TAIPEI, Taiwan, April 3, 2019 /PRNewswire/ -- GigaMedia
Limited (NASDAQ: GIGM) today announced its unaudited financial
results for the fourth quarter and full year of 2018.
Highlights for Year Ended December 31,
2018
Besides continuing our efforts in improving productivity, in
formulating GigaMedia's 2018 business plan, we conducted a
comprehensive strategic business review. And it became clear
that:
- Compared to our in-house offerings, the operations of licensed
games bear an uncompetitive cost structure where licensing costs
and channel costs usually take a huge bite out of earnings, leaving
little room for any marketing strategies.
- The operations of licensed games are inherently dependent on
the licensors and hard to take the initiative, and therefore often
slow in responding to a fad, a market trend or even a permanent
change in customers' preference.
Accordingly, in 2018 GigaMedia moved boldly forward to executing
the strategy of optimizing our product portfolio by trimming off or
terminating products or services that were below requirements, and
introducing license game more selectively. On the other hand, we
set in motion consolidating substantial resources for developing
our own offerings, into which direct investment was more than
$1 million during 2018.
"With the high margin of our in-house products, we are allowed
latitude to act proactively for a flexible combination of marketing
and promotional means to boost productivities," stated GigaMedia
Limited CEO James Huang, "and for
our own offerings, it is all the more essential and valuable to
develop long-term customer relationships."
In 2018, we invested further to enhance CRM system, which will
contribute to our operations in building up relationships, saving
marketing costs, and creating capacity for providing augmented
products and services. The cultivation of a loyal customer base
will eventually further boost customer value and create revenues
and profits.
Fourth Quarter and Full Year Overview
- Consolidated 4Q revenues decreased 2.59%
quarter-over-quarter and 20.17% year-over-year. Full year revenues
decreased 38.77% to $7.1 million from
$11.6 million in 2017.
- Income from operations for 4Q was a loss of $1.0 million, representing a loss reduction from
$1.5 million in 3Q, mainly due to a
decrease in advertising expenses. Full year operating loss, if
excluding impairment losses and gain on termination of agreement,
was a loss of $4.6 million for 2018,
representing a loss increase of $2.4
million from approximately $2.2
million for 2017.
- The net asset value was approximately $5.26 per share as of the end of 2018.
Unaudited Consolidated Financial Results
GigaMedia Limited is a diversified provider of digital
entertainment services. GigaMedia's digital entertainment service
business FunTown develops and operates a suite of digital
entertainments in Taiwan and
Hong Kong, with focus on
browser/mobile games and casual games.
Unaudited consolidated results of GigaMedia are summarized in
the table below.
For the Fourth Quarter
GIGAMEDIA 4Q18 UNAUDITED
CONSOLIDATED FINANCIAL RESULTS
|
(unaudited, all
figures in US$ thousands, except per share amounts)
|
|
4Q18
|
|
3Q18
|
|
Change
(%)
|
|
4Q18
|
|
4Q17
|
|
Change
(%)
|
Revenues
|
|
1,619
|
|
1,662
|
|
-2.59%
|
|
1,619
|
|
2,028
|
|
-20.17%
|
Gross
Profit
|
|
880
|
|
694
|
|
26.80%
|
|
880
|
|
1,007
|
|
-12.61%
|
Loss from
Operations
|
|
(1,021)
|
|
(1,484)
|
|
NM
|
|
(1,021)
|
|
988
|
|
NM
|
Net Income (Loss)
Attributable to GigaMedia
|
|
(503)
|
|
(1,083)
|
|
NM
|
|
(503)
|
|
1,070
|
|
NM
|
Net Income (Loss)
Per Share Attributable to GigaMedia, Diluted
|
|
(0.05)
|
|
(0.10)
|
|
NM
|
|
(0.05)
|
|
0.10
|
|
NM
|
EBITDA
(A)
|
|
(806)
|
|
(1,393)
|
|
NM
|
|
(806)
|
|
(785)
|
|
NM
|
Cash, Restricted
Cash and Cash Equivalents
|
|
59,826
|
|
60,439
|
|
-1.01%
|
|
59,826
|
|
64,177
|
|
-6.78%
|
|
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 2018
slightly decreased by 2.59% quarter-on-quarter from $1.7 million to $1.6
million, and decreased by 20.17% year-over-year.
- Consolidated loss from operation of the fourth quarter of
2018 was a loss of $1.0 million,
compared to a loss of $ 1.5 million
in the last quarter.
- Consolidated net income of the fourth quarter of 2018 was
a net loss of $0.5 million, with a
loss reduction of $0.6 million from a
net loss of $1.1 million in the last
quarter.
- Cash, restricted cash and cash equivalents at the end the
fourth quarter of 2018 amounted to $59.8
million, which slightly decreased from $60.4 million at the end the third quarter of
2018.
- Consolidated EBITDA for the fourth quarter of 2018 was a
loss of $0.8 million compared to a
loss of $1.4 million in the third
quarter of 2018.
Financial Position
GigaMedia maintained its solid financial position. Cash,
restricted cash and cash equivalents amounted to $59.8 million, or approximately $5.4 per share, along with zero bank loan and
$58.2M of shareholders' equity, as of
December 31, 2018.
For the Full Year 2018
GIGAMEDIA
FY18UNAUDITED CONSOLIDATED FINANCIAL RESULTS
|
(unaudited, all
figures in US$ thousands, except per share amounts)
|
|
FY18
|
|
FY17
|
|
Change
(%)
|
Revenues
|
|
7,101
|
|
11,596
|
|
-38.76%
|
Gross
Profit
|
|
3,516
|
|
6,498
|
|
-45.89%
|
Loss from
Operations
|
|
(4,823)
|
|
(490)
|
|
NM
|
Net Loss
Attributable to GigaMedia
|
|
(3,193)
|
|
1,086
|
|
NM
|
Net Loss Per Share
Attributable to GigaMedia, Diluted
|
|
(0.29)
|
|
0.10
|
|
NM
|
EBITDA
(A)
|
|
(4,360)
|
|
(1,099)
|
|
NM
|
Cash, Restricted
Cash and Cash Equivalents
|
|
59,826
|
|
64,177
|
|
-6.78%
|
|
|
|
|
|
|
|
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, 2018 was $7.1
million, decreased from $11.6
million in the prior year.
- Consolidated loss from operations for 2018 was a loss of
$4.8 million, compared to a loss of
$0.5 million in the last year. The
loss increase was mainly due to lower revenues in 2018, as well as
a gain of $1.7 million on termination
of licensing agreement was recognized in 2017.
- Consolidated net Income (loss) for 2018 was a net loss of
$3.2 million, compared to a net
income of $1.1 million in the prior
year. Earnings per share for 2018 was a loss of $0.29 per share, compared to a net income of
$0.1 per share for the prior
year.
Business Outlook
The following forward-looking statements reflect GigaMedia's
expectations as of
April 03, 2019. 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.
We believe it is critical for us to adopt the strategy of
developing in-house offerings and promoting customer relationships.
We expect these endeavors will begin contributing to our
productivities and profitability in the second half of 2019.
"Meanwhile, we keep seeking strategic investment targets with
expertise of AI or big data, in order to strengthen our business
and maximize shareholders' value," said GigaMedia CEO James Huang, "Such a capacity presents synergies
for us in elevating customer experiences and refining our data
analytics techniques of extracting value from our vast
database."
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 fourth quarter and full year 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 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 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
|
Twelve months
ended
|
|
|
12/31/2018
|
|
09/30/2018
|
|
12/31/2017
|
|
12/31/2018
|
|
12/31/2017
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
audited
|
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
Digital entertainment
service revenues
|
|
1,618,931
|
|
1,662,324
|
|
2,027,831
|
|
7,100,636
|
|
11,596,221
|
Other
revenues
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1,618,931
|
|
1,662,324
|
|
2,027,831
|
|
7,100,636
|
|
11,596,221
|
Operating
costs
|
|
|
|
|
|
|
|
|
|
|
Cost of digital
entertainment service revenues
|
|
739,324
|
|
968,442
|
|
1,020,993
|
|
3,584,875
|
|
5,098,495
|
Cost of other
revenues
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
739,324
|
|
968,442
|
|
1,020,993
|
|
3,584,875
|
|
5,098,495
|
Gross
profit
|
|
879,607
|
|
693,882
|
|
1,006,838
|
|
3,515,761
|
|
6,497,726
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
Product development
and engineering expenses
|
|
215,625
|
|
286,015
|
|
237,744
|
|
1,091,445
|
|
1,072,350
|
Selling and marketing
expenses
|
|
576,256
|
|
963,444
|
|
745,169
|
|
3,296,636
|
|
3,992,351
|
General and
administrative expenses
|
|
860,903
|
|
923,288
|
|
741,253
|
|
3,684,054
|
|
3,527,799
|
Impairment
losses
|
|
243,966
|
|
—
|
|
—
|
|
243,966
|
|
—
|
Gain on termination
of licensing agreement
|
|
—
|
|
—
|
|
(1,731,592)
|
|
—
|
|
(1,731,592)
|
Other
|
|
3,946
|
|
5,514
|
|
26,060
|
|
22,510
|
|
126,575
|
|
|
1,900,696
|
|
2,178,261
|
|
18,634
|
|
8,338,611
|
|
6,987,483
|
Income (loss) from
operations
|
|
(1,021,089)
|
|
(1,484,379)
|
|
988,204
|
|
(4,822,850)
|
|
(489,757)
|
Non-operating
income (expense)
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
333,338
|
|
351,262
|
|
207,775
|
|
1,302,145
|
|
602,224
|
Gain on sales of
marketable securities
|
|
—
|
|
—
|
|
1,618
|
|
—
|
|
1,618
|
Interest
expense
|
|
—
|
|
—
|
|
(112)
|
|
—
|
|
(33,544)
|
Foreign exchange
(loss) gain - net
|
|
129,052
|
|
49,285
|
|
(85,955)
|
|
266,255
|
|
(551,167)
|
(Loss) Gain on
disposal of property, plant and equipment
|
|
—
|
|
—
|
|
(1)
|
|
31
|
|
962
|
Equity in net loss on
equity method investments
|
|
—
|
|
—
|
|
(79)
|
|
—
|
|
(23,761)
|
Impairment loss on
marketable securities and investments
|
|
—
|
|
—
|
|
(176)
|
|
—
|
|
(52,651)
|
Other -
net
|
|
56,162
|
|
728
|
|
(1,712,323)
|
|
61,358
|
|
(38,702)
|
|
|
518,552
|
|
401,275
|
|
(1,589,253)
|
|
1,629,789
|
|
(95,021)
|
(Loss) income before
income taxes
|
|
(502,537)
|
|
(1,083,104)
|
|
(601,049)
|
|
(3,193,061)
|
|
(584,778)
|
Income tax benefit
(expense)
|
|
—
|
|
—
|
|
1,671,511
|
|
—
|
|
1,671,048
|
Net (loss) income
attributable to shareholders of GigaMedia
|
|
(502,537)
|
|
(1,083,104)
|
|
1,070,462
|
|
(3,193,061)
|
|
1,086,270
|
(Loss) earnings per
share attributable to GigaMedia
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
(0.05)
|
|
(0.10)
|
|
0.10
|
|
(0.29)
|
|
0.10
|
Diluted:
|
|
(0.05)
|
|
(0.10)
|
|
0.10
|
|
(0.29)
|
|
0.10
|
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
|
|
|
|
12/31/2018
|
|
09/30/2018
|
|
12/31/2017
|
|
|
unaudited
|
|
unaudited
|
|
audited
|
|
|
USD
|
|
USD
|
|
USD
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
59,307,829
|
|
59,923,784
|
|
63,670,458
|
Accounts receivable -
net
|
|
523,004
|
|
835,013
|
|
751,114
|
Prepaid
expenses
|
|
122,434
|
|
237,635
|
|
389,984
|
Restricted
cash
|
|
517,815
|
|
514,770
|
|
506,981
|
Other
receivables
|
|
2,998
|
|
316,540
|
|
67,884
|
Other current
assets
|
|
120,802
|
|
129,114
|
|
124,595
|
Total current
assets
|
|
60,594,882
|
|
61,956,856
|
|
65,511,016
|
|
|
|
|
|
|
|
Property, plant &
equipment - net
|
|
121,585
|
|
147,600
|
|
157,730
|
Intangible assets -
net
|
|
37,726
|
|
41,109
|
|
3,409
|
Prepaid licensing and
royalty fees
|
|
435,156
|
|
1,097,911
|
|
458,914
|
Other
assets
|
|
255,604
|
|
278,356
|
|
282,036
|
Total
assets
|
|
61,444,953
|
|
63,521,832
|
|
66,413,105
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
Short-term
borrowings
|
|
—
|
|
—
|
|
—
|
Accounts
payable
|
|
104,030
|
|
279,485
|
|
313,557
|
Accrued
compensation
|
|
170,470
|
|
606,547
|
|
548,903
|
Accrued
expenses
|
|
1,262,707
|
|
2,066,188
|
|
2,157,790
|
Unearned
revenue
|
|
1,369,769
|
|
1,971,039
|
|
1,863,308
|
Other current
liabilities
|
|
366,167
|
|
196,516
|
|
163,703
|
Total current and
total liabilities
|
|
3,273,143
|
|
5,119,775
|
|
5,047,261
|
GigaMedia's
shareholders' equity
|
|
58,171,810
|
|
58,402,057
|
|
61,365,844
|
Total liabilities and
equity
|
|
61,444,953
|
|
63,521,832
|
|
66,413,105
|
GIGAMEDIA
LIMITED
|
RECONCILIATIONS OF
NON-GAAP RESULTS OF OPERATIONS
|
|
|
|
Three months
ended
|
Twelve months
ended
|
|
|
12/31/2018
|
|
9/30/2018
|
|
12/31/2017
|
|
12/31/2018
|
|
12/31/2017
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
Reconciliation of
Net Income (Loss) to EBITDA
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to GigaMedia
|
|
(502,537)
|
|
(1,083,104)
|
|
1,070,462
|
|
(3,193,061)
|
|
1,086,270
|
Depreciation
|
|
25,301
|
|
25,318
|
|
20,886
|
|
99,635
|
|
42,424
|
Amortization
|
|
4,137
|
|
16,516
|
|
3,315
|
|
36,013
|
|
12,419
|
Interest
income
|
|
(333,338)
|
|
(351,262)
|
|
(207,775)
|
|
(1,302,145)
|
|
(602,224)
|
Interest
expense
|
|
—
|
|
—
|
|
112
|
|
—
|
|
33,544
|
Income tax (benefit)
expense
|
|
—
|
|
—
|
|
(1,671,511)
|
|
—
|
|
(1,671,048)
|
EBITDA
|
|
(806,437)
|
|
(1,392,532)
|
|
(784,511)
|
|
(4,359,558)
|
|
(1,098,615)
|
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content:http://www.prnewswire.com/news-releases/gigamedia-announces-fourth-quarter-and-full-year-2018-financial-results-300823843.html
SOURCE GigaMedia Limited