GigaMedia Announces Third-Quarter 2021 Financial Results

TAIPEI,Oct. 28,2021 -- GigaMedia Limited (NASDAQ: GIGM) todayannounced 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 $0.84million 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.

Thisthird quarter saw a rebound of our revenues due to seasonalityexhibited 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

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

3Q21

2Q21

Change

(%)

3Q21

3Q20

Change

(%)

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 Equivalentsand 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-GAAP Measures," for more details.)

Consolidated revenuesfor 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 profitincreased 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 operationof the third quarter of 2021 was $0.84 million,representing a decrease in loss by approximately $0.24 million from last quarter.

Consolidated net lossof the third quarter of 2021 was $0.73 million compared to $0.84 million in last quarter.

Cash,cash equivalents and restricted cashat 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 of October 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 the Company's 2020 Annual Report on Form20-F filedwith the U.S. Securities and Exchange Commission as referenced 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,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 LIMITED

CONSOLIDATED 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 revenues

1,564,208

1,224,749

2,028,138

4,235,233

5,457,589

Other revenues

—

—

—

—

—

1,589

Operating costs

Cost of digital entertainment service revenues

687,198

591,687

831,732

1,934,642

2,356,831

Cost of other revenues

—

—

—

—

—

687,831

Gross profit

877,010

633,062

1,196,406

2,300,591

3,100,758

Operating expenses

Product development and engineering expenses

365,732

373,057

341,023

1,084,686

1,002,584

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 before income taxes

(728,027)

(835,987)

(248,247)

(2,438,788)

(953,415)

Income tax benefit (expense)

—

—

—

—

—

Net lossattributable to shareholders of GigaMedia

(728,415)

Loss per share attributable to GigaMedia

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

11,235

Diluted

11,235

GIGAMEDIA LIMITED

CONSOLIDATED 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

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

57,915

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

3,632

3,180,578

3,463,126

Other liabilities

1,425

1,636,271

3,379

Total liabilities

5,105,057

4,816,849

3,466,505

Total equity

51,317

52,284,066

54,575,578

Total liabilities and equity

56,083

GIGAMEDIA LIMITED

RECONCILIATIONS 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

(728,415)

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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