SeaChange International, Inc. (NASDAQ: SEAC) today reported third
quarter fiscal 2019 revenue of $18.6 million and a U.S. GAAP loss
from operations of $2.5 million, or $0.07 per basic share, compared
to third quarter fiscal 2018 revenue of $23.4 million and U.S. GAAP
income from operations of $0.9 million, or $0.03 per fully diluted
share.
The Company’s U.S. GAAP third quarter fiscal 2019 results
included non-GAAP charges of $2.2 million, which consisted
primarily of stock-based compensation of $0.8 million, amortization
of intangible assets from prior acquisitions of $0.2 million and
severance and other restructuring costs of $1.0 million, while
third quarter fiscal 2018 results included non-GAAP charges of $2.3
million. The non-GAAP loss from operations in the third quarter of
fiscal 2019 was $0.3 million, or $0.01 per basic share, compared to
the third quarter of fiscal 2018 non-GAAP income from operations of
$3.2 million, or $0.09 per fully diluted share.
For the first nine months of fiscal 2019, the Company reported
revenue of $45.4 million and a U.S. GAAP loss from operations of
$15.9 million, or $0.45 per basic share, compared to revenue of
$57.3 million and a U.S. GAAP loss from operations of $6.6 million,
or $0.19 per basic share, in the same period in the prior fiscal
year. The non-GAAP loss from operations for the first nine months
of fiscal 2019 was $10.5 million, or $0.29 per basic share,
compared to non-GAAP operating income of $0.5 million, or $0.01 per
fully diluted share, in the same period of fiscal 2018.
Ed Terino, Chief Executive Officer, SeaChange, said, “Our third
quarter revenues were a substantial improvement over our prior two
quarters of fiscal 2019. We were successful in closing
several seven figure deals in Q3, as well as deals with several new
companies. We are seeing good pipeline opportunities for
sequential bookings growth in Q4’19, including software upgrade
opportunities within our service provider customer base as well as
several PanoramiC opportunities with new customers.”
He added, “As we head into FY2020, we are excited by the
market’s reaction to several product innovations for cFlow and
PanoramiC that we have demonstrated at recent industry trade shows
and expect to launch in the first half of fiscal 2020.”
Peter Faubert, Chief Financial Officer, SeaChange, said, “In the
third quarter, we completed most elements of the cost reduction
program announced in September, which was designed to save
approximately $6 million on an annualized basis. We are focused on
the goal of returning SeaChange to operating profitability and
positive cash flow in the first quarter of fiscal 2020.”
SeaChange ended the third quarter of fiscal 2019 with cash, cash
equivalents, restricted cash and marketable securities of $32.4
million, and no debt outstanding.
OutlookSeaChange anticipates fourth quarter
fiscal 2019 revenue to be in the range of $16 million to $20
million, U.S. GAAP operating loss from operations of $0.08 to $0.01
per basic share, and non-GAAP operating results between a loss of
$0.05 per basic share to income of $0.02 per fully diluted
share.
For the full fiscal year 2019, the Company has revised its
expectations to anticipate revenue in the range of $61 million to
$65 million, U.S. GAAP operating loss of $0.53 to $0.46 per basic
share and a non-GAAP operating loss between $0.34 to $0.27 per
basic share. Previously the Company had expected revenue in the
range of $70 million to $75 million, U.S. GAAP operating loss of
$0.37 to $0.26 per basic share and a non-GAAP operating loss
between $0.15 to $0.04 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 of
certain non-U.S. restructuring activities, and stock price
fluctuations.
Conference CallThe Company will host a
conference call to discuss its third quarter fiscal 2019 results at
5:00 p.m. ET today, Monday, December 10, 2018. The call may
be accessed by dialing 877-407-8037 (U.S.) and 201-689-8037
(international) and via live webcast on the Events page at
investors.seachange.com. The webcast replay will be archived
the same location following completion of the call.
About SeaChange International For 25 years,
SeaChange (Nasdaq: SEAC) has pioneered solutions to help video
providers around the world manage and monetize their content. As
the video industry rapidly evolves to meet the “anytime, anywhere”
demands of today’s viewers, SeaChange’s comprehensive content,
business, advertising, and experience management solutions provide
a mature, network-agnostic, cloud-enabled platform of scalable core
capabilities that video service providers, broadcasters, content
owners and brand advertisers need to create the personalized,
indivisual™ experiences that drive viewer engagement and
monetization. For more information, please visit
www.seachange.com.
Safe Harbor Provision
Any statements contained in this press release that do not
describe historical facts, including regarding anticipated revenue,
income from operations, cost savings and other financial matters,
including the anticipated closing of transactions, are neither
promises nor guarantees and may constitute “forward-looking
statements” as that term is defined in the U.S. Private Securities
Litigation Reform Act of 1995. Such forward-looking statements may
include words such as “may,” “might,” “will,” “should,” “could,”
“expects,” “plans,” “anticipates,” “believes,” “seeks,” “intends,”
“estimates,” “predicts,” “potential” or “continue,” the negative of
these terms and other comparable terminology. Any such
forward-looking statements contained herein are based on current
assumptions, estimates and expectations, but are subject to a
number of known and unknown risks and significant business,
economic and competitive uncertainties that may cause actual
results to differ materially from expectations. Numerous factors
could cause actual future results to differ materially from current
expectations expressed or implied by such forward-looking
statements, including, without limitation, the following: the
continued spending by the Company’s customers on video solutions
and services and expenses we may incur in fulfilling customer
arrangements; the success of our efforts to introduce SaaS-based
multiscreen service offerings; the Company’s ability to
successfully introduce new products or enhancements to existing
products; the manner in which the multiscreen video and OTT markets
develop; the Company’s transition to being a company that primarily
provides software solutions; the Company’s ability to compete in
the marketplace; any failure by the Company to respond to changing
technology; measures taken to address the variability in the market
for our products and services; the loss of or reduction in demand,
or the return of product, by one of the Company’s large customers
or the failure of revenue acceptance criteria in a given fiscal
quarter; consolidation in the markets the Company serves; the
cancellation or deferral of purchases of the Company’s products;
the length of the Company’s sales cycles; 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 impact of restructuring programs; 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 relating to the
Company’s intellectual property; 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 realize the
benefits of completed or future acquisitions; the impact of
acquisitions, divestitures or investments made by the Company; the
Company’s ability to raise additional funds through capital markets
on favorable terms and in a timely manner; the Company’s ability to
access sufficient funding to finance desired growth and operations;
the performance of the companies in which the Company has made
equity investments; any impairment of the Company’s assets; the
impact of changes in the market on the value of our investments;
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;
possible adjustments to estimates resulting from the new tax
legislation; any breach of the Company’s security measures and
customer data or our data being obtained unlawfully; service
interruptions or delays from our third-party data center hosting
facilities; disruptions to the Company’s information technology
systems; uncertainties of regulation of Internet and data traveling
over the Internet; the volatility of our stock; actions that may be
taken by significant stockholders; if securities analysts do not
publish favorable research or reports about our business; our use
of non-GAAP reporting; change in accounting standards; any weakness
in the Company’s 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; terrorist acts, conflicts, wars and
geopolitical uncertainties; and the Company’s Delaware
anti-takeover provisions. These risks and other risk factors that
could cause actual results to differ from those anticipated are
detailed in various publicly available documents filed by the
Company from time to time with the Securities and Exchange
Commission (SEC), which are available at www.sec.gov, including but
not limited to, such information appearing under the caption “Risk
Factors” in the Company’s Annual Report on Form 10-K filed with the
SEC on April 16, 2018. Any forward-looking statements should be
considered in light of those risk factors. The Company cautions
readers not to rely on any such forward-looking statements, which
speak only as of the date they are made. The Company disclaims any
intent or obligation to publicly update or revise any such
forward-looking statements to reflect any change in Company
expectations or future events, conditions or circumstances on which
any such forward-looking statements may be based, or that may
affect the likelihood that actual results may differ from those set
forth in such forward-looking statements.
Contact:Investors Mary T.
ConwayConway
Communications1-781-772-1679marytconway@comcast.net
TABLES TO FOLLOW
SeaChange International,
Inc.Condensed Consolidated Balance
Sheets(Unaudited, amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
October 31, |
|
January 31, |
|
|
|
|
2018 |
|
2018 |
Assets |
|
|
|
|
|
Cash and
cash equivalents |
|
|
|
$ |
21,554 |
|
$ |
43,652 |
Restricted cash |
|
|
|
|
543 |
|
|
9 |
Marketable securities |
|
|
|
|
10,286 |
|
|
8,440 |
Accounts
and other receivables, net |
|
|
|
|
12,669 |
|
|
22,537 |
Unbilled
receivables |
|
|
|
|
7,881 |
|
|
3,101 |
Inventories, net |
|
|
|
|
706 |
|
|
666 |
Prepaid
expenses and other current assets |
|
|
|
|
5,479 |
|
|
3,557 |
Property and equipment, net |
|
|
8,660 |
|
|
9,471 |
Goodwill and intangible assets, net |
|
|
24,487 |
|
|
26,882 |
Other assets |
|
|
1,068 |
|
|
1,015 |
Total
assets |
|
|
|
$ |
93,333 |
|
$ |
119,330 |
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
Accounts
payable and other current liabilities |
|
|
|
$ |
11,006 |
|
$ |
17,810 |
Deferred
revenues |
|
|
|
|
7,074 |
|
|
14,433 |
Deferred tax liabilities and income taxes payable |
|
|
600 |
|
|
1,367 |
Other long-term liabilities |
|
|
- |
|
|
- |
Total
liabilities |
|
|
|
18,680 |
|
|
33,610 |
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
|
74,653 |
|
|
85,720 |
Total
liabilities and stockholders’ equity |
|
|
|
$ |
93,333 |
|
$ |
119,330 |
|
|
|
|
|
|
|
SeaChange International,
Inc.Condensed Consolidated Statements of
Operations(Unaudited, amounts in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
October 31, |
|
October 31, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
Revenues: |
|
|
|
|
|
|
|
|
Products |
|
$ |
8,268 |
|
|
$ |
11,119 |
|
|
$ |
12,821 |
|
|
$ |
18,907 |
|
Services |
|
|
10,343 |
|
|
|
12,311 |
|
|
|
32,626 |
|
|
|
38,415 |
|
Total
revenues |
|
|
18,611 |
|
|
|
23,430 |
|
|
|
45,447 |
|
|
|
57,322 |
|
Cost of revenues: |
|
|
|
|
|
|
|
|
Products |
|
|
1,716 |
|
|
|
1,198 |
|
|
|
2,518 |
|
|
|
3,088 |
|
Services |
|
|
5,428 |
|
|
|
5,612 |
|
|
|
15,914 |
|
|
|
15,810 |
|
Amortization of intangible assets |
|
|
178 |
|
|
|
255 |
|
|
|
534 |
|
|
|
764 |
|
Stock-based compensation expense |
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
3 |
|
Total
cost of revenues |
|
|
7,323 |
|
|
|
7,066 |
|
|
|
18,967 |
|
|
|
19,665 |
|
Gross
profit |
|
|
11,288 |
|
|
|
16,364 |
|
|
|
26,480 |
|
|
|
37,657 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research
and development |
|
|
4,836 |
|
|
|
5,634 |
|
|
|
15,477 |
|
|
|
17,411 |
|
Selling
and marketing |
|
|
3,705 |
|
|
|
3,916 |
|
|
|
10,776 |
|
|
|
9,292 |
|
General
and administrative |
|
|
3,209 |
|
|
|
3,868 |
|
|
|
11,224 |
|
|
|
10,595 |
|
Amortization of intangible assets |
|
|
205 |
|
|
|
370 |
|
|
|
664 |
|
|
|
1,075 |
|
Stock-based compensation expense |
|
|
768 |
|
|
|
696 |
|
|
|
2,570 |
|
|
|
2,224 |
|
Professional fees - other |
|
|
50 |
|
|
|
- |
|
|
|
50 |
|
|
|
21 |
|
Severance
and other restructuring costs |
|
|
1,030 |
|
|
|
960 |
|
|
|
1,620 |
|
|
|
3,670 |
|
Total
operating expenses |
|
|
13,803 |
|
|
|
15,444 |
|
|
|
42,381 |
|
|
|
44,288 |
|
(Loss) Income from
operations |
|
|
(2,515 |
) |
|
|
920 |
|
|
|
(15,901 |
) |
|
|
(6,631 |
) |
Other (expenses)
income, net |
|
|
(2,087 |
) |
|
|
14 |
|
|
|
(4,898 |
) |
|
|
969 |
|
(Loss) income before
income taxes |
|
|
(4,602 |
) |
|
|
934 |
|
|
|
(20,799 |
) |
|
|
(5,662 |
) |
Income tax (benefit)
provision |
|
|
(775 |
) |
|
|
1,154 |
|
|
|
(2,421 |
) |
|
|
1,458 |
|
Net
loss |
|
$ |
(3,827 |
) |
|
$ |
(220 |
) |
|
$ |
(18,378 |
) |
|
$ |
(7,120 |
) |
|
|
|
|
|
|
|
|
|
Net loss per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.11 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.52 |
) |
|
$ |
(0.20 |
) |
Diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.52 |
) |
|
$ |
(0.20 |
) |
Weighted-average common
shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
35,747 |
|
|
|
35,479 |
|
|
|
35,668 |
|
|
|
35,381 |
|
Diluted |
|
|
35,747 |
|
|
|
35,479 |
|
|
|
35,668 |
|
|
|
35,381 |
|
|
|
|
|
|
|
|
|
|
SeaChange International,
IncCondensed Consolidated Statements of Cash
Flows(Unaudited, amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
October 31, |
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
Cash flows from operating activities: |
|
|
|
|
Net loss |
|
$ |
(18,378 |
) |
|
$ |
(7,120 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization of property and
equipment |
|
1,053 |
|
|
|
1,758 |
|
|
Amortization of intangible assets |
|
1,198 |
|
|
|
1,839 |
|
|
Stock-based compensation expense |
|
2,571 |
|
|
|
2,227 |
|
|
Deferred income taxes |
|
(702 |
) |
|
|
102 |
|
|
Other non-cash reconciling items, net |
|
27 |
|
|
|
76 |
|
|
Changes in operating assets and liabilities, excluding
impact of acquisition: |
|
|
|
|
Accounts receivable |
|
9,100 |
|
|
|
(1,401 |
) |
|
Unbilled receivables |
|
(4,957 |
) |
|
|
3,289 |
|
|
Inventories |
|
(43 |
) |
|
|
(165 |
) |
|
Prepaid expenses and other assets |
|
(2,107 |
) |
|
|
62 |
|
|
Accounts payable |
|
2,401 |
|
|
|
(3,199 |
) |
|
Accrued expenses |
|
(9,152 |
) |
|
|
942 |
|
|
Deferred revenues |
|
(7,060 |
) |
|
|
355 |
|
|
Other operating activities |
|
2,424 |
|
|
|
327 |
|
|
Total cash used in operating activities |
|
(23,625 |
) |
|
|
(908 |
) |
Cash flows from investing activities: |
|
|
|
|
Purchases of property and equipment |
|
|
|
|
(328 |
) |
|
|
(386 |
) |
|
Purchases of marketable securities |
|
|
|
|
(8,510 |
) |
|
|
(7,246 |
) |
|
Proceeds
from sale and maturity of marketable securities |
|
|
|
|
6,649 |
|
|
|
7,993 |
|
|
Other
investing activities |
|
|
|
|
- |
|
|
|
176 |
|
|
Total cash (used in) provided by investing activities |
|
(2,189 |
) |
|
|
537 |
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from issuance of common stock |
|
81 |
|
|
|
53 |
|
|
Payments of withholding tax on RSU vesting |
|
(43 |
) |
|
|
(52 |
) |
|
Total cash provided by financing activities |
|
38 |
|
|
|
1 |
|
Effect of exchange rate changes on cash |
|
4,213 |
|
|
|
(878 |
) |
Net decrease in cash, cash equivalents and restricted cash |
|
(21,563 |
) |
|
|
(1,248 |
) |
Cash, cash equivalents and restricted cash, beginning of
period |
|
43,661 |
|
|
|
28,411 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
22,097 |
|
|
$ |
27,163 |
|
|
|
|
|
|
|
|
|
Non-GAAP Measures
We define non-GAAP (loss) income from operations as U.S. GAAP
operating (loss) income plus stock-based compensation expenses,
amortization of intangible assets, non-operating 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 operating
(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 the non-GAAP (loss) income from operations financial
measure 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 the 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
financial adjustments described above in arriving at non-GAAP
(loss) income from operations 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 in seeing
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:
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
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.
Professional Fees - Other. We have excluded the
effect of legal and other professional costs 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 includes the reconciliations of our U.S.
GAAP (loss) income from operations, the most directly comparable
U.S. GAAP financial measure, to our non-GAAP (loss) income from
operations for the three and nine months ended October 31, 2018 and
2017 (amounts in thousands, except per share and percentage
data):
SeaChange International,
Inc.Reconciliation of GAAP to Non-GAAP
(Unaudited, amounts in thousands, except per share and
percentage data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
|
|
|
|
|
October 31, 2018 |
|
October 31, 2017 |
|
|
|
|
|
|
|
GAAP |
|
|
|
|
|
GAAP |
|
|
|
|
|
|
|
|
|
|
|
As Reported |
|
Adjustments |
|
Non-GAAP |
|
As Reported |
|
Adjustments |
|
Non-GAAP |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
|
|
|
|
$ |
8,268 |
|
|
$ |
- |
|
|
$ |
8,268 |
|
|
$ |
11,119 |
|
|
$ |
- |
|
|
$ |
11,119 |
|
|
Services |
|
|
|
|
|
|
10,343 |
|
|
|
- |
|
|
|
10,343 |
|
|
|
12,311 |
|
|
|
- |
|
|
|
12,311 |
|
|
Total revenues |
|
|
|
|
|
18,611 |
|
|
|
- |
|
|
|
18,611 |
|
|
|
23,430 |
|
|
|
- |
|
|
|
23,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
|
|
|
|
|
1,716 |
|
|
|
- |
|
|
|
1,716 |
|
|
|
1,198 |
|
|
|
- |
|
|
|
1,198 |
|
|
Services |
|
|
|
|
|
|
5,428 |
|
|
|
- |
|
|
|
5,428 |
|
|
|
5,612 |
|
|
|
- |
|
|
|
5,612 |
|
|
Amortization of intangible assets |
|
|
|
|
178 |
|
|
|
(178 |
) |
|
|
- |
|
|
|
255 |
|
|
|
(255 |
) |
|
|
- |
|
|
Stock-based
compensation |
|
|
|
|
1 |
|
|
|
(1 |
) |
|
|
- |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
- |
|
|
Total cost of revenues |
|
|
|
|
7,323 |
|
|
|
(179 |
) |
|
|
7,144 |
|
|
|
7,066 |
|
|
|
(256 |
) |
|
|
6,810 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
|
|
11,288 |
|
|
|
179 |
|
|
|
11,467 |
|
|
|
16,364 |
|
|
|
256 |
|
|
|
16,620 |
|
|
Gross profit percentage |
|
|
|
|
60.7 |
% |
|
|
1.0 |
% |
|
|
61.6 |
% |
|
|
69.8 |
% |
|
|
1.1 |
% |
|
|
70.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
|
|
4,836 |
|
|
|
- |
|
|
|
4,836 |
|
|
|
5,634 |
|
|
|
- |
|
|
|
5,634 |
|
|
Selling and
marketing |
|
|
|
|
|
3,705 |
|
|
|
- |
|
|
|
3,705 |
|
|
|
3,916 |
|
|
|
- |
|
|
|
3,916 |
|
|
General and
administrative |
|
|
|
|
3,209 |
|
|
|
- |
|
|
|
3,209 |
|
|
|
3,868 |
|
|
|
- |
|
|
|
3,868 |
|
|
Amortization of intangible assets |
|
|
|
|
205 |
|
|
|
(205 |
) |
|
|
- |
|
|
|
370 |
|
|
|
(370 |
) |
|
|
- |
|
|
Stock-based
compensation expense |
|
|
|
768 |
|
|
|
(768 |
) |
|
|
- |
|
|
|
696 |
|
|
|
(696 |
) |
|
|
- |
|
|
Professional fees - other |
|
|
|
|
50 |
|
|
|
(50 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Severance
and other restructuring costs |
|
|
|
1,030 |
|
|
|
(1,030 |
) |
|
|
- |
|
|
|
960 |
|
|
|
(960 |
) |
|
|
- |
|
|
Total operating expenses |
|
|
|
|
13,803 |
|
|
|
(2,053 |
) |
|
|
11,750 |
|
|
|
15,444 |
|
|
|
(2,026 |
) |
|
|
13,418 |
|
|
(Loss) income from operations |
|
|
|
$ |
(2,515 |
) |
|
$ |
2,232 |
|
|
$ |
(283 |
) |
|
$ |
920 |
|
|
$ |
2,282 |
|
|
$ |
3,202 |
|
|
(Loss) income from operations percentage |
|
|
|
(13.5 |
%) |
|
|
12.0 |
% |
|
|
(1.5 |
%) |
|
|
3.9 |
% |
|
|
9.7 |
% |
|
|
13.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
35,747 |
|
|
|
35,747 |
|
|
|
35,747 |
|
|
|
35,479 |
|
|
|
35,479 |
|
|
|
35,479 |
|
|
Diluted |
|
|
|
|
|
|
35,747 |
|
|
|
35,747 |
|
|
|
35,747 |
|
|
|
35,479 |
|
|
|
35,671 |
|
|
|
35,671 |
|
Non-GAAP operating (loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
$ |
(0.07 |
) |
|
$ |
0.06 |
|
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
0.07 |
|
|
$ |
0.10 |
|
|
Diluted |
|
|
|
|
|
$ |
(0.07 |
) |
|
$ |
0.06 |
|
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
|
$ |
0.06 |
|
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SeaChange International,
Inc.Reconciliation of GAAP to Non-GAAP
(Unaudited, amounts in thousands, except per share and
percentage data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
Nine Months Ended |
|
|
|
|
|
|
|
October 31, 2018 |
|
October 31, 2017 |
|
|
|
|
|
|
|
GAAP |
|
|
|
|
|
GAAP |
|
|
|
|
|
|
|
|
|
|
|
As Reported |
|
Adjustments |
|
Non-GAAP |
|
As Reported |
|
Adjustments |
|
Non-GAAP |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
|
|
|
|
$ |
12,821 |
|
|
$ |
- |
|
|
$ |
12,821 |
|
|
$ |
18,907 |
|
|
$ |
- |
|
|
$ |
18,907 |
|
|
Services |
|
|
|
|
|
|
32,626 |
|
|
|
- |
|
|
|
32,626 |
|
|
|
38,415 |
|
|
|
- |
|
|
|
38,415 |
|
|
Total revenues |
|
|
|
|
|
45,447 |
|
|
|
- |
|
|
|
45,447 |
|
|
|
57,322 |
|
|
|
- |
|
|
|
57,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
|
|
|
|
|
2,518 |
|
|
|
- |
|
|
|
2,518 |
|
|
|
3,088 |
|
|
|
- |
|
|
|
3,088 |
|
|
Services |
|
|
|
|
|
|
15,914 |
|
|
|
- |
|
|
|
15,914 |
|
|
|
15,810 |
|
|
|
593 |
|
|
|
16,403 |
|
|
Amortization of intangible assets |
|
|
|
|
534 |
|
|
|
(534 |
) |
|
|
- |
|
|
|
764 |
|
|
|
(764 |
) |
|
|
- |
|
|
Stock-based
compensation |
|
|
|
|
1 |
|
|
|
(1 |
) |
|
|
- |
|
|
|
3 |
|
|
|
(3 |
) |
|
|
- |
|
|
Total cost of revenues |
|
|
|
|
18,967 |
|
|
|
(535 |
) |
|
|
18,432 |
|
|
|
19,665 |
|
|
|
(174 |
) |
|
|
19,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
|
|
26,480 |
|
|
|
535 |
|
|
|
27,015 |
|
|
|
37,657 |
|
|
|
174 |
|
|
|
37,831 |
|
|
Gross profit percentage |
|
|
|
|
58.3 |
% |
|
|
1.2 |
% |
|
|
59.4 |
% |
|
|
65.7 |
% |
|
|
0.3 |
% |
|
|
66.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
|
|
15,477 |
|
|
|
- |
|
|
|
15,477 |
|
|
|
17,411 |
|
|
|
- |
|
|
|
17,411 |
|
|
Selling and
marketing |
|
|
|
|
|
10,776 |
|
|
|
- |
|
|
|
10,776 |
|
|
|
9,292 |
|
|
|
- |
|
|
|
9,292 |
|
|
General and
administrative |
|
|
|
|
11,224 |
|
|
|
- |
|
|
|
11,224 |
|
|
|
10,595 |
|
|
|
- |
|
|
|
10,595 |
|
|
Amortization of intangible assets |
|
|
|
|
664 |
|
|
|
(664 |
) |
|
|
- |
|
|
|
1,075 |
|
|
|
(1,075 |
) |
|
|
- |
|
|
Stock-based
compensation expense |
|
|
|
2,570 |
|
|
|
(2,570 |
) |
|
|
- |
|
|
|
2,224 |
|
|
|
(2,224 |
) |
|
|
- |
|
|
Professional fees - other |
|
|
|
|
50 |
|
|
|
(50 |
) |
|
|
- |
|
|
|
21 |
|
|
|
(21 |
) |
|
|
- |
|
|
Severance
and other restructuring costs |
|
|
|
1,620 |
|
|
|
(1,620 |
) |
|
|
- |
|
|
|
3,670 |
|
|
|
(3,670 |
) |
|
|
- |
|
|
Total operating expenses |
|
|
|
|
42,381 |
|
|
|
(4,904 |
) |
|
|
37,477 |
|
|
|
44,288 |
|
|
|
(6,990 |
) |
|
|
37,298 |
|
|
(Loss) income from operations |
|
|
|
$ |
(15,901 |
) |
|
$ |
5,439 |
|
|
$ |
(10,462 |
) |
|
$ |
(6,631 |
) |
|
$ |
7,164 |
|
|
$ |
533 |
|
|
(Loss) income from operations percentage |
|
|
|
(35.0 |
%) |
|
|
12.0 |
% |
|
|
(23.0 |
%) |
|
|
(11.6 |
%) |
|
|
12.5 |
% |
|
|
0.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
35,668 |
|
|
|
35,668 |
|
|
|
35,668 |
|
|
|
35,381 |
|
|
|
35,381 |
|
|
|
35,381 |
|
|
Diluted |
|
|
|
|
|
|
35,668 |
|
|
|
35,668 |
|
|
|
35,668 |
|
|
|
35,381 |
|
|
|
35,549 |
|
|
|
35,549 |
|
Non-GAAP operating (loss) income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
$ |
(0.45 |
) |
|
$ |
0.15 |
|
|
$ |
(0.29 |
) |
|
$ |
(0.19 |
) |
|
$ |
0.21 |
|
|
$ |
0.02 |
|
|
Diluted |
|
|
|
|
|
$ |
(0.45 |
) |
|
$ |
0.15 |
|
|
$ |
(0.29 |
) |
|
$ |
(0.19 |
) |
|
$ |
0.20 |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SeaChange International,
Inc.Reconciliation of GAAP to Non-GAAP Gross
Margins(Unaudited, amounts in thousands, except
percentages)
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
October 31, 2018 |
|
October 31, 2018 |
|
|
Total |
Products |
Services |
|
Total |
Products |
Services |
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
18,611 |
|
$ |
8,268 |
|
$ |
10,343 |
|
|
$ |
45,447 |
|
$ |
12,821 |
|
$ |
32,626 |
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
$ |
11,288 |
|
$ |
6,545 |
|
$ |
4,743 |
|
|
$ |
26,481 |
|
$ |
10,282 |
|
$ |
16,199 |
|
|
Exclude provision for loss contract |
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
Exclude amortization of intangible assets |
|
178 |
|
|
7 |
|
|
171 |
|
|
|
534 |
|
|
21 |
|
|
513 |
|
|
Exclude stock-based compensation |
|
1 |
|
|
- |
|
|
1 |
|
|
|
- |
|
|
- |
|
|
- |
|
|
Non-GAAP gross
profit |
$ |
11,467 |
|
$ |
6,552 |
|
$ |
4,915 |
|
|
$ |
27,015 |
|
$ |
10,303 |
|
$ |
16,712 |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit,
% |
|
61.6 |
% |
|
79.2 |
% |
|
47.5 |
% |
|
|
59.4 |
% |
|
80.4 |
% |
|
51.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
October 31, 2017 |
|
October 31, 2017 |
|
|
Total |
Products |
Services |
|
Total |
Products |
Services |
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
23,430 |
|
$ |
11,119 |
|
$ |
12,311 |
|
|
$ |
57,322 |
|
$ |
18,907 |
|
$ |
38,415 |
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
$ |
16,364 |
|
$ |
9,894 |
|
$ |
6,470 |
|
|
$ |
37,657 |
|
$ |
15,740 |
|
$ |
21,917 |
|
|
Exclude
provision for loss contract |
|
- |
|
|
- |
|
|
- |
|
|
|
(593 |
) |
|
- |
|
|
(593 |
) |
|
Exclude
amortization of intangible assets |
|
255 |
|
|
27 |
|
|
228 |
|
|
|
764 |
|
|
79 |
|
|
685 |
|
|
Exclude
stock-based compensation |
|
1 |
|
|
- |
|
|
1 |
|
|
|
3 |
|
|
- |
|
|
3 |
|
|
Non-GAAP gross
profit |
$ |
16,620 |
|
$ |
9,921 |
|
$ |
6,699 |
|
|
$ |
37,831 |
|
$ |
15,819 |
|
$ |
22,012 |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit,
% |
|
70.9 |
% |
|
89.2 |
% |
|
54.4 |
% |
|
|
66.0 |
% |
|
83.7 |
% |
|
57.3 |
% |
|
The following table reconciles the Company’s forecasted U.S.
GAAP operating loss per share to the Company’s forecasted non-GAAP
operating (loss) income per share for the Company’s fourth fiscal
quarter and full fiscal 2019:
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, 2019 |
|
January 31, 2019 |
GAAP revenue
guidance |
$ |
16,000 |
|
to |
$ |
20,000 |
|
|
$ |
61,000 |
|
to |
$ |
65,000 |
|
GAAP loss from
operations per basic share |
$ |
(0.08 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.53 |
) |
|
$ |
(0.46 |
) |
Exclude
stock compensation expense |
|
0.02 |
|
|
|
0.02 |
|
|
|
0.10 |
|
|
|
0.10 |
|
Exclude
amortization of intangible assets |
|
0.01 |
|
|
|
0.01 |
|
|
|
0.04 |
|
|
|
0.04 |
|
Exclude
professional fees associated with divestitures |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Exclude
restructuring costs |
|
- |
|
|
|
- |
|
|
|
0.05 |
|
|
|
0.05 |
|
Non-GAAP (loss) income
from operations per basic share |
$ |
(0.05 |
) |
|
$ |
0.02 |
|
|
$ |
(0.34 |
) |
|
$ |
(0.27 |
) |
|
|
|
|
|
|
|
|
SeaChange International,
Inc.Supplemental Schedule - Revenue
Breakout(Unaudited, amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
October 31, |
|
October 31, |
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Product revenues: |
|
|
|
|
|
|
|
|
|
Video
platform |
|
|
$ |
5,259 |
|
$ |
10,380 |
|
$ |
8,597 |
|
$ |
15,527 |
Advertising |
|
|
|
1,793 |
|
|
243 |
|
|
2,402 |
|
|
243 |
User
experience |
|
|
|
1 |
|
|
113 |
|
|
25 |
|
|
646 |
Hardware |
|
|
|
1,162 |
|
|
190 |
|
|
1,743 |
|
|
1,788 |
Third-party products |
|
|
|
54 |
|
|
193 |
|
|
54 |
|
|
703 |
Total
product revenues |
|
|
|
8,269 |
|
|
11,119 |
|
|
12,821 |
|
|
18,907 |
|
|
|
|
|
|
|
|
|
|
Service revenues: |
|
|
|
|
|
|
|
|
|
Maintenance and support |
|
|
|
7,510 |
|
|
8,140 |
|
|
21,750 |
|
|
25,122 |
SaaS |
|
|
|
60 |
|
|
479 |
|
|
254 |
|
|
2,186 |
Professional services - video platform |
|
|
|
2,636 |
|
|
3,371 |
|
|
10,365 |
|
|
10,541 |
User
experience |
|
|
|
136 |
|
|
321 |
|
|
257 |
|
|
566 |
Total
service revenues |
|
|
|
10,342 |
|
|
12,311 |
|
|
32,626 |
|
|
38,415 |
Total revenues |
|
$ |
18,611 |
|
$ |
23,430 |
|
$ |
45,447 |
|
$ |
57,322 |
|
|
|
|
|
|
|
|
|
|
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