PR Newswire | Jul 30, 2020 09:40PM EDT

07/30 20:39 CDT

GigaMedia Announces Second-Quarter 2020 Financial Results TAIPEI, July 30, 2020

TAIPEI, July 30, 2020 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today announced its second-quarter 2020 unaudited financial results.

Comments from Management

In the second quarter of 2020, GigaMedia reported revenues of $1.83 million, with a gross profit $0.98 million, an operating loss of $0.55 million and the net loss of $0.42 million. Total revenues increased by 13.8% if compared to the previous quarter.

"In spite of the ongoing disruption of the pandemic to our operations, we have achieved clear improvements," said GigaMedia CEO James Huang. "We have reshaped our cost structure and remodeled our marketing strategies, thereby approximately halved the operating loss if comparing to the same quarter last year."

"And we are also enhancing the playability and stickiness of FunTown M, our in-house developed mobile platform of casual games," continued GigaMedia CEO James Huang, "which will be the most crucial piece to fall in place for our turning profitable beyond just break-even."

Second Quarter Overview

* Operating revenues increased by approximately 13.8% quarter-on-quarter, to $1.83 million from $1.60 million in last quarter, and 4.3% year-over-year from $1.75 million the same period last year. The increase was mainly attributable to our efforts in revitalizing Tales Runner, a 14-year-old licensed game we operate in Hong Kong. * Gross profit increased slightly by 5.5% to $0.98 million from $0.93 million in last quarter, and increased by 27.2% compared to $0.77 million in the same period last year. * The net asset value was $4.96 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 browser/mobile games and casual games.

Unaudited consolidated results of GigaMedia are summarized in the table below.

For the Second Quarter

GIGAMEDIA 2Q20 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

(unaudited, all figures in US$ thousands, except Change Changeper share amounts) 2Q20 1Q20 2Q20 2Q19 (%) (%)

Revenues 1,826 1,604 13.8 % 1,826 1,750 4.3 %

Gross Profit 978 927 5.5 % 978 769 27.2 %

Loss from Operations (549) (640) NM (549) (1,122) NM

Net Loss Attributable to GigaMedia (419) (286) NM (419) (614) NM

Net Loss Per Share Attributable to (0.04) (0.03) NM (0.04) (0.06) NM GigaMedia, Diluted

EBITDA ^(A) (634) (536) NM (634) (1,000) NM

Cash, Cash Equivalents and 56,783 57,311 (0.9) % 56,783 58,015 (2.1) % Restricted Cash

NM= Not Meaningful

^(A) EBITDA (earnings before interest, taxes, depreciation, and amortization)is provided as a supplement toresults provided in accordance with U.S. generally accepted accountingprinciples ("GAAP"). (See, "Useof Non-GAAP Measures," for more details.)

Second-Quarter Financial Results

* Consolidated revenues for the second quarter of 2020 increased by 13.8% quarter-on-quarter to $1.83 million from $1.60 million in last quarter, and by 4.3% year-over-year from $1.75 million the same period last year. * Consolidated gross profit was $0.98 million, increased by 5.5% quarter-on-quarter and 27.2% year-over-year. * Consolidated operating expenses were $1.53 million, comparable to the first quarter of 2020 and decreased by 19.3% if compared to the same period last year, which reflected a decrease in marketing expenses and general expenses. * Consolidated loss from operation of the second quarter of 2020 was a loss of $0.55 million, reflecting an improvement from a loss of $0.64 million in the first quarter. * Net loss in the second quarter of 2020 was $0.42 million, increasing from a net loss of $0.29 million in the first quarter this year mainly due to lower interest income and exchange loss in this quarter. * Cash, cash equivalents and restricted cash at the end of the second quarter of 2020 amounted to $56.8 million, slightly decreased by 0.9% from $57.3 million as of the end of the first quarter.

Financial Position

GigaMedia maintained its solid financial position, with cash, cash equivalents and restricted cash amounted to $56.8 million, or $5.14 per share, as of June 30, 2020.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as ofJuly 30, 2020. Given potential changes in economic conditions and consumer spending, the evolving nature ofdigital entertainments, and various other risk factors, including those discussed in theCompany's 2019Annual Reporton Form20-F filedwith the U.S. Securities and Exchange Commissionasreferenced below, actual results may differ materially.

In the second half of 2020, we will continue improving productivities of the existing games, in which FunTown M,our own mobile platform of casual games, is expected to begin contributing to our revenues. Along with our various product lines and customer platform, we will gradually accumulate the momentum to an upward trend.

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

Q&A

For Q&A regarding the second quarter 2020 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 2020 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

06/30/2020 03/31/2020 06/30/2019 06/30/2020 06/30/2019

unaudited unaudited unaudited unaudited unaudited

USD USD USD USD USD

Operatingrevenues

Digitalentertainment 1,825,547 1,603,904 1,749,583 3,429,450 3,232,816service revenues

Other revenues - - - - -

1,825,547 1,603,904 1,749,583 3,429,450 3,232,816

Operating costs

Cost of digitalentertainmentservice 847,906 677,194 980,448 1,525,099 1,725,350

revenues

Cost of other - - - - -revenues

847,906 677,194 980,448 1,525,099 1,725,350

Gross profit 977,641 926,710 769,135 1,904,351 1,507,466

Operatingexpenses

Productdevelopment andengineering 332,745 328,815 325,144 661,560 645,638

expenses

Selling andmarketing 367,529 410,475 580,539 778,004 1,106,542expenses

General andadministrative 825,998 824,442 974,648 1,650,440 1,810,634expenses

Other (42) 2,984 11,165 2,942 16,380

1,526,230 1,566,716 1,891,496 3,092,946 3,579,194

Loss from (548,589) (640,006) (1,122,361) (1,188,595) (2,071,728)operations

Non-operatingincome (expense)

Interest income 212,881 255,719 414,450 468,600 796,250

Foreign exchange (82,357) 98,887 90,922 16,529 79,520(loss) gain - net

Other - net (1,404) (298) 3,416 (1,702) 50,328

129,120 354,308 508,788 483,427 926,098

Loss before (419,469) (285,698) (613,573) (705,168) (1,145,630)income taxes

Income tax - - - - -benefit (expense)

Netloss attributableto shareholders (419,469) (285,698) (613,573) (705,168) (1,145,630)ofGigaMedia

Loss per shareattributable toGigaMedia

Basic (0.04) (0.03) (0.06) (0.06) (0.10)

Diluted (0.04) (0.03) (0.06) (0.06) (0.10)

Weighted averagesharesoutstanding:

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

06/30/2020 03/31/2020 06/30/2019

unaudited unaudited unaudited

USD USD USD

Assets

Current assets

Cash and cash equivalents 56,247,678 56,777,472 57,489,563

Accounts receivable - net 349,450 355,225 591,905

Prepaid expenses 228,794 276,010 275,551

Restricted cash 535,153 533,436 525,354

Other receivables 203,671 238,396 458,383

Other current assets 142,230 148,757 131,150

Total current assets 57,706,976 58,329,296 59,471,906

Property, plant & equipment - net 7,740 8,117 92,580

Intangible assets - net 17,111 17,965 23,545

Prepaid licensing and royalty fees 184,365 210,530 574,274

Other assets 290,687 285,319 1,035,529

Total assets 58,206,879 58,851,227 61,197,834

Liabilities and equity

Accounts payable 69,147 60,405 119,597

Accrued compensation 278,622 156,948 253,262

Accrued expenses 1,321,262 1,449,553 1,340,539

Unearned revenue 1,058,940 1,285,399 1,617,881

Other current liabilities 627,162 715,877 197,776

Total current liabilities 3,355,133 3,668,182 3,529,055

Other liabilities 3,653 7,337 781,187

Total liabilities 3,358,786 3,675,519 4,310,242

GigaMedia's shareholders' equity 54,848,093 55,175,708 56,887,592

Total liabilities and equity 58,206,879 58,851,227 61,197,834

GIGAMEDIA LIMITED

RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS

Three months ended Six months ended

06/30/2020 03/31/2020 06/30/2019 06/30/2020 06/30/2019

unaudited unaudited unaudited unaudited unaudited

USD USD USD USD USD

Reconciliationof Net Loss toEBITDA

Net lossattributable (419,469) (285,698) (613,573) (705,168) (1,145,630)to GigaMedia

Depreciation 535 354 14,769 889 40,156

Amortization (2,257) 4,657 12,830 2,400 25,729

Interest (212,881) (255,719) (414,450) (468,600) (796,250)income

Interest - - - - -expense

Income tax(benefit) - - - - -expense

EBITDA (634,072) (536,406) (1,000,424) (1,170,479) (1,875,995)

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SOURCE GigaMedia Limited