GigaMedia Announces Second-Quarter 2020 Financial Results
TAIPEI, July 30, 2020 /PRNewswire/ -- 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 2Q20 1Q20 Change 2Q20 2Q19 Change
per share amounts)
(%) (%)
---
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 (0.04) (0.03) NM (0.04) (0.06) NM
GigaMedia, Diluted
EBITDA
(A) (634) (536) NM (634) (1,000) NM
Cash
, Cash Equivalents and 56,783 57,311 (0.9) 56,783 58,015 (2.1)
% %
Restricted Cash
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 847,906 677,194 980,448 1,525,099 1,725,350
revenues
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 332,745 328,815 325,144 661,560 645,638
expenses
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 (419,469) (285,698) (613,573) (705,168) (1,145,630)
GigaMedia
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)
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SOURCE GigaMedia Limited
