PR Newswire | Oct 28, 2021 09:02AM EDT

10/28 08:00 CDT

GigaMedia Announces Third-Quarter 2021 Financial Results TAIPEI, Oct. 28, 2021

TAIPEI, Oct. 28, 2021 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today announced its third-quarter 2021 unaudited financial results.

Comments from Management

In the third quarter of 2021, GigaMedia reported revenues of $1.56 million, with a gross profit of $0.88 million, an operating loss of $0.84 million and a net loss of $0.73 million. Total revenues increased by 27.7% if compared to last quarter, and gross profit margin improved to 56.1% from 51.7% last quarter.

This third quarter saw a rebound of our revenues due to seasonality exhibited in certain of our licensed games. And the operating expenses were kept in check, resulting to a mild improvement in operating loss.

Meanwhile, we are closing to complete the development of our fast-paced remake of legacy casual games. We believe the remake, as a sustainable business model, will contribute to our steady growth and enhanced profitability for future years.

Third Quarter Overview

* Revenues increased by 27.7% quarter-on-quarter to approximately $1.56 million from $1.23 million last quarter. The increase was mainly due to our efforts in promoting Tales Runner, a 15-year-old licensed game, during the summer vacation. * Consolidated loss from operations for the third quarter of 2021 amounted to $0.84 million, representing a reduction of loss from $1.08 million last quarter. * The net asset value was around $4.67 per share.

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 Third Quarter

GIGAMEDIA3Q21 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

Change Change(unaudited, all figures in US$ thousands, except per share amounts) 3Q21 2Q21 3Q21 3Q20 (%) (%)

Revenues 1,564 1,225 27.7% 1,564 2,028 -22.9%

Gross Profit 877 633 38.6% 877 1,196 -26.7%

Loss from Operations (842) (1,079) NM (842) (357) NM

Net Loss Attributable to GigaMedia (728) (836) NM (728) (248) NM

Loss Per Share Attributable to GigaMedia, Diluted (0.07) (0.08) NM (0.07) (0.02) NM

EBITDA ^(A) (791) (911) NM (791) (317) NM

Cash, Cash Equivalents and Restricted Cash 43,152 43,650 -1.1% 43,152 46,869 -7.9%

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-GAAPMeasures," for more details.)

* Consolidated revenues for the third quarter of 2021 were $1.56 million, representing an increase of 27.7% compared to $1.23 million in the prior quarter, but decreased by 22.9% year-over-year from $2.03 million the same quarter last year. * Consolidated gross profit increased by 38.6% quarter-on-quarter to $0.88 million from $0.63 million last quarter, or decreased by 26.7% year-over-year from $1.20 million in the third quarter last year. * Consolidated loss from operation of the third quarter of 2021 was $0.84 million, representing a decrease in loss by approximately $0.24 million from last quarter. * Consolidated net loss of the third quarter of 2021 was $0.73 million compared to $0.84 million in last quarter. * Cash, cash equivalents and restricted cash at the end of the third quarter of 2021 was $43.2 million, decreasing by 1.1% from $43.7 million last quarter.

Financial Position

GigaMedia maintained its solid financial position, with cash, cash equivalents and restricted cash amounting to $43.2 million as of September 30, 2021, or $3.90 per share.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as ofOctober 28, 2021. Given potential changes in economic conditions and consumer spending, the evolving nature of online games, and various other risk factors, including those discussed in theCompany's 2020Annual Reporton Form20-F filedwith the U.S. Securities and Exchange Commissionasreferenced below, actual results may differ materially.

For the following quarter, GigaMedia will continue the strategies of internally-driven growth by improving productivities of the existing games, executing effective marketing, and pursuing a steady expansion of customer base.

"Meanwhile, we are also exploring possibilities of expanding our business through strategic investments to maximize shareholders' value," stated CEO James Huang.

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 U.S. GAAP, unless otherwise noted as "non-GAAP," and are presented in U.S. dollars.

Q&A

For Q&A regarding the third 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 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 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.

GIGAMEDIA LIMITEDCONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended Nine months ended

9/30/2021 6/30/2021 9/30/2020 9/30/2021 9/30/2020

unaudited unaudited unaudited unaudited unaudited

USD USD USD USD USD

Operating revenues

Digital entertainment service 1,564,208 1,224,749 2,028,138 4,235,233 5,457,589revenues

Other revenues - - - - -

1,564,208 1,224,749 2,028,138 4,235,233 5,457,589

Operating costs

Cost of digital entertainment 687,198 591,687 831,732 1,934,642 2,356,831service revenues

Cost of other revenues - - - - -

687,198 591,687 831,732 1,934,642 2,356,831

Gross profit 877,010 633,062 1,196,406 2,300,591 3,100,758

Operating expenses

Product development and engineering 365,732 373,057 341,023 1,084,686 1,002,584expenses

Selling and marketing expenses 459,519 376,914 374,462 1,233,467 1,152,466

General and administrative expenses 893,651 960,474 836,107 2,800,317 2,486,547

Other 33 2,103 2,157 4,735 5,099

1,718,935 1,712,548 1,553,749 5,123,205 4,646,696

Loss from operations (841,925) (1,079,486) (357,343) (2,822,614) (1,545,938)

Non-operating income (expense)

Interest income 68,084 80,184 71,014 226,863 539,613

Foreign exchange (loss) gain - net (32,305) 163,139 39,214 81,477 55,744

Gain on disposal of investments 79,411 - - 79,411 -

Other - net (1,292) 176 (1,132) (3,925) (2,834)

113,898 243,499 109,096 383,826 592,523

Loss from continuing operations (728,027) (835,987) (248,247) (2,438,788) (953,415)before income taxes

Income tax benefit (expense) - - - - -

Net loss attributable to (728,027) (835,987) (248,247) (2,438,788) (953,415)shareholders of GigaMedia

Loss per share attributable toGigaMedia

Basic: (0.07) (0.08) (0.02) (0.22) (0.09)

Diluted: (0.07) (0.08) (0.02) (0.22) (0.09)

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 LIMITEDCONSOLIDATED BALANCE SHEETS

9/30/2021 6/30/2021 9/30/2020

unaudited unaudited unaudited

USD USD USD

Assets

Current assets

Cash and cash equivalents 42,851,769 43,350,182 46,333,621

Accounts receivable - net 300,895 282,780 322,000

Prepaid expenses 436,201 242,488 155,357

Restricted cash 300,000 300,000 535,605

Other receivables 15,463 52,422 36,450

Other current assets 158,342 154,622 165,411

Total current assets 44,062,670 44,382,494 47,548,444

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

Property, plant & equipment - net 45,427 48,349 22,580

Intangible assets - net 7,376 9,625 16,186

Prepaid licensing and royalty fees 57,030 73,762 142,860

Other assets 2,518,871 2,586,685 312,013

Total assets 56,691,374 57,100,915 58,042,083

Liabilities and equity

Accounts payable 40,154 44,870 74,138

Accrued compensation 395,323 279,896 403,753

Accrued expenses 1,396,646 1,138,777 1,397,399

Unearned revenue 912,399 930,026 1,041,862

Other current liabilities 842,110 787,009 545,974

Total current liabilities 3,586,632 3,180,578 3,463,126

Other liabilities 1,518,425 1,636,271 3,379

Total liabilities 5,105,057 4,816,849 3,466,505

Total equity 51,586,317 52,284,066 54,575,578

Total liabilities and equity 56,691,374 57,100,915 58,042,083

GIGAMEDIA LIMITEDRECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS

Three months ended Nine months ended

9/30/2021 6/30/2021 9/30/2020 9/30/2021 9/30/2020

unaudited unaudited unaudited unaudited unaudited

USD USD USD USD USD

Reconciliation of Net Loss to EBITDA

Net loss attributable to GigaMedia (728,027) (835,987) (248,247) (2,438,788) (953,415)

Depreciation 2,936 2,920 752 7,759 1,641

Amortization 2,252 2,242 1,224 6,503 3,624

Interest income (68,084) (80,184) (71,014) (226,863) (539,613)

Interest expense - - - - -

Income tax (benefit) expense - - - - -

EBITDA (790,923) (911,009) (317,285) (2,651,389) (1,487,763)

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SOURCE GigaMedia