EX-99 2 gigm-ex99_1.htm EX-99.1 EX-99

 

Exhibit 99.1

FOR IMMEDIATE RELEASE

For further information contact:

 

 

 

Investor Relations Department

Country/City Code 8862 Tel: 2656-8096

IR@gigamedia.com.tw

 

GigaMedia Announces Fourth-Quarter and Full Year 2022 Financial Results

 

TAIPEI, Taiwan, March 31, 2023 – GigaMedia Limited (NASDAQ: GIGM) today announced its unaudited financial results for the fourth quarter and full year of 2022.

 

Highlights for Year Ended December 31, 2022

 

For 2022, GigaMedia reported revenues of $5.6 million, with a gross profit of $3.3 million, an operating loss of $3.0 million and the net loss of $3.1 million.

 

"In spite of all the difficulties, GigaMeida delivered an improving result for 2022," said GigaMedia CEO James Huang. 2022 was indeed very challenging for entertainment business, with all the rising cost of living and the eroded consumer confidence. "But we managed to enhance our productivity with a leaner organization structure," continued CEO James Huang.

 

Notwithstanding a slower season in the fourth quarter, we closed 2022 with a smaller net loss of $3.1 million from $3.4 million in the prior year. While we generated slightly higher revenues than last year, the gross margin rate increased considerably from 52.9% to 58.2%. Furthermore, even under the current inflationary environment, the operating expenditures were trimmed down from $6.9 million to $6.3 million.

 

Meanwhile, we continued searching opportunities of mergers and acquisitions. Certain projects have been reviewed and examined, but we would not rush into making any reckless decision. "We believe patience, a virtue too often undervalued, is very important in making a strategic investment successful," stated GigaMedia CEO James Huang.

 

Fourth Quarter and Full Year Overview

•
Consolidated 4Q revenues decreased by 30.0% quarter-on-quarter mainly due to seasonality, and by 12.3% year-over-year. Nevertheless, full year revenues increased slightly by 1.7% to $5.6 million from $5.5 million in 2021.
•
Loss from operations for 4Q was $0.7 million, almost the same if compared to the third quarter in 2022, as we managed to reduce the operating costs and expenses. Full year operating loss was $3.0 million, representing a reduction of loss by $1.0 million from approximately $4.0 million in 2021.
•
The net asset value was approximately $4.40 per share as of the end of 2022.

 

Unaudited Consolidated Financial Results

-1-

 

 

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 Full Year 2022

GIGAMEDIA FY22 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

 

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

 

FY22

 

 

FY21

 

 

Change
(%)

 

Revenues

 

 

5,585

 

 

 

5,492

 

 

 

1.7

%

Gross Profit

 

 

3,250

 

 

 

2,908

 

 

 

11.8

%

Loss from Operations

 

 

(3,020

)

 

 

(3,974

)

 

NM

 

Net Loss Attributable to GigaMedia

 

 

(3,058

)

 

 

(3,425

)

 

NM

 

Net Loss Per Share Attributable to GigaMedia, Diluted

 

 

(0.28

)

 

 

(0.31

)

 

NM

 

EBITDA (A)

 

 

(3,743

)

 

 

(3,656

)

 

NM

 

Cash, Cash Equivalents and Restricted Cash

 

 

39,107

 

 

 

41,762

 

 

 

-6.4

%

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.)

 

•
Consolidated revenues for the year ended December 31, 2022 was $5.6 million, slightly increased from $5.5 million in the prior year. The increase was mainly due to our efforts in promoting a licensed game Tales Runner, we operate in Hong Kong.
•
Consolidated loss from operations for 2022 was $3.0 million, compared to a loss of $4.0 million in the last year. The decrease of loss was mainly due to improved cost structure and more streamlined operations.
•
Consolidated net loss for 2022 was $3.1 million, slightly decreased from $3.4 million in the prior year. Loss per share for 2022 was $0.28 per share, compared to $0.31 last year.
•
Cash, cash equivalents and restricted cash at the year end of 2022 amounted to $39.1 million.

 

For the Fourth Quarter

 

GIGAMEDIA 4Q22 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

 

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

 

4Q22

 

 

3Q22

 

 

Change
(%)

 

 

4Q22

 

 

4Q21

 

 

Change
(%)

 

Revenues

 

 

1,102

 

 

 

1,575

 

 

 

-30.0

%

 

 

1,102

 

 

 

1,257

 

 

 

-12.3

%

Gross Profit

 

 

626

 

 

 

949

 

 

 

-34.0

%

 

 

626

 

 

 

607

 

 

 

3.1

%

Loss from Operations

 

 

(675

)

 

 

(674

)

 

NM

 

 

 

(675

)

 

 

(1,152

)

 

NM

 

Net Income (Loss) Attributable to GigaMedia

 

 

40

 

 

 

(869

)

 

NM

 

 

 

40

 

 

 

(986

)

 

NM

 

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

 

 

0.00

 

 

 

(0.08

)

 

NM

 

 

 

0.00

 

 

 

(0.09

)

 

NM

 

EBITDA (A)

 

 

(293

)

 

 

(1,106

)

 

NM

 

 

 

(293

)

 

 

(1,005

)

 

NM

 

Cash, Cash Equivalents and Restricted Cash

 

 

39,107

 

 

 

39,556

 

 

 

-1.1

%

 

 

39,107

 

 

 

41,762

 

 

 

-6.4

%

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.)

 

-2-

 

 

Fourth-Quarter Financial Results

•
Consolidated revenues for the fourth quarter of 2022 decreased by 30.0% quarter-on-quarter from $1.6 million to $1.1 million mainly due to seasonality, and decreased by 12.3% year-over-year mainly as revenues from casual games declined.
•
Consolidated loss from operations of the fourth quarter of 2022 was $0.7 million, same as the loss in the last quarter, and representing a loss decrease from $1.2 million year-over-year.
•
Consolidated net income of the fourth quarter of 2022 was $0.04 million, increased from a net loss of $0.9 million in the last quarter.
•
Cash, cash equivalents and restricted cash at the end of the fourth quarter of 2022 amounted to $39.1 million, slightly decreased from $39.6 million at the end of the prior quarter.

 

Financial Position

GigaMedia maintained its solid financial position. Cash, cash equivalents and restricted cash amounted to $39.1 million, or approximately $3.54 per share, along with zero bank loan. Our shareholders’ equity was approximately $48.6 million of as of December 31, 2022.

 

Business Outlook

The following forward-looking statements reflect GigaMedia’s expectations as of March 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 2021 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

 

As the economic outlook for Taiwan and Hong Kong for the next year would be just slightly better at best when worries over inflation and recession would linger, we expect a mild growth for 2023. Nonetheless, we will be seeking ways of replicating our successful offerings to different territories, generations and segments. "We will be pursuing growth and promoting our business in a more cost-effective way, as it is essential to preserve resources and streamline the operations when facing economic uncertainties," said GigaMedia CEO James Huang.

 

In the meantime, we will continue exploring potential strategic investment and acquisition targets that would enable us to accelerate corporate growth and enhance long-term profitability.

 

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

-3-

 

 

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

Unaudited results

All quarterly and certain annual 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 2022 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 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 digital entertainment products or services that are appealing to users, our ability to retain existing users and attract new users, and our ability to launch digital entertainment products and services 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)

-4-

 

 

GIGAMEDIA LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

Three months ended

 

 

Twelve months ended

 

 

 

12/31/2022

 

 

09/30/2022

 

 

12/31/2021

 

 

12/31/2022

 

 

12/31/2021

 

 

 

unaudited

 

 

unaudited

 

 

unaudited

 

 

unaudited

 

 

audited

 

 

 

USD

 

 

USD

 

 

USD

 

 

USD

 

 

USD

 

Operating revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digital entertainment service revenues

 

 

1,101,507

 

 

 

1,574,971

 

 

 

1,257,099

 

 

 

5,585,340

 

 

 

5,492,333

 

 

 

 

1,101,507

 

 

 

1,574,971

 

 

 

1,257,099

 

 

 

5,585,340

 

 

 

5,492,333

 

Operating costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Digital entertainment service revenues

 

 

475,714

 

 

 

625,992

 

 

 

649,791

 

 

 

2,334,982

 

 

 

2,584,434

 

 

 

 

475,714

 

 

 

625,992

 

 

 

649,791

 

 

 

2,334,982

 

 

 

2,584,434

 

Gross profit

 

 

625,793

 

 

 

948,979

 

 

 

607,308

 

 

 

3,250,358

 

 

 

2,907,899

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product development and engineering expenses

 

 

163,043

 

 

 

303,838

 

 

 

363,917

 

 

 

1,110,284

 

 

 

1,448,604

 

Selling and marketing expenses

 

 

406,749

 

 

 

425,498

 

 

 

495,573

 

 

 

1,644,351

 

 

 

1,729,039

 

General and administrative expenses and others

 

 

730,850

 

 

 

892,368

 

 

 

897,473

 

 

 

3,514,508

 

 

 

3,697,791

 

Other

 

 

(245

)

 

 

820

 

 

 

2,020

 

 

 

1,513

 

 

 

6,755

 

 

 

 

1,300,397

 

 

 

1,622,524

 

 

 

1,758,983

 

 

 

6,270,656

 

 

 

6,882,189

 

Loss from operations

 

 

(674,604

)

 

 

(673,545

)

 

 

(1,151,675

)

 

 

(3,020,298

)

 

 

(3,974,290

)

Non-operating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

343,762

 

 

 

245,113

 

 

 

24,951

 

 

 

718,285

 

 

 

251,814

 

Foreign exchange gain (loss) - net

 

 

413,529

 

 

 

(635,103

)

 

 

41,038

 

 

 

(941,245

)

 

 

122,515

 

Gain on disposal of investments

 

 

—

 

 

 

—

 

 

 

45,863

 

 

 

—

 

 

 

125,274

 

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

 

 

(79,446

)

 

 

170,010

 

 

 

—

 

 

 

101,702

 

 

 

—

 

Other - net

 

 

37,289

 

 

 

24,785

 

 

 

53,605

 

 

 

83,345

 

 

 

49,680

 

 

 

 

715,134

 

 

 

(195,195

)

 

 

165,457

 

 

 

(37,913

)

 

 

549,283

 

Income (loss) from continuing operations before income taxes

 

 

40,530

 

 

 

(868,740

)

 

 

(986,218

)

 

 

(3,058,211

)

 

 

(3,425,007

)

Income tax expense

 

 

(263

)

 

 

—

 

 

 

—

 

 

 

(263

)

 

 

—

 

Net (loss) income attributable to shareholders of GigaMedia

 

 

40,267

 

 

 

(868,740

)

 

 

(986,218

)

 

 

(3,058,474

)

 

 

(3,425,007

)

Earnings (loss) per share attributable to GigaMedia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) from continuing operations

 

 

0.00

 

 

 

(0.08

)

 

 

(0.09

)

 

 

(0.28

)

 

 

(0.31

)

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) from continuing operations

 

 

0.00

 

 

 

(0.08

)

 

 

(0.09

)

 

 

(0.28

)

 

 

(0.31

)

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

 

 

-5-

 

 

GIGAMEDIA LIMITED

CONSOLIDATED BALANCE SHEETS

 

 

12/31/2022

 

 

09/30/2022

 

 

12/31/2021

 

 

 

unaudited

 

 

unaudited

 

 

audited

 

 

 

USD

 

 

USD

 

 

USD

 

Assets

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

38,794,467

 

 

 

39,243,562

 

 

 

41,455,445

 

Marketable securities-current

 

 

8,132,000

 

 

 

8,132,000

 

 

 

—

 

Accounts receivable - net

 

 

199,109

 

 

 

193,988

 

 

 

264,890

 

Prepaid expenses

 

 

60,059

 

 

 

479,308

 

 

 

400,954

 

Restricted cash

 

 

312,823

 

 

 

312,737

 

 

 

306,411

 

Other receivables

 

 

374,025

 

 

 

397,454

 

 

 

473

 

Other current assets

 

 

135,624

 

 

 

142,483

 

 

 

154,344

 

Total current assets

 

 

48,008,107

 

 

 

48,901,532

 

 

 

42,582,517

 

 

 

 

 

 

 

 

 

 

 

Marketable securities - noncurrent

 

 

2,190,000

 

 

 

2,190,000

 

 

 

10,322,000

 

Property, plant & equipment - net

 

 

102,729

 

 

 

69,648

 

 

 

87,806

 

Intangible assets - net

 

 

19,421

 

 

 

4,313

 

 

 

11,746

 

Prepaid licensing and royalty fees

 

 

176,530

 

 

 

214,820

 

 

 

35,017

 

Other assets

 

 

1,640,443

 

 

 

1,638,755

 

 

 

2,479,237

 

Total assets

 

 

52,137,230

 

 

 

53,019,068

 

 

 

55,518,323

 

 

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

52,660

 

 

 

39,304

 

 

 

118,343

 

Accrued compensation

 

 

186,984

 

 

 

327,625

 

 

 

236,316

 

Accrued expenses

 

 

964,203

 

 

 

1,269,049

 

 

 

1,199,039

 

Unearned revenue

 

 

817,446

 

 

 

864,491

 

 

 

880,203

 

Other current liabilities

 

 

616,151

 

 

 

785,621

 

 

 

782,630

 

Total current liabilities

 

 

2,637,444

 

 

 

3,286,090

 

 

 

3,216,531

 

Other liabilities

 

 

893,174

 

 

 

857,277

 

 

 

1,450,487

 

Total liabilities

 

 

3,530,618

 

 

 

4,143,367

 

 

 

4,667,018

 

Total equity

 

 

48,606,612

 

 

 

48,875,701

 

 

 

50,851,305

 

Total liabilities and equity

 

 

52,137,230

 

 

 

53,019,068

 

 

 

55,518,323

 

 

-6-

 

 

GIGAMEDIA LIMITED

RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS

 

 

Three months ended

 

 

Twelve months ended

 

 

 

12/31/2022

 

 

9/30/2022

 

 

12/31/2021

 

 

12/31/2022

 

 

12/31/2021

 

 

 

unaudited

 

 

unaudited

 

 

unaudited

 

 

unaudited

 

 

unaudited

 

 

 

USD

 

 

USD

 

 

USD

 

 

USD

 

 

USD

 

Reconciliation of Net Income (Loss) to EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to GigaMedia

 

 

40,267

 

 

 

(868,740

)

 

 

(986,218

)

 

 

(3,058,474

)

 

 

(3,425,007

)

Depreciation

 

 

6,998

 

 

 

5,681

 

 

 

3,889

 

 

 

23,915

 

 

 

11,647

 

Amortization

 

 

2,803

 

 

 

2,055

 

 

 

2,254

 

 

 

9,222

 

 

 

8,758

 

Interest income

 

 

(343,762

)

 

 

(245,113

)

 

 

(24,951

)

 

 

(718,285

)

 

 

(251,814

)

Interest expense

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

265

 

Income tax expense

 

 

263

 

 

 

—

 

 

 

—

 

 

 

263

 

 

 

—

 

EBITDA

 

 

(293,431

)

 

 

(1,106,117

)

 

 

(1,005,026

)

 

 

(3,743,359

)

 

 

(3,656,151

)

 

-7-