Gigamedia (NASDAQ:GIGM)

First Quarter 2012 Results

• Revenues for the first quarter of 2012 increased to $8.4 million from $7.4 million in the fourth quarter of 2011 and decreased from $10.4 million in the first quarter of 2011.
• Non-GAAP basic and fully-diluted loss per share in the first quarter of 2012 were both $0.05 vs a loss of $0.02 in prior year period.

"We made good progress in the first quarter building new Giga," stated GigaMedia Chief Executive Officer John Stringer. "Operating results began to benefit from our aggressive steps to improve productivity and lower our cost base, and we are continuing to take strong action to align our expense to revenue ratios with leading game companies."

"As part of our efforts to manage cash, improve margins and create a business model with leverage, we are in the process of disposing of our subsidiary IAHGames, which we expect to further strengthen new Giga's performance," stated CEO John Stringer. "Gross margin in the first quarter excluding IAHGames was approximately 65 percent."

"Looking ahead, we will continue to execute productivity initiatives, which will have stronger impact in the second half of 2012 than the first," stated CEO John Stringer. "We will also take steps to drive our top line in the second half of 2012, including implementing new performance compensation programs linked to key KPIs and adding new games."

Second Quarter Outlook

In the second quarter of 2012, management expects consolidated revenues to decline 10-15 percent from the first quarter impacted by 1) decreased contributions from IAHGames, and 2) decreased contributions from FunTown following the Chinese New Year season in the first quarter when online gamer activity peaks. Management expects gross margin to remain steady at approximately 65 percent, excluding IAHGames. Management expects a quarter-over-quarter increase in total operating expenses in the second quarter due to expenses related to workforce reductions and the disposal of IAHGames.   

TAIPEI, April 25, 2012 /PRNewswire-Asia/ -- GigaMedia Limited (NASDAQ: GIGM) today updated its progress in executing new management's turnaround plans.

The company's turnaround plans, driven by CEO John Stringer, are based on an explicit decision-making framework with clear objectives: effectively managing cash, maintaining the company's listing on NASDAQ, and executing new strategic growth plans.

As part of efforts to better manage cash, new productivity initiatives are underway to improve margins and create a new business model with leverage.

Management is currently reducing system and administrative and organizational complexities, which is expected to lower the company's cost base. This includes reducing the number of legal entities to yield savings on audit requirements, tax filings and administrative needs; reducing the number of systems used in business units to allow for better data flow and better productivity; and reducing the company's back office structure utilizing a shared hub and spoke approach to create a less costly infrastructure.

Management is also reducing personnel to support productivity. Following a reduction in force in March at Jidi Joy in mainland China, management implemented similar steps in April at FunTown in Taiwan, reducing the team from approximately 260 to 230, and is currently reviewing operations at IAHGames.

"The company's complex organizational structure, inefficiencies and redundancies have resulted in a higher cost base than best of class standards; a big opportunity to streamline, simplify how the business operates, and improve financial performance," stated GigaMedia Limited Chief Executive Officer John Stringer.

Management anticipates its initiatives to drive productivity and cost savings in all businesses and corporate functions beginning in the second half of 2012, with a portion of the savings to be re-invested for future growth and a portion to benefit ongoing financial performance.

"Our early initiatives have focused on managing cash and growing lean – creating a new business model that is viable and scalable," stated CEO John Stringer. "We are on track and expect to complement this with new strategic growth initiatives this year to further drive operational leverage as we build new Giga."

Fourth Quarter 2011 Results

• Revenues for the fourth quarter decreased to $7.4 million from $8.9 million in the same period of 2010 and from $7.8 million in the third quarter of 2011.
• Net loss for the fourth quarter of 2011 was $51.3 million compared to a loss of $41.3 million in the fourth quarter of 2010 and a loss of $7.8 million in the third quarter of 2011.
• Core net loss for the fourth quarter of 2011 was $5.5 million, compared to a core net loss of $8.0 million in the same period last year and a core net loss of $3.8 million in the third quarter of 2011. Core basic and fully-diluted loss per share in the fourth quarter of 2011 were both $0.11 vs $0.14 in prior year.

Business unit deconsolidations resulted in sharp revenue declines in 2011," stated GigaMedia CEO John Stringer. "Unfortunately, costs and expenses were not adjusted quickly enough in response, leaving a dysfunctional business model."

"In the fourth quarter, the company's top line did not improve and the cost structure remained too high," stated CEO John Stringer. "We recorded significant write-downs in the fourth quarter reflecting continued underperformance; in short it was a difficult year."

"In 2012, new Giga began to take shape: Dirk Chen, our new CFO, and I joined the board at the start of the year, right after the addition of two new board members," stated CEO John Stringer. "Together we are making good progress implementing a turnaround plan based on an explicit decision-making framework with clear objectives: 1) effectively managing cash; 2) maintaining the company's listing on NASDAQ, and 3) executing a new vision for growth."

"We are now increasing focus on key business sectors and beginning to adjust our business model to improve our expense to revenue ratio," stated CEO John Stringer. "We look forward to updating our progress in 2012, confident in our ability to deliver improved performance by year-end."

Guidance

In the first quarter of 2012, management expects consolidated revenues to be flat to slightly up compared to the fourth quarter of 2011. Management does not anticipate bad debt expenses or write-downs in the first quarter, resulting in significant decreases in total operating expenses and net loss quarter-over-quarter.   

The letter received from NASDAQ notes that for 10 consecutive business days, from January 26, 2012 to February 8, 2012, the closing bid price of GigaMedia's ordinary shares was US$1.00 or greater and states, "Accordingly, the company has regained compliance with listing rule 5450(a)(1) and this matter is now closed."

TAIPEI, Feb. 18, 2012 /PRNewswire-Asia/ -- GigaMedia Limited (NASDAQ: GIGM) ("GigaMedia") today updated its guidance for the company's unaudited fourth-quarter 2011 consolidated financial results.

The following estimates are based on the current business outlook:

Revenues: Held steady quarter-over-quarter at approximately US$7.8 million.

Operating expenses: Remained stable compared to the third quarter of 2011 at approximately US$7.9 million before bad debt expenses; increased approximately 21 percent compared to the previous quarter to approximately US$10.1 million when including fourth-quarter bad debt expenses.

Cash, cash equivalents, restricted cash, and marketable securities-current: Increased sequentially as of December 31, 2011 to approximately US$67.0 million; total short-term borrowings remained stable at approximately US$11.8 million resulting in net cash of approximately US$55.2 million in the fourth quarter, up from approximately US$44.5 million in the third quarter. Fourth-quarter cash included proceeds from the sale of GigaMedia's interest in T2CN and from the initial sales of certain of GigaMedia's Asian studio investments, which totaled approximately US$4.7 million and US$6.3 million, respectively.

Non-cash charges: Estimated to be approximately US$50-US$60 million in the fourth quarter, contributing to a net loss for the period. The company expects to report non-cash impairment charges related to investments made under previous management, primarily consisting of charges to Everest Gaming and certain assets in GigaMedia's Asian online games business.

GigaMedia expects to announce its fourth-quarter and full-year 2011 consolidated financial results in the second half of March.

Third Quarter 2011 Results

• Third quarter revenue of 2011 held steady at $7.8 million compared to $7.8 million in the same period of 2010
• Third-quarter 2011 core net loss was $3.9 million; core basic and fully-diluted loss per share were each $0.07 vs loss of $0.17 in prior year

TAIPEI, Taiwan, Oct. 7, 2011 /PRNewswire-Asia-FirstCall/ -- GigaMedia Limited (NASDAQ: GIGM) announced today that as part of the company's strategic restructuring and new strategic growth plans, its IAHGames operation and Blizzard Entertainment, Inc. have mutually agreed to terminate their distribution partnership under which IAHGames distributed certain Blizzard Entertainment game products in Southeast Asia.

In accordance with the agreement, IAHGames' commitments under the distribution partnership will be fully terminated after certain obligations of IAHGames have been fulfilled. 

IAHGames will redeploy its resources to increase focus on its online game operations in key markets in Southeast Asia.

Second Quarter 2011 Results

TAIPEI, May 26, 2011 /PRNewswire-Asia-FirstCall/ -- GigaMedia Limited (NASDAQ: GIGM) today announced first-quarter 2011 revenues of $10.4 million, up 17 percent quarter-over-quarter.

First-quarter 2011 core net loss was $975 thousand; core basic and fully-diluted loss per share were each $0.02. (1)

"We are making good progress in turning around our Asian online games business," stated GigaMedia Chief Executive Officer Yichin Lee. "We delivered solid top-line growth this quarter from our current game portfolio and began to more effectively control costs."

In the second quarter of 2011, in line with seasonal trends following the traditionally strong Chinese New Year holiday, management anticipates a quarterly sequential decrease in revenues. Management also expects a decrease in operating expenses resulting from ongoing cost control initiatives.   

TAIPEI, May 23, 2011 /PRNewswire-Asia-FirstCall/ -- GigaMedia Limited (NASDAQ: GIGM) announced today that its board of directors has approved a US$11 million share repurchase program of the company's common stock.

Under the terms of the approved program, GigaMedia may purchase up to US$11 million worth of its issued and outstanding shares beginning from June 1, 2011. The repurchases will be made from time to time on the open market at prevailing market prices pursuant to a Rule 10b5-1 plan. The purchases will be made subject to restrictions relating to volume, pricing and timing. The timing and extent of any purchases will depend upon market conditions, the trading price of GigaMedia's shares and other factors.

GigaMedia expects to implement this share repurchase program in a manner consistent with market conditions and the interests of the shareholders and in compliance with the company's securities trading policy and relevant Singapore and U.S. laws and regulations. GigaMedia's board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size accordingly.

GigaMedia plans to fund repurchases made under this program from the company's available cash balance. GigaMedia plans to cancel all repurchased shares.

HONG KONG, March 20, 2011 /PRNewswire-Asia/ --GigaMedia Limited (Nasdaq: GIGM) announced today the appointment of Yichin Lee as its new CEO, replacing Arthur Wang who is retiring after leading GigaMedia for the last seven years.

Mr. Lee, who joined GigaMedia's board as an independent director in September 2003, has over two decades of management consulting and operational experience – a strong and deep track record of successfully guiding and building international technology businesses. He will assume the role of CEO effective immediately.

Mr. Wang will remain on the board of directors and serve as a special advisor to the new CEO.

"With Yichin as our new CEO, I retire with full confidence in GigaMedia's future. He is the complete package. He has all the skills and experience to take Giga to the next level," stated Arthur Wang. "It has been a great honor to lead Giga for the past seven years, to drive our transformation from a broken ISP to our position today as a leading online entertainment firm, with top content generation and a platform that spans across North and South Asia – plus our large equity position in the Everest poker and casino platform."

HONG KONG, Jan. 26, 2011 /PRNewswire-Asia-FirstCall/ -- GigaMedia Limited today announced that it expects renewed growth and operating profitability in 2011 as a result of enhanced operating efficiency, improved economic conditions in Europe, as well as the launch of new games on its pan-Asian game platform.