SeaChange International, Inc. (NASDAQ:SEAC) today reported third
quarter fiscal 2017 revenue of $20.0 million and U.S. GAAP loss
from operations of $8.4 million, or $0.24 per basic share, compared
to third quarter fiscal 2016 revenue of $28.7 million and U.S. GAAP
loss from operations of $11.8 million, or $0.35 per basic
share.
The Company’s U.S. GAAP third quarter fiscal 2017 results
included non-GAAP charges of $4.1 million, which consisted
primarily of severance and other restructuring costs, stock-based
compensation, amortization of intangible assets from prior
acquisitions, and other non-operating expense professional fees,
while the third quarter fiscal 2016 results included $12.2 million
of similar non-GAAP charges as well as a provision for loss
contract of $9.2 million. Non-GAAP loss from operations for
the third quarter of fiscal 2017 was $4.3 million, or $0.13 per
basic share, compared to the third quarter of fiscal 2016 non-GAAP
income from operations of $0.4 million, or $0.01 per diluted
share.
For the first nine months of fiscal 2017, the Company posted
revenue of $60.0 million and a U.S. GAAP loss from operations of
$29.7 million, or $0.85 per basic share compared to revenue of
$79.8 million and U.S. GAAP loss from operations of $26.1 million,
or $0.78 per basic share in the same prior period. The
Company posted a non-GAAP loss from operations for the first nine
months of fiscal 2017 of $18.7 million, or $0.54 per basic share
compared to a non-GAAP loss from operations of $7.7 million, or
$0.23 per basic share for the same period of the prior fiscal
year.
“While we are disappointed with our year to date revenue
performance, we continue to make good progress with our turnaround
efforts and our initiatives to drive costs down and return to
profitability and cash flow positive performance,” said Ed Terino,
Chief Executive Officer, SeaChange. “During the third quarter
we continued to strengthen our sales and engineering organizations,
while reducing our cost structure. We remain on track to complete
our cost reduction efforts by fiscal year-end that will yield
approximately $30 million in annual cost savings. These
efforts have already yielded results with increased sales leads, a
growing revenue pipeline, and improved product quality. New
business in the third quarter included a Latin American
video-on-demand and advertising customer upgrade to our Adrenalin
and Infusion platforms, as well as our content management
system. In North America, we won another new customer for
Adrenalin, replacing a video back office competitor in the process.
In addition, we are very pleased to welcome Mark Tubinis as Senior
Vice President of Engineering & Global Services, and believe
that his extensive experience will enhance our ability to optimize
quality and product innovation.”
Peter Faubert, Chief Financial Officer, SeaChange, said, “We
made substantial progress in improving our working capital
management and remain on track to be cash flow positive in the
fiscal fourth quarter. Contributing to the improvements in working
capital management, we reduced our unbilled receivables in the
third quarter, which will provide a positive impact to our cash
flow going forward.”
SeaChange ended the third quarter of fiscal 2017 with cash, cash
equivalents, restricted cash and marketable securities of
approximately $38 million, and no debt outstanding.
OutlookSeaChange anticipates fourth quarter
fiscal 2017 revenue to be in the range of $22 million to $24
million, U.S. GAAP loss from operations to be in the range of $0.13
to $0.18 per basic share, and non-GAAP loss from operations to be
in the range of $0.05 to $0.10 per basic share. For full
fiscal 2017, SeaChange now anticipates revenue to be in the range
of $82 million to $84 million, U.S. GAAP loss from operations to be
in the range of $0.99 to $1.04 per basic share, and non-GAAP
operating loss to be in the range of $0.60 to $0.65 per basic
share.
These GAAP estimates are subject to a number of variables that
are outside of management’s control, including the size of
restructuring expenses, which are influenced by the timing and
scope of restructuring activities, and stock price
fluctuations. The Company has made no provision for
restructuring expense in its outlook for the fourth quarter of
fiscal 2017.
Conference CallThe Company will host a
conference call to discuss its third quarter fiscal 2017 results at
5:00 p.m. ET today, Tuesday, December 6, 2016. The call
may be accessed at 877-407-8037 (U.S.) and 201-689-8037
(international) and via live webcast
at www.schange.com/IR. A replay of the conference call
will be available through December 20, 2016
at 877-660-6853 (U.S.)
or 201-612-7415 (international), conference ID
1364-9586. The webcast will be archived on the investor
relations section of the Company's website
at www.schange.com/IR.
About SeaChange InternationalEnabling our
customers to deliver billions of premium video streams across a
matrix of Pay TV and OTT platforms, SeaChange (Nasdaq:SEAC)
empowers service providers, broadcasters, content owners and brand
advertisers to entertain audiences, engage consumers and expand
business opportunities. As a three-time Emmy award-winning
organization with 23 years of experience, we give media businesses
the content management, delivery and monetization capabilities they
need to craft an individualized branded experience for every viewer
that sets the pace for quality and value worldwide. For more
information, please visit www.schange.com.
Safe Harbor Provision Any statements contained
in this press release that do not describe historical facts,
including regarding anticipated revenue, operating loss, cost
saving initiatives and related costs savings and other financial
matters, are neither promises nor guarantees and may constitute
forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Any such forward-looking
statements contained herein are based on current assumptions and
expectations, but are subject to a number of risks and
uncertainties that may cause actual results to differ materially
from expectations. Factors that could cause actual future results
to differ materially from current expectations include the
following: the continued spending by the Company's customers on
video systems and services and expenses we may incur in fulfilling
customer arrangements; the continued development of the multiscreen
video and OTT market; the inability to meet revenue targets for our
SaaS-based multiscreen service offering; the Company's ability to
successfully introduce new products or enhancements to existing
products and the rate of decline in revenue attributable to our
legacy products; the Company's transition to being a company that
primarily provides software solutions; worldwide economic cycles;
measures taken to address the variability in the market for our
products and services; the loss of or reduction in demand by
one of the Company's large customers; consolidation in the
television service providers industry; the cancellation or deferral
of purchases of the Company's products; the length of the Company's
sales cycles; the timing of revenue recognition of new products due
to customer integration and acceptance requirements; any decline in
demand or average selling prices for our products and services;
failure to manage product transitions; failure to achieve our
financial forecasts due to inaccurate sales forecasts or other
factors, including due to expenses we may incur in fulfilling
customer arrangements; the Company's ability to generate sufficient
revenues to reduce its losses or regain profitability; the
Company's ability to manage its growth; the risks associated with
international operations; the ability of the Company and its
intermediaries to comply with the Foreign Corrupt Practices Act;
foreign currency fluctuation; the Company's ability to protect its
intellectual property rights and the expenses that may be incurred
by the Company to protect its intellectual property rights; an
unfavorable result of current or future litigation; content
providers limiting the scope of content licensed for use in the
video-on-demand and OTT market or other limitations in materials we
use to provide our products and services; the Company's ability to
obtain necessary licenses or distribution rights for third-party
technology; the Company's ability to compete in its marketplace;
the Company's ability to respond to changing technologies; the
impact of acquisitions, divestitures or investments made by the
Company; the Company's ability to access sufficient funding to
finance desired growth and operations; the impact of changes in the
market on the value of our investments; any impairment of the
Company's assets; changes in the regulatory environment; the
Company's ability to hire and retain highly skilled employees; the
ability of the Company to manage and oversee the outsourcing of
engineering work; additional tax liabilities to which the Company
may be subject; the security measures of the Company are breached
and customer data or our data is obtained unlawfully; service
interruptions or delays from our third-party datacenter hosting
facilities; the implementation of restructuring programs;
disruptions to the Company's information technology systems;
uncertainties of regulation of Internet and data
traveling over the Internet; if securities analysts do not
publish favorable research or reports about our business; our use
of non-GAAP reporting; the effectiveness of the Company's
disclosure controls and procedures and internal controls over
financial reporting; the Company's use of estimates in accounting
for the Company's contracts; the performance of the Company's
third-party vendors; the Company's entry into fixed price contracts
and the related risk of cost overruns; the risks associated with
purchasing material components from sole suppliers and using a
limited number of third-party manufacturers; compliance with
conflict minerals regulations; terrorist acts, conflicts, wars and
geopolitical uncertainties; the Company's Delaware
anti-takeover provisions; and the effect on revenue and reported
results of a change in financial accounting standards.
Further information on factors that could cause actual results
to differ from those anticipated is detailed in various publicly
available documents made by the Company from time to time with
the Securities and Exchange Commission, including but not
limited to, those appearing under the caption "Certain Risk
Factors" in the Company's Annual Report on Form 10-K filed
on April 13, 2016. Any forward-looking statements should be
considered in light of those factors. The Company cautions readers
not to place undue reliance on any such forward-looking statements,
which speak as of the date they are made. The Company disclaims any
obligation to publicly update or revise any such statements to
reflect any change in Company expectations or events, conditions or
circumstances on which any such statements may be based, or that
may affect the likelihood that actual results may differ from those
set forth in the forward-looking statements.
SeaChange International,
Inc. |
Preliminary Condensed Consolidated Balance
Sheets |
(Amounts in
thousands) |
|
|
|
|
|
|
|
October 31, |
|
January 31, |
|
|
2016 |
|
2016 |
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
Cash and
cash equivalents |
|
$ |
27,484 |
|
$ |
58,733 |
Restricted cash |
|
|
108 |
|
|
82 |
Marketable securities |
|
|
10,270 |
|
|
12,268 |
Accounts
and other receivables, net |
|
|
25,020 |
|
|
26,331 |
Unbilled
receivables |
|
|
7,913 |
|
|
10,680 |
Inventories, net |
|
|
998 |
|
|
1,682 |
Asset
held for sale |
|
|
235 |
|
|
- |
Prepaid
expenses and other current assets |
|
|
3,374 |
|
|
3,827 |
Property
and equipment, net |
|
|
12,089 |
|
|
14,129 |
Goodwill
and intangible assets, net |
|
|
51,074 |
|
|
44,301 |
Other
assets |
|
|
4,922 |
|
|
5,636 |
Total
assets |
|
$ |
143,487 |
|
$ |
177,669 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
Accounts
payable and other current liabilities |
|
$ |
17,458 |
|
$ |
23,546 |
Deferred
stock consideration |
|
|
- |
|
|
3,205 |
Deferred
revenues |
|
|
13,634 |
|
|
17,410 |
Deferred
tax liabilities and income taxes payable |
|
|
16,593 |
|
|
1,389 |
Other
long term liabilities |
|
|
1,255 |
|
|
1,101 |
Total
liabilities |
|
|
48,940 |
|
|
46,651 |
|
|
|
|
|
Total
stockholders’ equity |
|
|
94,547 |
|
|
131,018 |
Total
liabilities and stockholders’ equity |
|
$ |
143,487 |
|
$ |
177,669 |
|
|
|
|
|
|
SeaChange International, Inc. |
Preliminary Condensed Consolidated Statements
of Operations |
(Unaudited, amounts in thousands, except per
share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
October 31, |
|
October 31, |
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenues: |
|
|
|
|
|
|
|
|
|
Products |
|
|
$ |
3,746 |
|
|
$ |
6,195 |
|
|
$ |
10,481 |
|
|
$ |
16,314 |
|
Services |
|
|
|
16,215 |
|
|
|
22,552 |
|
|
|
49,502 |
|
|
|
63,481 |
|
Total
revenues |
|
|
|
19,961 |
|
|
|
28,747 |
|
|
|
59,983 |
|
|
|
79,795 |
|
Cost of revenues: |
|
|
|
|
|
|
|
|
|
Products |
|
|
|
1,824 |
|
|
|
1,528 |
|
|
|
4,506 |
|
|
|
4,766 |
|
Services |
|
|
|
8,036 |
|
|
|
10,963 |
|
|
|
27,982 |
|
|
|
33,829 |
|
Provision
for loss contract |
|
|
|
- |
|
|
|
9,162 |
|
|
|
- |
|
|
|
9,162 |
|
Amortization of intangible assets |
|
|
|
315 |
|
|
|
184 |
|
|
|
947 |
|
|
|
557 |
|
Stock-based compensation expense |
|
|
|
(26 |
) |
|
|
33 |
|
|
|
131 |
|
|
|
61 |
|
Total
cost of revenues |
|
|
|
10,149 |
|
|
|
21,870 |
|
|
|
33,566 |
|
|
|
48,375 |
|
Gross
profit |
|
|
|
9,812 |
|
|
|
6,877 |
|
|
|
26,417 |
|
|
|
31,420 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
|
7,325 |
|
|
|
8,273 |
|
|
|
23,751 |
|
|
|
26,176 |
|
Selling
and marketing |
|
|
|
3,422 |
|
|
|
3,965 |
|
|
|
10,841 |
|
|
|
11,263 |
|
General
and administrative |
|
|
|
3,673 |
|
|
|
3,648 |
|
|
|
11,579 |
|
|
|
11,446 |
|
Amortization of intangible assets |
|
|
|
540 |
|
|
|
1,038 |
|
|
|
1,572 |
|
|
|
3,003 |
|
Stock-based compensation expense |
|
|
|
791 |
|
|
|
1,104 |
|
|
|
1,685 |
|
|
|
2,943 |
|
Earn-outs
and change in fair value of earn-outs |
|
|
|
- |
|
|
|
492 |
|
|
|
249 |
|
|
|
1,475 |
|
Professional fees - other |
|
|
|
24 |
|
|
|
1 |
|
|
|
328 |
|
|
|
145 |
|
Severance
and other restructuring costs |
|
|
|
2,373 |
|
|
|
197 |
|
|
|
5,991 |
|
|
|
1,026 |
|
Loss on
impairment of long-lived assets |
|
|
|
99 |
|
|
|
- |
|
|
|
99 |
|
|
|
- |
|
Total
operating expenses |
|
|
|
18,247 |
|
|
|
18,718 |
|
|
|
56,095 |
|
|
|
57,477 |
|
Loss
from operations |
|
|
|
(8,435 |
) |
|
|
(11,841 |
) |
|
|
(29,678 |
) |
|
|
(26,057 |
) |
Other
(expenses) income, net |
|
|
|
(67 |
) |
|
|
38 |
|
|
|
220 |
|
|
|
(390 |
) |
Loss
before income taxes and equity income in earnings of
affiliates |
|
|
|
(8,502 |
) |
|
|
(11,803 |
) |
|
|
(29,458 |
) |
|
|
(26,447 |
) |
Income
tax (benefit) provision |
|
|
|
(420 |
) |
|
|
(1,228 |
) |
|
|
14,415 |
|
|
|
(1,003 |
) |
Equity
income in earnings of affiliates, net of tax |
|
|
|
- |
|
|
|
10 |
|
|
|
- |
|
|
|
27 |
|
Net
Loss |
|
|
$ |
(8,082 |
) |
|
$ |
(10,565 |
) |
|
$ |
(43,873 |
) |
|
$ |
(25,417 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss
per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
$ |
(0.23 |
) |
|
$ |
(0.31 |
) |
|
$ |
(1.26 |
) |
|
$ |
(0.76 |
) |
Diluted |
|
|
$ |
(0.23 |
) |
|
$ |
(0.31 |
) |
|
$ |
(1.26 |
) |
|
$ |
(0.76 |
) |
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
35,186 |
|
|
|
33,636 |
|
|
|
34,889 |
|
|
|
33,440 |
|
Diluted |
|
|
|
35,186 |
|
|
|
33,636 |
|
|
|
34,889 |
|
|
|
33,440 |
|
|
|
|
|
|
|
|
|
|
|
|
SeaChange International, Inc. |
Preliminary Condensed Consolidated Statements
of Cash Flows |
(Unaudited, amounts in thousands) |
|
|
|
|
|
|
|
Nine Months Ended |
|
|
October 31, |
|
|
2016 |
|
2015 |
Cash flows from operating
activities: |
|
|
|
|
Net loss |
|
$ |
(43,873 |
) |
|
$ |
(25,417 |
) |
Adjustments to reconcile net loss
to net cash used in operating activities: |
|
|
|
|
Depreciation and amortization of
property and equipment |
|
|
2,289 |
|
|
|
2,554 |
|
Provision for loss contract |
|
|
- |
|
|
|
9,162 |
|
Provision for inventory
obsolescence |
|
|
318 |
|
|
|
65 |
|
Amortization of intangible
assets |
|
|
2,519 |
|
|
|
3,560 |
|
Fair value of acquisition-related
contingent consideration |
|
|
249 |
|
|
|
1,475 |
|
Stock-based compensation
expense |
|
|
1,816 |
|
|
|
3,004 |
|
Deferred income taxes |
|
|
14,649 |
|
|
|
(960 |
) |
Other |
|
|
113 |
|
|
|
61 |
|
Changes in operating assets and
liabilities, excluding impact of acquisition: |
|
|
|
|
Accounts receivable |
|
|
1,987 |
|
|
|
895 |
|
Unbilled receivables |
|
|
2,913 |
|
|
|
(5,743 |
) |
Inventories |
|
|
338 |
|
|
|
(1,207 |
) |
Prepaid expenses and other
assets |
|
|
428 |
|
|
|
(158 |
) |
Accounts payable |
|
|
(2,102 |
) |
|
|
718 |
|
Accrued expenses |
|
|
(4,942 |
) |
|
|
(4,056 |
) |
Deferred revenues |
|
|
(3,864 |
) |
|
|
(2,770 |
) |
Other |
|
|
173 |
|
|
|
(625 |
) |
Total cash used in operating
activities |
|
|
(26,989 |
) |
|
|
(19,442 |
) |
Cash flows from investing
activities: |
|
|
|
|
Purchases of property and
equipment |
|
|
(521 |
) |
|
|
(1,140 |
) |
Investment in capitalized
software |
|
|
- |
|
|
|
(2,030 |
) |
Purchases of marketable
securities |
|
|
(2,252 |
) |
|
|
(3,005 |
) |
Proceeds from sale and maturity of
marketable securities |
|
|
4,249 |
|
|
|
4,503 |
|
Cash paid for acquisition of
business, net of cash acquired |
|
|
(5,243 |
) |
|
|
(11,686 |
) |
Other investing activities |
|
|
2 |
|
|
|
453 |
|
Total cash used in investing
activities |
|
|
(3,765 |
) |
|
|
(12,905 |
) |
Cash flows from financing
activities: |
|
|
|
|
Proceeds from issuance of common
stock relating to stock option exercises |
|
|
64 |
|
|
|
88 |
|
Other financing activities |
|
|
(4 |
) |
|
|
- |
|
Total cash provided by financing
activities |
|
|
60 |
|
|
|
88 |
|
Effect of exchange rate changes on cash |
|
|
(555 |
) |
|
|
270 |
|
Net decrease in cash and cash equivalents |
|
|
(31,249 |
) |
|
|
(31,989 |
) |
Cash and cash equivalents, beginning of
period |
|
|
58,733 |
|
|
|
90,019 |
|
Cash and cash equivalents, end of period |
|
$ |
27,484 |
|
|
$ |
58,030 |
|
|
|
|
|
|
Use of Non-GAAP Financial Information
We define non-GAAP (loss) income from operations as U.S.
Generally Accepted Accounting Principles (“U.S. GAAP”) operating
loss plus stock-based compensation expenses, amortization of
intangible assets, provision for loss contract, earn-outs and
change in fair value of earn-outs, non-operating expense
professional fees and severance and other restructuring costs. We
discuss non-GAAP (loss) income from operations in our quarterly
earnings releases and certain other communications as we believe
non-GAAP (loss) income from operations is an important measure that
is not calculated according to U.S. GAAP. We use non-GAAP (loss)
income from operations in internal forecasts and models when
establishing internal operating budgets, supplementing the
financial results and forecasts reported to our Board of Directors,
determining a component of bonus compensation for executive
officers and other key employees based on operating performance and
evaluating short-term and long-term operating trends in our
operations. We believe that non-GAAP (loss) income from operations
assists in providing an enhanced understanding of our underlying
operational measures to manage the business, to evaluate
performance compared to prior periods and the marketplace, and to
establish operational goals. We believe that these non-GAAP
financial adjustments are useful to investors because they allow
investors to evaluate the effectiveness of the methodology and
information used by management in our financial and operational
decision-making.
Non-GAAP (loss) income from operations is a non-GAAP financial
measure and should not be considered in isolation or as a
substitute for financial information provided in accordance with
U.S. GAAP. This non-GAAP financial measure may not be computed in
the same manner as similarly titled measures used by other
companies. We expect to continue to incur expenses similar to the
non-GAAP (loss) income from operations financial adjustments
described above, and investors should not infer from our
presentation of this non-GAAP financial measure that these costs
are unusual, infrequent or non-recurring.
In managing and reviewing our business performance, we exclude a
number of items required by U.S. GAAP. Management believes that
excluding these items is useful in understanding the trends and
managing our operations. We provide these supplemental non-GAAP
measures in order to assist the investment community to see
SeaChange through the “eyes of management,” and therefore enhance
the understanding of SeaChange’s operating performance. Non-GAAP
financial measures should be viewed in addition to, not as an
alternative to, our reported results prepared in accordance with
U.S. GAAP. Our non-GAAP financial measures reflect adjustments
based on the following items:
Provision for Loss Contract. We entered into a
fixed-price customer contract on a multi-year arrangement, which
included multiple vendors. As the system integrator on the project,
we are subject to any costs overruns or increases with these
vendors resulting in delays or acceptance by our customer. Delays
of customer acceptance on this project require us to recognize a
loss on this project in the period the determination is made. As a
result, we recorded an estimated charge of $9.2 million in the
third quarter of fiscal 2016. We believe that the exclusion of this
expense allows a comparison of operating results that would
otherwise impair comparability between periods.
Amortization of Intangible Assets. We incur
amortization expense of intangible assets related to various
acquisitions that have been made in recent years. These intangible
assets are valued at the time of acquisition, are then amortized
over a period of several years after the acquisition and generally
cannot be changed or influenced by management after the
acquisition. We believe that exclusion of these expenses allows
comparisons of operating results that are consistent over time for
both the Company’s newly-acquired and long-held businesses.
Stock-based Compensation Expense. We incur
expenses related to stock-based compensation included in our U.S.
GAAP presentation of cost of revenues and operating expenses.
Although stock-based compensation is an expense we incur and is
viewed as a form of compensation, the expense varies in amount from
period to period, and is affected by market forces that are
difficult to predict and are not within the control of management,
such as the market price and volatility of our shares, risk-free
interest rates and the expected term and forfeiture rates of the
awards.
Earn-outs and Change in Fair Value of
Earn-outs. Earn-outs and the change in the fair value of
earn-outs are considered by management to be non-recurring expenses
to the former shareholders of the businesses we acquire. We also
incur expenses due to changes in fair value related to contingent
consideration that we believe would otherwise impair comparability
among periods.
Professional Fees - Other. We
have excluded the effect of legal and other professional fees
associated with our acquisitions, divestitures, litigation and
strategic alternatives because the amounts are considered
significant non-operating expenses.
Severance and Other Restructuring
Costs. We incur charges due to the
restructuring of our business, including severance charges and
facility reductions resulting from our restructuring and
streamlining efforts and any changes due to revised estimates,
which we generally would not have otherwise incurred in the periods
presented as part of our continuing operations.
The following table reconciles the Company’s estimated U.S. GAAP
loss from operations to the Company’s non-GAAP (loss) income from
operations:
|
SeaChange International, Inc. |
Preliminary Reconciliation of GAAP to
Non-GAAP |
(Unaudited, amounts in thousands, except per
share and percentage data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
|
October 31, 2016 |
|
October 31, 2015 |
|
|
|
GAAP |
|
|
|
|
|
GAAP |
|
|
|
|
|
|
|
As Reported |
|
Adjustments |
|
Non-GAAP |
|
As Reported |
|
Adjustments |
|
Non-GAAP |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
|
$ |
3,746 |
|
|
$ |
- |
|
|
$ |
3,746 |
|
|
$ |
6,195 |
|
|
$ |
- |
|
|
$ |
6,195 |
|
Services |
|
|
|
16,215 |
|
|
|
- |
|
|
|
16,215 |
|
|
|
22,552 |
|
|
|
- |
|
|
|
22,552 |
|
Total revenues |
|
|
|
19,961 |
|
|
|
- |
|
|
|
19,961 |
|
|
|
28,747 |
|
|
|
- |
|
|
|
28,747 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
|
|
1,824 |
|
|
|
- |
|
|
|
1,824 |
|
|
|
1,528 |
|
|
|
- |
|
|
|
1,528 |
|
Services |
|
|
|
8,036 |
|
|
|
- |
|
|
|
8,036 |
|
|
|
10,963 |
|
|
|
- |
|
|
|
10,963 |
|
Provision for loss contract |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
9,162 |
|
|
|
(9,162 |
) |
|
|
- |
|
Amortization of intangible
assets |
|
|
|
315 |
|
|
|
(315 |
) |
|
|
- |
|
|
|
184 |
|
|
|
(184 |
) |
|
|
- |
|
Stock-based compensation |
|
|
|
(26 |
) |
|
|
26 |
|
|
|
- |
|
|
|
33 |
|
|
|
(33 |
) |
|
|
- |
|
Total cost of revenues |
|
|
|
10,149 |
|
|
|
(289 |
) |
|
|
9,860 |
|
|
|
21,870 |
|
|
|
(9,379 |
) |
|
|
12,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
9,812 |
|
|
|
289 |
|
|
|
10,101 |
|
|
|
6,877 |
|
|
|
9,379 |
|
|
|
16,256 |
|
Gross profit
percentage |
|
|
|
49.2 |
% |
|
|
1.4 |
% |
|
|
50.6 |
% |
|
|
23.9 |
% |
|
|
32.6 |
% |
|
|
56.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
|
7,325 |
|
|
|
- |
|
|
|
7,325 |
|
|
|
8,273 |
|
|
|
- |
|
|
|
8,273 |
|
Selling and marketing |
|
|
|
3,422 |
|
|
|
- |
|
|
|
3,422 |
|
|
|
3,965 |
|
|
|
- |
|
|
|
3,965 |
|
General and administrative |
|
|
|
3,673 |
|
|
|
- |
|
|
|
3,673 |
|
|
|
3,648 |
|
|
|
- |
|
|
|
3,648 |
|
Amortization of intangible
assets |
|
|
|
540 |
|
|
|
(540 |
) |
|
|
- |
|
|
|
1,038 |
|
|
|
(1,038 |
) |
|
|
- |
|
Stock-based compensation
expense |
|
|
|
791 |
|
|
|
(791 |
) |
|
|
- |
|
|
|
1,104 |
|
|
|
(1,104 |
) |
|
|
- |
|
Earn-outs and change in fair value
of earn-outs |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
492 |
|
|
|
(492 |
) |
|
|
- |
|
Professional fees - other |
|
|
|
24 |
|
|
|
(24 |
) |
|
|
- |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
- |
|
Severance and other restructuring
costs |
|
|
|
2,373 |
|
|
|
(2,373 |
) |
|
|
- |
|
|
|
197 |
|
|
|
(197 |
) |
|
|
- |
|
Loss on impairment of long-lived
assets |
|
|
|
99 |
|
|
|
(99 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total operating expenses |
|
|
|
18,247 |
|
|
|
(3,827 |
) |
|
|
14,420 |
|
|
|
18,718 |
|
|
|
(2,832 |
) |
|
|
15,886 |
|
(Loss) income from
operations |
|
|
$ |
(8,435 |
) |
|
$ |
4,116 |
|
|
$ |
(4,319 |
) |
|
$ |
(11,841 |
) |
|
$ |
12,211 |
|
|
$ |
370 |
|
(Loss) income from
operations percentage |
|
|
|
(42.3 |
%) |
|
|
20.7 |
% |
|
|
(21.6 |
%) |
|
|
(41.2 |
%) |
|
|
42.5 |
% |
|
|
1.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
35,186 |
|
|
|
35,186 |
|
|
|
35,186 |
|
|
|
33,636 |
|
|
|
33,636 |
|
|
|
33,636 |
|
Diluted |
|
|
|
35,186 |
|
|
|
35,209 |
|
|
|
35,186 |
|
|
|
33,636 |
|
|
|
33,835 |
|
|
|
33,835 |
|
Non-GAAP operating (loss) income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
$ |
(0.24 |
) |
|
$ |
0.11 |
|
|
$ |
(0.13 |
) |
|
$ |
(0.35 |
) |
|
$ |
0.36 |
|
|
$ |
0.01 |
|
Diluted |
|
|
$ |
(0.24 |
) |
|
$ |
0.11 |
|
|
$ |
(0.13 |
) |
|
$ |
(0.35 |
) |
|
$ |
0.36 |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SeaChange International, Inc. |
Preliminary Reconciliation of GAAP to
Non-GAAP |
(Unaudited, amounts in thousands, except per
share and percentage data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
Nine Months Ended |
|
|
|
October 31, 2016 |
|
October 31, 2015 |
|
|
|
GAAP |
|
|
|
|
|
GAAP |
|
|
|
|
|
|
|
As Reported |
|
Adjustments |
|
Non-GAAP |
|
As Reported |
|
Adjustments |
|
Non-GAAP |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
|
$ |
10,481 |
|
|
$ |
- |
|
|
$ |
10,481 |
|
|
$ |
16,314 |
|
|
$ |
- |
|
|
$ |
16,314 |
|
Services |
|
|
|
49,502 |
|
|
|
- |
|
|
|
49,502 |
|
|
|
63,481 |
|
|
|
- |
|
|
|
63,481 |
|
Total revenues |
|
|
|
59,983 |
|
|
|
- |
|
|
|
59,983 |
|
|
|
79,795 |
|
|
|
- |
|
|
|
79,795 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
|
|
4,506 |
|
|
|
- |
|
|
|
4,506 |
|
|
|
4,766 |
|
|
|
- |
|
|
|
4,766 |
|
Services |
|
|
|
27,982 |
|
|
|
- |
|
|
|
27,982 |
|
|
|
33,829 |
|
|
|
- |
|
|
|
33,829 |
|
Provision
for loss contract |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
9,162 |
|
|
|
(9,162 |
) |
|
|
- |
|
Amortization of intangible assets |
|
|
|
947 |
|
|
|
(947 |
) |
|
|
- |
|
|
|
557 |
|
|
|
(557 |
) |
|
|
- |
|
Stock-based compensation |
|
|
|
131 |
|
|
|
(131 |
) |
|
|
- |
|
|
|
61 |
|
|
|
(61 |
) |
|
|
- |
|
Total cost of revenues |
|
|
|
33,566 |
|
|
|
(1,078 |
) |
|
|
32,488 |
|
|
|
48,375 |
|
|
|
(9,780 |
) |
|
|
38,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
26,417 |
|
|
|
1,078 |
|
|
|
27,495 |
|
|
|
31,420 |
|
|
|
9,780 |
|
|
|
41,200 |
|
Gross profit
percentage |
|
|
|
44.0 |
% |
|
|
1.8 |
% |
|
|
45.8 |
% |
|
|
39.4 |
% |
|
|
12.2 |
% |
|
|
51.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
|
23,751 |
|
|
|
- |
|
|
|
23,751 |
|
|
|
26,176 |
|
|
|
- |
|
|
|
26,176 |
|
Selling
and marketing |
|
|
|
10,841 |
|
|
|
- |
|
|
|
10,841 |
|
|
|
11,263 |
|
|
|
- |
|
|
|
11,263 |
|
General
and administrative |
|
|
|
11,579 |
|
|
|
- |
|
|
|
11,579 |
|
|
|
11,446 |
|
|
|
- |
|
|
|
11,446 |
|
Amortization of intangible assets |
|
|
|
1,572 |
|
|
|
(1,572 |
) |
|
|
- |
|
|
|
3,003 |
|
|
|
(3,003 |
) |
|
|
- |
|
Stock-based compensation expense |
|
|
|
1,685 |
|
|
|
(1,685 |
) |
|
|
- |
|
|
|
2,943 |
|
|
|
(2,943 |
) |
|
|
- |
|
Earn-outs and change in fair value of earn-outs |
|
|
249 |
|
|
|
(249 |
) |
|
|
- |
|
|
|
1,475 |
|
|
|
(1,475 |
) |
|
|
- |
|
Professional fees - other |
|
|
|
328 |
|
|
|
(328 |
) |
|
|
- |
|
|
|
145 |
|
|
|
(145 |
) |
|
|
- |
|
Severance
and other restructuring costs |
|
|
|
5,991 |
|
|
|
(5,991 |
) |
|
|
- |
|
|
|
1,026 |
|
|
|
(1,026 |
) |
|
|
- |
|
Loss on
impairment of long-lived asset |
|
|
|
99 |
|
|
|
(99 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total operating expenses |
|
|
|
56,095 |
|
|
|
(9,924 |
) |
|
|
46,171 |
|
|
|
57,477 |
|
|
|
(8,592 |
) |
|
|
48,885 |
|
(Loss) income from operations |
|
|
$ |
(29,678 |
) |
|
$ |
11,002 |
|
|
$ |
(18,676 |
) |
|
$ |
(26,057 |
) |
|
$ |
18,372 |
|
|
$ |
(7,685 |
) |
(Loss) income from operations percentage |
|
|
|
(49.5 |
%) |
|
|
18.4 |
% |
|
|
(31.1 |
%) |
|
|
(32.7 |
%) |
|
|
23.1 |
% |
|
|
(9.6 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
34,889 |
|
|
|
34,889 |
|
|
|
34,889 |
|
|
|
33,440 |
|
|
|
33,440 |
|
|
|
33,440 |
|
Diluted |
|
|
|
34,889 |
|
|
|
34,955 |
|
|
|
34,889 |
|
|
|
33,440 |
|
|
|
33,615 |
|
|
|
33,440 |
|
Non-GAAP
operating (loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
$ |
(0.85 |
) |
|
$ |
0.31 |
|
|
$ |
(0.54 |
) |
|
$ |
(0.78 |
) |
|
$ |
0.55 |
|
|
$ |
(0.23 |
) |
Diluted |
|
|
$ |
(0.85 |
) |
|
$ |
0.31 |
|
|
$ |
(0.54 |
) |
|
$ |
(0.78 |
) |
|
$ |
0.55 |
|
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles the Company’s forecasted U.S.
GAAP loss from operations to the Company’s forecasted non-GAAP loss
from operations for the Company’s fourth fiscal quarter and full
fiscal 2017:
|
|
|
|
SeaChange International,
Inc.Reconciliation of GAAP to Non-GAAP
Guidance(Unaudited, amounts in thousands except per share
data) |
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
January 31, 2017 |
|
January 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
guidance |
$ |
22,000 |
|
to |
$ |
24,000 |
|
|
$ |
82,000 |
|
to |
$ |
84,000 |
|
|
|
|
|
|
GAAP loss from
operations per basic share |
$ |
(0.18 |
) |
|
$ |
(0.13 |
) |
|
$ |
(1.04 |
) |
|
$ |
(0.99 |
) |
Exclude
stock compensation expense |
|
0.03 |
|
|
|
0.03 |
|
|
|
0.08 |
|
|
|
0.08 |
|
Exclude
amortization of intangible assets |
|
0.02 |
|
|
|
0.02 |
|
|
|
0.09 |
|
|
|
0.09 |
|
Exclude
earnouts |
|
- |
|
|
|
- |
|
|
|
0.01 |
|
|
|
0.01 |
|
Exclude
professional fees associated with divestitures |
|
- |
|
|
|
- |
|
|
|
0.01 |
|
|
|
0.01 |
|
Exclude
restructuring costs |
|
0.03 |
|
|
|
0.03 |
|
|
|
0.20 |
|
|
|
0.20 |
|
Non-GAAP loss from
operations per basic share |
$ |
(0.10 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.65 |
) |
|
$ |
(0.60 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
SeaChange International,
Inc. |
|
|
|
|
|
|
|
|
|
|
|
Supplemental Schedule - Revenue
Breakout |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited, amounts in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
|
October 31, |
|
|
October 31, |
|
|
|
|
2016 |
|
2015 |
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Product Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Video
Platform |
|
|
$ |
1,797 |
|
$ |
3,051 |
|
|
$ |
6,148 |
|
$ |
8,222 |
|
Advertising |
|
|
|
98 |
|
|
650 |
|
|
|
219 |
|
|
987 |
|
User
Experience |
|
|
|
189 |
|
|
168 |
|
|
|
481 |
|
|
53 |
|
Hardware |
|
|
|
1,209 |
|
|
2,146 |
|
|
|
2,141 |
|
|
5,741 |
|
Third-party Products |
|
|
|
453 |
|
|
180 |
|
|
|
1,492 |
|
|
1,311 |
|
Total
Product Revenues |
|
|
|
3,746 |
|
|
6,195 |
|
|
|
10,481 |
|
|
16,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Revenues: |
|
|
|
|
|
|
|
|
|
|
|
Maintenance and Support |
|
|
|
8,768 |
|
|
10,724 |
|
|
|
27,521 |
|
|
30,289 |
|
SaaS |
|
|
|
692 |
|
|
1,967 |
|
|
|
2,487 |
|
|
3,280 |
|
Professional Services - Video Platform |
|
|
|
5,206 |
|
|
8,063 |
|
|
|
15,571 |
|
|
18,500 |
|
User
Experience |
|
|
|
1,549 |
|
|
1,798 |
|
|
|
3,923 |
|
|
11,412 |
|
Total
Service Revenues |
|
|
|
16,215 |
|
|
22,552 |
|
|
|
49,502 |
|
|
63,481 |
|
Total Revenues |
|
$ |
19,961 |
|
$ |
28,747 |
|
|
$ |
59,983 |
|
$ |
79,795 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact: Press
Jim Sheehan
SeaChange
1-978-897-0100 x3064
jim.sheehan@schange.com
Investors
Monica Gould
The Blueshirt Group
1-212-871-3927
monica@blueshirtgroup.com
SeaChange (NASDAQ:SEAC)
Historical Stock Chart
From Mar 2024 to Apr 2024
SeaChange (NASDAQ:SEAC)
Historical Stock Chart
From Apr 2023 to Apr 2024