770
|
Other
revenues
|
|
|
345,516
|
|
712,646
|
|
234,987
|
|
1,501,854
|
|
658,819
|
|
|
|
2,005,529
|
|
2,727,568
|
|
2,472,485
|
|
7,895,181
|
|
7,118,589
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Asian online
game and service revenues
|
|
|
2,230,148
|
|
1,777,811
|
|
1,972,295
|
|
5,974,124
|
|
4,176,186
|
Cost of other
revenues
|
|
|
373,245
|
|
732,775
|
|
294,982
|
|
1,563,539
|
|
904,102
|
|
|
|
2,603,393
|
|
2,510,586
|
|
2,267,277
|
|
7,537,663
|
|
5,080,288
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit (loss)
|
|
|
(597,864)
|
|
216,982
|
|
205,208
|
|
357,518
|
|
2,038,301
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
Product development
and engineering expenses
|
|
|
151,621
|
|
164,085
|
|
197,745
|
|
497,413
|
|
671,583
|
Selling and marketing
expenses
|
|
|
1,649,356
|
|
2,262,207
|
|
1,759,991
|
|
6,598,679
|
|
5,009,682
|
General and
administrative expenses
|
|
|
1,997,787
|
|
1,265,399
|
|
1,878,580
|
|
4,549,022
|
|
5,500,141
|
Impairment
losses
|
|
|
805,746
|
|
0
|
|
0
|
|
805,746
|
|
0
|
Other
|
|
|
37,291
|
|
326,594
|
|
0
|
|
363,885
|
|
0
|
|
|
|
4,641,801
|
|
4,018,285
|
|
3,836,316
|
|
12,814,745
|
|
11,181,406
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(5,239,665)
|
|
(3,801,303)
|
|
(3,631,108)
|
|
(12,457,227)
|
|
(9,143,105)
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
62,153
|
|
106,324
|
|
187,194
|
|
271,006
|
|
535,584
|
Gain on sales of
marketable securities
|
|
|
5,844,306
|
|
4,703,500
|
|
2,447,065
|
|
20,020,869
|
|
2,609,357
|
Interest
expense
|
|
|
(24,142)
|
|
(48,224)
|
|
(78,714)
|
|
(154,479)
|
|
(162,694)
|
Foreign exchange
(loss) gain - net
|
|
|
(346,248)
|
|
(17,655)
|
|
20,058
|
|
(380,146)
|
|
(311,755)
|
Equity in net (loss)
earnings on equity method investments
|
|
|
(615,990)
|
|
22,954
|
|
(3,848,048)
|
|
(552,936)
|
|
(4,069,323)
|
Changes in the fair value of an instrument recognized at fair value
|
|
|
637
|
|
879,472
|
|
0
|
|
(71,552)
|
|
0
|
Gain on disposal of
investments
|
|
|
37,364
|
|
0
|
|
0
|
|
37,364
|
|
0
|
Other
|
|
|
33,477
|
|
(508,926)
|
|
22,550
|
|
(457,074)
|
|
98,395
|
|
|
|
4,991,557
|
|
5,137,445
|
|
(1,249,895)
|
|
18,713,052
|
|
(1,300,436)
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income from
continuing operations before income taxes
|
|
|
(248,108)
|
|
1,336,142
|
|
(4,881,003)
|
|
6,255,825
|
|
(10,443,541)
|
Income tax (expense)
benefit
|
|
|
(125)
|
|
170
|
|
125
|
|
13,396
|
|
60,254
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income from
continuing operations
|
|
|
(248,233)
|
|
1,336,312
|
|
(4,880,878)
|
|
6,269,221
|
|
(10,383,287)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
|
(248,233)
|
|
1,336,312
|
|
(4,880,878)
|
|
6,269,221
|
|
(10,383,287)
|
Less: Net (income)
loss attributable to noncontrolling interest
|
|
|
(53,111)
|
|
40,525
|
|
41,966
|
|
45,545
|
|
(208,419)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to shareholders of GigaMedia
|
|
|
(301,344)
|
|
1,376,837
|
|
(4,838,912)
|
|
6,314,766
|
|
(10,591,706)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
share attributable to GigaMedia
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from
continuing operations
|
|
|
(0.01)
|
|
0.02
|
|
(0.09)
|
|
0.11
|
|
(0.20)
|
Loss from
discontinued operations
|
|
|
0.00
|
|
0.00
|
|
0.00
|
|
0.00
|
|
0.00
|
|
|
|
(0.01)
|
|
0.02
|
|
(0.09)
|
|
0.11
|
|
(0.20)
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from
continuing operations
|
|
|
(0.01)
|
|
0.02
|
|
(0.09)
|
|
0.11
|
|
(0.20)
|
Loss from
discontinued operations
|
|
|
0.00
|
|
0.00
|
|
0.00
|
|
0.00
|
|
0.00
|
|
|
|
(0.01)
|
|
0.02
|
|
(0.09)
|
|
0.11
|
|
(0.20)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
55,261,661
|
|
55,261,661
|
|
55,261,661
|
|
55,261,661
|
|
53,477,178
|
Diluted
|
|
|
55,261,661
|
|
55,262,036
|
|
55,261,661
|
|
55,261,873
|
|
53,477,178
|
GIGAMEDIA
LIMITED
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
9/30/2015
|
|
6/30/2015
|
|
9/30/2014
|
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
|
USD
|
|
USD
|
|
USD
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
74,818,341
|
|
68,299,828
|
|
38,899,281
|
Marketable securities
- current
|
|
5,307
|
|
5,307
|
|
18,041,022
|
Accounts receivable -
net
|
|
982,186
|
|
1,675,561
|
|
1,327,883
|
Prepaid
expenses
|
|
420,918
|
|
1,019,249
|
|
534,534
|
Restricted
cash
|
|
|
1,000,000
|
|
1,000,000
|
|
9,006,571
|
Other
receivables
|
|
74,327
|
|
186,994
|
|
2,739,712
|
Other current
assets
|
|
258,117
|
|
273,500
|
|
166,917
|
Total current
assets
|
|
77,559,196
|
|
72,460,439
|
|
70,715,920
|
|
|
|
|
|
|
|
|
Marketable securities
- noncurrent
|
|
0
|
|
4,744,000
|
|
9,073,630
|
Investments
|
|
|
5,798,904
|
|
6,740,252
|
|
20,775,344
|
Property, plant &
equipment - net
|
|
1,502,697
|
|
1,675,312
|
|
1,753,309
|
Intangible assets -
net
|
|
137,532
|
|
206,780
|
|
592,482
|
Prepaid licensing and royalty fees
|
|
3,150,519
|
|
5,026,779
|
|
5,061,593
|
Other
assets
|
|
|
333,006
|
|
369,685
|
|
309,549
|
Total
assets
|
|
|
88,481,854
|
|
91,223,247
|
|
108,281,827
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
Short-term
borrowings
|
|
5,780,347
|
|
4,536,617
|
|
19,395,135
|
Accounts
payable
|
|
280,738
|
|
557,599
|
|
453,885
|
Accrued
compensation
|
|
672,966
|
|
464,384
|
|
1,144,451
|
Accrued
expenses
|
|
2,233,313
|
|
3,739,583
|
|
2,508,376
|
Unearned
revenue
|
|
1,591,386
|
|
1,673,170
|
|
2,172,611
|
Other current
liabilities
|
|
1,632,963
|
|
1,800,582
|
|
3,781,432
|
Total current
liabilities
|
|
12,191,713
|
|
12,771,935
|
|
29,455,890
|
Other
liabilities
|
|
|
1,937,864
|
|
1,933,173
|
|
181,193
|
Total
liabilities
|
|
|
14,129,577
|
|
14,705,108
|
|
29,637,083
|
GigaMedia's
shareholders' equity
|
|
74,352,277
|
|
76,607,057
|
|
78,589,516
|
Noncontrolling
interest
|
|
0
|
|
(88,918)
|
|
55,228
|
Total
equity
|
|
|
74,352,277
|
|
76,518,139
|
|
78,644,744
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
|
88,481,854
|
|
91,223,247
|
|
108,281,827
|
GIGAMEDIA
LIMITED
|
|
|
|
Reconciliations of
Non-GAAP Results of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
Nine months
ended
|
|
|
9/30/2015
|
|
6/30/2015
|
|
9/30/2014
|
|
9/30/2015
|
|
9/30/2014
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
Reconciliation of Net Income (Loss) to EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to GigaMedia
|
|
(301,344)
|
|
1,376,837
|
|
(4,838,912)
|
|
6,314,766
|
|
(10,591,706)
|
Depreciation
|
|
73,079
|
|
80,296
|
|
76,182
|
|
227,587
|
|
229,470
|
Amortization
|
|
59,838
|
|
64,129
|
|
282,115
|
|
179,283
|
|
951,569
|
Interest
income
|
|
(62,153)
|
|
(106,302)
|
|
(187,194)
|
|
(270,985)
|
|
(535,383)
|
Interest
expense
|
|
23,934
|
|
47,975
|
|
78,714
|
|
154,011
|
|
162,694
|
Income tax (benefit)
expense
|
|
125
|
|
(170)
|
|
(125)
|
|
(13,396)
|
|
(60,254)
|
EBITDA
|
|
(206,521)
|
|
1,462,765
|
|
(4,589,220)
|
|
6,591,266
|
|
(9,843,610)
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/gigamedia-announces-third-quarter-2015-financial-results-300172207.html
SOURCE GigaMedia Limited