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Form 6-K GIGAMEDIA Ltd For: Mar 24

March 24, 2016 6:45 AM EDT

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15D-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of March, 2016

Commission File Number: 000-30540

 

 

GIGAMEDIA LIMITED

 

 

8F, No. 22, Lane 407, Section 2, Tiding Boulevard

Neihu District

Taipei, Taiwan (R.O.C.)

 

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F  x            Form 40-F  ¨

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

Yes  ¨            No   x

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b) :82-                 .)

GIGAMEDIA LIMITED is submitting under cover of Form 6-K:

 

  1. GigaMedia Announces Fourth-Quarter and Full-Year 2015 Financial Results (attached hereto as Exhibit 99.1)

 

 

 


Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  GigaMedia Limited
  (Registrant)
Date: March 24, 2016  

By: /s/ HUANG, SHIH-CHIN

  (Signature)
  Name: HUANG, SHIH-CHIN
  Title: Head of Finance Department

Exhibit 99.1

 

FOR IMMEDIATE RELEASE    For further information contact:
   Annie Sun
   Investor Relations Services
   Country/City Code 8862 Tel: 2656-8096
   [email protected]

GigaMedia Announces Fourth-Quarter

and Full-Year 2015 Financial Results

TAIPEI, Taiwan, March 24, 2016 – GigaMedia Limited (NASDAQ: GIGM) today announced its fourth-quarter and full-year 2015 unaudited financial results.

Message from Management

Fourth quarter was crucial for our company as we completed the restructuring of the organization. Both the management and the board agreed to remain the Company in good financial health. Therefore, in 2015, the Company endeavored to clean up the underperforming business and investment assets, and streamline the mobile game business.

In the fourth quarter, the operating revenues generated from the online and mobile game business were $2.2 million, and its gross profit was $1.1 million and gross margin accounted for about 50%, of which improved adequately compared with 28% of gross margin in 1Q15.

In 2015, the annual operating revenues were $10.3 million, up by 4.8% from $9.8 million of 2014. However, the Company recognized $4.3 million of impairment losses in 2015 mainly for prepaid license and royalty fees of ArcheAge as a result of an evaluation of its possible profitability upon release. The short-term borrowings decreased from $18.6 million in 2014 to $6.1 million in 2015; besides, given the market volatility, the Company disposed most of its marketable securities and realized a capital gain at the amount of approximately $20 million.

At the end of September last year, the Company launched a new mobile game namely “Yume100” licensed from Japan. With this game, the Company started to find a niche market, targeting female players in the age range of 20 to 40. Up to now, it’s been six months upon its release in Taiwan and its revenue generation continues to be consistent. As of the end of 2015, the sales revenues generated by Yume100 were about $1 million. Due to the success of Yume100 launch in Taiwan, more and more well-known developers get to approach us for cooperation.


Looking forward to 2016, the Company plans to penetrate the female niche market and meanwhile, expects for collaboration with more renowned game developers aiming at publishing more popular games with good quality and good monetization. Besides, while the Company continues to look for investment opportunities, the management still remains conservative views on the global economic outlook, and carefully evaluates the investment potential.

Consolidated Financial Results

GigaMedia Limited is a diversified provider of online games and cloud computing services. GigaMedia’s online game business, FunTown, develops and operates a suite of games in Taiwan and Hong Kong, with focus on browser/mobile games and social casino games. GigaMedia’s cloud computing business, GigaCloud, was launched in early April 2013 and is focused on providing small and medium-sized enterprises in Greater China with critical communications services and IT solutions that increase flexibility, efficiency and competitiveness.

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

For the Fourth Quarter

 

GIGAMEDIA 4Q15 UNAUDITED CONSOLIDATED FINANCIAL RESULTS  

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

   4Q15      3Q15      Change
(%)
    4Q15      4Q14      Change
(%)
 

Revenues

     2,356         2,006         17.4     2,356         2,660         -11.4

Gross Profit

     1,005         -598         268.1     1,005         -94         1169.1

Loss from Operations

     -5,478         -5,240         -4.5     -5,478         -4,330         -26.5

Net Income (Loss) Attributable to GigaMedia

     -8,903         -301         - 2857.8     -8,903         5,437         -263.8

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

     -0.81         -0.03         - 2600.0     -0.81         0.49         -265.3

EBITDA (A)

     -8,815         -207         - 4258.5 %     -8,815         5,675         -255.3

Cash and Marketable Securities-Current

     71,436         74,824         -4.5     71,436         79,980         -10.7

 

(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 were $2.4 million, grew by 17.4% quarter-on-quarter primarily due to the growth of mobile gaming business with the revenues of $2.2 million in 4Q15, up from $1.7 million in 3Q15. The revenues were down by 11.4% quarter-over-quarter as the Company was restructuring its cloud computing business in 4Q15 and its contribution dwindled.

 

    Consolidated operating expenses were $6.5 million, up from $4.6 million in 3Q15 (+39.7% quarter-on-quarter) mainly resulting from the impairment losses of $3.1 million.

 

    Impairment losses were approximately $3.1 million recognized mainly for the prepaid license and royalty fees of ArcheAge, for which the game license agreement was signed in October 2010.

 

    Net loss was $8.9 million in 4Q15 mostly due to $2 million consideration paid to Strawberry Cosmetics for the termination of the proposed acquisition and the impairment losses recognized for ArcheAge and the investment of other games.

Financial Position

GigaMedia maintained its solid financial position with cash and cash equivalents, marketable securities-current and restricted cash accounted for $72.4 million as of December 31, 2015, or approximately $6.55 per share. In consideration of short-term borrowings, its net cash was estimated at $66.3 million as of December 31, 2015, or approximately $5.91 per share.

For the Full Year 2015

 

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

   FY15 (unaudited)      FY14 (audited)      Change (%)  

Revenues

     10,251         9,779         4.8

Gross Profit

     1,362         1,944         -29.9

Loss from Operations

     -17,935         -13,473         -33.1

Net Loss Attributable to GigaMedia

     -2,588         -5,155         49.8

Net Loss Per Share Attributable to GigaMedia, Diluted

     -0.23         -0.48         52.1

EBITDA (A)

     -2,223         -4,168         46.7


Consolidated revenues increased to $10.3 million in 2015 from $9.8 million in 2014, up by 4.8% mainly due to the growth of overall business.

Consolidated gross profit decreased to $1.4 million in 2015 from $1.9 million in 2014 (-29.9% year-over-year) attributable to an increase in operating costs and lowered operating leverage. The gross margin dropped to 13.3% in 2015, down from 19.9% in 2014.

Consolidated loss from operations for 2015 was $17.9 million, up from $13.5 million in 2014 as a result of the impairment losses for ArcheAge and the expenses accrued for the restructuring of the Company’s underperforming business units in 4Q15.

Consolidated net loss attributable to the shareholders of the Company amounts to $2.6 million in 2015 compared to a loss of $5.2 million in 2014.

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

Full-year and quarterly results

All 2015 quarterly and full-year figures and all 2014 quarterly results referred to in the text, tables and attachments to this release are unaudited; all full-year 2014 amounts are audited. 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.


Webcast

Management will not hold an investor conference call and webcast for a discussion about the financial results of the fourth quarter and full year 2015 as the release dates of the financial results of the first quarter 2016 and the 2015 annual report are close. However, investors may still send the questions via email to [email protected].tw, and the responses will be replied individually.

An announcement for the next webcast will be made along with the release of the financial results of the first quarter of 2016.

About GigaMedia

Headquartered in Taipei, Taiwan, GigaMedia Limited (Singapore registration number: 199905474H) is a diversified provider of online games and cloud computing services. GigaMedia’s online games business develops and operates a suite of games in Taiwan and Hong Kong, with focus on browser/mobile games and social casino games. The company’s cloud computing business is focused on providing SMEs in Greater China with critical communications services and IT solutions that increase flexibility, efficiency and competitiveness. 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 2015 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  
     12/31/2015     9/30/2015     12/31/2014     12/31/2015     12/31/2014  
     unaudited     unaudited     unaudited     unaudited     audited  
     USD     USD     USD     USD     USD  

Operating revenues

          

Asian online game and service revenues

     2,151,598        1,660,013        1,739,623        8,544,926        8,199,393   

Other revenues

     204,215        345,516        920,732        1,706,069        1,579,551   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     2,355,813        2,005,529        2,660,355        10,250,995        9,778,944   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs

          

Cost of Asian online game and service revenues

     1,043,327        2,230,148        1,833,963        7,017,451        6,010,149   

Cost of other revenues

     307,688        373,245        920,471        1,871,227        1,824,573   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     1,351,015        2,603,393        2,754,434        8,888,678        7,834,722   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit (loss)

     1,004,798        (597,864     (94,079     1,362,317        1,944,222   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

          

Product development and engineering expenses

     190,547        151,621        220,748        687,961        892,331   

Selling and marketing expenses

     2,057,035        1,649,356        1,697,665        8,655,713        6,707,346   

General and administrative expenses

     1,152,772        1,997,787        915,407        5,701,793        6,415,549   

Impairment losses

     3,446,056        805,746        1,401,667        4,251,803        1,401,667   

Other

     (363,885     37,291        0        0        0   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     6,482,525        4,641,801        4,235,487        19,297,270        15,416,893   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (5,477,727     (5,239,665     (4,329,566     (17,934,953     (13,472,671
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-operating income (expense)

          

Interest income

     62,201        62,153        146,579        333,207        682,163   

(Loss) gain on sales of marketable securities

     (812     5,844,306        6,011,518        20,020,057        8,620,875   

Interest expense

     (27,413     (24,142     (80,344     (181,892     (243,037

Foreign exchange loss - net

     (17,113     (346,248     (244,306     (397,259     (556,061

Equity in net (loss) earnings on equity method investments

     (52,011     (615,990     3,538,522        (604,947     (530,801

Changes in the fair value of an instrument recognized at fair value

     699        637        74,213        (70,853     74,213   

(Loss) gain on disposal of investments

     (365     37,364        0        37,000        0   

Impairment loss on marketable securities and investments

     (1,289,779     0        0        (1,289,779     0   

Other

     (2,100,315     33,477        263,660        (2,557,390     362,055   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (3,424,908     4,991,557        9,709,842        15,288,144        8,409,407   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) Income from continuing operations before income taxes

     (8,902,635     (248,108     5,380,276        (2,646,809     (5,063,264

Income tax benefit (expense)

     429        (125     13,005        13,824        73,258   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) Income from continuing operations

     (8,902,206     (248,233     5,393,281        (2,632,985     (4,990,006
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

     (8,902,206     (248,233     5,393,281        (2,632,985     (4,990,006

Less: Net (income) loss attributable to noncontrolling interest

     (445     (53,111     43,639        45,100        (164,780
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to shareholders of GigaMedia

     (8,902,651     (301,344     5,436,920        (2,587,885     (5,154,786
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) earnings per share attributable to GigaMedia

          

Basic:

          

(Loss) income from continuing operations

     (0.81     (0.03     0.49        (0.23     (0.48

Loss from discontinued operations

     0.00        0.00        0.00        0.00        0.00   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (0.81     (0.03     0.49        (0.23     (0.48
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted:

          

(Loss) income from continuing operations

     (0.81     (0.03     0.49        (0.23     (0.48

Loss from discontinued operations

     0.00        0.00        0.00        0.00        0.00   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (0.81     (0.03     0.49        (0.23     (0.48
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding:

          

Basic

     11,052,332        11,052,332        11,052,332        11,052,332        10,785,393   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     11,052,332        11,052,332        11,056,966        11,052,332        10,785,393   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


GIGAMEDIA LIMITED

CONSOLIDATED BALANCE SHEETS

 

     12/31/2015      9/30/2015      12/31/2014  
     unaudited      unaudited      audited  
     USD      USD      USD  

Assets

        

Current assets

        

Cash and cash equivalents

     71,432,293         74,818,341         50,640,355   

Marketable securities - current

     3,830         5,307         29,339,926   

Accounts receivable - net

     1,246,371         982,186         1,297,785   

Prepaid expenses

     545,200         420,918         564,080   

Restricted cash

     1,000,000         1,000,000         8,990,666   

Other receivables

     112,993         74,327         129,126   

Other current assets

     225,086         258,117         195,998   
  

 

 

    

 

 

    

 

 

 

Total current assets

     74,565,773         77,559,196         91,157,936   

Marketable securities - noncurrent

     0         0         4,744,000   

Investments

     4,519,147         5,798,904         5,780,778   

Property, plant & equipment-net

     1,390,711         1,502,697         1,663,424   

Intangible assets-net

     87,710         137,532         221,630   

Prepaid licensing and royalty fees

     238,611         3,150,519         4,382,772   

Other assets

     388,193         333,006         353,258   
  

 

 

    

 

 

    

 

 

 

Total assets

     81,190,145         88,481,854         108,303,798   
  

 

 

    

 

 

    

 

 

 

Liabilities and equity

        

Short-term borrowings

     6,092,917         5,780,347         18,641,390   

Accounts payable

     319,601         280,738         770,965   

Accrued compensation

     759,260         672,966         795,431   

Accrued expenses

     2,978,563         2,233,313         3,464,652   

Unearned revenue

     1,750,253         1,591,386         1,945,945   

Other current liabilities

     1,701,754         1,632,963         1,718,709   
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     13,602,348         12,191,713         27,337,092   

Other liabilities

     1,937,878         1,937,864         1,938,256   
  

 

 

    

 

 

    

 

 

 

Total liabilities

     15,540,226         14,129,577         29,275,348   
  

 

 

    

 

 

    

 

 

 

GigaMedia’s shareholders’ equity

     65,649,919         74,352,277         79,017,995   

Noncontrolling interest

     0         0         10,455   
  

 

 

    

 

 

    

 

 

 

Total equity

     65,649,919         74,352,277         79,028,450   
  

 

 

    

 

 

    

 

 

 

Total liabilities and equity

     81,190,145         88,481,854         108,303,798   
  

 

 

    

 

 

    

 

 

 


GIGAMEDIA LIMITED

Reconciliations of Non-GAAP Results of Operations

 

     Three months ended     Twelve months ended  
     12/31/2015     9/30/2015     12/31/2014     12/31/2015     12/31/2014  
     unaudited     unaudited     audited     unaudited     audited  
     USD     USD     USD     USD     USD  

Reconciliation of Net (Loss) Income to EBITDA

          

Net (loss) income attributable to GigaMedia

     (8,902,651     (301,344     5,436,920        (2,587,885     (5,154,786

Depreciation

     66,455        73,079        76,309        294,042        305,779   

Amortization

     56,793        59,838        241,060        236,076        1,192,629   

Interest income

     (62,201     (62,153     (146,450     (333,186     (681,833

Interest expense

     27,418        23,934        80,344        181,429        243,037   

Income tax (benefit) expense

     (429     125        (13,005     (13,824     (73,258
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     (8,814,615     (206,521     5,675,178        (2,223,348     (4,168,432
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


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