TAIPEI, Taiwan, May 6, 2016 /PRNewswire/ -- GigaMedia Limited (NASDAQ: GIGM) today announced its first-quarter 2016 unaudited financial results.

CEO's comments

"The positive increase in revenue of our licensed game, Yume100 which began last quarter, has continued into 2016. The revenues in the fourth quarter of 2015 were 0.98 million, and for the first quarter of 2016 increased by 26 percent to $1.24 million," stated GigaMedia Limited Chief Executive Officer Collin Hwang. "We are glad to see the steady growth, and going forward, we remain committed to keep the revenue growing up."

"In the following quarters, we will launch new licensed games from Japan, Korea and China. We expect to add new revenue streams from our licensed products," GigaMedia Limited Chief Executive Officer Collin Hwang continued.

"Meanwhile, we also persist in reviewing our operational plan of Cloud business. We plan to combine our experiences in online games and cloud business, which allow us to provide integrative services to game companies or potential entrants in gaming industry. While we restructure our cloud business, we are also looking for overseas partners for casual game business. This could help us to realize the plan of integration."

"Besides keeping the Company's online games maintain stable, and study the feasibility of the transformation of cloud business, cost saving is still undergoing to increase operations efficiency," stated GigaMedia Limited Chief Executive Officer Collin Hwang.

Overview

• FunTown operations gross margin improved to 57 percent from 52 percent in the fourth quarter of 2015 on higher revenue and lower outsourced fees.
• The Company's consolidated EBITDA for the first quarter of 2016 amounted to $1 million, a growth of 112% from minus $8.8 million a quarter before. The consolidated gross profit increased $0.3 million to $1.3 million.
• The online game business expects to soon announce the licensing of a popular mobile-based RPG game. Following localization, planning and testing, management is looking ahead to its launching in the second quarter this year, and to bring in revenue in the third quarter.
• General and administrative expenses continued trending down, decreasing 27 percent year-on-year.
• Low headquarters operating expenses of $0.75 million, down from $0.9 million in the fourth quarter of 2015.
• Cash outflow from operations of approximately $1 million.
• Short-term debt remained at approximately $6.2 million.
• The online game business has achieved break even in the first quarter of 2016, and the management expects to have sustainable revenue growth.

Unaudited Consolidated Financial Results

GigaMedia Limited is a diversified provider of online games and cloud computing services. GigaMedia's online games 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 First Quarter

First-Quarter Financial Results

• Consolidated revenues for the first quarter of 2016 increased to $2.4 million from $2.3 million in the fourth quarter of 2015 and decreased from $3.2 million in the first quarter of 2015. The quarter-on-quarter increase reflected the steady growth in the Company's games business FunTown. First-quarter revenue from FunTown grew 11 percent quarter-on-quarter to $2.4 million from $2.2 million. The quarterly increase was mainly from the licensed game Yume100 and TalesRunner in Hong Kong.
• Consolidated operating expenses were $1.9 million in the first quarter of 2016, which made significant change from the fourth quarter last year, decreased 78% from $8.5 million to $1.9 million quarter-on-quarter, primarily due to impairment loss of $3.1 million and termination expense of a proposed acquisition of $2.0 million recognized in the fourth quarter of 2015. Excluding such impairment loss and termination expense, the consolidated operating expenses decreased by $1.6 million, or 46%, quarter-on-quarter primarily due to reduced selling and marketing expenses as well as general and administrative expenses.
• Consolidated non-operating income was $1.5 million thanks to the capital gains on disposal of property and investment of PerfectPairs.
• Net income was $1 million attributable to the gains on disposal of property and investment, and an increase on the operating revenues. It was up by 112%.
• Cash and marketable securities-current in the first quarter accounted for $72.5 million, slightly increased by 1.5% from $71.4 million in the fourth quarter of 2015 resulting from the disposal of property and investment of PerfectPairs.

Cash and Strategic Investment

GigaMedia maintained its solid financial position with cash and cash equivalents, marketable securities-current and restricted cash accounted for $73.5 million as of March 31, 2016, or approximately $6.65 per share.

Business Outlook

The following forward-looking statements reflect GigaMedia's expectations as of May 6, 2016. Given potential changes in economic conditions and consumer spending, the evolving nature of online games, and various other risk factors, including those discussed in the Company's 2015 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission as referenced below, actual results may differ materially.

The mobile gaming business has been on the track since the fourth quarter of 2015, and in this quarter, the Company continued bringing in revenue and achieved break even. The Company has met the expectation on the cost reduction and margin improvement. In the upcoming quarters, new licensed games will be published, and the Company hopes to see the same or better performances as "Yume100" by generate stable revenues and creating margin.

With regards to social casino game platform, the revenues grew 16% from $0.75 million to $0.88 million.

As for computing business, the Company is currently restructuring the business plan. The Company is eager to combine cloud and gaming business to increase the probability for success.

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 first quarter 2016 performance upon the release, investors may send the questions via email to [email protected], and the responses will be replied individually.

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 2016 and its other filings with the United States Securities and Exchange Commission.

For further information contact:

Annie Sun Investor Relations Department Country/City Code 8862 Tel: 2656-8096 [email protected]

(Tables to follow)

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SOURCE GigaMedia