TAIPEI, Taiwan, May 2,
2018 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today
announced its first-quarter 2018 unaudited financial results.
Comments from Management
In the first quarter of 2018, the digital entertainment service
revenues increased 6.5% due to a new game launched in mid-December 2017, which led a growth in gross
profit by 20.6% quarter-on-quarter.
Currently, there are three licensed games in pipeline waiting
for release. Management is looking forward to seeing healthy growth
of our new licensed games and expecting to have a long-term
profitability.
First Quarter Overview
- Operating revenue increased by $0.2 million or 6.5% in quarter-on-quarter
comparison, mainly due to a new game launched in
December 2017.
- Total assets amounted to
$65.6 million,decreased from $66.4 million at the end of the last quarter,
mainly due to the net loss incurred in this
quarter.
Unaudited Consolidated Financial Results
GigaMedia Limited is a diversified provider of digital
entertainment services. GigaMedia's digital entertainment service
business FunTown develops and operates a suite of digital
entertainments in Taiwan and
Hong Kong, with focus on
browser/mobile games and casual games. Unaudited consolidated
results of GigaMedia are summarized in the table below.
For the First Quarter
GIGAMEDIA
1Q18 UNAUDITED CONSOLIDATED FINANCIAL
RESULTS
|
|
(unaudited, all
figures in US$ thousands, except per share
amounts)
|
|
1Q18
|
|
4Q17
|
|
|
Change
(%)
|
|
1Q18
|
|
1Q17
|
|
Change
(%)
|
Revenues
|
|
|
2,160
|
|
|
2,028
|
|
|
6.5%
|
|
2,160
|
|
|
4,147
|
|
|
(47.9)%
|
Gross
Profit
|
|
|
1,214
|
|
|
1,007
|
|
|
20.6%
|
|
1,214
|
|
|
2,282
|
|
|
(46.8)%
|
Income
(Loss) from Operations
|
|
|
(975)
|
|
|
988
|
|
|
NM
|
|
(975)
|
|
|
(429)
|
|
NM
|
Net Income (Loss)
Attributable to GigaMedia
|
|
|
(853)
|
|
|
1,070
|
|
NM
|
|
(853)
|
|
|
(760)
|
|
NM
|
Net Income (Loss)
Per Share Attributable to
GigaMedia, Diluted
|
|
|
(0.08)
|
|
|
0.10
|
|
NM
|
|
(0.08)
|
|
|
(0.07)
|
|
NM
|
EBITDA
(A)
|
|
|
(1,104)
|
|
|
(785)
|
|
NM
|
|
(1,104)
|
|
|
(821)
|
|
NM
|
Cash and
Marketable Securities-Current
|
|
|
62,111
|
|
|
63,670
|
|
|
(2.4)%
|
|
62,111
|
|
|
65,354
|
|
|
(5.0)%
|
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.)
|
First-Quarter Financial Results
- Consolidated revenues for the first quarter of 2018 increased
6.5% quarter-on-quarter to $2.2
million from $2.0 million in
the fourth quarter of 2017, but decreased by 47.9% year-over-year
from $4.1 million in the first
quarter of 2017. The quarter-on-quarter increase reflected the
growth of the new licensed game launched in December 2017, while the year-over-year decrease
was due to declined performance in the licensed games
Dragon, which was newly launched in December 2016 and had dwindled from its peak in
the first quarter of 2017.
- Consolidated gross profit increased 20.6% from $1.0 million to $1.2
million quarter-on-quarter, but decreased by 46.8% from
$2.3 million to $1.2 million year-over-year.
- Consolidated operating expenses were $2.2 million in the first quarter of 2018. An
increase by $2.2 million
quarter-on-quarter and a decrease of $0.5
million from $2.7 million to
$2.2 million year-over-year. The
quarter-on-quarter change was mainly resulted from the
reclassification from non-operating income of the ArcheAge
income in the fourth quarter of 2017, and the increased marketing
expenses in the first quarter of 2018 for the newly launched game
Akaseka, while the year-over-year change was due to less
marketing expenses in promoting Akaseka, compared to the
marketing expenses for Dragon in the same period last
year.
- Income (Loss) from operation of the first quarter of 2018 was a
loss of $1.0 million, reduced by
approximately $2.0 million from an
income of $1.0 million last quarter,
mainly due to the reclassification of the ArcheAge income in
the fourth quarter of 2017. An increase of loss by $0.5 million from a loss of $0.4 million was also seen in the year-over-year
comparison.
- Net income (loss) of the first quarter of 2018 was a net
loss of $0.9 million, deteriorated by
approximately$1.9 million from a net income of $1.1 million in the fourth quarter of 2017,
mainly due to the reversal of income tax liabilities of
$1.7 million in the fourth quarter of
2017.
- Cash and marketable securities-current at the first quarter-end
of 2018 accounted for $62.0 million,
decreased by $1.5 million from the
fourth quarter-end of 2017.
Financial Position
As of March 31, 2018, GigaMedia
had $62.6 million in cash and
restricted cash, approximately $5.7
per share, compared to $65.9 million,
or $6.0 per share, at the end of the
first quarter of 2017. The decrease mostly reflected the net cash
used in operating activities and the fully repayment of short-term
debt, which amounted to $2.6 million
as of a year ago.
Business Outlook
The following forward-looking statements reflect GigaMedia's
expectations as of May 2,
2018. 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 2017 Annual Report on Form 20-F filed with
the U.S. Securities and Exchange Commission as referenced below,
actual results may differ materially.
GigaMedia CEO James Huang stated:
"We have launched one more female-oriented game 'Akaseka' in
December 2017, which contributed
stably. We will keep looking for more female-oriented games to
enhance revenue stability healthy margin. And with smart spending
on commercial advertisements to achieve high efficiency on
marketing expense, improvements in revenues will accompany with
operating profits of more robustness.
Management will continually search for high gross profit games
to maintain a stable and increased level of profitability by
introducing more quality games in the coming quarters.
To look over the past two years, the management has been
clearing up assets, trying to keep more cash on hand. We are
persistently and prudently searching for investment targets with
high potentials to expand our business and drive higher return for
our shareholders."
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
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 first quarter 2018 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.
GigaMedia's digital entertainment service business develops and
operates a suite of digital entertainments in Taiwan and Hong
Kong, with focus on browser/mobile games and casual 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 2018 and its
other filings with the United States Securities and Exchange
Commission.
GIGAMEDIA
LIMITED
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
Three months
ended
|
|
|
3/31/2018
|
|
12/31/2017
|
|
3/31/2017
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
USD
|
|
USD
|
|
USD
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
Digital entertainment
service revenues
|
|
|
2,160,466
|
|
|
2,027,831
|
|
|
4,147,068
|
Other
revenues
|
|
|
--
|
|
|
--
|
|
|
--
|
|
|
|
2,160,466
|
|
|
2,027,831
|
|
|
4,147,068
|
Operating
costs
|
|
|
|
|
|
|
|
|
|
Cost of digital
entertainment service revenues
|
|
|
946,688
|
|
|
1,020,993
|
|
|
1,864,588
|
Cost of other
revenues
|
|
|
--
|
|
|
--
|
|
|
--
|
|
|
|
946,688
|
|
|
1,020,993
|
|
|
1,864,588
|
Gross
profit
|
|
|
1,213,778
|
|
|
1,006,838
|
|
|
2,282,480
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Product development
and engineering expenses
|
|
|
289,171
|
|
|
237,744
|
|
|
276,697
|
Selling and marketing
expenses
|
|
|
996,751
|
|
|
745,169
|
|
|
1,470,628
|
General and
administrative expenses
|
|
|
896,504
|
|
|
741,253
|
|
|
964,524
|
Gain on licensing
agreement
|
|
|
--
|
|
|
(1,731,592)
|
|
|
--
|
Other
|
|
|
6,494
|
|
|
26,060
|
|
|
--
|
|
|
|
2,188,920
|
|
|
18,634
|
|
|
2,711,849
|
Income (loss) from
operations
|
|
|
(975,142)
|
|
|
988,204
|
|
|
(429,369)
|
Non-operating
income (expense)
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
278,943
|
|
|
207,775
|
|
|
77,174
|
Gain on sales of
marketable securities
|
|
|
--
|
|
|
1,618
|
|
|
--
|
Interest
expense
|
|
|
--
|
|
|
(112)
|
|
|
(11,730)
|
Foreign exchange loss
– net
|
|
|
(158,912)
|
|
|
(85,955)
|
|
|
(377,450)
|
Loss on disposal of
property, plant and equipment
|
|
|
--
|
|
|
(1)
|
|
|
--
|
Equity in net loss on
equity method investments
|
|
|
--
|
|
|
(79)
|
|
|
(23,265)
|
Impairment loss on
marketable securities and investments
|
|
|
--
|
|
|
(176)
|
|
|
--
|
Other
|
|
|
2,346
|
|
|
(1,712,323)
|
|
|
5,501
|
|
|
|
122,377
|
|
|
(1,589,253)
|
|
|
(329,770)
|
Loss before income
taxes
|
|
|
(852,765)
|
|
|
(601,049)
|
|
|
(759,139)
|
Income tax benefit
(expense)
|
|
|
--
|
|
|
1,671,511
|
|
|
(456)
|
Net (loss) income
attributable to shareholders of GigaMedia
|
|
|
(852,765)
|
|
|
1,070,462
|
|
|
(759,595)
|
(Loss) Earnings per
share attributable to GigaMedia
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
(0.08)
|
|
|
0.10
|
|
|
(0.07)
|
Diluted
|
|
|
(0.08)
|
|
|
0.10
|
|
|
(0.07)
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
11,052,235
|
|
|
11,052,235
|
|
|
11,052,235
|
Diluted
|
|
|
11,052,235
|
|
|
11,052,235
|
|
|
11,052,235
|
GIGAMEDIA
LIMITED
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
3/31/2018
|
|
12/31/2017
|
|
3/31/2017
|
|
|
unaudited
|
|
audited
|
|
unaudited
|
|
|
USD
|
|
USD
|
|
USD
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
62,111,308
|
|
|
63,670,458
|
|
|
65,351,207
|
Marketable securities
- current
|
|
|
--
|
|
|
--
|
|
|
2,617
|
Accounts receivable -
net
|
|
|
626,225
|
|
|
751,114
|
|
|
1,247,420
|
Prepaid
expenses
|
|
|
384,051
|
|
|
389,984
|
|
|
493,229
|
Restricted
cash
|
|
|
506,981
|
|
|
506,981
|
|
|
500,000
|
Other
receivables
|
|
|
314,331
|
|
|
67,884
|
|
|
949,225
|
Other current
assets
|
|
|
140,241
|
|
|
124,595
|
|
|
176,686
|
Total current
assets
|
|
|
64,083,137
|
|
|
65,511,016
|
|
|
68,720,384
|
|
|
|
|
|
|
|
|
|
|
Marketable securities
- noncurrent
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
--
|
|
|
--
|
|
|
52,790
|
Property, plant &
equipment - net
|
|
|
203,992
|
|
|
157,730
|
|
|
22,434
|
Intangible assets -
net
|
|
|
9,353
|
|
|
3,409
|
|
|
4,824
|
Prepaid licensing and
royalty fees
|
|
|
993,833
|
|
|
458,914
|
|
|
904,404
|
Other
assets
|
|
|
289,821
|
|
|
282,036
|
|
|
367,749
|
Total
assets
|
|
|
65,580,136
|
|
|
66,413,105
|
|
|
70,072,585
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
|
--
|
|
|
--
|
|
|
2,637,652
|
Accounts
payable
|
|
|
364,977
|
|
|
313,557
|
|
|
434,631
|
Accrued
compensation
|
|
|
207,524
|
|
|
548,903
|
|
|
225,287
|
Accrued
expenses
|
|
|
2,148,836
|
|
|
2,157,790
|
|
|
3,332,207
|
Unearned
revenue
|
|
|
1,845,355
|
|
|
1,863,308
|
|
|
2,150,001
|
Other current
liabilities
|
|
|
336,062
|
|
|
163,703
|
|
|
404,262
|
Total current
liabilities
|
|
|
4,902,754
|
|
|
5,047,261
|
|
|
9,184,040
|
Other
liabilities
|
|
|
--
|
|
|
--
|
|
|
1,671,511
|
Total
liabilities
|
|
|
4,902,754
|
|
|
5,047,261
|
|
|
10,855,551
|
GigaMedia's
shareholders' equity
|
|
|
60,677,382
|
|
|
61,365,844
|
|
|
59,217,034
|
Noncontrolling
interest
|
|
|
--
|
|
|
--
|
|
|
--
|
Total
equity
|
|
|
60,677,382
|
|
|
61,365,844
|
|
|
59,217,034
|
Total liabilities and
equity
|
|
|
65,580,136
|
|
|
66,413,105
|
|
|
70,072,585
|
GIGAMEDIA
LIMITED
|
Reconciliations of
Non-GAAP Results of Operations
|
|
|
|
|
|
Three months
ended
|
|
|
3/31/2018
|
|
|
12/31/2017
|
|
|
3/31/2017
|
|
|
unaudited
|
|
|
unaudited
|
|
|
unaudited
|
|
|
USD
|
|
|
USD
|
|
|
USD
|
Reconciliation of
Net Income (Loss) to EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to GigaMedia
|
|
|
(852,765)
|
|
|
|
1,070,462
|
|
|
|
(759,595)
|
Depreciation
|
|
|
23,454
|
|
|
|
20,886
|
|
|
|
953
|
Amortization
|
|
|
3,828
|
|
|
|
3,315
|
|
|
|
2,798
|
Interest
income
|
|
|
(278,943)
|
|
|
|
(207,775)
|
|
|
|
(77,174)
|
Interest
expense
|
|
|
--
|
|
|
|
112
|
|
|
|
11,730
|
Income tax (benefit)
expense
|
|
|
--
|
|
|
|
(1,671,511)
|
|
|
|
456
|
EBITDA
|
|
|
(1,104,426)
|
|
|
|
(784,511)
|
|
|
|
(820,832)
|
View original
content:http://www.prnewswire.com/news-releases/gigamedia-announces-first-quarter-2018-financial-results-300641033.html
SOURCE GigaMedia Limited