TAIPEI, Taiwan, Nov. 4, 2016 /PRNewswire/ -- GigaMedia Limited
(NASDAQ: GIGM) today announced its unaudited financial results for
the third quarter of 2016. The Company grew its total revenues by
19 percent quarter-on-quarter.
Third Quarter Overview and Recent Development
- Consolidated 3Q revenue grew 19 percent quarter-on-quarter
and 23 percent year-over-year; gross profit increased 35 percent
and 338 percent comparing with Q2 2016 and Q3 2015
respectively.
- New mobile game revenue stream continues to expand. Revenue
from online games increased 19 percent in the prior quarter from
$2.1 million to $2.5 million. One new mobile RPG game,
JJHero, would be launched in the middle of October.
- Loss from operations decreased 27 percent from $1.3 million to $0.9
million quarter-on-quarter and 82 percent from $5.2 million to $0.9
million year-over-year.
- Consolidated general and administrative expenses
decreased 53 percent year-over-year.
- Cloud business is integrated into gaming business.
CEO's comments
"This quarter, we are pleased to announce the efforts we put in
the prior quarter generated a positive return on the revenue. The
online and offline events we held not only have enhanced the
Company's brand visibility but also driving more leads back to the
games," stated GigaMedia Limited
Chief Executive Officer Collin
Hwang.
"According to research, there are more than 440 million gamers
in China and about 35 percent of
the users use paid services. It's a big market we can't neglect. At
the same time, the qualities of Chinese games are improving
nowadays. We will move step by step to get accurate predictions on
the licensed games performances and also on the self-developed
products, we expect to provide more quality and fun games to our
gamers," stated GigaMedia Limited
Chief Executive Officer Collin
Hwang.
"Currently, Japan is the second
largest mobile games market in the world, behind only China. We are happy to see that there are more
Japanese gaming companies reach us initiatively to discuss the
opportunities of cooperation due to our hard work on operating
licensed games in Taiwan and
Hong Kong and this also makes us
able to bring in more quality games," continued GigaMedia Limited Chief
Executive Officer Collin Hwang.
"As for our social games, we plan to enrich this category by
adding more slots games and strengthen the original ones, to bring
more entertained and mainstream games to our gamers and also
improve the entire gaming atmosphere," GigaMedia Limited Chief Executive Officer
Collin Hwang continued.
"For the past two quarters, we have reviewed our cloud business
carefully due to the under-performance and expected cash burn. We
management team decided to do strategic transformation on resource
integration to improve operations and maximize long-term
development and performance,"
stated GigaMedia Limited Chief Executive Officer Collin Hwang.
"We have transferred our cloud services to our business
partners. All the services remain the same and cost no loss to our
original customers. We intend to implant our technology and
know-how into gaming business, to revolutionize gaming with a cloud
streaming service. Our staff in GigaCloud Ltd. will fully support
GigaMedia Limited and Funtown to do the development. We will
continue bringing out the best performances. Resources will be
fully utilized in the company and shared by all teams which are in
line with our internal integration," GigaMedia Limited Chief Executive Officer
Collin Hwang continued.
"Last but not least, we are open to acquisitions so long as it
has a strategic fit. With the strong balance sheet and cash we
have, we would like to use our business expertise on online gaming
and marketing to seeking acquisition opportunities in the United States, China, Japan
and other countries, and we consider now would be a good time to
explore investment opportunities. All potential investments will be
evaluated carefully and thoughtfully to maximize shareholder
value," stated GigaMedia Limited
Chief Executive Officer Collin
Hwang.
Unaudited Consolidated Financial Results
GigaMedia Limited is a diversified provider of online games.
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. Unaudited
consolidated results of GigaMedia are summarized in the table
below.
For the Third Quarter
GIGAMEDIA 3Q16
UNAUDITED CONSOLIDATED FINANCIAL RESULTS
|
(unaudited, all
figures in US$ thousands, except per share
amounts)
|
|
3Q16
|
|
2Q16
|
|
Change
(%)
|
|
3Q16
|
|
3Q15
|
|
Change
(%)
|
Revenues
|
|
|
2,457
|
|
|
2,062
|
|
|
19.2%
|
|
|
2,457
|
|
|
2,006
|
|
|
22.5%
|
Gross Profit
(Loss)
|
|
|
1,424
|
|
|
1,058
|
|
|
34.6%
|
|
|
1,424
|
|
|
(598)
|
|
|
338.1%
|
Loss from
Operations
|
|
|
(943)
|
|
|
(1,284)
|
|
|
26.6%
|
|
|
(943)
|
|
|
(5,240)
|
|
|
82.0%
|
Net Loss
Attributable to GigaMedia
|
|
|
(2,173)
|
|
|
(2,146)
|
|
|
(1.3)%
|
|
|
(2,173)
|
|
|
(301)
|
|
|
(621.9)%
|
Net Loss Per Share
Attributable to GigaMedia, Diluted
|
|
|
(0.20)
|
|
|
(0.19)
|
|
|
(5.3)%
|
|
|
(0.20)
|
|
|
(0.03)
|
|
|
(566.6)%
|
EBITDA
(A)
|
|
|
(2,152)
|
|
|
(2,144)
|
|
|
(0.4)%
|
|
|
(2,152)
|
|
|
(207)
|
|
|
(940.0)%
|
Cash and
Marketable Securities-Current
|
|
|
67,730
|
|
|
70,585
|
|
|
(4.0)%
|
|
|
67,730
|
|
|
74,824
|
|
|
(9.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.)
|
Third-Quarter Financial Results
- Consolidated revenues for the third quarter of 2016 were
$2.5 million; this compared to
$2.1 million in the second quarter of
2016 and $2 million in the third
quarter of 2015. The results reflected positive growth and
contribution from online game business
- Consolidated gross profit for the third quarter of 2016 was
$1.4 million; this compared to
$1.1 million in the second quarter of
2016 and minus $0.6 million in the
third quarter of 2015.
- Consolidated operating expenses were $2.4 million in the third quarter of 2016,
comparing with the third quarter of 2015, the expense decreased 49%
from $4.6 million to $2.4 million. The expense remains at the same
level around $2.3 million comparing
with the second quarter of 2016.
- Consolidated loss from operations was $0.9 million in the third quarter of 2016,
decreases of $0.3 million and
$4.3 million quarter-on-quarter and
year-over-year respectively.
- Consolidated non-operating expenses/income in the third quarter
of 2016 was a loss of $1.2 million,
and the loss increased $0.4 million
quarter-on-quarter; this was due to foreign exchange loss and
equity-method loss on Eastgate.
- Consolidated net income for the third quarter of 2016 was a
loss of $2.2 million compared to a
loss of $2.1 million in the second
quarter of 2016 and a loss of $0.3
million in the third quarter of 2015.The period variations
primarily reflected the non-operating income from gain on sales of
marketable securities and investment loss.
Consolidate EBITDA for the third
quarter of 2016 was a loss of $2.2
million compared to a loss of $2.1
million in the second quarter of 2016 and a loss of
$0.2 million in the third quarter of
2015.
Financial Position
As of September 30, 2016,
GigaMedia had $68.7 million in cash,
restricted cash and marketable securities-current approximately
$6.22 per share, compared to
$71.6 million at the end of the
second quarter of 2016, which mostly reflecting the loan repayment
of $3 million. Short-term debt was
down to $2.6 million at the end of
third quarter, a 54 percent decrease over last quarter.
Business Outlook
The following forward-looking statements reflect GigaMedia's
expectations as of November 4, 2016.
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
2015 Annual Report on Form 20-F filed with the U.S.
Securities and Exchange Commission as referenced below, actual
results may differ materially.
In the fourth quarter, Gigamedia expects the following
initiative will make contribution and boost revenues.
- The integration of cloud technology and online game
business.
- New licensed mobile game which is licensed from China is scheduled to launch in the fourth
quarter.
- The Company has completed development of its self-developed
social game products which will be considered to add into Company's
social game platform after the internal testing process is
finished.
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.
Q&A
For Q&A regarding the third quarter 2016 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 online games. 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. 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 2016 and its
other filings with the United States Securities and Exchange
Commission.
GIGAMEDIA
LIMITED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
Three months
ended
|
|
|
9/30/2016
|
|
|
6/31/2016
|
|
|
9/30/2015
|
|
|
unaudited
|
|
|
unaudited
|
|
|
unaudited
|
|
|
USD
|
|
|
USD
|
|
|
USD
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
Asian online game and
service revenues
|
|
|
2,457,165
|
|
|
2,061,392
|
|
|
1,660,013
|
Other
revenues
|
|
|
302
|
|
|
283
|
|
|
345,516
|
|
|
|
2,457,467
|
|
|
2,061,675
|
|
|
2,005,529
|
Operating
costs
|
|
|
|
|
|
|
|
|
|
Cost of Asian online
game and service revenues
|
|
|
1,032,941
|
|
|
1,003,828
|
|
|
2,230,148
|
Cost of other
revenues
|
|
|
315
|
|
|
296
|
|
|
373,245
|
|
|
|
1,033,256
|
|
|
1,004,124
|
|
|
2,603,393
|
Gross profit
(loss)
|
|
|
1,424,211
|
|
|
1,057,551
|
|
|
(597,864)
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Product development
and engineering expenses
|
|
|
418,748
|
|
|
167,563
|
|
|
151,621
|
Selling and marketing
expenses
|
|
|
985,433
|
|
|
1,426,594
|
|
|
1,649,356
|
General and
administrative expenses
|
|
|
962,576
|
|
|
746,910
|
|
|
1,997,787
|
Impairment
losses
|
|
|
—
|
|
|
—
|
|
|
805,746
|
Other
|
|
|
—
|
|
|
—
|
|
|
37,291
|
|
|
|
2,366,757
|
|
|
2,341,067
|
|
|
4,641,801
|
Loss from
operations
|
|
|
(942,546)
|
|
|
(1,283,516)
|
|
|
(5,239,665)
|
Non-operating
income (expense)
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
69,823
|
|
|
80,925
|
|
|
62,153
|
Gain on sales of
marketable securities
|
|
|
—
|
|
|
—
|
|
|
5,844,306
|
Interest
expense
|
|
|
(16,045)
|
|
|
(25,981)
|
|
|
(24,142)
|
Foreign exchange loss
- net
|
|
|
(193,649)
|
|
|
(94,062)
|
|
|
(346,248)
|
Gain on disposal of
property, plant and equipment
|
|
|
8,771
|
|
|
8,090
|
|
|
—
|
Equity in net loss on
equity method investments
|
|
|
(1,117,217)
|
|
|
(858,492)
|
|
|
(615,990)
|
Changes in the fair
value of an instrument recognized at fair value
|
|
|
—
|
|
|
—
|
|
|
637
|
Gain on disposal of
investments
|
|
|
9,125
|
|
|
8,567
|
|
|
37,364
|
Other
|
|
|
8,518
|
|
|
15,237
|
|
|
33,477
|
|
|
|
(1,230,674)
|
|
|
(865,716)
|
|
|
4,991,557
|
Loss from continuing
operations before income taxes
|
|
|
(2,173,220)
|
|
|
(2,149,232)
|
|
|
(248,108)
|
Income tax benefit
(expense)
|
|
|
25
|
|
|
2,961
|
|
|
(125)
|
Loss from continuing
operations
|
|
|
(2,173,195)
|
|
|
(2,146,271)
|
|
|
(248,233)
|
Net loss
|
|
|
(2,173,195)
|
|
|
(2,146,271)
|
|
|
(248,233)
|
Less: Net income
attributable to non-controlling interest
|
|
|
—
|
|
|
—
|
|
|
(53,111)
|
Net loss attributable
to shareholders of GigaMedia
|
|
|
(2,173,195)
|
|
|
(2,146,271)
|
|
|
(301,344)
|
Loss per share
attributable to GigaMedia
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
|
|
(0.20)
|
|
|
(0.19)
|
|
|
(0.03)
|
Loss from discontinued
operations
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
|
(0.20)
|
|
|
(0.19)
|
|
|
(0.03)
|
Diluted:
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
|
|
(0.20)
|
|
|
(0.19)
|
|
|
(0.03)
|
Loss from discontinued
operations
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
|
(0.20)
|
|
|
(0.19)
|
|
|
(0.03)
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
11,052,235
|
|
|
11,052,235
|
|
|
11,052,332
|
Diluted
|
|
|
11,052,235
|
|
|
11,052,235
|
|
|
11,052,332
|
GIGAMEDIA
LIMITED
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
9/30/2016
|
|
6/30/2016
|
|
9/30/2015
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
USD
|
|
USD
|
|
USD
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
67,726,267
|
|
|
70,581,209
|
|
|
74,818,341
|
Marketable securities
- current
|
|
|
3,830
|
|
|
3,830
|
|
|
5,307
|
Accounts receivable -
net
|
|
|
1,245,375
|
|
|
820,603
|
|
|
982,186
|
Prepaid
expenses
|
|
|
445,515
|
|
|
488,851
|
|
|
420,918
|
Restricted
cash
|
|
|
1,004,110
|
|
|
1,004,110
|
|
|
1,000,000
|
Other
receivables
|
|
|
46,870
|
|
|
30,059
|
|
|
74,327
|
Other current
assets
|
|
|
188,209
|
|
|
192,924
|
|
|
258,117
|
Total current
assets
|
|
|
70,660,176
|
|
|
73,121,586
|
|
|
77,559,196
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
1,273,018
|
|
|
3,720,766
|
|
|
5,798,904
|
Property, plant &
equipment - net
|
|
|
579,459
|
|
|
400,831
|
|
|
1,502,697
|
Intangible assets -
net
|
|
|
83,623
|
|
|
111,064
|
|
|
137,532
|
Prepaid licensing and
royalty fees
|
|
|
1,536,574
|
|
|
912,055
|
|
|
3,150,519
|
Other
assets
|
|
|
426,742
|
|
|
414,857
|
|
|
333,006
|
Total
assets
|
|
|
74,559,592
|
|
|
78,681,159
|
|
|
88,481,854
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
|
2,551,020
|
|
|
5,577,072
|
|
|
5,780,347
|
Accounts
payable
|
|
|
409,812
|
|
|
272,203
|
|
|
280,738
|
Accrued
compensation
|
|
|
615,666
|
|
|
392,706
|
|
|
672,966
|
Accrued
expenses
|
|
|
2,456,071
|
|
|
2,560,114
|
|
|
2,233,313
|
Unearned
revenue
|
|
|
2,091,888
|
|
|
1,661,640
|
|
|
1,591,386
|
Other current
liabilities
|
|
|
1,761,767
|
|
|
1,614,011
|
|
|
1,632,963
|
Total current
liabilities
|
|
|
9,886,224
|
|
|
12,077,746
|
|
|
12,191,713
|
Other
liabilities
|
|
|
1,712,015
|
|
|
1,712,015
|
|
|
1,933,173
|
Total
liabilities
|
|
|
11,598,239
|
|
|
13,789,761
|
|
|
14,129,577
|
GigaMedia's
shareholders' equity
|
|
|
62,961,353
|
|
|
64,891,398
|
|
|
74,352,277
|
Noncontrolling
interest
|
|
|
—
|
|
|
—
|
|
|
—
|
Total
equity
|
|
|
62,961,353
|
|
|
64,891,398
|
|
|
74,352,277
|
Total liabilities and
equity
|
|
|
74,559,592
|
|
|
78,681,159
|
|
|
88,481,854
|
GIGAMEDIA
LIMITED
Reconciliations of
Non-GAAP Results of Operations
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
9/30/2016
|
|
|
6/30/2016
|
|
|
9/30/2015
|
|
|
|
unaudited
|
|
|
unaudited
|
|
|
unaudited
|
|
|
|
USD
|
|
|
USD
|
|
|
USD
|
|
Reconciliation of
Net Income (Loss) to EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to GigaMedia
|
|
|
(2,173,195)
|
|
|
|
(2,146,271)
|
|
|
|
(301,344)
|
|
Depreciation
|
|
|
44,713
|
|
|
|
29,306
|
|
|
|
73,079
|
|
Amortization
|
|
|
29,832
|
|
|
|
30,947
|
|
|
|
59,838
|
|
Interest
income
|
|
|
(69,823)
|
|
|
|
(80,925)
|
|
|
|
(62,153)
|
|
Interest
expense
|
|
|
16,045
|
|
|
|
25,981
|
|
|
|
23,934
|
|
Income tax (benefit)
expense
|
|
|
(25)
|
|
|
|
(2,961)
|
|
|
|
125
|
|
EBITDA
|
|
|
(2,152,453)
|
|
|
|
(2,143,923)
|
|
|
|
(206,521)
|
|
For further information contact:
Annie Sun
Investor Relations Department
Country/City Code 8862 Tel: 2656-8096
annie.sun@gigamedia.com.tw
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/gigamedia-announces-third-quarter-2016-financial-results-300357641.html
SOURCE GigaMedia