GigaMedia Announces First-Quarter 2023 Financial Results

   2023-05-03 13:05

TAIPEI, May 3, 2023 /PRNewswire/ — GigaMedia Limited (NASDAQ: GIGM) today announced its first quarter 2023 unaudited financial results.

Comments from Management



For the first quarter of 2023, GigaMedia reported revenues of $1.33 million with a gross profit of $0.79 million, an operating loss of $0.70 million and the net loss of $0.31 million.

If compared to the previous quarter, the revenues increased by 20.2% and gross profit increased by 26.5%, exhibiting not only the seasonality arising from the new year and students’ winter vacation, but also our efforts in streamlining the workforce and improving the operating cost structure. 

Now with a slimmer team in place, for 2023 we plan to continue our exploration of digital entertainment to further develop and promote our own products and services.

First Quarter Overview

  • Operating revenues increased by 20.2% in quarter-on-quarter comparison but decreased by 14.3% year-over-year. 
  • Loss from operations slightly increased to $0.70 million from $0.68 million last quarter, and net loss was $0.31 million from net income $0.35 million last quarter mainly due to the fluctuation in foreign exchange and certain year-end evaluation in the previous quarter.

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 mobile games and casual games. Unaudited consolidated results of GigaMedia are summarized in the table below.

For the First Quarter

GIGAMEDIA 1Q23 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

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

1Q23

4Q22

Change
(%)

1Q23

1Q22

Change
(%)

Revenues

1,325

1,102

20.2

%

1,325

1,546

(14.3

) %

Gross Profit

792

626

26.5

%

792

901

(12.1

) %

Loss from Operations

(698

)

(675

)

NM

(698

)

(828

)

NM

Net Income (Loss) Attributable to GigaMedia

(313

)

347

NM

(313

)

(1,099

)

NM

Net Income (Loss) Per Share Attributable to GigaMedia, Diluted

(0.03

)

0.03

NM

(0.03

)

(0.10

)

NM

EBITDA (A)

(704

)

13

NM

(704

)

(1,154

)

NM

Cash, Cash Equivalents and Restricted Cash

38,119

39,107

(2.5

) %

38,119

40,534

(6.0

) %

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.)

First-Quarter Financial Results

  • Consolidated revenues for the first quarter of 2023 increased by 20.2% quarter-on-quarter to $1.3 million, from $1.1 million in the fourth quarter of 2022, but decreased by 14.3% year-over-year from $1.5 million in the first quarter of 2022. 
  • Consolidated gross profit increased to $0.8 million from $0.6 million in last quarter and decreased by 12.1% from $0.9 million in the same quarter last year.
  • Consolidated operating expenses were $1.5 million in the first quarter of 2023, approximately increased by 14.6% when compared to prior quarter.
  • Net loss for the first quarter of 2023 was $0.3 million, which was an increase of loss from an income of $0.3 million last quarter, but a decrease from a loss of $1.1 million in the same quarter last year.
  • Cash, cash equivalents and restricted cash at the first quarter-end of 2023 amounted to $38.1 million, decreased by approximately $1.0 million from $39.1 million at the fourth quarter-end of 2022.

Financial Position

GigaMedia maintained its solid financial position, with cash, cash equivalents and restricted cash amounting to $38.1 million, or approximately $3.45 per share as of March 31, 2023.

Business Outlook

The following forward-looking statements reflect GigaMedia’s expectations as of May 3, 2023. 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 2022 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

“As life is gradually returning to a post-COVID normal routine,” said GigaMedia CEO James Huang, “we are optimistic for the rebounding of consumer confidence and therefore digital entertainment spendings.” And as always, we will be pursuing sustainable growth and healthy margin by improving our existing products while developing and promoting new offerings in effective ways.

Meanwhile, our business strategies always include expanding through mergers and acquisitions. We will keep looking for investment opportunities that have strategic capacity to accelerate our growth and enhance shareholders’ value.

Use of Non-GAAP Measures

To supplement GigaMedia’s consolidated financial statements presented in accordance with U.S. 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 first quarter 2023 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. GigaMedia’s digital entertainment service business develops and operates a suite of digital entertainments in Taiwan and Hong Kong, with focus on browser/mobile games and casual 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 2023 and its other filings with the United States Securities and Exchange Commission.

GIGAMEDIA LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended

3/31/2023

12/31/2022

3/31/2022

unaudited

unaudited

unaudited

USD

USD

USD

Operating revenues

Digital entertainment service revenues

1,325,352

1,101,507

1,545,575

1,325,352

1,101,507

1,545,575

Operating costs

Cost of digital entertainment service revenues

533,136

475,714

644,369

533,136

475,714

644,369

Gross profit

792,216

625,793

901,206

Operating expenses

Product development and engineering expenses

178,192

163,043

322,438

Selling and marketing expenses

431,089

406,749

435,205

General and administrative expenses

879,655

730,850

971,101

Other

1,082

(245

)

226

1,490,018

1,300,397

1,728,970

Loss from operations

(697,802

)

(674,604

)

(827,764

)

Non-operating income (expense)

Interest income

404,550

343,762

62,835

Foreign exchange (loss) gain – net

(826

)

413,529

(339,131

)

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

(18,729

)

227,384

Other-net

107

37,289

4,922

385,102

1,021,964

(271,374

)

Income (loss) from continuing operations before income taxes

(312,700

)

347,360

(1,099,138

)

Income tax expense

(263

)

Net income (loss) attributable to shareholders of GigaMedia

(312,700

)

347,097

(1,099,138

)

Earnings (loss) per share attributable to GigaMedia

Basic:

Earnings (loss)  from continuing operations

(0.03

)

0.03

(0.10

)

Diluted:

Earnings (loss)  from continuing operations

(0.03

)

0.03

(0.10

)

Weighted average shares outstanding:

Basic

11,052,235

11,052,235

11,052,235

Diluted

11,052,235

11,052,235

11,052,235

 

GIGAMEDIA LIMITED
CONSOLIDATED BALANCE SHEETS

3/31/2023

12/31/2022

3/31/2022

unaudited

audited

unaudited

USD

USD

USD

Assets

Current assets

Cash and cash equivalents

37,806,540

38,794,467

40,221,362

Marketable securities-current

7,950,000

7,950,000

Accounts receivable – net

154,890

199,109

245,742

Prepaid expenses

368,322

60,059

728,280

Restricted cash

312,739

312,823

312,772

Other receivables

766,871

374,025

21,143

Other current assets

122,895

135,624

151,560

Total current assets

47,482,257

47,826,107

41,680,859

Marketable securities – noncurrent

2,371,000

2,371,000

10,322,000

Property, plant & equipment – net

146,094

102,729

79,266

Intangible assets – net

16,537

19,421

9,166

Prepaid licensing and royalty fees

140,850

176,530

299,117

Other assets

1,546,465

1,640,443

2,322,368

Total assets

51,703,203

52,136,230

54,712,776

Liabilities and equity

Accounts payable

78,604

52,660

47,916

Accrued compensation

133,645

186,984

188,353

Accrued expenses

878,269

964,203

1,436,606

Unearned revenue

871,981

817,446

890,395

Other current liabilities

636,631

616,151

820,580

Total current liabilities

2,599,130

2,637,444

3,383,850

Other liabilities

793,946

893,174

1,262,455

Total liabilities

3,393,076

3,530,618

4,646,305

Total equity

48,310,127

48,605,612

50,066,471

Total liabilities and equity

51,703,203

52,136,230

54,712,776

 

GIGAMEDIA LIMITED
Reconciliations of Non-GAAP Results of Operations

Three months ended

3/31/2023

12/31/2022

3/31/2022

unaudited

unaudited

unaudited

USD

USD

USD

Reconciliation of Net Income (Loss) to EBITDA

Net income (loss) attributable to GigaMedia

(312,700

)

347,097

(1,099,138

)

Depreciation

10,326

6,998

5,764

Amortization

3,054

2,803

2,239

Interest income

(404,550

)

(343,762

)

(62,835

)

Interest expense

Income tax expense

263

EBITDA

(703,870

)

13,399

(1,153,970

)

 


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