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Subjects: ERN, ERP

GigaMedia Announces Second-Quarter 2022 Financial Results


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

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, except
per 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

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 engineering
expenses



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 operations
before 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 to
noncontrolling 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 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)


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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