GigaMedia Announces Second-Quarter 2021 Financial Results

TAIPEI, July 30, 2021 /PRNewswire/ — GigaMedia Limited (NASDAQ: GIGM) today announced its second-quarter 2021 unaudited financial results.

Comments from Management

In the second quarter of 2021, GigaMedia reported revenues of $1.23 million, with a gross profit $0.63 million, an operating loss of $1.08 million and the net loss of $0.84 million. Total revenues decreased by 15.3% if compared to the previous quarter.

The decrease in revenues was mainly due to seasonality and the dwindling in certain licensed games. While Taiwan experienced an outbreak of the COVID-19 pandemic in mid-May, we managed to minimize the disruption caused to our business operations.

"The first half year of 2021 was indeed tough for us," said GigaMedia CEO James Huang, "but after weathering all these, we have gathered pace and are confident for a brighter second half year."

Second Quarter Overview

  • Operating revenues decreased by approximately 15.3% quarter-on-quarter, to $1.23 million from $1.45 million in last quarter, and decreased by 32.9% year-over-year from $1.83 million the same period last year. The decrease was mainly due to seasonality and the slowdown of the upgrades and supports form our licensors affected by the COVID-19 pandemic.
  • Gross profit decreased by 20% to $0.63 million from $0.79 million in last quarter, and decreased by 35.3% compared to $0.98 million in the same period last year.
  • The net asset value was $4.73 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 2Q21 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

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

2Q21

1Q21

Change

(%)

2Q21

2Q20

Change

(%)

Revenues

1,225

1,446

-15.28

%

1,225

1,826

-32.91

%

Gross Profit

633

791

-19.97

%

633

978

-35.28

%

Loss from Operations

(1,079)

(901)

NM

(1,079)

(549)

NM

Net Loss Attributable to GigaMedia

(836)

(875)

NM

(836)

(419)

NM

Net Loss Per Share Attributable to GigaMedia, Diluted

(0.08)

(0.08)

NM

(0.08)

(0.04)

NM

EBITDA (A)

(911)

(949)

NM

(911)

(634)

NM

Cash , Cash Equivalents and Restricted Cash

43,650

44,446

-1.79

%

43,650

56,783

-23.12

%

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 2021 decreased by 15.3% quarter-on-quarter to $1.23 million from $1.45 million in last quarter, and by 32.9% year-over-year from $1.83 million the same period last year.
  • Consolidated gross profit was $0.63 million, decreased by 20.0% quarter-on-quarter and 35.3% year-over-year.
  • Consolidated operating expenses were $1.71 million increased by 1.2% if compared to the first quarter of 2021, and increased by 12.2% if compared to the same period last year.
  • Consolidated loss from operation of the second quarter of 2021 was a loss of $1.08 million, increased from a loss of $0.90 million in the first quarter.
  • Net loss in the second quarter of 2021 was $0.84 million, decreased from a net loss of $0.87 million in the first quarter.
  • Cash, cash equivalents and restricted cash at the end of the second quarter of 2021 amounted to $43.7 million, slightly decreased by 1.8% from $44.4 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 $43.7 million, or $3.95 per share, as of June 30, 2021.

Business Outlook

The following forward-looking statements reflect GigaMedia’s expectations as of July 30, 2021. 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 2020 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 2021, we will be committing ourselves to boosting the productivity of our in-house developed casual games, mainly by introducing fast-paced playability, building gamers’ sense of community to improve stickiness, and enhancing marketing effectiveness," stated GigaMedia CEO James Huang.

Meanwhile, our management continues evaluating and pursuing prospects of strategic investment opportunities which 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 2021 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 2021 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

06/30/2021

03/31/2021

06/30/2020

06/30/2021

06/30/2020

unaudited

unaudited

unaudited

unaudited

unaudited

USD

USD

USD

USD

USD

Operating revenues

Digital entertainment service revenues

1,224,749

1,446,276

1,825,547

2,671,025

3,429,450

Operating costs

Cost of digital entertainment service revenues

591,687

655,757

847,906

1,247,444

1,525,099

Gross profit

633,062

790,519

977,641

1,423,581

1,904,351

Operating expenses

Product development and engineering expenses

373,057

345,898

332,745

718,955

661,560

Selling and marketing expenses

376,914

397,033

367,529

773,947

778,004

General and administrative expenses

960,474

946,192

825,998

1,906,666

1,650,440

Other

2,103

2,599

(42)

4,703

2,942

1,712,548

1,691,722

1,526,230

3,404,271

3,092,946

Loss from operations

(1,079,486)

(901,203)

(548,589)

(1,980,690)

(1,188,595)

Non-operating income (expense)

Interest income

80,184

78,595

212,881

158,779

468,600

Foreign exchange (loss) gain – net

163,139

(49,357)

(82,357)

113,782

16,529

Other – net

176

(2,809)

(1,404)

(2,633)

(1,702)

243,499

26,429

129,120

269,928

483,427

Loss from continuing operations before income taxes

(835,987)

(874,774)

(419,469)

(1,710,762)

(705,168)

Income tax benefit (expense)

Net loss attributable to shareholders of GigaMedia

(835,987)

(874,774)

(419,469)

(1,710,762)

(705,168)

Loss per share attributable to GigaMedia

  Basic:

(0.08)

(0.08)

(0.04)

(0.15)

(0.06)

  Diluted

(0.08)

(0.08)

(0.04)

(0.15)

(0.06)

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 SHEET

06/30/2021

03/31/2021

06/30/2020

unaudited

unaudited

unaudited

USD

USD

USD

Assets

Current assets

Cash and cash equivalents

43,350,182

44,146,308

56,247,678

Accounts receivable – net

282,780

281,945

349,450

Prepaid expenses

242,488

393,587

228,794

Restricted cash

300,000

300,000

535,153

Other receivables

52,422

25,937

203,671

Other current assets

154,622

156,622

142,230

Total current assets

44,382,494

45,304,399

57,706,976

Marketable securities – noncurrent

10,000,000

10,000,000

Property, plant & equipment – net

48,349

38,860

7,740

Intangible assets – net

9,625

11,596

17,111

Prepaid licensing and royalty fees

73,762

108,878

184,365

Other assets

2,586,685

2,481,910

290,687

Total assets

57,100,915

57,945,643

58,206,879

Liabilities and equity

Accounts payable

44,870

88,009

69,147

Accrued compensation

279,896

161,287

278,622

Accrued expenses

1,138,777

1,083,293

1,321,262

Unearned revenue

930,026

949,396

1,058,940

Other current liabilities

787,009

740,286

627,162

Total current liabilities

3,180,578

3,022,271

3,355,133

Other liabilities

1,636,271

1,655,437

3,653

Total liabilities

4,816,849

4,677,708

3,358,786

Total equity

52,284,066

53,267,935

54,848,093

Total liabilities and equity

57,100,915

57,945,643

58,206,879

 

GIGAMEDIA LIMITED

RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS

Three months ended

Six months ended

06/30/2021

03/31/2021

06/30/2020

06/30/2021

06/30/2020

unaudited

unaudited

unaudited

unaudited

unaudited

USD

USD

USD

USD

USD

Reconciliation of Net Loss to EBITDA

Net loss attributable to GigaMedia

(835,987)

(874,774)

(419,469)

(1,710,762)

(705,168)

Depreciation

2,920

1,902

535

4,822

889

Amortization

2,242

2,010

(2,257)

4,252

2,400

Interest income

(80,184)

(78,595)

(212,881)

(158,779)

(468,600)

Interest expense

Income tax (benefit) expense

EBITDA

(911,009)

(949,457)

(634,072)

(1,860,467)

(1,170,479)

 

 

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