GigaMedia Announces Second-Quarter 2023 Financial Results
Comments from Management
In the second quarter of 2023, GigaMedia reported revenues of
The decrease in revenues was mainly as a result of seasonality, as the second quarter is usually a slower season than the first. Currently we focused on fine-tuning the operation of our casual games and customer platform for upcoming summer vacation.
Second Quarter Overview
- Operating revenues decreased by approximately
22.6% quarter-on-quarter, to$1.03 million $1.33 million 24.8% year-over-year from$1.36 million - Gross profit decreased by
28.5% to$0.57 million $0.79 million 26.9% compared to$0.77 million - The net asset value was
$4.32
Unaudited Consolidated Financial Results
GigaMedia Limited is a diversified provider of digital entertainment services. GigaMedia's digital entertainment service business FunTown develops and operates a suite of digital entertainments in
Unaudited consolidated results of GigaMedia are summarized in the table below.
For the Second Quarter
GIGAMEDIA 2Q23 UNAUDITED CONSOLIDATED FINANCIAL RESULTS | ||||||||||||||||||||||||
(unaudited, all figures in US$ thousands, except per | 2Q23 | 1Q23 | Change | 2Q23 | 2Q22 | Change | ||||||||||||||||||
Revenues | 1,025 | 1,325 | -22.64 | % | 1,025 | 1,363 | -24.80 | % | ||||||||||||||||
Gross Profit | 566 | 792 | -28.54 | % | 566 | 774 | -26.87 | % | ||||||||||||||||
Loss from Operations | (919) | (698) | NM | (919) | (844) | NM | ||||||||||||||||||
Net Loss Attributable to GigaMedia | (562) | (313) | NM | (562) | (1,131) | NM | ||||||||||||||||||
Net Loss Per Share Attributable to | (0.05) | (0.03) | NM | (0.05) | (0.10) | NM | ||||||||||||||||||
EBITDA (A) | (982) | (704) | NM | (982) | (1,190) | NM | ||||||||||||||||||
Cash, Cash Equivalent and Restricted | 37,775 | 38,119 | -0.90 | % | 37,775 | 39,631 | -4.68 | % | ||||||||||||||||
NM= Nt Meaningful | ||||||||||||||||||||||||
(A) EBITDA (earnings before interest, taxes, depreciation, and amortization) is provided as a supplement to | ||||||||||||||||||||||||
Second-Quarter Financial Results
- Consolidated revenues for the second quarter of 2023 decreased by
22.6% quarter-on-quarter to$1.03 million $1.33 million 24.8% year-over-year from$1.36 million - Consolidated gross profit was
$0.57 million 28.5% quarter-on-quarter and decreased by26.9% year-over-year. - Consolidated loss from operation of the second quarter of 2023 was a loss of
$0.92 million $0.70 - Net loss in the second quarter of 2023 was
$0.56 million $0.31 million - Cash, cash equivalents and restricted cash at the end of the second quarter of 2023 amounted to
$37.8 million 0.9% from$38.1 million
Financial Position
GigaMedia maintained its solid financial position, with cash, cash equivalents and restricted cash amounted to
Business Outlook
The following forward-looking statements reflect GigaMedia's expectations as of July 31, 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
"In the second half of 2023, we will dedicate ourselves to boosting the productivity of our products and services. GigaMedia will stick to the strategy of pursuing healthy growth with a lean operation while seeking for strategic expansion and new business," stated GigaMedia CEO James Huang.
As for new business, our management continues evaluating and pursuing prospects of strategic investment targets that 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
Q&A
For Q&A regarding the second quarter 2023 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
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.
(Tables to follow)
GIGAMEDIA LIMITED | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
Three months ended | Six months ended | |||||||||||||||||||
06/30/2023 | 03/31/2023 | 06/30/2022 | 06/30/2023 | 06/30/2022 | ||||||||||||||||
unaudited | unaudited | unaudited | unaudited | unaudited | ||||||||||||||||
USD | USD | USD | USD | USD | ||||||||||||||||
Operating revenues | ||||||||||||||||||||
Digital entertainment service revenues | 1,025,056 | 1,325,352 | 1,363,287 | 2,350,408 | 2,908,862 | |||||||||||||||
1,025,056 | 1,325,352 | 1,363,287 | 2,350,408 | 2,908,862 | ||||||||||||||||
Operating costs | ||||||||||||||||||||
Cost of Digital entertainment service revenues | 458,667 | 533,136 | 588,907 | 991,803 | 1,233,276 | |||||||||||||||
458,667 | 533,136 | 588,907 | 991,803 | 1,233,276 | ||||||||||||||||
Gross profit | 566,389 | 792,216 | 774,380 | 1,358,605 | 1,675,586 | |||||||||||||||
Operating expenses | ||||||||||||||||||||
Product development and engineering expenses | 188,457 | 178,192 | 320,965 | 366,649 | 643,403 | |||||||||||||||
Selling and marketing expenses | 406,876 | 431,089 | 376,899 | 837,965 | 812,104 | |||||||||||||||
General and administrative expenses and others | 890,636 | 879,655 | 920,190 | 1,770,291 | 1,891,290 | |||||||||||||||
Other | (101) | 1,082 | 712 | 981 | 938 | |||||||||||||||
1,485,868 | 1,490,018 | 1,618,766 | 2,975,886 | 3,347,735 | ||||||||||||||||
Loss from operations | (919,479) | (697,802) | (844,386) | (1,617,281) | (1,672,149) | |||||||||||||||
Non-operating income (expense) | ||||||||||||||||||||
Interest income | 435,038 | 404,550 | 66,576 | 839,588 | 129,410 | |||||||||||||||
Foreign exchange loss - net | (135,898) | (826) | (380,540) | (136,724) | (719,671) | |||||||||||||||
Changes in the fair value of an instrument recognized at fair value | 52,092 | (18,729) | 11,138 | 33,363 | 11,138 | |||||||||||||||
Other - net | 6,659 | 107 | 16,349 | 6,766 | 21,271 | |||||||||||||||
357,891 | 385,102 | (286,477) | 742,993 | (557,852) | ||||||||||||||||
Loss from continuing operations before income taxes | (561,588) | (312,700) | (1,130,863) | (874,288) | (2,230,001) | |||||||||||||||
Income tax expense | — | — | — | — | — | |||||||||||||||
Net loss attributable to shareholders of GigaMedia | (561,588) | (312,700) | (1,130,863) | (874,288) | (2,230,001) | |||||||||||||||
Loss per share attributable to GigaMedia | ||||||||||||||||||||
Basic: | (0.05) | (0.03) | (0.10) | (0.08) | (0.20) | |||||||||||||||
Diluted: | (0.05) | (0.03) | (0.10) | (0.08) | (0.20) | |||||||||||||||
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 | ||||||||||||
06/30/2023 | 03/31/2023 | 06/30/2022 | ||||||||||
unaudited | unaudited | unaudited | ||||||||||
USD | USD | USD | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 37,462,050 | 37,806,540 | 39,317,946 | |||||||||
Marketable securities-current | 7,950,000 | 7,950,000 | — | |||||||||
Accounts receivable - net | 187,385 | 154,890 | 192,716 | |||||||||
Prepaid expenses | 225,334 | 368,322 | 574,021 | |||||||||
Restricted cash | 312,762 | 312,739 | 312,746 | |||||||||
Other receivables | 765,741 | 766,871 | 42,222 | |||||||||
Other current assets | 118,950 | 122,895 | 144,983 | |||||||||
Total current assets | 47,022,222 | 47,482,257 | 40,584,634 | |||||||||
Marketable securities - noncurrent | 2,371,000 | 2,371,000 | 10,322,000 | |||||||||
Property, plant & equipment - net | 131,758 | 146,094 | 70,913 | |||||||||
Intangible assets - net | 13,188 | 16,537 | 6,718 | |||||||||
Prepaid licensing and royalty fees | 101,919 | 140,850 | 249,965 | |||||||||
Other assets | 1,510,307 | 1,546,465 | 2,155,254 | |||||||||
Total assets | 51,150,394 | 51,703,203 | 53,389,484 | |||||||||
Liabilities and equity | ||||||||||||
Accounts payable | 28,747 | 78,604 | 31,757 | |||||||||
Accrued compensation | 230,931 | 133,645 | 268,124 | |||||||||
Accrued expenses | 855,201 | 878,269 | 1,104,625 | |||||||||
Unearned revenue | 847,887 | 871,981 | 824,361 | |||||||||
Other current liabilities | 718,266 | 636,631 | 819,888 | |||||||||
Total current liabilities | 2,681,032 | 2,599,130 | 3,048,755 | |||||||||
Other liabilities | 714,650 | 793,946 | 1,064,777 | |||||||||
Total liabilities | 3,395,682 | 3,393,076 | 4,113,532 | |||||||||
Total equity | 47,754,712 | 48,310,127 | 49,275,952 | |||||||||
Total liabilities and equity | 51,150,394 | 51,703,203 | 53,389,484 | |||||||||
GIGAMEDIA LIMITED | ||||||||||||||||||||
RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS | ||||||||||||||||||||
Three months ended | Six months ended | |||||||||||||||||||
06/30/2023 | 03/31/2023 | 06/30/2022 | 06/30/2023 | 06/30/2022 | ||||||||||||||||
unaudited | unaudited | unaudited | unaudited | unaudited | ||||||||||||||||
USD | USD | USD | USD | USD | ||||||||||||||||
Reconciliation of Net Income (Loss) to EBITDA | ||||||||||||||||||||
Net income (loss) attributable to GigaMedia | (561,588) | (312,700) | (1,130,863) | (874,288) | (2,230,001) | |||||||||||||||
Depreciation | 11,259 | 10,326 | 5,472 | 21,585 | 11,236 | |||||||||||||||
Amortization | 3,024 | 3,054 | 2,125 | 6,078 | 4,364 | |||||||||||||||
Interest income | (435,038) | (404,550) | (66,577) | (839,588) | (129,409) | |||||||||||||||
Interest expense | — | — | — | — | — | |||||||||||||||
Income tax (benefit) expense | — | — | — | — | — | |||||||||||||||
EBITDA | (982,343) | (703,870) | (1,189,843) | (1,686,213) | (2,343,810) | |||||||||||||||
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SOURCE GigaMedia
