TAIPEI, March 29, 2024 /PRNewswire/ — GigaMedia Limited (NASDAQ: GIGM) today announced its unaudited financial results for the fourth quarter and full year of 2023.

Highlights

For 2023, GigaMedia reported revenues of $4.3 million, with a gross profit of $2.4 million, an operating loss of $3.2 million and the net loss of $3.5 million.

The revenues decreased by 23.2% in 2023. During 2023, we terminated a non-performing game while streamlined others, and correspondingly scaled back related workforce, costs and overhead. As a result, we managed to slash operating expenditures down by approximately 10.7%. All in all, the net loss before including investment valuation adjustment was narrowed to $1.3 million, less than half of that in 2022. However, pursuant to requirements of the accounting standards, we recorded a $2.2 million valuation loss on our investments, and the net loss became $3.5 million, $0.7 million higher than 2022.

On the balance sheet side, we maintained a solid financial position with a small cash burn rate in 2023, and our cash, cash equivalents and restricted cash amounted to $38.8 million at the end of 2023, slightly decreased from $39.1 million at the end of 2022.

In 2024, we will be devoted in developing AI-powered tools to enhance efficiency on renovating contents in our casual games. Besides in-house application, we will also explore potentials for the tools to become a commercialized solution of platform for publishing AI-assisted creation of products. We believe achieving sophistication in AI is very crucial in boosting our productivity and accelerate the growth of our business.

Fourth Quarter and Full Year Overview

  • Consolidated 4Q revenues decreased by 18.8% quarter-on-quarter mainly due to seasonality, and by 21.1% year-over-year due to certain licensed games declined. Full year revenues decreased by 23.2% to $4.3 million from $5.6 million in 2022. 
  • Loss from operations for 4Q was $0.6 million, representing a loss decrease from $0.9 million in the third quarter in 2023, as we managed to reduce the operating costs and expenses. Full year operating loss was $3.2 million, which slightly increased from $3.0 million in 2022.
  • The net asset value was approximately $3.87 per share as of the end of 2023.

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 2023

GIGAMEDIA FY23 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

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

FY23

FY22

Change
(%)

Revenues

4,292

5,585

-23.2 %

Gross Profit

2,446

3,250

-24.7 %

Loss from Operations

(3,155)

(3,021)

NM

Net Loss Attributable to GigaMedia

(3,463)

(2,752)

NM

Net Loss Per Share Attributable to GigaMedia, Diluted

(0.31)

(0.25)

NM

EBITDA (A)

(5,218)

(3,437)

NM

Cash, Cash Equivalents and Restricted Cash

38,783

39,107

-0.8 %

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, 2023 was $4.3 million, decreased from $5.6 million in the prior year. The decrease was mainly as revenues from certain licensed games declined.
  • Consolidated loss from operations for 2023 was $3.2 million, compared to a loss of $3.0 million in the last year. The increase of loss was mainly due to the decline of revenues. 
  • Consolidated net loss for 2023 was $3.5 million, increased from $2.8 million in the prior year. Loss per share for 2023 was $0.31 per share, compared to $0.25 last year.
  • Cash, cash equivalents and restricted cash at the year end of 2023 amounted to $38.8 million.

For the Fourth Quarter

GIGAMEDIA 4Q23 UNAUDITED CONSOLIDATED FINANCIAL RESULTS

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

4Q23

3Q23

Change
(%)

4Q23

4Q22

Change
(%)

Revenues

870

1,071

-18.8 %

870

1,102

-21.1 %

Gross Profit

504

583

-13.6 %

504

626

-19.5 %

Loss from Operations

(645)

(893)

NM

(645)

(675)

NM

Net Income (Loss) Attributable to
GigaMedia

(2,082)

(507)

NM

(2,082)

347

NM

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

(0.19)

(0.05)

NM

(0.19)

0.03

NM

EBITDA (A)

(2,586)

(946)

NM

(2,586)

13

NM

Cash, Cash Equivalents and Restricted
Cash

38,783

38,823

-0.1 %

38,783

39,107

-0.8 %

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 2023 decreased by 18.8% quarter-on-quarter from $1.1 million to $0.9 million mainly due to seasonality, and decreased by 21.1% year-over-year mainly as revenues from licensed games declined.
  • Consolidated loss from operations of the fourth quarter of 2023 was $0.6 million, compare to a loss of $0.9 million in the last quarter.
  • Consolidated net loss of the fourth quarter of 2023 was $2.6 million, increased from a net loss of $0.9 million in the last quarter, mainly due to a valuation loss of $2.2 million in investments.
  • Cash, cash equivalents and restricted cash at the end of the fourth quarter of 2023 amounted to $38.8 million, almost the same if compared to the prior quarter.

Financial Position

GigaMedia maintained its solid financial position. Cash, cash equivalents and restricted cash amounted to $38.8 million, or approximately $3.51 per share, along with zero bank loan. Our shareholders’ equity was approximately $42.8 million of as of December 31, 2023.

Business Outlook

The following forward-looking statements reflect GigaMedia’s expectations as of March 29, 2024. 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 2022 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

Since late 2023, we have being taking measures to re-examine mechanisms in our legacy casual games and to reconstruct players’ ecosystem. While the effect would take some time to exhibit, we believe that will lead to a healthier gross margin in the long-run for our own offerings.

Meanwhile, our business strategies always include expanding through mergers and acquisitions. “We will continue reviewing strategic opportunities that would enable us to accelerate our growth and enhance shareholders’ value,” stated CEO James Huang.

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 2023 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 2023 and its other filings with the United States Securities and Exchange Commission.

(Tables to follow)

GIGAMEDIA LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands of US dollars, except for earnings per share amounts)

Three months ended

Twelve months ended

31/12/2023

30/9/2023

31/12/2022

31/12/2023

31/12/2022

unaudited

unaudited

unaudited

unaudited

audited

Operating revenues

Digital entertainment service revenues

870

1,071

1,102

4,292

5,585

870

1,071

1,102

4,292

5,585

Operating costs

Cost of Digital entertainment service revenues

366

488

476

1,846

2,335

366

488

476

1,846

2,335

Gross profit

504

583

626

2,446

3,250

Operating expenses

Product development and engineering
expenses

179

183

163

729

1,110

Selling and marketing expenses

344

441

407

1,623

1,644

General and administrative expenses and
others

626

846

731

3,242

3,515

Other

6

7

2

1,149

1,476

1,301

5,601

6,271

Loss from operations

(645)

(893)

(675)

(3,155)

(3,021)

Non-operating income (expense)

Interest income

518

453

344

1,811

718

Foreign exchange gain (loss) – net

339

(236)

414

(34)

(941)

Gain on disposal of investments

(1)

77

76

Changes in the fair value of investment in
equity securities recognized at fair value

(2,293)

86

227

(2,174)

409

Other – net

6

37

13

83

(1,437)

386

1,022

(308)

269

Income (loss) before income taxes

(2,082)

(507)

347

(3,463)

(2,752)

Income tax expense

Net (loss) income attributable to shareholders
of GigaMedia

(2,082)

(507)

347

(3,463)

(2,752)

Earnings (loss) per share attributable to
GigaMedia

Basic:

(0.19)

(0.05)

0.03

(0.31)

(0.25)

Diluted:

(0.19)

(0.05)

0.03

(0.31)

(0.25)

Weighted average shares outstanding:

Basic

11,052

11,052

11,052

11,052

11,052

Diluted

11,052

11,052

11,052

11,052

11,052

GIGAMEDIA LIMITED

CONSOLIDATED BALANCE SHEETS

(in thousands of US dollars)

31/12/2023

30/9/2023

31/12/2022

unaudited

unaudited

audited

Assets

Current assets

Cash and cash equivalents

38,470

38,510

38,794

Marketable securities – current

7,950

Accounts receivable – net

227

253

199

Prepaid expenses

394

123

60

Restricted cash

313

313

313

Other receivables

2

364

374

Other current assets

141

145

136

Total current assets

39,547

39,708

47,826

Marketable securities – noncurrent

5,036

9,433

2,371

Property, plant & equipment – net

111

116

103

Intangible assets – net

13

10

19

Prepaid licensing and royalty fees

24

65

177

Other assets

1,365

1,348

1,640

Total assets

46,096

50,680

52,136

Liabilities and equity

Accounts payable

44

29

53

Accrued compensation

396

321

187

Accrued expenses

1,126

1,005

964

Unearned revenue

573

812

817

Other current liabilities

665

721

616

Total current liabilities

2,804

2,888

2,637

Other liabilities

495

562

893

Total liabilities

3,299

3,450

3,530

Total equity

42,797

47,230

48,606

Total liabilities and equity

46,096

50,680

52,136

GIGAMEDIA LIMITED

RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS

(in thousands of US dollars)

Three months ended

Twelve months ended

31/12/2023

30/9/2023

31/12/2022

31/12/2023

31/12/2022

unaudited

unaudited

unaudited

unaudited

unaudited

Reconciliation of Net Income (Loss)
to EBITDA

Net income (loss) attributable to
GigaMedia

(2,082)

(507)

347

(3,463)

(2,752)

Depreciation

11

11

7

44

24

Amortization

3

3

3

12

9

Interest income

(518)

(453)

(344)

(1,811)

(718)

Interest expense

Income tax expense

EBITDA

(2,586)

(946)

13

(5,218)

(3,437)