GigaMedia Announces Second-Quarter 2022 Financial Results

Jul 29th, 2022 13:00 EST

TAIPEI, July 29, 2022 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today announced its second-quarter 2022 unaudited financial results.

Comments from Management

In the second quarter of 2022, GigaMedia reported revenues of $1.36 million, with a gross profit $0.77 million, an operating loss of $0.84 million and the net loss of $1.13 million. Total revenues decreased by 11.8% if compared to the previous quarter.

The decrease in revenues was mainly as a result of a weaker consumer sentiment on entertainment, which was undermined by inflation, downturn in financial markets, and an unprecedented COVID-19 upsurge in Taiwan.

"The first half of 2022 had posed challenges for us," said GigaMedia CEO James Huang, "nonetheless, we managed to minimize the adverse impacts to our business and continued making progress in improving our products and services."

Second Quarter Overview

  • Operating revenues decreased by approximately 11.8% quarter-on-quarter, to $1.36 million from $1.55 million in last quarter, but increased by 11.3% year-over-year from $1.22 million the same period last year. The decrease from last quarter was mainly due to reduced consumer spending on entertainment amid a worsening economic environment.
  • Gross profit decreased by 14.1% to $0.77 million from $0.90 million in last quarter, and increased by 22.3% compared to $0.63 million in the same period last year.
  • The net asset value was $4.46 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 2Q22 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

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

2Q22

1Q22

Change

(%)

2Q22

2Q21

Change

(%)

Revenues

1,363

1,546

-11.84 %

1,363

1,225

11.27 %

Gross Profit

774

901

-14.10 %

774

633

22.27 %

Loss from Operations

(844)

(828)

NM

(844)

(1,079)

NM

Net Loss Attributable to GigaMedia

(1,131)

(1,099)

NM

(1,131)

(836)

NM

Net Loss Per Share Attributable to GigaMedia, Diluted

(0.10)

(0.10)

NM

(0.10)

(0.08)

NM

EBITDA (A)

(1,190)

(1,154)

NM

(1,190)

(911)

NM

Cash, Cash Equivalent and Restricted Cash

39,631

40,534

-2.23 %

39,631

43,650

-9.21 %

 

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 2022 decreased by 11.8% quarter-on-quarter to $1.36 million from $1.55 million in last quarter, but increased by 11.3% year-over-year from $1.22 million the same period last year.
  • Consolidated gross profit was $0.77 million, decreased by 14.1% quarter-on-quarter but increased by 22.3% year-over-year.
  • Consolidated loss from operation of the second quarter of 2022 was a loss of $0.84 million, comparable to the operating loss in the first quarter.
  • Net loss in the second quarter of 2022 was $1.13 million, increased slightly from a net loss of $1.10 million in the first quarter.
  • Cash, cash equivalents and restricted cash at the end of the second quarter of 2022 amounted to $39.6 million, decreased by 2.2% from $40.5 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 $39.6 million, or $3.59 per share, as of June 30, 2022.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as of July 29, 2022. 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 2021 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 2022, we will be committing ourselves to boosting the productivity of our products and services by enhancing customer loyalty to our platforms, and expanding customer base with effective marketing strategies," stated GigaMedia CEO James Huang.

Meanwhile, our management continues exploring possibilities of expanding our business through strategic investments to create greater shareholder value. And the recent upheaval in the global capital market may exhibit a chance of acquiring quality assets at a discount, for which we will pursue promising investment opportunities prudently but boldly.

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 2022 performance upon the release, investors may send the questions via email to [email protected], 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 2022 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

06/30/2022

03/31/2022

06/30/2021

06/30/2022

06/30/2021

unaudited

unaudited

unaudited

unaudited

unaudited

USD

USD

USD

USD

USD

Operating revenues

Digital entertainment service revenues

1,363,287

1,545,575

1,224,749

2,908,862

2,671,025

Other revenues

1,363,287

1,545,575

1,224,749

2,908,862

2,671,025

Operating costs

Cost of Digital entertainment service revenues

588,907

644,369

591,687

1,233,276

1,247,444

Cost of other revenues

588,907

644,369

591,687

1,233,276

1,247,444

Gross profit

774,380

901,206

633,062

1,675,586

1,423,581

Operating expenses

Product development and engineeringexpenses

320,965

322,438

373,057

643,403

718,955

Selling and marketing expenses

376,899

435,205

376,914

812,104

773,947

General and administrative expenses

920,189

971,101

960,474

1,891,290

1,906,666

Other

712

226

2,103

938

4,703

1,618,765

1,728,970

1,712,548

3,347,735

3,404,271

Income (loss) from operations

(844,385)

(827,764)

(1,079,486)

(1,672,149)

(1,980,690)

Non-operating income (expense)

Interest income

66,575

62,835

80,184

129,410

158,779

Foreign exchange (loss) gain - net

(380,540)

(339,131)

163,139

(719,671)

113,782

Changes in the fair value of an instrument recognized at fair value

11,138

11,138

Other - net

16,349

4,922

176

21,271

(2,633)

(286,478)

(271,374)

243,499

(557,852)

269,928

(Loss) Income from continuing operationsbefore income taxes

(1,130,863)

(1,099,138)

(835,987)

(2,230,001)

(1,710,762)

Income tax benefit (expense)

(Loss) Income from continuing operations

(1,130,863)

(1,099,138)

(835,987)

(2,230,001)

(1,710,762)

Net (loss) income

(1,130,863)

(1,099,138)

(835,987)

(2,230,001)

(1,710,762)

Less: Net loss attributable tononcontrolling interest

Net (loss) income attributable to shareholders of GigaMedia

(1,130,863)

(1,099,138)

(835,987)

(2,230,001)

(1,710,762)

(Loss) Earnings per share attributable to GigaMedia

Basic:

(Loss) Earnings from continuing operations

(0.10)

(0.10)

(0.08)

(0.20)

(0.15)

Loss from discontinued operations

0.00

0.00

0.00

0.00

0.00

(0.10)

(0.10)

(0.08)

(0.20)

(0.15)

Diluted:

(Loss) Earnings from continuingoperations

(0.10)

(0.10)

(0.08)

(0.20)

(0.15)

Loss from discontinued operations

0.00

0.00

0.00

0.00

0.00

(0.10)

(0.10)

(0.08)

(0.20)

(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 SHEET 

06/30/2022

03/31/2022

06/30/2021

unaudited

unaudited

unaudited

USD

USD

USD

Assets

Current assets

Cash and cash equivalents

39,317,946

40,221,362

43,350,182

Accounts receivable - net

192,716

245,742

282,780

Prepaid expenses

574,021

728,280

242,488

Restricted cash

312,746

312,772

300,000

Other receivables

42,222

21,143

52,422

Other current assets

144,983

151,560

154,622

Total current assets

40,584,634

41,680,859

44,382,494

Marketable securities - noncurrent

10,322,000

10,322,000

10,000,000

Property, plant & equipment - net

70,913

79,266

48,349

Intangible assets - net

6,718

9,166

9,625

Prepaid licensing and royalty fees

249,965

299,117

73,762

Other assets

2,155,254

2,322,368

2,586,685

Total assets

53,389,484

54,712,776

57,100,915

Liabilities and equity

Accounts payable

31,757

47,916

44,870

Accrued compensation

268,124

188,353

279,896

Accrued expenses

1,104,625

1,436,606

1,138,777

Unearned revenue

824,361

890,395

930,026

Other current liabilities

819,888

820,580

787,009

Total current liabilities

3,048,755

3,383,850

3,180,578

Other liabilities

1,064,777

1,262,455

1,636,271

Total liabilities

4,113,532

4,646,305

4,816,849

GigaMedia's shareholders' equity

49,275,952

50,066,471

52,284,066

Noncontrolling interest

Total equity

49,275,952

50,066,471

52,284,066

Total liabilities and equity

53,389,484

54,712,776

57,100,915

GIGAMEDIA LIMITED 

RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS 

Three months ended

Six months ended

06/30/2022

03/31/2022

06/30/2021

06/30/2022

06/30/2021

unaudited

unaudited

unaudited

unaudited

unaudited

USD

USD

USD

USD

USD

Reconciliation of Net Income (Loss) to

EBITDA

Net income (loss) attributable to GigaMedia

(1,130,863)

(1,099,138)

(835,987)

(2,230,001)

(1,710,762)

Depreciation

5,472

5,764

2,920

11,236

4,822

Amortization

2,125

2,239

2,242

4,364

4,252

Interest income

(66,574)

(62,835)

(80,184)

(129,409)

(158,779)

Interest expense

Income tax (benefit) expense

EBITDA

(1,189,840)

(1,153,970)

(911,009)

(2,343,810)

(1,860,467)

SOURCE GigaMedia

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