GigaMedia Limited (GIGM, Financial), the provider of entertainment software, seems to have fared well in the first quarter ended March 31, 2015. The online entertainment provider released its unaudited report on Friday. Revenues for the quarter came in at $3.2 million as compared to $2.0 million for the same period in the prior year. Gross profit, however, fell 27.3% from $1,015 thousand last year to $738,000 this quarter. The company currently has a market capitalization value of $42.56 million. On trading day Friday, the highest value per share touched $0.80. Considering a 52-week basis, stock of GigaMedia touched a high of $1.18 per share while lowest price was $0.7.
Number mix
As stated earlier, revenues reported were $3,162 thousand, a 45.4% increase as compared to the previous year’s first quarter. The main reason for the increase in revenue was the spurt in revenues from the gaming division. This division alone contributed $2.7 million, an increase of 35% quarter over quarter. Operating expenses also rose 16% to $4.2 million from $3.6 million for Q1, 2014. This was in line with the fourth quarter operating expenses last year as a notable change was not witnessed. Non-operating income reported was $8.6 million. This was due to the sale of stock last month. The EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter was $5.3 million, a 6% decline as compared to 2014’s fourth quarter. However, the company is progressing steadily given that the EBITDA for the first quarter last year ran into negative figures at $2.8 million loss.
Operating revenues reported was $3.2 million, an 18.9% rise over the fourth quarter. Revenues mainly rose as various new mobile games were launched at the end of last year and the beginning of this year. Five new mobile games and a new role-playing game launched in February gave the company an additional advantage. This success has stemmed from the fact that around 59% of total operating revenues were contributed from mobile games alone. Social casino games made up 27% while the Cloud computing unit contributed 14% of the total operating revenue.
Management moves
GigaMedia, which have its headquarters at Taipei, Taiwan, have maintained a strong financial position. By the end of the quarter, total cash was $84.6 million or $1.53 a share. Cash and marketable securities-current was $75.6 million, a reduction of 5.5% as compared to 2014’s fourth quarter. On the same day the results were declared, Dirk Chen, the chief financial officer of GigaMedia, announced his resignation. He cited personal reasons for his departure as the CFO. However, he will still serve on the board of directors to help in strategic decision making. Chen helped the company in consolidating its strengths on financial grounds. He also ensured that GigaMedia implemented sound financial practices coupled with good corporate governance. CEO Collin Hwang thanked him for his service and wished him the best for his future endeavors. Huang Shih-Chin, HOD of the financial unit, will take over his post on an interim basis.
Investors take
GigaMedia has an institutional type of share ownership with 3,101 thousand shares held by the end of the quarter. The company has around 22 owners and an ownership of about 5.61%. The entertainment provider expects its cloud computing services and social casino game to witness a good growth in the coming months this year. Though not made official as yet, GigaMedia is contemplating on signing on partnerships or making strategic investments so as to increase its revenue. This in turn could provide a good EPS to shareholders. The company announced the completion of sale of around $18 million stock last month. This was done on the Taiwan open market through block sales. In all probability, hopefully the working capital will get enhanced due to the disposal of securities investment.
