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8-K - 8-K - SEACHANGE INTERNATIONAL INCd638433d8k.htm

Exhibit 99.1

 

LOGO

NEWS RELEASE

 

Contact:    Press    Investors
   Jim Sheehan    Monica Gould
   SeaChange    The Blueshirt Group
   1-978-897-0100 x3064    1-212-871-3927
   jim.sheehan@schange.com    monica@blueshirtgroup.com

SEACHANGE INTERNATIONAL REPORTS

THIRD QUARTER FISCAL 2014 RESULTS

 

    GAAP Operating Income of $0.5 Million, Compared to $1.6 Million GAAP Operating Loss in Prior Year

 

    New Product Revenue Increases to 45% of Total Product Revenue

 

    Two Large Adrenalin Deployments Commercially Launched in Europe

ACTON, Mass. (Dec. 5, 2013) – SeaChange International, Inc. (NASDAQ: SEAC), a leading global multi-screen video software innovator, today reported third quarter fiscal 2014 revenue of $37.8 million and non-GAAP operating income of $2.9 million, or $0.09 per fully diluted share, from continuing operations. In comparison, third quarter fiscal 2013 revenue was $39.2 million and non-GAAP operating income was $2.9 million, or $0.09 per fully diluted share, from continuing operations. The Company posted U.S. GAAP operating income of $0.5 million, or $0.02 per diluted share, for the third quarter of fiscal 2014, compared to a U.S. GAAP operating loss for the third quarter of fiscal 2013 of $1.6 million, or $0.05 per fully diluted share. The Company’s U.S. GAAP third quarter fiscal 2014 results include charges of $2.4 million that are excluded from our non-GAAP results, which consisted primarily of stock-based compensation and amortization of intangible assets from prior acquisitions.

For the first nine months of fiscal 2014, the Company posted revenues of $110.7 million and non-GAAP operating income of $7.5 million, compared to revenues of $112.6 million and non-GAAP operating income of $6.4 million in the same prior period. The Company posted a GAAP operating loss for the first nine months of fiscal 2014 of approximately $0.8 million, compared to a GAAP operating loss of $10.3 million for the same prior period.

“We continue to execute on our plan to deliver our new generation of products globally, which have grown 62 percent year over year to represent 45 percent of all product revenues, compared to 25 percent a year ago,” said Raghu Rau, CEO, SeaChange. “We are also pleased to announce the commercial launch of our Adrenalin multi-screen platform by a large European telco and a Scandinavian cable operator during the quarter. Our Infusion advanced advertising platform, integrated with Adrenalin, was launched by a large European service provider last week.”

 

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SeaChange Q3 FY14 Results/Page 2

 

“Our opportunity funnel remains very robust and we continue to respond to strong interest in our Nucleus gateway software and Adrenalin by many of the world’s leading operators,” Rau continued. “However, we continue to experience some delays in receiving final product acceptances and some agreements expected for the third and fourth quarter are experiencing delays in signing due to expanded scope and the complex nature of the customer decision making process, which involves the customer selecting multiple vendors.”

Commenting on the Company’s outlook, Anthony Dias, Chief Financial Officer, stated, “We anticipate that our fourth quarter fiscal 2014 revenue will be in the range of $40 million to $45 million and non-GAAP operating income, on a fully diluted share basis, will be in the range of $0.15 to $0.20 per share, reflecting the anticipated delays in receiving customer acceptances of new products and finalization of agreements for Nucleus and Adrenalin.”

SeaChange ended the third quarter of fiscal 2014 with cash, cash equivalents and marketable securities of $126.4 million.

The Company will host a conference call to discuss its third quarter fiscal 2014 results at 5:00 p.m. ET today, Thursday, December 5, 2013. 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. For those unable to listen to the live conference call, a replay will be available through December 19, 2013 and may be accessed by dialing 877-660-6853 (U.S.) or 201-612-7415 (international). Callers will be prompted for replay conference ID number 424595. An archived version of the webcast will also be available on the investor relations section of the Company’s website at www.schange.com/IR.

About SeaChange International

Ranked among the top 250 software companies in the world, SeaChange International (NASDAQ: SEAC) enables transformative multi-screen video services through an open, cloud-based, intelligent software platform trusted by cable, IPTV and mobile operators globally. Personalized and fully monetized video experiences anytime on any device, in the home and everywhere, are the product of the Company’s superior video back office platform, advertising and in-home gateway offerings.

SeaChange’s customers include many of the world’s most powerful media brands including all major cable operators in the Americas and Europe, and the largest telecom companies in the world. Headquartered in Acton, Massachusetts, SeaChange is TL 9000 certified and has product development, support and sales offices around the world. Visit www.schange.com.

 

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SeaChange Q3 FY14 Results/Page 3

 

Safe Harbor Provision

Any statements contained in this press release that do not describe historical facts, including without limitation statements regarding future financial performance and the repurchase of the Company’s shares, 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; the continued development of the multi-screen video market; the Company’s ability to successfully introduce new products or enhancements to existing products including its next generation products scheduled for release in fiscal year 2014; worldwide economic cycles; steps taken to address the variability in the market for our products and services; uncertainties introduced by our prior evaluation of strategic alternatives; the Company’s transition to being a company that primarily provides software solutions; the loss of one of the Company’s large customers; 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; the Company’s ability to manage its growth; the risks associated with international operations; compliance with conflict minerals regulations; 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 market or other limitations in materials we use to provide our products and services; the Company’s ability to compete in its marketplace; the Company’s ability to respond to changing technologies; the impact of acquisitions or divestitures made by the Company; changes in the regulatory environment; the Company’s ability to hire and retain highly skilled employees; and the effectiveness of the Company’s disclosure controls and procedures and internal controls over financial reporting.

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 10, 2013. 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.

 

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SeaChange Q3 FY14 Results/Page 4

 

SeaChange International, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, amounts in thousands)

 

     October 31,      January 31,  
     2013      2013  

Assets

     

Cash and cash equivalents

   $ 114,107       $ 106,721   

Marketable securities and restricted cash

     12,320         14,211   

Accounts and other receivables, net

     33,895         40,103   

Inventories, net

     7,317         7,372   

Prepaid expenses and other current assets

     5,929         11,332   

Assets held for sale

     —           465   

Property and equipment, net

     18,916         18,399   

Goodwill and intangible assets, net

     59,578         62,617   

Other assets

     2,079         4,909   
  

 

 

    

 

 

 

Total assets

   $ 254,141       $ 266,129   
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

     

Accounts payable and other current liabilities

   $ 16,513       $ 27,962   

Deferred revenues

     26,709         30,603   

Other long term liabilities

     246         325   

Deferred tax liabilities and income taxes payable

     4,552         5,038   
  

 

 

    

 

 

 

Total liabilities

     48,020         63,928   
  

 

 

    

 

 

 

Total stockholders’ equity

     206,121         202,201   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 254,141       $ 266,129   
  

 

 

    

 

 

 

 

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SeaChange Q3 FY14 Results/Page 5

 

SeaChange International, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited, amounts in thousands, except per share data)

 

     Three Months Ended     Nine Months Ended  
     October 31,     October 31,  
     2013     2012     2013     2012  

Revenues:

        

Products

   $ 13,822      $ 15,213      $ 44,809      $ 40,681   

Services

     23,949        24,036        65,894        71,932   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     37,771        39,249        110,703        112,613   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

        

Products

     3,271        5,454        7,845        13,609   

Services

     13,225        13,557        40,386        38,550   

Amortization of intangible assets

     320        520        947        1,548   

Stock-based compensation expense

     67        (85     191        109   

Inventory write-down

     —          —          —          1,752   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     16,883        19,446        49,369        55,568   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     20,888        19,803        61,334        57,045   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Research and development

     10,212        9,202        30,007        28,449   

Selling and marketing

     3,948        3,859        11,283        11,860   

General and administrative

     4,184        4,295        13,664        13,745   

Amortization of intangible assets

     842        969        2,512        2,891   

Stock-based compensation expense

     588        1,517        2,234        4,355   

Earn-outs and change in fair value of earn-outs

     (94     64        (60     1,667   

Professional fees: acquisitions, divestitures, litigation, and strategic alternatives

     603        26        1,524        1,445   

Severance and other restructuring costs

     76        1,476        922        2,918   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     20,359        21,408        62,086        67,330   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     529        (1,605     (752     (10,285

Other (expenses) income, net

     (153     337        (592     (92

(Loss) gain on sale of investment in affiliates

     (25     —          (363     814   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes and equity income in earnings of affiliates

     351        (1,268     (1,707     (9,563

Income tax benefit

     (423     (882     (784     (766

Equity income in earnings of affiliates, net of tax

     24        49        44        75   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     798        (337     (879     (8,722
  

 

 

   

 

 

   

 

 

   

 

 

 

Gain (loss) on sale of discontinued operations, net of tax

     —          124        —          (14,324

(Loss) income from discontinued operations, net of tax

     (221     87        (744     (2,655
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 577      $ (126   $ (1,623   $ (25,701
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 577      $ (126   $ (1,623   $ (25,701

Other comprehensive income (loss), net of tax:

        

Foreign currency translation adjustment

     1,215        1,453        527        6,612   

Unrealized gain (loss) on marketable securities

     2        (10     (7     (10
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

   $ 1,794      $ 1,317      $ (1,103   $ (19,099
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share:

        

Basic income (loss) per share

   $ 0.02      $ (0.00   $ (0.05   $ (0.79
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted income (loss) per share

   $ 0.02      $ (0.00   $ (0.05   $ (0.79
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share from continuing operations:

        

Basic income (loss) per share

   $ 0.02      $ (0.01   $ (0.03   $ (0.27
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted income (loss) per share

   $ 0.02      $ (0.01   $ (0.03   $ (0.27
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income per share from discontinued operations:

        

Basic (loss) income per share

   $ (0.00   $ 0.01      $ (0.02   $ (0.52
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted (loss) income per share

   $ (0.00   $ 0.01      $ (0.02   $ (0.52
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding:

        

Basic

     32,813        32,474        32,636        32,554   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     33,595        32,474        32,636        32,554   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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SeaChange Q3 FY14 Results/Page 6

 

SeaChange International, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

 

     Nine Months Ended
October 31,
 
     2013     2012  

Cash flows from operating activities:

    

Net loss

   $ (1,623   $ (25,701

Net loss from discontinued operations

     744        16,979   

Adjustments to reconcile net loss to net cash provided by (used in) operating activities from continuing operations:

    

Depreciation of fixed assets

     3,345        3,341   

Amortization of intangible assets

     3,459        4,439   

Impairment of long-lived asset

     —          967   

Loss (gain) on sale of investment in affiliates

     363        (814

Stock-based compensation expense

     2,425        4,464   

Changes in contingent consideration related to acquisitions

     (60     1,667   

Deferred income taxes

     —          (487

Other

     427        115   

Changes in operating assets and liabilities:

    

Accounts receivable

     6,334        (2,874

Unbilled receivables

     (4,217     3,963   

Inventories

     (859     2,461   

Prepaid expenses and other assets

     6,412        (2,484

Accounts payable

     (1,642     (2,102

Accrued expenses

     (1,514     595   

Customer deposits

     (4,143     (1,733

Deferred revenues

     (3,964     (6,389

Other

     651        200   
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities from continuing operations

     6,138        (3,393

Net cash (used in) provided by operating activities from discontinued operations

     (744     717   
  

 

 

   

 

 

 

Total cash provided by (used in) operating activities

     5,394        (2,676
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of property and equipment

     (1,834     (2,423

Purchases of marketable securities

     (6,911     (12,110

Proceeds from sale and maturity of marketable securities

     8,698        11,205   

Proceeds from sale of equity investment

     1,128        814   

Acquisition of businesses and payment of contingent consideration, net of cash acquired

     (4,018     (7,866

Change in restricted cash

     (1     (923

Proceeds from sale of plant and equipment

     22        —     
  

 

 

   

 

 

 

Net cash used in investing activities from continuing operations

     (2,916     (11,303

Net cash provided by investing activities from discontinued operations

     4,000        23,560   
  

 

 

   

 

 

 

Total cash provided by investing activities

     1,084        12,257   
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Repurchases of our common stock

     —          (6,078

Proceeds from issuance of common stock relating to stock option exercises

     1,037        1,140   
  

 

 

   

 

 

 

Total cash provided by (used in) financing activities

     1,037        (4,938
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     (129     (170
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     7,386        4,473   
  

 

 

   

 

 

 

Cash and cash equivalents, beginning of period

     106,721        80,585   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 114,107      $ 85,058   
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information:

    

Income taxes paid

   $ 933      $ 1,307   

Supplemental disclosure of non-cash investing and financing activities:

    

Transfer of items originally classified as inventories to equipment

   $ 866      $ 570   

Issuance of common stock for settlement of contingent consideration related to acquisitions

   $ 1,560      $ —     

Asset held for sale reclassified to asset held for use and reclassified from current assets to property and equipment

   $ 465      $ —     

 

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SeaChange Q2 FY14 Results/Page 7

 

Use of Non-GAAP Financial Information

We define non-GAAP income from operations as U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) operating income or loss plus stock-based compensation expenses, amortization of intangible assets, inventory write-downs, if any, earn-outs and change in fair value of earn-outs, professional fees associated with acquisitions, divestitures, litigation and strategic alternatives and severance and other restructuring costs. We define adjusted EBITDA as U.S. GAAP operating income or loss before depreciation expense, amortization of intangible assets, stock-based compensation expense, inventory write-downs, if any, earn-outs and change in fair value of earn-outs, professional fees associated with acquisitions, divestitures, litigation and strategic alternatives, and severance and other restructuring costs. We discuss non-GAAP income from operations in our quarterly earnings releases and certain other communications as we believe non-GAAP income from operations and adjusted EBITDA are both important measures that are not calculated according to U.S. GAAP. We use non-GAAP income from operations and adjusted EBITDA 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 income from operations and adjusted EBITDA financial measures assist 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 income from operations and adjusted EBITDA are non-GAAP financial measures and should not be considered in isolation or as a substitute for financial information provided in accordance with U.S. GAAP. These non-GAAP financial measures 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 income from operations and adjusted EBITDA 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, and 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 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, selling, general and administrative expense and research and development expense. 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.

 

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SeaChange Q3 FY14 Results/Page 8

 

Inventory Write-down. We incur inventory write-downs of our legacy product lines as we end the life of certain product lines to focus on selling our new products being developed.

Earn-outs and Change in Fair Value of Earn-outs. Earn-outs and the change in the fair value of the earn-outs are considered by management to be non-recurring expenses to the former shareholders of the businesses we acquire. We also incur expense due to changes in fair value related to contingent consideration that we believe would otherwise impair comparability among periods.

Professional Fees: Acquisitions, Divestitures, Litigation and Strategic Alternatives. We have excluded the effect of legal and other professional fees associated with our acquisitions, divestitures, litigation and strategic alternatives because the amounts are largely considered to be significant non-operating expenses.

Severance and Other Restructuring. 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. We also incurred charges for the hiring and appointment of the Chief Executive Officer.

Depreciation Expense. We incur depreciation expense related to capital assets purchased to support the ongoing operations of the business. These assets are recorded at cost and are depreciated using the straight-line method over the useful life of the asset. Purchases of such assets may vary significantly from period to period and without any correlation to underlying operating performance. Management believes that exclusion of depreciation expense allows comparisons of operating results that are consistent across past, present and future periods.

The following tables reconcile the Company’s income (loss) from operations, the most directly comparable U.S. GAAP financial measure, to the Company’s non-GAAP income from operations and the reconciliation of our U.S. GAAP income (loss) from operations to our adjusted EBITDA for the three and nine months ended October 31, 2013 and 2012:

 

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SeaChange Q3 FY14 Results/Page 9

 

SeaChange International, Inc.

Reconciliation of GAAP to Non-GAAP

(Unaudited, amounts in thousands)

 

     Three Months Ended     Three Months Ended  
     October 31, 2013     October 31, 2012  
     GAAP                 GAAP              
     As Reported     Adjustments     Non-GAAP     As Reported     Adjustments     Non-GAAP  

Revenues:

            

Products

   $ 13,822      $ —        $ 13,822      $ 15,213      $ —        $ 15,213   

Services

     23,949        —          23,949        24,036        —          24,036   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     37,771        —          37,771        39,249        —          39,249   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

            

Products

     3,271        —          3,271        5,454        —          5,454   

Services

     13,225        —          13,225        13,557        —          13,557   

Amortization of intangible assets

     320        (320     —          520        (520     —     

Stock-based compensation

     67        (67     —          (85     85        —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     16,883        (387     16,496        19,446        (435     19,011   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     20,888        387        21,275        19,803        435        20,238   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit percentage

     55.3     1.0     56.3     50.5     1.1     51.6

Operating expenses:

            

Research and development

     10,212        —          10,212        9,202        —          9,202   

Selling and marketing

     3,948        —          3,948        3,859        —          3,859   

General and administrative

     4,184        —          4,184        4,295        —          4,295   

Amortization of intangible assets

     842        (842     —          969        (969     —     

Stock-based compensation expense

     588        (588     —          1,517        (1,517     —     

Earn-outs and change in fair value of earn-outs

     (94     94        —          64        (64     —     

Professional fees: acquisitions, divestitures, litigation and strategic alternatives

     603        (603     —          26        (26     —     

Severance and other restructuring costs

     76        (76     —          1,476        (1,476     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     20,359        (2,015     18,344        21,408        (4,052     17,356   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

   $ 529      $ 2,402      $ 2,931      $ (1,605   $ 4,487      $ 2,882   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations percentage

     1.4     6.3     7.8     (4.1 %)      11.4     7.3

Weighted average common shares outstanding:

            

Basic

     32,813        32,813        32,813        32,474        32,474        32,474   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     33,595        33,595        33,595        32,474        32,995        32,995   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income (loss) per share:

            

Basic

   $ 0.02      $ 0.07      $ 0.09      $ (0.05   $ 0.14      $ 0.09   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.02      $ 0.07      $ 0.09      $ (0.05   $ 0.14      $ 0.09   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA:

            

Income (loss) from operations

       $ 529          $ (1,605

Depreciation expense

         1,042            1,034   

Amortization of intangible assets

         1,162            1,489   

Stock-based compensation expense

         655            1,432   

Earn-outs and changes in fair value

         (94         64   

Professional fees: acquisitions, divestitures, etc.

         603            26   

Severance and other restructuring

         76            1,476   
      

 

 

       

 

 

 

Adjusted EBITDA

       $ 3,973          $ 3,916   
      

 

 

       

 

 

 

Adjusted EBITDA %

         10.5         10.0

 

-more-


SeaChange Q3 FY14 Results/Page 10

 

SeaChange International, Inc.

Reconciliation of GAAP to Non-GAAP

(Unaudited, amounts in thousands)

 

     Nine Months Ended     Nine Months Ended  
     October 31, 2013     October 31, 2012  
     GAAP                 GAAP              
     As Reported     Adjustments     Non-GAAP     As Reported     Adjustments     Non-GAAP  

Revenues:

            

Products

   $ 44,809      $ —        $ 44,809      $ 40,681      $ —        $ 40,681   

Services

     65,894        —          65,894        71,932        —          71,932   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     110,703        —          110,703        112,613        —          112,613   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

            

Products

       —          7,845        13,609        —          13,609   

Services

     40,386        —          40,386        38,550        —          38,550   

Amortization of intangible assets

     947        (947     —          1,548        (1,548     —     

Stock-based compensation

     191        (191     —          109        (109     —     

Inventory write-down

     —          —            1,752        (1,752     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     49,369        (1,138     48,231        55,568        (3,409     52,159   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     61,334        1,138        62,472        57,045        3,409        60,454   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit percentage

     55.4     1.0     56.4     50.7     3.0     53.7

Operating expenses:

            

Research and development

     30,007        —          30,007        28,449        —          28,449   

Selling and marketing

     11,283        —          11,283        11,860        —          11,860   

General and administrative

     13,664        —          13,664        13,745        —          13,745   

Amortization of intangible assets

     2,512        (2,512     —          2,891        (2,891     —     

Stock-based compensation expense

     2,234        (2,234     —          4,355        (4,355     —     

Earn-outs and change in fair value of earn-outs

     (60     60        —          1,667        (1,667     —     

Professional fees: acquisitions, divestitures, litigation and strategic alternatives

     1,524        (1,524     —          1,445        (1,445     —     

Severance and other restructuring costs

     922        (922     —          2,918        (2,918     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     62,086        (7,132     54,954        67,330        (13,276     54,054   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

   $ (752   $ 8,270      $ 7,518      $ (10,285   $ 16,685      $ 6,400   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations percentage

     (0.7 %)      7.4     6.8     (9.1 %)      14.8     5.7
            

Weighted average common shares outstanding:

            

Basic

     32,636        32,636        32,636        32,554        32,554        32,554   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     32,636        33,485        33,485        32,554        33,087        33,087   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating (loss) income per share:

            

Basic

   $ (0.02   $ 0.25      $ 0.23      $ (0.32   $ 0.52      $ 0.20   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.02   $ 0.25      $ 0.23      $ (0.32   $ 0.51      $ 0.19   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA:

            

Loss from operations

       $ (752       $ (10,285

Depreciation expense

         3,345            3,341   

Amortization of intangible assets

         3,459            4,439   

Stock-based compensation expense

         2,425            4,464   

Earn-outs and changes in fair value

         (60         1,667   

Professional fees: acquisitions, divestitures, etc.

         1,524            1,445   

Inventory write-down

         —              1,752   

Severance and other restructuring

         922            2,918   
      

 

 

       

 

 

 

Adjusted EBITDA

       $ 10,863          $ 9,741   
      

 

 

       

 

 

 

Adjusted EBITDA %

         9.8         8.6

---end press release and tables---