TAIPEI, Taiwan, March 29, 2018 /PRNewswire/ -- GigaMedia
Limited (NASDAQ: GIGM) today announced its unaudited financial results for the fourth quarter and full year of 2017.
"After the efforts in recent years in cleaning up the Company's balance sheet and streamlining its operations, GigaMedia is
now operating with a healthy margin, efficient marketing expenditures and disciplined overhead costs," stated GigaMedia Limited
Chief Executive Officer James Huang.
Fourth Quarter and Full Year Overview
- Consolidated 4Q revenues decreased 11.98% quarter-over-quarter and 0.49% year-over-year. Full year revenues increased
29.26% to $11.6 million compared to $9.0 million in 2016.
- Gross profit decreased 30.89% comparing to 3Q 2017, but increased 2.65% comparing to the prior year fourth quarter, to
approximately $1.0 million. Full year gross profit increased by $1.7
million or 34.45% to $6.5 million. Gross margin rate for full year of 2017 was 56.04%,
slightly increased from 53.87% last year.
- Operating expenses in 4Q, excluding a reclassification from non-operating income of $1.7
million related to the ArcheAge transaction in 2Q 2017, slightly decreased 1.24% from prior quarter. Full year
operating expenses, excluding impairment losses and the ArcheAge income, decreased by $1.3
million or 13.24% to $8.7 million from $10.0
million.
- Income from operations for 4Q, excluding the reclassification from non-operating income of the $1.7 million ArcheAge income, decreased to a loss $0.7 million from a
loss $0.3 million in 3Q, mainly due to lower revenues in 4Q. Full year operating loss, if
excluding impairment losses and the ArcheAge income, were a loss of $2.2 million for 2017,
representing a loss reduction of $3.0 million.
- Consolidated general and administrative expenses in 4Q decreased by 17.31% quarter-on-quarter and by 10.89%
year-over-year. Full year consolidated general and administrative expenses slightly increased by 2.07%.
- Income tax benefit of $1.7 million in this quarter was related to a reversal of deferred
income tax liabilities originally accrued for certain withholding obligations.
- Adjusted EBITDA for the year ended December 31, 2017 was a loss of $1.1 million, compared to adjusted EBITA of $7.2 million loss in the prior
year.
Unaudited Consolidated Financial Results
GigaMedia Limited is a diversified provider of online games. GigaMedia's online games business FunTown develops and operates a
suite of games in Taiwan and Hong Kong, with focus on online
games and other digital entertainments.
Unaudited consolidated results of GigaMedia are summarized in the table below.
For the Fourth Quarter
|
GIGAMEDIA4Q17 UNAUDITED CONSOLIDATED FINANCIAL RESULTS
|
|
(unaudited, all figures in US$ thousands, except per share amounts)
|
|
4Q17
|
|
|
3Q17
|
|
|
Change
(%)
|
|
|
4Q17
|
|
|
4Q16
|
|
|
Change
(%)
|
|
Revenues
|
|
2,028
|
|
|
2,304
|
|
|
-11.98%
|
|
|
2,028
|
|
|
2,038
|
|
|
-0.49%
|
|
Gross Profit
|
|
1,007
|
|
|
1,457
|
|
|
-30.89%
|
|
|
1,007
|
|
|
981
|
|
|
2.65%
|
|
Income (Loss) from Operations
|
|
988
|
|
|
(315)
|
|
|
NM
|
|
|
988
|
|
|
(4,422)
|
|
|
NM
|
|
Net Income (Loss) Attributable to GigaMedia
|
|
1,070
|
|
|
(129)
|
|
|
NM
|
|
|
1,070
|
|
|
(2,807)
|
|
|
NM
|
|
Net Income (Loss) Per Share Attributable to GigaMedia, Diluted
|
|
0.10
|
|
|
(0.01)
|
|
|
NM
|
|
|
0.10
|
|
|
(0.25)
|
|
|
NM
|
|
EBITDA (A)
|
|
(785)
|
|
|
(305)
|
|
|
NM
|
|
|
(785)
|
|
|
(3,948)
|
|
|
NM
|
|
Cash and Marketable Securities-Current
|
|
63,670
|
|
|
63,770
|
|
|
-0.16%
|
|
|
63,670
|
|
|
65,713
|
|
|
-3.11%
|
|
|
(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.)
|
Fourth-Quarter Financial Results
- Consolidated revenues for the fourth quarter of 2017 decreased 11.98% quarter-on-quarter from
$2.3 million to $2.0 million and slightly decreased by 0.49%
year-over-year.
- Consolidated gross profit decreased 30.89% quarter-on-quarter from $1.5
million to $1.0 million and increased 2.65% year-over-year.
- Consolidated operating expenses were $0.02 million in the fourth
quarter of 2017. A decrease of $1.8 million from the third quarter of 2017 is mainly due to a
reclassification from non-operating income of $1.7 million related to the ArcheAge
transaction, already recognized in the second quarter of 2017. It also reflected the effective budgeting and cost management on
general and administrative expenses. A slight increase in selling and marketing expenses from $0.6
million in the third quarter of 2017 to $0.7 million in the fourth quarter of 2017 is
mainly due to the launch of a new game in mid-December 2017.
- Consolidated income (loss) from operation of the fourth quarter of 2017 was an income of
$1.0 million, compared to a loss of $ 0.3 million in the last
quarter. The improvement from loss to income was mainly due to the reclassification of the ArcheAge income of
$1.7 million.
- Game division, excluding the reclassification of the ArcheAge income, almost reached break-even point, with an
operating loss $0.3 million in this quarter, comparing both to an income of $0.2 million of the third quarter of 2017 and a loss of $3.5 million in the
same period of last year.
- Income tax benefit of the fourth quarter of 2017 was $1.7 million.
The benefit was related to a reversal of deferred income tax liabilities originally accrued for certain withholding
obligations.
- Consolidated net income of the fourth quarter of 2017 was a net income of $1.1 million compared to a net loss of $2.8 million in the fourth quarter of
2016.
- Cash and cash equivalents in the fourth quarter of 2017 accounted for $63.7
million, which decreased 0.2% from $63.8 million in the third quarter of 2017.
- Consolidated EBITDA for the fourth quarter of 2017 was a loss of $0.8
million compared to a loss of $0.3 million in the third quarter of 2017 and a loss of
$3.9 million in the fourth quarter of 2016.
Financial Position
GigaMedia maintained its solid financial position with cash and cash equivalents, and restricted cash accounted for
$64.2 million approximately $5.8 per share as of December 31, 2017. The short-term debt remained zero, compared to $2.5 million as
of the fourth quarter of 2016 and the total liabilities decreased $1.8 million quarter-on-quarter
from $6.8 million to $5.0 million.
For the Full Year 2017
|
(all figures in US$ thousands, except per share amounts)
|
|
FY17 (unaudited)
|
|
|
FY16 (audited)
|
|
|
Change
(%)
|
|
Revenues
|
|
11,596
|
|
|
8,971
|
|
|
29.26%
|
|
Gross Profit
|
|
6,498
|
|
|
4,833
|
|
|
34.45%
|
|
Loss from Operations
|
|
(490)
|
|
|
(7,130)
|
|
|
NM
|
|
Net Income (Loss) Attributable to GigaMedia
|
|
1,086
|
|
|
(6,066)
|
|
|
NM
|
|
Net Income (Loss) Per Share Attributable to GigaMedia, Diluted
|
|
0.10
|
|
|
(0.55)
|
|
|
NM
|
|
EBITDA (A)
|
|
(1,099)
|
|
|
(7,164)
|
|
|
NM
|
|
|
(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.)
|
- Consolidated revenues for the year ended December 31, 2017 was
$11.6 million, compared to $9.0 million in the last year. Gross
profit was $6.5 million, compared to $4.8 million last year.
- Consolidated gross profit for the year ended December 31, 2017 was
$6.5 million, compared to $4.8 million last year.
- Consolidated loss from operations for 2017 was a loss of $0.5
million, compared to a loss of $7.1 million in the last year. The loss reduction was
mainly attributable to the decreases in marketing expenses and impairment losses, as well as the income from transferring the
license right of ArcheAge to XL Games Inc.
- Consolidated net Income (loss) for 2017 was $1.1 million, compared to
a loss of $6.0 million in the same period last year. Earnings per share for the year ended
December 31, 2017 was $0.10, compared to loss per share of
$0.55 last year.
Business Outlook
The following forward-looking statements reflect GigaMedia's expectations as of March
29 , 201 8 . Given potential changes in economic conditions and consumer spending, the evolving
nature of online games, and various other risk factors, including those discussed in the C ompany's 20
16 Annual Report on Form 20-F fi led with the U.S. Securities and Exchange Commission
as referenced below, actual results may differ materially.
GigaMedia CEO James Huang stated: "We are continually looking for high gross profit games,
focusing on smart spending on commercial advertisements to achieve high efficiency on marketing expense. With these the
strategies, we can see the improvements now.
To look over the past two years, the management has been clearing up assets, trying to keep more cash on hand. We are
persistently searching for investment targets with high potentials to expand our business and drive higher revenue for our
shareholders."
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 fourth quarter and full year 2017 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 online games. GigaMedia's online
games business develops and operates a suite of games in Taiwan and Hong Kong, with focus on browser/mobile games and social casino games. More information on GigaMedia can be
obtained from www.gigamedia.com.
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
2017 and its other filings with the United States Securities and Exchange Commission.
(Tables to follow)
|
GIGAMEDIA LIMITED
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Twelve months ended
|
|
|
|
12/31/2017
|
|
|
|
09/30/2017
|
|
|
|
12/31/2016
|
|
|
|
12/31/2017
|
|
|
|
12/31/2016
|
|
|
|
unaudited
|
|
|
|
unaudited
|
|
|
|
unaudited
|
|
|
|
unaudited
|
|
|
|
audited
|
|
|
|
USD
|
|
|
|
USD
|
|
|
|
USD
|
|
|
|
USD
|
|
|
|
USD
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asian online game and service revenues
|
|
|
2,027,831
|
|
|
|
2,304,287
|
|
|
|
2,038,188
|
|
|
|
11,596,221
|
|
|
|
8,971,305
|
|
Other revenues
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,027,831
|
|
|
|
2,304,287
|
|
|
|
2,038,188
|
|
|
|
11,596,221
|
|
|
|
8,971,305
|
|
Operating costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Asian online game and service revenues
|
|
|
1,020,993
|
|
|
|
846,905
|
|
|
|
1,057,163
|
|
|
|
5,098,495
|
|
|
|
4,138,111
|
|
Cost of other revenues
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,020,993
|
|
|
|
846,905
|
|
|
|
1,057,163
|
|
|
|
5,098,495
|
|
|
|
4,138,111
|
|
Gross profit
|
|
|
1,006,838
|
|
|
|
1,457,382
|
|
|
|
981,025
|
|
|
|
6,497,726
|
|
|
|
4,833,194
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product development and engineering expenses
|
|
|
237,744
|
|
|
|
269,539
|
|
|
|
330,895
|
|
|
|
1,072,350
|
|
|
|
1,045,182
|
|
Selling and marketing expenses
|
|
|
745,169
|
|
|
|
601,638
|
|
|
|
2,311,585
|
|
|
|
3,992,351
|
|
|
|
5,512,695
|
|
General and administrative expenses
|
|
|
741,253
|
|
|
|
896,398
|
|
|
|
831,817
|
|
|
|
3,527,799
|
|
|
|
3,456,300
|
|
Impairment losses
|
|
|
—
|
|
|
|
—
|
|
|
|
1,914,565
|
|
|
|
—
|
|
|
|
1,914,565
|
|
Other
|
|
|
(1,705,532)
|
|
|
|
4,515
|
|
|
|
14,196
|
|
|
|
(1,605,017)
|
|
|
|
35,002
|
|
|
|
18,634
|
|
|
|
1,772,090
|
|
|
|
5,403,058
|
|
|
|
6,987,483
|
|
|
|
11,963,744
|
|
Income (loss) from operations
|
|
|
988,204
|
|
|
|
(314,708)
|
|
|
|
(4,422,033)
|
|
|
|
(489,757)
|
|
|
|
(7,130,550)
|
|
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
207,775
|
|
|
|
208,696
|
|
|
|
84,383
|
|
|
|
602,224
|
|
|
|
302,515
|
|
Gain on sales of marketable securities
|
|
|
1,618
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,618
|
|
|
|
—
|
|
Interest expense
|
|
|
(112)
|
|
|
|
(9,985)
|
|
|
|
(11,831)
|
|
|
|
(33,544)
|
|
|
|
(81,446)
|
|
Foreign exchange (loss) gain - net
|
|
|
(85,955)
|
|
|
|
(13,239)
|
|
|
|
56,878
|
|
|
|
(551,167)
|
|
|
|
(300,651)
|
|
Gain (loss) on disposal of property, plant and equipment
|
|
|
(1)
|
|
|
|
(2)
|
|
|
|
(39,709)
|
|
|
|
962
|
|
|
|
751,133
|
|
Equity in net loss on equity method investments
|
|
|
(79)
|
|
|
|
(105)
|
|
|
|
264,979
|
|
|
|
(23,761)
|
|
|
|
(1,730,872)
|
|
Gain on disposal of investments
|
|
|
—
|
|
|
|
—
|
|
|
|
25,894
|
|
|
|
—
|
|
|
|
848,629
|
|
Impairment loss on marketable securities and investments
|
|
|
(176)
|
|
|
|
(233)
|
|
|
|
—
|
|
|
|
(52,651)
|
|
|
|
—
|
|
Other - net
|
|
|
(1,712,323)
|
|
|
|
860
|
|
|
|
88,655
|
|
|
|
(38,702)
|
|
|
|
125,532
|
|
|
|
(1,589,253)
|
|
|
|
185,992
|
|
|
|
469,249
|
|
|
|
(95,021)
|
|
|
|
(85,160)
|
|
Loss from continuing operations before income taxes
|
|
|
(601,049)
|
|
|
|
(128,716)
|
|
|
|
(3,952,784)
|
|
|
|
(584,778)
|
|
|
|
(7,215,710)
|
|
Income tax benefit (expense)
|
|
|
1,671,511
|
|
|
|
(7)
|
|
|
|
1,146,193
|
|
|
|
1,671,048
|
|
|
|
1,148,723
|
|
Net (loss) income attributable to shareholders of GigaMedia
|
|
|
1,070,462
|
|
|
|
(128,723)
|
|
|
|
(2,806,591)
|
|
|
|
1,086,270
|
|
|
|
(6,066,987)
|
|
Earnings (loss) per share attributable to GigaMedia:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.10
|
|
|
|
(0.01)
|
|
|
|
(0.25)
|
|
|
|
0.10
|
|
|
|
(0.55)
|
|
Diluted
|
|
|
0.10
|
|
|
|
(0.01)
|
|
|
|
(0.25)
|
|
|
|
0.10
|
|
|
|
(0.55)
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2017
|
|
|
|
09/30/2017
|
|
|
|
12/31/2016
|
|
|
|
unaudited
|
|
|
|
unaudited
|
|
|
|
audited
|
|
|
|
USD
|
|
|
|
USD
|
|
|
|
USD
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
63,670,458
|
|
|
|
63,767,004
|
|
|
|
65,710,816
|
|
Marketable securities - current
|
|
|
—
|
|
|
|
2,617
|
|
|
|
2,617
|
|
Accounts receivable - net
|
|
|
751,114
|
|
|
|
699,407
|
|
|
|
870,785
|
|
Prepaid expenses
|
|
|
389,984
|
|
|
|
310,286
|
|
|
|
547,818
|
|
Restricted cash
|
|
|
506,981
|
|
|
|
503,640
|
|
|
|
500,000
|
|
Other receivables
|
|
|
67,884
|
|
|
|
495,685
|
|
|
|
1,099,183
|
|
Other current assets
|
|
|
124,595
|
|
|
|
155,240
|
|
|
|
151,358
|
|
Total current assets
|
|
|
65,511,016
|
|
|
|
65,933,879
|
|
|
|
68,882,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities - noncurrent
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
—
|
|
|
|
—
|
|
|
|
72,052
|
|
Property, plant & equipment - net
|
|
|
157,730
|
|
|
|
135,287
|
|
|
|
6,605
|
|
Intangible assets - net
|
|
|
3,409
|
|
|
|
2,812
|
|
|
|
—
|
|
Prepaid licensing and royalty fees
|
|
|
458,914
|
|
|
|
516,477
|
|
|
|
1,020,034
|
|
Other assets
|
|
|
282,036
|
|
|
|
325,763
|
|
|
|
346,072
|
|
Total assets
|
|
|
66,413,105
|
|
|
|
66,914,218
|
|
|
|
70,327,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
|
—
|
|
|
|
—
|
|
|
|
2,480,620
|
|
Accounts payable
|
|
|
313,557
|
|
|
|
269,316
|
|
|
|
265,966
|
|
Accrued compensation
|
|
|
548,903
|
|
|
|
565,446
|
|
|
|
210,083
|
|
Accrued expenses
|
|
|
2,157,790
|
|
|
|
2,037,396
|
|
|
|
3,827,905
|
|
Unearned revenue
|
|
|
1,863,308
|
|
|
|
2,068,262
|
|
|
|
1,867,623
|
|
Other current liabilities
|
|
|
163,703
|
|
|
|
223,173
|
|
|
|
346,036
|
|
Total current liabilities
|
|
|
5,047,261
|
|
|
|
5,163,593
|
|
|
|
8,998,233
|
|
Other liabilities
|
|
|
—
|
|
|
|
1,671,511
|
|
|
|
1,671,511
|
|
Total liabilities
|
|
|
5,047,261
|
|
|
|
6,835,104
|
|
|
|
10,669,744
|
|
GigaMedia's shareholders' equity
|
|
|
61,365,844
|
|
|
|
60,079,114
|
|
|
|
59,657,596
|
|
Noncontrolling interest
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total equity
|
|
|
61,365,844
|
|
|
|
60,079,114
|
|
|
|
59,657,596
|
|
Total liabilities and equity
|
|
|
66,413,105
|
|
|
|
66,914,218
|
|
|
|
70,327,340
|
|
GIGAMEDIA LIMITED
|
|
RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS
|
|
|
|
|
|
Three months ended
|
|
|
|
12/31/2017
|
|
|
9/30/2017
|
|
|
12/31/2016
|
|
|
|
unaudited
|
|
|
unaudited
|
|
|
unaudited
|
|
|
|
USD
|
|
|
USD
|
|
|
USD
|
|
Reconciliation of Net Income (Loss) to EBITDA
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to GigaMedia
|
|
|
1,070,462
|
|
|
(128,723)
|
|
|
(2,806,591)
|
|
Depreciation
|
|
|
20,886
|
|
|
18,929
|
|
|
50,414
|
|
Amortization
|
|
|
3,315
|
|
|
3,301
|
|
|
26,967
|
|
Interest income
|
|
|
(207,775)
|
|
|
(208,695)
|
|
|
(84,383)
|
|
Interest expense
|
|
|
112
|
|
|
9,985
|
|
|
11,831
|
|
Income tax expense (benefit)
|
|
|
(1,671,511)
|
|
|
7
|
|
|
(1,146,193)
|
|
EBITDA
|
|
|
(784,511)
|
|
|
(305,196)
|
|
|
(3,947,955)
|
View original content:http://www.prnewswire.com/news-releases/gigamedia-announces-fourth-quarter-and-full-year-2017-financial-results-300621658.html
SOURCE GigaMedia Limited