Exhibit 99.1
GIGAMEDIA REPORTS NET LOSS OF
NT$481.4 MILLION FOR FULL YEAR 2003
TAIPEI, Taiwan, April 12, 2004 - GigaMedia Limited ("GigaMedia" or the
"Company") (NASDAQ: GIGM, www.giga.net.tw), a diversified provider of broadband
and entertainment services, today announced the Company's fourth quarter and
full-year 2003 consolidated operating and financial results. Consolidated
results of GigaMedia are summarized below. All figures referred to in the text,
tables and attachments to this release (other than full-year 2002 figures) are
unaudited.
QUARTERLY ANNUAL
----------------------- ------------------------
(in millions of NT dollars, except per share amounts) 4Q03 3Q03 2003(1) 2002(1)
---------- ---------- ---------- ----------
REVENUES
Offline music distribution business 663 634.6 2,608.9 1,890.1
Online broadband ISP business 179 166.4 673.8 665.7
Total 842 801 3,282.7 2,555.8
OPERATING INCOME (LOSS)
Offline music distribution business (139.4) (26.2) (247.1) (340.8)
Online broadband ISP business (106.6) (61.7) (238) (483.9)
Total (246) (87.9) (485.1) (824.7)
NET INCOME (LOSS)
Offline music distribution business (157.4) (23.9) (258.4) (340.7)
Online broadband ISP business (174.6) (76.8) (330) (366.8)
Total(2) (266.8) (90.8) (481.4) (638)
NET INCOME (LOSS) PER SHARE(2) (5.32) (1.81) (9.60) (12.72)
AVERAGE SHARES OUTSTANDING 50,154,000 50,154,000 50,154,000 50,154,000
TOTAL CASH AND SHORT-TERM INVESTMENTS 2,182.6 2,159.9 2,182.6 2,096.4
(1) Financial results for 2002 incorporate results of Rose Records and Tachung
Records only following the respective January 29, 2002 and September 30,
2002 acquisitions of the music chains by GigaMedia. As a result,
consolidated revenues, operating loss, net loss and net loss per share
figures for 2002 and 2003 periods may not be comparable.
(2) Net loss excludes minority interests, which comprise 41.4% of GigaMedia's
offline music distribution business, which operates under the subsidiary
G-Music Limited ("G-Music").
Consolidated revenues for 2003 increased 28% to NT$3,282.7 million from
NT$2,555.8 million in 2002. Financial results for 2002 incorporate results of
Rose Records and Tachung Records only following the respective January 29, 2002
and September 30, 2002 acquisitions of the music chains by GigaMedia. As a
result, consolidated revenues, operating loss, net loss and net loss per share
figures for 2002 and 2003 periods may not be comparable.
Consolidated operating loss for 2003 decreased 41% to NT$485.1 million from
NT$824.7 million in 2002. Fiscal year 2002 consolidated operating loss included
charges incurred during the fourth quarter of 2002 amounting to approximately
NT$323.6 million for goodwill related to the purchase of the Company's offline
music distribution business and impairment of GigaMedia's investment in an
online music company, GigaMusic.com Limited. As a result, year-over-year
consolidated operating loss may not be comparable.
Consolidated net loss for 2003 decreased 25% to NT$481.4 million from NT$638
million in 2002. Consolidated net loss excludes minority interests, which
comprise 41.4% of GigaMedia's offline music distribution business, which
operates under the subsidiary G-Music.
Fourth Quarter Results
For the fourth quarter of 2003, consolidated revenues increased 5% to NT$842
million from NT$801 million in the third quarter of 2003, primarily due to
improved sales in G-Music. G-Music recorded revenues of NT$663 million during
the period compared to NT$634.6 million in the third quarter.
Consolidated operating loss in the fourth quarter of 2003 increased 180% to
NT$246 million from NT$87.9 million in the third quarter of 2003. The increase
in consolidated operating loss during the quarter was mainly attributable to
charges consisting of NT$99 million for slow-moving music inventory, NT$53.6
million for reevaluation of hardware related to one-way cable modem service, and
NT$25.4 million for goodwill related to the purchase of GigaMedia's offline
music distribution business.
Consolidated net loss in the fourth quarter of 2003 increased 194% to NT$266.8
million from NT$90.8 million in the third quarter of 2003. Net loss excludes
minority interests, which comprise 41.4% of G-Music.
Balance Sheet
Cash and other cash equivalents at the end of the fourth quarter of 2003 totaled
NT$1,198.9 million, not including additional short-term investments totaling
NT$983.6 million, compared to NT$1,240.2 million and NT$919.8 million,
respectively, at the previous period-end.
BUSINESS SEGMENT RESULTS
OFFLINE MUSIC DISTRIBUTION BUSINESS
QUARTERLY ANNUAL
------------------- -----------------------
(in millions of NT dollars) 4Q03 3Q03 2003(1) 2002(1)
------ ----- -------- -------
REVENUES 663 634.6 2,608.9 1,890.1
OPERATING INCOME (LOSS) (139.4) (26.2) (247.1) (340.8)
NET INCOME (LOSS) (157.4) (23.9) (258.4) (340.7)
(1) G-Music results incorporate results of Rose Records and Tachung Records
only following the respective January 29, 2002 and September 30, 2002
acquisitions of the music chains by GigaMedia. As a result, revenues,
operating loss, and net loss figures for 2002 and 2003 periods may not be
comparable.
Total revenues for the quarter ended December 31, 2003 were NT$663 million, up
4% from the NT$634.6 million recorded during the prior period. Fourth quarter
sales improved over the third quarter mainly due to a recovery from the negative
impact of SARS, which delayed a significant number of artist releases until the
fourth quarter. Overall, G-Music revenues continued to be negatively impacted by
digital piracy. G-Music results incorporate results of Rose Records and Tachung
Records only following the respective January 29, 2002 and September 30, 2002
acquisitions of the music chains by GigaMedia. As a result, revenues, operating
loss, and net loss figures for 2002 and 2003 periods may not be comparable.
Operating loss for the quarter ended December 31, 2003 was NT$139.4 million.
This represented an increased operating loss of approximately NT$113.2 million
over the third quarter, due primarily to a slow-moving inventory charge of
approximately NT$99 million recorded during the fourth quarter of 2003.
Net loss increased from NT$23.9 million in the third quarter of 2003 to NT$157.4
million in the fourth quarter of 2003, primarily due to the aforementioned
inventory charge incurred during the fourth quarter. Net loss for the year
declined by 24% to NT$258.4 million from NT$340.7 million in 2002. Net loss for
2003 was disproportionately smaller than net loss for 2002 because net loss in
2002 included a charge of approximately NT$242.9 million for goodwill related to
the purchase of GigaMedia's offline music distribution business.
ONLINE BROADBAND ISP BUSINESS
QUARTERLY ANNUAL
----------------- ------------------
(in millions of NT dollars) 4Q03 3Q03 2003 2002
------ ----- ------ ------
REVENUES 179 166.4 673.8 665.7
OPERATING INCOME (LOSS) (106.6) (61.7) (238) 483.9
NET INCOME (LOSS) (174.6) (76.8) (330) (366.8)
Total revenues for the quarter ended December 31, 2003 increased 8% to NT$179
million from NT$166.4 million during the previous quarter. Subscribers and
blended ARPU during the period were relatively flat at approximately 103,000 and
approximately NT$428 per month, respectively. In order to offset price drops and
achieve revenue growth, the Company is focused on migrating users to higher
specification products and phasing out one-way cable modem service.
Operating loss in the fourth quarter of 2003 increased by 73% to NT$106.6
million from NT$61.7 million in the third quarter of 2003, primarily due to a
charge of approximately NT$53.6 million incurred during the fourth quarter in
connection with the revaluation of hardware related to one-way cable modem
service.
Net loss increased in the fourth quarter of 2003 to NT$174.6 million from a net
loss of NT$76.8 million in the prior period, resulting primarily from the
aforementioned one-way cable modem hardware revaluation charge, as well as
charges incurred during the quarter of approximately NT$84.8 million for
investment in online music company Rock Internet Corporation and disposal of
property and assets.
BUSINESS OUTLOOK
The following forward-looking statements reflect GigaMedia's expectations as of
April 9, 2004. Given potential changes in economic conditions and consumer
spending, the evolving nature of broadband, fluctuations in Taiwan's recorded
music market and various other risk factors, including those discussed in our
20-F filing with the U.S. Securities and Exchange Commission referenced below,
actual results may differ materially.
GigaMedia is providing the following outlook for the first quarter of 2004:
o GigaMedia expects continued weakness in the music distribution market. For
the first quarter of 2004, total revenues in this business segment are
expected to be flat, with operating loss flat to slightly improved.
o GigaMedia's expects continued strong price competition in the broadband ISP
market. For the first quarter of 2004, total revenues and costs and
expenses in this business segment are expected to increase slightly, with
flat to slightly improved subscriber numbers.
ABOUT GIGAMEDIA
GigaMedia Limited is a diversified provider of broadband and entertainment
services in Taiwan. The Company's online/offline business model provides the
Company multiple distribution channels and the ability to meet future market
demands as technology drives new media and entertainment industry change.
GigaMedia operates Taiwan's two largest music store chains, Rose Records and
Tachung Records through its subsidiary G-Music. The Company also operates a
major Taiwanese broadband ISP, providing Internet access service and broadband
content with multiple delivery technologies. The Company offers interactive
Chinese-language multimedia Web sites through its Web destination
http://www.gigigaga.com. GigaMedia also provides broadband services to corporate
subscribers in Taiwan through its subsidiary Koos Broadband Telecom Limited.
Strategic investors of GigaMedia include the Koos Group, a major participant in
Taiwan's manufacturing, finance, telecommunications, media, and cable
industries. More information on GigaMedia can be obtained from
http://ir.giga.net.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. GigaMedia cautions readers that forward-looking statements are based on
the company's current expectations and involve a number of risks and
uncertainties. Actual results may differ materially from those contained in such
forward-looking statements. Information as to certain factors that could cause
actual results to vary can be found in GigaMedia's Annual Report on Form 20-F/A
filed with the United States Securities and Exchange Commission in August 2003.
Contact:
GigaMedia Limited
Brad Miller, Investor Relations Director
Country/City Code 8862 Tel: 8770-7966 ext. 1107
brad.miller@gigamedia.com.tw
# # #
(Tables to follow)
================================================================================
GIGAMEDIA LIMITED
CONSOLIDATED STATEMENT OF OPERATIONS
Three months ended Twelve months ended
--------------------------------- ---------------------------------
31-Dec-03 30-Sep-03 31-Dec-03 31-Dec-02
unaudited unaudited unaudited audited
NT$ NT$ NT$ NT$
------------- ----------- ------------- -------------
Operating revenues
Access revenues 173,835,393 160,877,041 650,243,454 638,915,986
Sales/rental/installation 648,625,006 623,376,542 2,559,007,505 1,864,127,632
Advertising and promotional revenues 15,937,950 12,634,563 54,894,295 32,800,897
Subscription revenues 2,540,050 3,037,084 13,302,320 18,460,181
Other revenues 1,085,884 1,058,057 5,202,862 1,504,086
------------- ----------- ------------- -------------
Total 842,024,283 800,983,287 3,282,650,436 2,555,808,782
------------- ----------- ------------- -------------
Costs and expenses
Operating costs 281,210,078 135,737,145 676,883,933 634,871,762
Cost of sales/rental/installation 557,032,075 536,554,294 2,244,196,442 1,686,255,380
Product development & engineering
expenses 11,243,053 9,906,685 41,672,828 64,444,148
Selling and marketing expenses 124,031,485 126,497,685 501,097,458 427,310,095
General and administrative expenses 84,169,850 80,465,650 273,188,365 292,571,593
Bad debt expenses 4,964,732 (285,678) 5,362,193 32,167,104
Impairment loss on goodwill and 25,389,253 0 25,389,253 242,937,970
intangible assets
Other cost 0 0 0 0
------------- ----------- ------------- -------------
Total 1,088,040,526 888,875,781 3,767,790,472 3,380,558,052
------------- ----------- ------------- -------------
Gain (loss) from operations (246,016,243) (87,892,494) (485,140,036) (824,749,270)
------------- ----------- ------------- -------------
Non-operating income (expense)
Interest income 3,441,502 3,039,033 14,414,202 34,905,666
Foreign exchange gain (loss) - net 2,085,690 (22,387,330) (24,868,979) 93,940,891
Investment income (loss) (54,042,719) 4,063,962 (40,997,794) 7,110,121
Loss on disposal of property, plant &
equipment (26,266,644) (30,200) (29,107,301) (30,593,561)
Interest expense (3,972) (3,972) (1,247,464) (1,392,246)
Other non-operating income (expense) (6,655,620) 2,351,673 (17,170,262) 4,687,141
------------- ----------- ------------- -------------
Subtotal (81,441,763) (12,966,834) (98,977,598) 108,658,012
------------- ----------- ------------- -------------
Income tax benefit (expense) 4,826,363 0 4,879,390 (4,383,123)
Minority interest income (loss) (65,461,235) (10,060,170) (107,559,491) (73,718,467)
------------- ----------- ------------- -------------
Net loss (266,823,134) (90,799,158) (481,437,533) (637,989,668)
============= =========== ============= =============
Net loss per common share (5.32) (1.81) (9.60) (12.72)
============= =========== ============= =============
Average shares outstanding 50,154,000 50,154,000 50,154,000 50,154,000
GIGAMEDIA LIMITED
CONSOLIDATED BALANCE SHEET
December 31 September 30 December 31
2003 2003 2002
------------- ------------- -------------
Assets NT$ NT$ NT$
Current assets
Cash and cash equivalents 1,198,934,164 1,240,172,606 1,241,156,606
Short-term investments 983,644,970 919,765,494 855,272,747
Accounts receivable 138,961,491 152,585,755 127,603,032
Receivable from related parties 7,929,178 0 5,704,749
Inventories-net 163,185,383 245,386,852 360,216,481
Prepaid expenses 46,458,932 33,296,521 19,868,580
Restricted cash 65,409,035 62,583,602 100,414,633
Note receivable from officer 12,650,102 17,537,846 18,534,000
Other current assets 22,604,935 32,304,106 148,943,506
------------- ------------- -------------
Total current assets 2,639,778,190 2,703,632,782 2,877,714,334
------------- ------------- -------------
Investment 518,381,498 558,494,759 641,088,040
Property, plant and equipment - net 531,155,219 645,900,509 738,938,134
Goodwill 0 25,389,253 25,389,253
Intangible assets - net 210,583,405 218,440,528 242,011,896
Other assets 169,443,050 168,673,700 170,896,219
------------- ------------- -------------
Total assets 4,069,341,362 4,320,531,531 4,696,037,876
------------- ------------- -------------
Liabilities and Shareholders' Equity
Current liabilities
Short-term loans 0 0 93,000,000
Notes and accounts payable 568,165,333 585,953,716 470,646,049
Payable to related parties 29,604,444 0 20,510,508
Accrued compensation 48,176,735 38,093,764 44,609,960
Accrued expenses 93,511,432 59,394,580 53,150,057
Other current liabilities 76,159,669 71,596,070 118,395,017
------------- ------------- -------------
Total current liabilities 815,617,613 755,038,130 800,311,591
------------- ------------- -------------
Other liabilities 61,064,414 58,379,227 48,668,859
Total liabilities 876,682,027 813,417,357 848,980,450
Minority interests 119,620,826 185,082,122 227,180,378
Total shareholders' equity 3,073,038,509 3,322,032,052 3,619,877,048
------------- ------------- -------------
Total liabilities and shareholders' equity 4,069,341,362 4,320,531,531 4,696,037,876
------------- ------------- -------------