TAIPEI, Taiwan, Aug. 2, 2019 /PRNewswire/ -- GigaMedia
Limited (NASDAQ: GIGM) today announced its second-quarter 2019
unaudited financial results.
Comments from Management
In the first half of year 2019, we continued devoting efforts to
optimizing our product portfolio, building up brand strength and
enhancing operational efficiency. For our business in licensed
games, the successful launch of Senran Kagura: New Link in
April has brought us a satisfactory amount of revenues in its
introductory stage, while two underperforming games were
terminated.
For in-house offerings, besides improving the existing
self-developed games, we also have made progress in developing a
new casual games platform, aiming to launch it in the second half
of 2019. "As discussed in previous release guidance, we put
emphasis on enhancing our in-house products. The direct investment
into in-house product development was over $600 thousand in the first half of 2019, which
was 9.5% higher than in the same period last year," said GigaMedia
CEO James Huang.
We were also developing a customer platform, which will
contribute to our operations in establishing relationships, saving
marketing costs, and creating capacity for providing augmented
products and services. "The customer platform is currently under
small-scale test-run, but we believe the growing interaction of the
customer platform and our wide range of diverse game offerings will
generate synergistic effect for one another in the future," said
CEO James Huang.
"The numbers might look similar as in prior quarters," stated
CEO James Huang, "but the robustness
is now exhibited in our operations, and momentums have gradually
accumulated."
Second Quarter Overview
- Operating revenues increased by approximately 18%
quarter-on-quarter, to $1.8 million
from $1.5 million last quarter, and
5.49% year-over-year from $1.7
million the same period last year. The increase was mainly
attributable to Senran Kagura, a new game launched in
April.
- Gross profit increased slightly to $0.8
million from $0.7 million in
the first quarter of 2019.
- The net asset value was $5.15 per
share.
Unaudited Consolidated Financial Results
GigaMedia Limited is a diversified provider of digital
entertainment services. GigaMedia's digital entertainment service
business FunTown develops and operates a suite of digital
entertainments in Taiwan and
Hong Kong, with focus on
browser/mobile games and casual games.
Unaudited consolidated results of GigaMedia are summarized in
the table below.
For the Second Quarter
GIGAMEDIA 2Q19
UNAUDITED CONSOLIDATED FINANCIAL RESULTS
|
|
(unaudited, all
figures in US$ thousands, except
per share amounts)
|
|
2Q19
|
|
1Q19
|
|
Change
(%)
|
|
|
2Q19
|
|
2Q18
|
|
Change
(%)
|
|
Revenues
|
|
1,750
|
|
1,483
|
|
18.00
|
%
|
|
1,750
|
|
1,659
|
|
5.49
|
%
|
Gross
Profit
|
|
769
|
|
738
|
|
4.20
|
%
|
|
769
|
|
728
|
|
5.63
|
%
|
Loss from
Operations
|
|
(1,122)
|
|
(949)
|
|
NM
|
|
|
(1,122)
|
|
(1,342)
|
|
NM
|
|
Net Loss
Attributable to GigaMedia
|
|
(614)
|
|
(532)
|
|
NM
|
|
|
(614)
|
|
(755)
|
|
NM
|
|
Net Loss Per Share
Attributable to
GigaMedia, Diluted
|
|
(0.06)
|
|
(0.05)
|
|
NM
|
|
|
(0.06)
|
|
(0.07)
|
|
NM
|
|
EBITDA
(A)
|
|
(1,000)
|
|
(876)
|
|
NM
|
|
|
(1,000)
|
|
(1,056)
|
|
NM
|
|
Cash,
Restricted Cash and Cash
Equivalents
|
|
58,015
|
|
58,494
|
|
-0.82
|
%
|
|
58,015
|
|
61,244
|
|
-5.27
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.)
|
Second-Quarter Financial Results
- Consolidated revenues for the second quarter of 2019
increased by 18% quarter-on-quarter to $1.8
million from $1.5 million in
last quarter, and by 5.49% year-over-year from $1.7 million the same period last year, due to a
boost from Senran Kagura, a new game launched in April that
generated cash revenues of $1.0
million, where $0.4 million
were deferred to next quarter in accordance with accounting
requirements. Revenues from other games decreased mainly due to
seasonality.
- Consolidated gross profit was $0.8
million, slightly increased quarter-on-quarter and
year-over-year. The gross margin rate was slightly lower due to
initial costs incurred for the launch of a new game.
- Consolidated operating expenses were $1.9 million, or increased by 12.1% the second
quarter of 2019, comparable to that in last quarter, and decreased
by 8.7% if compared to that in the same period last year,
reflecting an increase marketing expenses for the launch of
Senran Kagura, and certain general expenses incurred in this
quarter.
- Consolidated loss from operation of the second quarter of
2019 was $1.1million, an increase of
$0.2 million loss from the first
quarter of 2019.
- Net loss in the second quarter of 2019 was $0.6 million, comparable to a net loss of
$0.5 million in the first quarter
this year, and slightly improved from a net loss of $0.8 million in the second quarter of 2018.
- Cash, restricted cash and cash equivalents at the end of
the second quarter of 2019 amounted to $58.0
million, slightly decreased by 0.8% from $58.5 million as of the end of the first quarter
of this year.
Financial Position
GigaMedia maintained its solid financial position, with cash,
restricted cash and cash equivalents amounted to $58.0 million, or $5.25 per share, as of June 30, 2019.
Business Outlook
The following forward-looking statements reflect GigaMedia's
expectations as of August
2, 2019. Given potential changes in
economic conditions and consumer spending, the evolving nature
of digital entertainments, and various other risk
factors, including those discussed in the Company's
2018 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 second half of 2019, we will continue to improve
productivities of the existing games, in which the newly launched
Senran Kagura and our female-oriented games are expected to
contribute soundly to our revenues. We are also optimistic with the
renovations of our in-house casual game offerings with customer
platform, which will gradually accumulate to an upward trend for
us.
"We are leveraging our deep expertise in self-developed games
and creating an advanced framework for promoting customer
relationships. We believe that loyal customer base will eventually
help to boost in revenues and profits," stated CEO James Huang.
Meanwhile, our business strategies always include expanding
through mergers and acquisitions. "We will also continue reviewing
potential targets that would enable us to accelerate our growth and
enhance shareholders' value," said CEO James Huang.
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 second quarter 2019 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 2019 and its
other filings with the United States Securities and Exchange
Commission.
(Tables to follow)
GIGAMEDIA
LIMITED
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
06/30/2019
|
|
03/31/2019
|
|
06/30/2018
|
|
06/30/2019
|
|
06/30/2018
|
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
Operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital entertainment
service revenues
|
|
1,749,583
|
|
|
1,483,233
|
|
|
1,658,914
|
|
|
3,232,816
|
|
|
3,819,380
|
|
Other
revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
1,749,583
|
|
|
1,483,233
|
|
|
1,658,914
|
|
|
3,232,816
|
|
|
3,819,380
|
|
Operating
costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Digital
entertainment service
revenues
|
|
980,448
|
|
|
744,901
|
|
|
930,421
|
|
|
1,725,350
|
|
|
1,877,109
|
|
Cost of other
revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
980,448
|
|
|
744,901
|
|
|
930,421
|
|
|
1,725,350
|
|
|
1,877,109
|
|
Gross
profit
|
|
769,135
|
|
|
738,332
|
|
|
728,493
|
|
|
1,507,466
|
|
|
1,942,271
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product development
and engineering
expenses
|
|
325,144
|
|
|
320,494
|
|
|
300,635
|
|
|
645,638
|
|
|
589,806
|
|
Selling and marketing
expenses
|
|
580,539
|
|
|
526,003
|
|
|
760,185
|
|
|
1,106,542
|
|
|
1,756,936
|
|
General and
administrative expenses
|
|
974,648
|
|
|
835,987
|
|
|
1,003,359
|
|
|
1,810,634
|
|
|
1,899,863
|
|
Other
|
|
11,165
|
|
|
5,214
|
|
|
6,555
|
|
|
16,380
|
|
|
13,049
|
|
|
|
1,891,496
|
|
|
1,687,698
|
|
|
2,070,734
|
|
|
3,579,194
|
|
|
4,259,654
|
|
Income (loss) from
operations
|
|
(1,122,361)
|
|
|
(949,366)
|
|
|
(1,342,241)
|
|
|
(2,071,728)
|
|
|
(2,317,383)
|
|
Non-operating
income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
414,450
|
|
|
381,799
|
|
|
338,602
|
|
|
796,250
|
|
|
617,546
|
|
Foreign exchange
(loss) gain - net
|
|
90,922
|
|
|
(11,402)
|
|
|
246,830
|
|
|
79,520
|
|
|
87,917
|
|
(Loss) Gain on
disposal of property, plant
and equipment
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
Other -
net
|
|
3,416
|
|
|
46,912
|
|
|
2,122
|
|
|
50,328
|
|
|
4,468
|
|
|
|
508,788
|
|
|
417,309
|
|
|
587,585
|
|
|
926,098
|
|
|
709,962
|
|
(Loss) Income from
continuing operations
before income taxes
|
|
(613,573)
|
|
|
(532,057)
|
|
|
(754,656)
|
|
|
(1,145,630)
|
|
|
(1,607,421)
|
|
Income tax benefit
(expense)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(Loss) Income from
continuing operations
|
|
(613,573)
|
|
|
(532,057)
|
|
|
(754,656)
|
|
|
(1,145,630)
|
|
|
(1,607,421)
|
|
Net (loss)
income
|
|
(613,573)
|
|
|
(532,057)
|
|
|
(754,656)
|
|
|
(1,145,630)
|
|
|
(1,607,421)
|
|
Less: Net loss
attributable to
noncontrolling interest
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
Net (loss) income
attributable to
shareholders of GigaMedia
|
|
(613,573)
|
|
|
(532,057)
|
|
|
(754,656)
|
|
|
(1,145,630)
|
|
|
(1,607,421)
|
|
(Loss) Earnings per
share attributable to
GigaMedia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Earnings from
continuing
operations
|
|
(0.06)
|
|
|
(0.05)
|
|
|
(0.07)
|
|
|
(0.10)
|
|
|
(0.15)
|
|
Loss from discontinued
operations
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
|
(0.06)
|
|
|
(0.05)
|
|
|
(0.07)
|
|
|
(0.10)
|
|
|
(0.15)
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Earnings from
continuing
operations
|
|
(0.06)
|
|
|
(0.05)
|
|
|
(0.07)
|
|
|
(0.10)
|
|
|
(0.15)
|
|
Loss from discontinued
operations
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
|
(0.06)
|
|
|
(0.05)
|
|
|
(0.07)
|
|
|
(0.10)
|
|
|
(0.15)
|
|
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
|
|
|
|
|
06/30/2019
|
|
03/31/2019
|
|
06/30/2018
|
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
|
USD
|
|
USD
|
|
USD
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
57,489,563
|
|
|
57,976,503
|
|
|
60,732,757
|
|
Marketable securities
- current
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Accounts receivable -
net
|
|
|
591,905
|
|
|
589,520
|
|
|
672,143
|
|
Prepaid
expenses
|
|
|
275,551
|
|
|
208,919
|
|
|
309,952
|
|
Restricted
cash
|
|
|
525,354
|
|
|
517,815
|
|
|
511,710
|
|
Other
receivables
|
|
|
458,383
|
|
|
375,192
|
|
|
335,119
|
|
Other current
assets
|
|
|
131,150
|
|
|
127,377
|
|
|
121,693
|
|
Total current
assets
|
|
|
59,471,906
|
|
|
59,795,326
|
|
|
62,683,374
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant &
equipment - net
|
|
|
92,580
|
|
|
100,148
|
|
|
173,051
|
|
Intangible assets -
net
|
|
|
23,545
|
|
|
32,492
|
|
|
48,473
|
|
Prepaid licensing and
royalty fees
|
|
|
574,274
|
|
|
383,681
|
|
|
1,043,823
|
|
Other
assets
|
|
|
1,035,529
|
|
|
1,034,278
|
|
|
279,616
|
|
Total
assets
|
|
|
61,197,834
|
|
|
61,345,925
|
|
|
64,228,337
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Accounts
payable
|
|
|
119,597
|
|
|
98,921
|
|
|
244,240
|
|
Accrued
compensation
|
|
|
253,262
|
|
|
134,243
|
|
|
405,416
|
|
Accrued
expenses
|
|
|
1,340,539
|
|
|
1,228,483
|
|
|
2,098,418
|
|
Unearned
revenue
|
|
|
1,617,881
|
|
|
1,290,792
|
|
|
1,756,877
|
|
Other current
liabilities
|
|
|
197,776
|
|
|
177,073
|
|
|
176,174
|
|
Total current
liabilities
|
|
|
3,529,055
|
|
|
2,929,512
|
|
|
4,681,125
|
|
Other
liabilities
|
|
|
781,187
|
|
|
779,919
|
|
|
—
|
|
Total
liabilities
|
|
|
4,310,242
|
|
|
3,709,431
|
|
|
4,681,125
|
|
GigaMedia's
shareholders' equity
|
|
|
56,887,592
|
|
|
57,636,494
|
|
|
59,547,212
|
|
Noncontrolling
interest
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
equity
|
|
|
56,887,592
|
|
|
57,636,494
|
|
|
59,547,212
|
|
Total liabilities and
equity
|
|
|
61,197,834
|
|
|
61,345,925
|
|
|
64,228,337
|
|
GIGAMEDIA
LIMITED
|
RECONCILIATIONS OF
NON-GAAP RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
06/30/2019
|
|
03/31/2019
|
|
06/30/2018
|
|
06/30/2019
|
|
06/30/2018
|
|
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
unaudited
|
|
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
USD
|
|
Reconciliation of
Net Income (Loss) to
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to GigaMedia
|
|
|
(613,573)
|
|
|
(532,057)
|
|
|
(754,656)
|
|
|
(1,145,630)
|
|
|
(1,607,421)
|
|
Depreciation
|
|
|
14,769
|
|
|
25,388
|
|
|
25,563
|
|
|
40,156
|
|
|
49,017
|
|
Amortization
|
|
|
12,830
|
|
|
12,899
|
|
|
11,532
|
|
|
25,729
|
|
|
15,360
|
|
Interest
income
|
|
|
(414,450)
|
|
|
(381,799)
|
|
|
(338,602)
|
|
|
(796,250)
|
|
|
(617,546)
|
|
Interest
expense
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income tax (benefit)
expense
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
EBITDA
|
|
|
(1,000,424)
|
|
|
(875,569)
|
|
|
(1,056,163)
|
|
|
(1,875,995)
|
|
|
(2,160,590)
|
|
View original
content:http://www.prnewswire.com/news-releases/gigamedia-announces-second-quarter-2019-financial-results-300895598.html
SOURCE GigaMedia Limited