GigaMedia Announces Fourth-Quarter and Full Year 2022 Financial Results
03/31/2023 - 09:04 AM
TAIPEI , March 31, 2023 /PRNewswire/ -- 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 $4.40 per share as of the end of 2022. Unaudited Consolidated Financial Results
GigaMedia Limited is a diversified provider of digital entertainment services. GigaMedia's digital entertainment service business FunTown develops and operates a suite of digital entertainments in Taiwan and Hong Kong , with focus on mobile games and casual games.
Unaudited consolidated results of GigaMedia are summarized in the table below.
For the Full Year 2022
GIGAMEDIA FY22 UNAUDITED CONSOLIDATED FINANCIAL RESULTS
(unaudited, all figures in US$ 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.)
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 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)
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
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
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
)
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SOURCE GigaMedia