Exhibit 99.1
GIGAMEDIA REPORTS US$775 THOUSAND FIRST QUARTER 2004 NET LOSS
TAIPEI, Taiwan, May 25, 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 consolidated operating and
financial results for the first quarter ended March 31, 2004. Consolidated
results of GigaMedia are summarized below. All figures referred to in the text,
tables and attachments to this release are unaudited.
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YEAR-OVER-YEAR QUARTER-OVER-QUARTER
(in millions of US dollars, except share -------------- % -------------------- %
figures) 1Q04 1Q03 CHANGE 1Q04 4Q03 CHANGE
- ------------------------------------------------------------------------------------------------------------------------
REVENUES
Offline music distribution business 21.7 21.7 0 21.7 19.5 12
Online broadband ISP business 5.5 4.6 19 5.5 5.3 5
---------- ---------- ---------- ----------
Total 27.3(2) 26.3 3 27.3(2) 24.7(2) 10
OPERATING INCOME (LOSS)
Offline music distribution business (0.4) (0.9) -54 (0.4) (4.1) NM(3)
Online broadband ISP business (0.8) (1.1) -26 (0.8) (3.2) NM(3)
---------- ---------- ---------- ----------
Total (1.2) (2.0) -39 (1.2) (7.3) NM(3)
NET INCOME (LOSS)
Offline music distribution business (0.4) (0.9) -56 (0.4) (4.6) NM(3)
Online broadband ISP business (0.6) (0.9) -41 (0.6) (5.2) NM(3)
---------- ---------- ---------- ----------
Total(1) (0.8) (1.4) -46 (0.8) (8.0) NM(3)
NET INCOME (LOSS) PER SHARE(1) (0.02) (0.03) -46 (0.02) (0.16) NM(3)
AVERAGE SHARES OUTSTANDING 50,154,000 50,154,000 - 50,154,000 50,154,000 -
TOTAL CASH + SHORT-TERM INVESTMENTS 41.0(4) 57.0 -28 41.0(4) 64.3 -36
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(1) Net loss excludes amounts attributable to minority interests. GigaMedia's
subsidiary G-Music Limited ("G-Music") conducts an offline music distribution
business. Minority shareholders own a 41.4% equity interest in G-Music.
(2) Total presented may differ from the sum of the component amounts due to
rounding.
(3) Not meaningful. Note that quarter-over-quarter comparisons of consolidated
operating loss, consolidated net loss and net loss per share figures may not be
meaningful due to revaluation and goodwill impairment charges incurred during
the fourth quarter of 2003.
(4) Note that this excludes an additional US$6.5 million paid in connection with
the acquisition of Grand Virtual subsequent to the balance sheet date hereof on
April 1, 2004.
First quarter 2004 consolidated revenues, consolidated operating loss and
consolidated net loss were US$27.3 million, US$1.2 million and US$775 thousand,
respectively. This compares to first quarter 2003 consolidated revenues,
consolidated operating loss and consolidated net loss of US$26.3 million, US$2.0
million and US$1.4 million, respectively, and to respective fourth quarter 2003
amounts of US$24.7 million, US$7.3 million and US$8.0 million.
Consolidated net loss excludes amounts attributable to minority interests;
namely, the 41.4% minority interest in G-Music.
Year-over-year reductions in consolidated operating loss and consolidated net
loss were primarily driven by the implementation of cost controls in both the
offline music distribution business and the online broadband ISP business.
Balance Sheet
Cash and other cash equivalents at the end of the first quarter of 2004 totaled
US$12.4 million, not including additional short-term investments totaling
US$28.6 million, compared to US$35.3 million and US$29.0 million, respectively,
at the end of the fourth quarter of 2003. The decline in cash and other cash
equivalents at the end of the first quarter compared to the end of the fourth
quarter of 2003 was primarily attributable to cash payments made totaling
approximately US$26.0 million related to GigaMedia's all-cash acquisition of the
software developer Grand Virtual valued at approximately US$32.5 million, to a
limited extent offset by a partial redemption of GigaMedia's long-term
investments and subsequent investment gain in March 2004 totaling approximately
US$4.4 million.
BUSINESS SEGMENT RESULTS
OFFLINE MUSIC DISTRIBUTION BUSINESS
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YEAR-OVER-YEAR QUARTER-OVER-QUARTER
-------------- % -------------------- %
(in millions of US dollars) 1Q04 1Q03 CHANGE 1Q04 4Q03 CHANGE
- -----------------------------------------------------------------------------------------------
REVENUES 21.7 21.7 0 21.7 19.5 12
OPERATING INCOME (LOSS (0.4) (0.9) -54 (0.4) (4.1) NM(1)
NET INCOME (LOSS) (0.4) (0.9) -56 (0.4) (4.6) NM(1)
- -----------------------------------------------------------------------------------------------
(1) Not meaningful, as a result of the revaluation and goodwill impairment
charges discussed above.
First quarter 2004 total revenues, operating loss and net loss were US$21.7
million, US$425 thousand and US$374 thousand, respectively. This compares to
first quarter 2003 total revenues, operating loss and net loss of US$21.7
million, US$916 thousand and US$858 thousand, respectively, and to respective
fourth quarter 2003 amounts of US$19.5 million, US$4.1 million and US$4.6
million.
ONLINE BROADBAND ISP BUSINESS
- -----------------------------------------------------------------------------------------------
YEAR-OVER-YEAR QUARTER-OVER-QUARTER
-------------- % -------------------- %
(in millions of US dollars) 1Q04 1Q03 CHANGE 1Q04 4Q03 CHANGE
- -----------------------------------------------------------------------------------------------
REVENUES 5.5 4.6 19 5.5 5.3 5
OPERATING INCOME (LOSS) (0.8) (1.1) -26 (0.8) (3.2) NM(1)
NET INCOME (LOSS) (0.6) (0.9) -41 (0.6) (5.2) NM(1)
- -----------------------------------------------------------------------------------------------
(1) Not meaningful, as a result of the revaluation and goodwill impairment
charges discussed above.
First quarter 2004 total revenues, operating loss and net loss were US$5.5
million, US$824 thousand and US$556 thousand, respectively. This compares to
first quarter 2003 total revenues,
operating loss and net loss of US$4.6 million, US$1.1 million and US$943
thousand, respectively, and to respective fourth quarter 2003 amounts of US$5.3
million, US$3.2 million and US$5.2 million.
Subscribers during the quarter ended March 31, 2004 were flat compared to the
fourth quarter of 2003 at approximately 104,000, with average monthly revenue
per subscriber ("ARPU") down 3% compared to the fourth quarter of 2003 at
approximately US$12.30 per month. 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.
BUSINESS OUTLOOK
The following forward-looking statements reflect GigaMedia's expectations as of
May 24, 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
2002 Annual Report or 20-F/A filing with the U.S. Securities and Exchange
Commission referenced below, actual results may differ materially.
GigaMedia is providing the following outlook for the second quarter of 2004:
o GigaMedia expects continued weakness in the music distribution market.
For the second quarter of 2004, total revenues in this business
segment are expected to be flat compared to the first quarter of 2004,
with operating loss flat to slightly improved.
o GigaMedia expects continued strong price competition in the broadband
ISP market. For the second quarter of 2004, total revenues and costs
and expenses in this business segment are expected to increase
slightly compared to the first quarter of 2004, with flat to slightly
improved subscriber numbers.
o GigaMedia expects its newly acquired subsidiary Grand Virtual to make
a contribution to operating results in the second quarter of 2004.
ABOUT GIGAMEDIA
GigaMedia Limited is a diversified provider of broadband and entertainment
services, with headquarters in Taipei, 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.
Offline, GigaMedia operates Taiwan's two largest music store chains, Rose
Records and Tachung Records, through its subsidiary G-Music. Online, the Company
operates a major Taiwanese broadband ISP, providing Internet access service and
broadband content with multiple delivery technologies via its Web destination
http://www.gigigaga.com. GigaMedia also provides broadband services to corporate
subscribers in Taiwan through its subsidiary Koos Broadband Telecom Limited.
Through GigaMedia's subsidiary Grand Virtual, based in Cambridge, Massachusetts,
the Company develops software for online entertainment services,
including online gaming and social networking. Note that GigaMedia began to
consolidate results of Grand Virtual in April 2004 and that management expects
to provide results of Grand Virtual in the Company's second quarter 2004
results. 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)
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GIGAMEDIA LIMITED
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three months ended
3/31/2004 3/31/2003 12/31/2004
----------------------------------------
USD USD USD
----------------------------------------
33.38 34.69 33.99
----------------------------------------
Operating revenues
Access revenues 5,361,538 4,432,050 5,039,954
Sales/Rental/Installation 21,325,007 21,288,283 19,082,819
Advertising revenues 482,932 438,523 468,901
Subscription revenues 66,807 119,681 74,729
Other revenues 18,253 71,363 31,947
---------- ---------- ----------
Total operating revenues 27,254,538 26,349,899 24,698,350
---------- ---------- ----------
Costs and expenses
Operating cost 3,463,853 3,828,752 8,273,318
Cost of sales/rental/installation 18,336,300 19,042,846 16,388,116
Product development & engineering expenses 303,702 311,245 330,775
Selling and marketing expenses 3,914,314 3,727,039 3,611,477
General and administrative expenses 2,477,919 1,459,319 2,508,380
Bad debt expenses 0 8,735 146,064
Impairment loss on goodwill 0 0 746,962
---------- ---------- ----------
Total costs and expenses 28,496,088 28,377,937 32,005,094
---------- ---------- ----------
Gain(Loss) from Operations. (1,241,550) (2,028,037) (7,306,744)
---------- ---------- ----------
Non-operating income (expense)
Interest income 57,049 106,399 101,250
Foreign exchange gain(loss)-net (621,210) (5,563) 61,362
Investment income 708,761 120,602 (1,589,959)
Gain (loss) on disposal of property, plant & equipment (575) (1,113) (772,776)
Interest income (expense) (72) (34,700) (117)
Other non-operating income (expense) 164,774 41,933 (227,585)
Non-operating income (expense) 308,726 227,558 (2,427,825)
Income tax expense 0 0 141,994
Minority interest income (loss) (157,717) (355,089) (1,925,897)
---------- ---------- ----------
Net Income (Loss) (775,107) (1,445,391) (7,950,666)
---------- ---------- ----------
Net loss per common share (0.02) (0.03) (0.16)
---------- ---------- ----------
Average shares outstanding 50,154,000 50,154,000 50,154,000
GIGAMEDIA LIMITED
CONSOLIDATED BALANCE SHEET
(Unaudited)
Three months ended
3/31/2004 3/31/2003 12/31/2004
-------------------------------------------
USD USD USD
-------------------------------------------
33.025 34.745 33.97
-------------------------------------------
Assets
Current assets
Cash and cash equivalents 12,422,287 32,773,564 35,293,911
Short-term investments 28,626,613 24,258,629 28,956,284
Accounts receivable 5,421,321 4,333,443 4,093,324
Receivables from related parties 0 0 230,805
Inventories-net 6,163,754 8,840,156 4,803,809
Prepaid expenses 4,106,200 631,740 1,367,646
Restricted cash 1,348,788 1,810,932 1,925,494
Note receivable from officer 172,506 533,429 372,390
Other current assets 1,670,495 2,602,433 665,438
----------- ----------- -----------
Total Current Assets 59,931,964 75,784,326 77,709,102
----------- ----------- -----------
Investment
Total investment 37,180,454 16,767,182 15,259,979
Property, plant & equipment - net 15,210,658 20,405,210 15,636,009
Goodwill 0 730,731 0
Intangible assets - net 6,138,570 6,739,237 6,199,099
Total other assets 4,771,214 4,843,581 4,988,020
----------- ----------- -----------
Total assets 123,232,861 125,270,267 119,792,210
----------- ----------- -----------
Liabilities & shareholders' equity
Short-term loans 0 0 0
Notes and accounts payable 18,546,566 13,275,604 16,787,852
Payable to related parties 0 0 407,215
Accrued compensation 1,081,550 577,564 1,418,214
Accrued expenses 3,939,524 1,518,979 3,255,365
Other current liabilities 3,313,940 1,180,042 2,241,968
----------- ----------- -----------
Total current liabilities 26,881,580 16,552,189 24,110,616
----------- ----------- -----------
Total other liabilities 1,979,445 1,485,801 1,797,598
Total liabilities 28,861,025 18,037,990 25,908,214
Minority interests 3,221,304 6,183,979 3,521,367
Total shareholders' equity 91,150,532 101,048,299 90,362,630
----------- ----------- -----------
Total liabilities and shareholders' equity 123,232,861 125,270,267 119,792,210
----------- ----------- -----------