$GIGM
Two years of turning around operations and building a diversified growth company
On November 14, 2013, GigaMedia announced a strengthened business outlook for 2014 forecasting accelerating revenue growth and significant improvement in its financials. [see Outlook]
The strengthened business outlook is the end result of decisive steps management took in 2013 to turn around GigaMedia’s financial performance.
2013 Restructuring and Repositioning
GigaMedia entered 2013 facing many challenges. The company was dependent on an online games business operating an unfocused, aging portfolio of games in a shrinking market – PC games, and its pipeline was weak. With few clear opportunities to grow, the business outlook was uncertain.
To address these challenges, management restructured operations in 2013. The restructuring focused on cost cutting, building two new growth platforms in high-growth game markets – mobile games and social casino games, and strengthening a third growth platform – a new cloud computing business. GigaMedia also invested in new technology to support growth, including the acquisition of a majority interest in a mobile games developer, and strengthened its management team and board of directors.
2014 Growing Value
Today GigaMedia has a new management team, a new board, and new businesses. In 2014, for the first time in several years, the company will launch multiple growth initiatives. The company is strongly positioned to grow value:
Cost structure down sharply – 1Q consolidated operating costs down approximately 48% YoY.
Focus is on growth markets: mobile and social casino games, and cloud computing services.
Games business expects growth: First mobile game launched in March; more mobile games and new social casino games platforms coming in 2014, to be followed by a new social mobile game platform.
Cloud business forecasts growth: New cloud services made initial revenue contributions in Q4 2013; multiple new services to be launched in 2014 expanding target market to larger enterprises.
Given the company’s healthy balance sheet, management also continues to examine and evaluate strategic acquisition and partnership opportunities that it believes may add synergies to GigaMedia’s businesses and accelerate the company’s growth.
