EX-99.1 2 gigm-ex991_22.htm EX-99.1 gigm-ex991_22.htm

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

  

 

  

For further information contact:

 

  

 

  

 

 

  

 

  

Investor Relations Department

 

  

 

  

Country/City Code 8862 Tel: 2656-8096

 

  

 

  

IR@gigamedia.com.tw

 

GigaMedia Announces Second-Quarter 2020

Financial Results

 

TAIPEI, Taiwan, July 30, 2020 GigaMedia Limited (NASDAQ: GIGM) today announced its second-quarter 2020 unaudited financial results.

Comments from Management

 

In the second quarter of 2020, GigaMedia reported revenues of $1.83 million, with a gross profit $0.98 million, an operating loss of $0.55 million and the net loss of $0.42 million. Total revenues increased by 13.8% if compared to the previous quarter.

 

“In spite of the ongoing disruption of the pandemic to our operations, we have achieved clear improvements,” said GigaMedia CEO James Huang. “We have reshaped our cost structure and remodeled our marketing strategies, thereby approximately halved the operating loss if comparing to the same quarter last year.”

 

“And we are also enhancing the playability and stickiness of FunTown M, our in-house developed mobile platform of casual games,” continued GigaMedia CEO James Huang, “which will be the most crucial piece to fall in place for our turning profitable beyond just break-even.”

 

Second Quarter Overview

Operating revenues increased by approximately 13.8% quarter-on-quarter, to $1.83 million from $1.60 million in last quarter, and 4.3% year-over-year from $1.75 million the same period last year. The increase was mainly attributable to our efforts in revitalizing Tales Runner, a 14-year-old licensed game we operate in Hong Kong.

Gross profit increased slightly by 5.5% to $0.98 million from $0.93 million in last quarter, and increased by 27.2% compared to $0.77 million in the same period last year.

The net asset value was $4.96 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 2Q20 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

 

(unaudited, all figures in US$ thousands, except per share amounts)

 

2Q20

 

 

1Q20

 

 

Change

(%)

 

 

2Q20

 

 

 

 

2Q19

 

 

Change

(%)

 

Revenues

 

 

1,826

 

 

 

1,604

 

 

 

13.8

%

 

 

1,826

 

 

 

 

 

1,750

 

 

 

4.3

%

Gross Profit

 

 

978

 

 

 

927

 

 

 

5.5

%

 

 

978

 

 

 

 

 

769

 

 

 

27.2

%

Loss from Operations

 

 

(549

)

 

 

(640

)

 

NM

 

 

 

(549

)

 

 

 

 

(1,122

)

 

NM

 

Net Loss Attributable to GigaMedia

 

 

(419

)

 

 

(286

)

 

NM

 

 

 

(419

)

 

 

 

 

(614

)

 

NM

 

Net Loss Per Share Attributable to

  GigaMedia, Diluted

 

 

(0.04

)

 

 

(0.03

)

 

NM

 

 

 

(0.04

)

 

 

 

 

(0.06

)

 

NM

 

EBITDA (A)

 

 

(634

)

 

 

(536

)

 

NM

 

 

 

(634

)

 

 

 

 

(1,000

)

 

NM

 

Cash, Cash Equivalents and

  Restricted Cash

 

 

56,783

 

 

 

57,311

 

 

 

(0.9)

%

 

 

56,783

 

 

 

 

 

58,015

 

 

 

(2.1)

%

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 2020 increased by 13.8% quarter-on-quarter to $1.83 million from $1.60 million in last quarter, and by 4.3% year-over-year from $1.75 million the same period last year.

Consolidated gross profit was $0.98 million, increased by 5.5% quarter-on-quarter and 27.2% year-over-year.

Consolidated operating expenses were $1.53 million, comparable to the first quarter of 2020 and decreased by 19.3% if compared to the same period last year, which reflected a decrease in marketing expenses and general expenses.

Consolidated loss from operation of the second quarter of 2020 was a loss of $0.55 million, reflecting an improvement from a loss of $0.64 million in the first quarter.

Net loss in the second quarter of 2020 was $0.42 million, increasing from a net loss of $0.29 million in the first quarter this year mainly due to lower interest income and exchange loss in this quarter.  

Cash, cash equivalents and restricted cash at the end of the second quarter of 2020 amounted to $56.8 million, slightly decreased by 0.9% from $57.3 million as of the end of the first quarter.

Financial Position


GigaMedia maintained its solid financial position, with cash, cash equivalents and restricted cash amounted to $56.8 million, or $5.14 per share, as of June 30, 2020.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as of July 30, 2020. 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 2019 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 2020, we will continue improving productivities of the existing games, in which FunTown M, our own mobile platform of casual games, is expected to begin contributing to our revenues. Along with our various product lines and customer platform, we will gradually accumulate the momentum to an upward trend.

 

Meanwhile, our management continues evaluating and pursuing prospects of strategic investment targets that are with potential to expand our business and create greater shareholder value.

 

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 2020 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 2020 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

 

 

 

06/30/2020

 

 

03/31/2020

 

 

06/30/2019

 

 

06/30/2020

 

 

06/30/2019

 

 

 

unaudited

 

 

unaudited

 

 

unaudited

 

 

unaudited

 

 

unaudited

 

 

 

USD

 

 

USD

 

 

USD

 

 

USD

 

 

USD

 

Operating revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital entertainment service revenues

 

 

1,825,547

 

 

 

1,603,904

 

 

 

1,749,583

 

 

 

3,429,450

 

 

 

3,232,816

 

Other revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,825,547

 

 

 

1,603,904

 

 

 

1,749,583

 

 

 

3,429,450

 

 

 

3,232,816

 

Operating costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of digital entertainment service

   revenues

 

 

847,906

 

 

 

677,194

 

 

 

980,448

 

 

 

1,525,099

 

 

 

1,725,350

 

Cost of other revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

847,906

 

 

 

677,194

 

 

 

980,448

 

 

 

1,525,099

 

 

 

1,725,350

 

Gross profit

 

 

977,641

 

 

 

926,710

 

 

 

769,135

 

 

 

1,904,351

 

 

 

1,507,466

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product development and engineering

  expenses

 

 

332,745

 

 

 

328,815

 

 

 

325,144

 

 

 

661,560

 

 

 

645,638

 

Selling and marketing expenses

 

 

367,529

 

 

 

410,475

 

 

 

580,539

 

 

 

778,004

 

 

 

1,106,542

 

General and administrative expenses

 

 

825,998

 

 

 

824,442

 

 

 

974,648

 

 

 

1,650,440

 

 

 

1,810,634

 

Other

 

 

(42

)

 

 

2,984

 

 

 

11,165

 

 

 

2,942

 

 

 

16,380

 

 

 

 

1,526,230

 

 

 

1,566,716

 

 

 

1,891,496

 

 

 

3,092,946

 

 

 

3,579,194

 

Loss from operations

 

 

(548,589

)

 

 

(640,006

)

 

 

(1,122,361

)

 

 

(1,188,595

)

 

 

(2,071,728

)

Non-operating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

212,881

 

 

 

255,719

 

 

 

414,450

 

 

 

468,600

 

 

 

796,250

 

Foreign exchange (loss) gain - net

 

 

(82,357

)

 

 

98,887

 

 

 

90,922

 

 

 

16,529

 

 

 

79,520

 

Other - net

 

 

(1,404

)

 

 

(298

)

 

 

3,416

 

 

 

(1,702

)

 

 

50,328

 

 

 

 

129,120

 

 

 

354,308

 

 

 

508,788

 

 

 

483,427

 

 

 

926,098

 

Loss before income taxes

 

 

(419,469

)

 

 

(285,698

)

 

 

(613,573

)

 

 

(705,168

)

 

 

(1,145,630

)

Income tax benefit (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to shareholders of GigaMedia

 

 

(419,469

)

 

 

(285,698

)

 

 

(613,573

)

 

 

(705,168

)

 

 

(1,145,630

)

Loss per share attributable to GigaMedia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Basic

 

 

(0.04

)

 

 

(0.03

)

 

 

(0.06

)

 

 

(0.06

)

 

 

(0.10

)

  Diluted

 

 

(0.04

)

 

 

(0.03

)

 

 

(0.06

)

 

 

(0.06

)

 

 

(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

 

 

06/30/2020

 

 

03/31/2020

 

 

06/30/2019

 

 

 

unaudited

 

 

unaudited

 

 

unaudited

 

 

 

USD

 

 

USD

 

 

USD

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

56,247,678

 

 

 

56,777,472

 

 

 

57,489,563

 

Accounts receivable - net

 

 

349,450

 

 

 

355,225

 

 

 

591,905

 

Prepaid expenses

 

 

228,794

 

 

 

276,010

 

 

 

275,551

 

Restricted cash

 

 

535,153

 

 

 

533,436

 

 

 

525,354

 

Other receivables

 

 

203,671

 

 

 

238,396

 

 

 

458,383

 

Other current assets

 

 

142,230

 

 

 

148,757

 

 

 

131,150

 

Total current assets

 

 

57,706,976

 

 

 

58,329,296

 

 

 

59,471,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant & equipment - net

 

 

7,740

 

 

 

8,117

 

 

 

92,580

 

Intangible assets - net

 

 

17,111

 

 

 

17,965

 

 

 

23,545

 

Prepaid licensing and royalty fees

 

 

184,365

 

 

 

210,530

 

 

 

574,274

 

Other assets

 

 

290,687

 

 

 

285,319

 

 

 

1,035,529

 

Total assets

 

 

58,206,879

 

 

 

58,851,227

 

 

 

61,197,834

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

69,147

 

 

 

60,405

 

 

 

119,597

 

Accrued compensation

 

 

278,622

 

 

 

156,948

 

 

 

253,262

 

Accrued expenses

 

 

1,321,262

 

 

 

1,449,553

 

 

 

1,340,539

 

Unearned revenue

 

 

1,058,940

 

 

 

1,285,399

 

 

 

1,617,881

 

Other current liabilities

 

 

627,162

 

 

 

715,877

 

 

 

197,776

 

Total current liabilities

 

 

3,355,133

 

 

 

3,668,182

 

 

 

3,529,055

 

Other liabilities

 

 

3,653

 

 

 

7,337

 

 

 

781,187

 

Total liabilities

 

 

3,358,786

 

 

 

3,675,519

 

 

 

4,310,242

 

GigaMedia’s shareholders’ equity

 

 

54,848,093

 

 

 

55,175,708

 

 

 

56,887,592

 

Total liabilities and equity

 

 

58,206,879

 

 

 

58,851,227

 

 

 

61,197,834

 

 



GIGAMEDIA LIMITED

RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS

 

 

Three months ended

 

 

Six months ended

 

 

 

06/30/2020

 

 

03/31/2020

 

 

06/30/2019

 

 

06/30/2020

 

 

06/30/2019

 

 

 

unaudited

 

 

unaudited

 

 

unaudited

 

 

unaudited

 

 

unaudited

 

 

 

USD

 

 

USD

 

 

USD

 

 

USD

 

 

USD

 

Reconciliation of Net Loss to EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to GigaMedia

 

 

(419,469

)

 

 

(285,698

)

 

 

(613,573

)

 

 

(705,168

)

 

 

(1,145,630

)

Depreciation

 

 

535

 

 

 

354

 

 

 

14,769

 

 

 

889

 

 

 

40,156

 

Amortization

 

 

(2,257

)

 

 

4,657

 

 

 

12,830

 

 

 

2,400

 

 

 

25,729

 

Interest income

 

 

(212,881

)

 

 

(255,719

)

 

 

(414,450

)

 

 

(468,600

)

 

 

(796,250

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax (benefit) expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

 

(634,072

)

 

 

(536,406

)

 

 

(1,000,424

)

 

 

(1,170,479

)

 

 

(1,875,995

)