PR Newswire | May 3, 2021 09:02AM EDT

05/03 08:00 CDT

GigaMedia Announces First-Quarter 2021 Financial Results TAIPEI, May 3, 2021

TAIPEI, May 3, 2021 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today announced its first quarter 2021 unaudited financial results.

Comments from Management

For the first quarter of 2021, GigaMedia reported revenues of $1.45 million with a gross profit of $0.79 million, an operating loss of $0.90 million and the net loss of $0.88 million. Total revenues increased by 2.0% if compared to the previous quarter.

"Our business momentum has slowed since the fourth quarter 2020," said GigaMedia CEO James Huang, "but as we stick with our strategies of internally-driven growth and effective marketing, we managed to sustain growth in revenues and keep costs and expenses in check."

FirstQuarterOverview

* Operating revenues increased slightly by 2.0% in quarter-on-quarter comparison, and decreased by 9.9% year-over-year. The slowdown was primarily due to declines in certain of our licensed mobile games, where the upgrades and supports from our Japanese and Korean licensors were severely hampered by the COVID-19 pandemic. * Loss from operations increased to $0.90 million from $0.61 million last quarter, and net loss to $0.88 million, from $0.34 million last quarter. The increases were mainly due to rises in certain general expenses.

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 theFirstQuarter

GIGAMEDIA 1Q21 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

(unaudited, all figures in US$ thousands, except per share Change Changeamounts) 1Q21 4Q20 1Q21 1Q20 (%) (%)

Revenues 1,446 1,418 2.0 % 1,446 1,604 (9.9) %

Gross Profit 791 818 (3.3) % 791 927 (14.7) %

Loss from Operations (901) (607) NM (901) (640) NM

Net Loss Attributable to GigaMedia (875) (340) NM (875) (286) NM

Loss Per Share Attributable to GigaMedia, Diluted (0.08) (0.03) NM (0.08) (0.03) NM

EBITDA ^(A) (949) (411) NM (949) (536) NM

Cash, Cash Equivalents and Restricted Cash 44,446 46,002 (3.4) % 44,446 57,311 (22.4) %

NM= Not Meaningful

^(A) EBITDA (earnings before interest, taxes, depreciation, andamortization) is provided as a supplement to results provided inaccordance 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 2021 increased by 2.0% quarter-on-quarter to $1.45 million, from $1.42 million in the fourth quarter of 2020, and decreased by 9.9% year-over-year from $1.60 million in the first quarter of 2020. The slowdown was primarily due to declines in certain of our licensed mobile games, where the upgrades and supports from our Japanese and Korean licensors were severely hampered by the COVID-19 pandemic. * Consolidated gross profit decreased to $0.79 million from $0.82 million in last quarter and decreased by 14.70% from $0.93 million in the same quarter last year. * Consolidated operating expenses were $1.69 million in the first quarter of 2021, representing an increase by $0.27 million quarter-on-quarter, or an increase by $0.13 million from $1.57 million year-over-year. The increase was mainly due to rises in certain general expenses. * Net loss for the first quarter of 2021 was $0.87 million, increased from a loss of $0.34 million in the fourth quarter of 2020, from a loss of $0.28 million in the same quarter last year. * Cash, cash equivalents and restricted cash at the first quarter-end of 2021 accounted for $44.45 million, which decreased by $1.56 million from the end of 2020.

Financial Position

GigaMedia maintained its solid financial position, with cash, cash equivalents and restricted cash amounting to $44.45 million, or approximately $4.02 per share as of March 31, 2021.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as ofMay 3, 2021. Given potential changes in economic conditions and consumer spending, the evolving nature ofdigital entertainments, and various other risk factors, including those discussed in the Company's2020Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

"The second quarter of 2021 is already expected to be tough," cautioned GigaMedia CEO James Huang, "but we will continue boosting productivities and enhancing services for our in-house developed casual games by introducing fast-paced playability and accelerating the development of our customer platform."

Meanwhile, our business strategies always include expanding through mergers and acquisitions. "Including the possible cooperation with Aeolus Robotics Corporation," said CEO James Huang, "we will keep pursuing investment opportunities that are with strategic potentials 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 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 2021 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. 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 2021 and its other filings with the United States Securities and Exchange Commission.

(Tables to follow)

GIGAMEDIA LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended

3/31/2021 12/31/2020 3/31/2020

unaudited unaudited unaudited

USD USD USD

Operating revenues

Digital entertainment service revenues 1,446,276 1,417,636 1,603,904

Other revenues - - -

1,446,276 1,417,636 1,603,904

Operating costs

Cost of digital entertainment service 655,757 599,458 677,194revenues

Cost of other revenues - - -

655,757 599,458 677,194

Gross profit 790,519 818,178 926,710

Operating expenses

Product development and engineering 345,898 324,404 328,815expenses

Selling and marketing expenses 397,033 466,093 410,475

General and administrative expenses 946,192 634,118 824,442

Other 2,599 163 2,984

1,691,722 1,424,778 1,566,716

Loss from operations (901,203) (606,600) (640,006)

Non-operating income (expense)

Interest income 78,595 73,403 255,719

Foreign exchange (loss) gain - net (49,357) 142,951 98,887

Other-net (2,809) 50,256 (298)

26,429 266,610 354,308

Loss before income taxes (874,774) (339,990) (285,698)

Income tax expense - - -

Net loss attributable to shareholders (874,774) (339,990) (285,698)of GigaMedia

Loss per share attributable toGigaMedia

Basic: (0.08) (0.03) (0.03)

Diluted: (0.08) (0.03) (0.03)

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

3/31/2021 12/31/2020 3/31/2020

unaudited audited unaudited

USD USD USD

Assets

Current assets

Cash and cash equivalents 44,146,308 45,702,352 56,777,472

Accounts receivable - net 281,945 274,584 355,225

Prepaid expenses 393,587 87,728 276,010

Restricted cash 300,000 300,000 533,436

Other receivables 25,937 3,579 238,396

Other current assets 156,622 157,020 148,757

Total current assets 45,304,399 46,525,263 58,329,296

Marketable securities - noncurrent 10,000,000 10,000,000 -

Property, plant & equipment - net 38,860 21,852 8,117

Intangible assets - net 11,596 3,640 17,965

Prepaid licensing and royalty fees 108,878 130,718 210,530

Other assets 2,481,910 341,701 285,319

Total assets 57,945,643 57,023,174 58,851,227

Liabilities and equity

Short-term borrowings - - -

Accounts payable 88,009 69,931 60,405

Accrued expenses 1,244,580 1,515,712 1,606,501

Unearned revenue 949,396 949,853 1,285,399

Other current liabilities 740,286 387,712 715,877

Total current liabilities 3,022,271 2,923,208 3,668,182

Other liabilities 1,655,437 3,103 7,337

Total liabilities 4,677,708 2,926,311 3,675,519

Total equity 53,267,935 54,096,863 55,175,708

Total liabilities and equity 57,945,643 57,023,174 58,851,227

GIGAMEDIA LIMITED

Reconciliations of Non-GAAP Results of Operations

Three months ended

3/31/2021 12/31/2020 3/31/2020

unaudited unaudited unaudited

USD USD USD

Reconciliation of Net Income (Loss) toEBITDA

Net loss attributable to GigaMedia (874,774) (339,990) (285,698)

Depreciation 1,902 1,192 354

Amortization 2,010 1,252 4,657

Interest income (78,595) (73,403) (255,719)

Interest expense - - -

Income tax expense - - -

EBITDA (949,457) (410,949) (536,406)

View original content: http://www.prnewswire.com/news-releases/gigamedia-announces-first-quarter-2021-financial-results-301282101.html

SOURCE GigaMedia Limited