GigaMedia Reports Third-Quarter 2011 Financial Results


TAIPEI, Taiwan, November 18, 2011 /PRNewswire-Asia/ -- GigaMedia Limited (NASDAQ: GIGM) today announced third-quarter 2011 revenues of $7.8 million, down 12 percent quarter-over-quarter.

Third-quarter 2011 core net loss was $3.9 million; core basic and fully-diluted loss per share were each $0.07. (Note 1)

"We experienced a challenging environment during the third quarter with low levels of customer activity in our casual games and strong competition," stated GigaMedia Limited Chief Executive Officer Yichin Lee. "Weaknesses are clear: our offerings are not broad or deep enough and our business unit operations are not efficient. As a result, our financial performance continues to suffer."

"We are making incremental improvements but need to restructure to respond to an ongoing, dramatic shift in online gaming from PCs to mobile devices," added CEO Yichin Lee. "As a third-party publisher, we are at a competitive disadvantage in today's environment where the risks for major games are higher than ever and speed and flexibility are critical. In sum, our strategy as a publisher is not working."

"Starting in the fourth quarter we will change course," added CEO Yichin Lee. "We will build a more complete online games business with a broader and deeper portfolio supported by specific development capabilities for different game genres. We will also extend our platform to mobile devices. The partnership announced today with Mark Jacob's team is a major breakthrough in this area. We believe this approach will both allow us to better compete and lower our risk."

"We will also restructure our business portfolio, adding growth initiatives in new areas of the media value chain," stated CEO Yichin Lee. "New offline initiatives will be added to deepen our customer connections and lower our risk profile."

'In short, going forward we will create a business that is more easily planned and managed and a business model that we can better control and leverage," stated CEO Yichin Lee. "We have a lot of work ahead of us, but we are convinced our strategy will provide us with substantial opportunities for growth, stronger performance, and increased shareholder value."

Note 1:

Core net loss and core basic and fully-diluted loss per share are 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.


    * Taiwan: Business continued to deliver solid profitability; MMO games A.V.A. and Tales Runner drove a 20 percent year-over-year increase in FunTown's revenues; preparing early 2012 launch of new iPhone MahJong product; tournament competitions held in 3Q for A.V.A. and MahJong - initial steps in expanding GigaMedia's game tournament platform.

    * Southeast Asia: restructuring drove a quarter-over-quarter improvement of gross margin, to 33.7 percent from 11.8 percent.

    * Investments ongoing in new China platform while continuing to evaluate new games and pursue all means to resolve the dispute in connection with the China-based business T2CN.

    * Corporate update: 1) share buyback continues to return value to shareholders; under the board-approved share buyback plan, as of September 30, 2011 GigaMedia has repurchased a total of 4.7 million shares; and 2) management committed to the disposal of certain Asian studio investments within 2011 to realize gains and crystallize value on GigaMedia's balance sheet.

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