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8-K - 8-K - SEACHANGE INTERNATIONAL INCd902365d8k.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

FOURTH QUARTER AND FULL FISCAL 2015 RESULTS

 

    Signed Contract with New European Service Provider for Adrenalin

 

    U.S. Axiom VOD Customer Signs Contract for Adrenalin Upgrade

ACTON, Mass. (April 2, 2015) – SeaChange International, Inc. (NASDAQ: SEAC) today reported fourth quarter fiscal 2015 revenue of $31.3 million and U.S. GAAP loss from operations of $5.3 million, or $0.16 per basic share for the fourth quarter of fiscal 2015, compared to fourth quarter fiscal 2014 revenue of $35.6 million and U.S. GAAP operating loss of $0.9 million, or $0.03 per basic share. The Company’s U.S. GAAP fourth quarter fiscal 2015 results include non-GAAP charges of $3.6 million, which consisted primarily of severance and other restructuring costs, stock-based compensation, amortization of intangible assets from prior acquisitions, and professional fees from divestitures and litigation.

For the full fiscal year ended January 31, 2015, the Company posted revenues of $115.4 million and U.S. GAAP operating loss of $26.5 million, or $0.81 per basic share, compared to revenues of $146.3 million and U.S. GAAP operating loss of $1.6 million, or $0.05 per basic share, from continuing operations in the same prior period. The Company posted a non-GAAP loss from operations for fiscal 2015 of $13.8 million, or $0.42 per basic share, compared to an $8.4 million operating income, or $0.25 per fully diluted share, from continuing operations for the same prior period. Included in the full fiscal 2015 results are $12.7 million in non-GAAP charges related to severance and other restructuring charges, stock-based compensation, amortization of intangible assets from prior acquisitions, and professional fees from divestitures and litigation, while the full fiscal 2014 results included $10.1 million of similar non-GAAP charges.

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SeaChange Q4 FY15 Results/Page 2

 

“Our Fiscal 2015 was focused intensively on delivering our next generation back office and gateway products to new customers and upgrading existing customers to ensure their new multiscreen revenue and subscriber retention opportunities,” said Jay Samit, Chief Executive Officer, SeaChange. “In the fourth quarter, we were very pleased to sign a new, large cable service provider customer in Russia for an Adrenalin rollout this year. We also began shipping Adrenalin to upgrade another North American Axiom video-on-demand customer in support of its multiscreen expansion. Also during the fourth quarter, our Nucleus video gateway product entered commercial deployment into cable homes in Poland. We anticipate this success will be followed by Nucleus rollouts in other markets in Europe and the Americas this year.”

“I’m pleased with the speed at which SeaChange has enacted its strategy to bring a comprehensive OTT platform to our existing service provider customers and create engagement with new types of customers including broadcasters, television programmers, studios and other owners and distributors of premium video,” Samit continued. “Today, SeaChange’s OTT go-to-market activity has been aided by a rapid integration of Timeline Labs into our global organization. Further out, I anticipate that an influx of new product capabilities from our Timeline Labs acquisition, particularly in the realm of data analytics, will bolster SeaChange’s competitive strengths and core product value.”

Anthony Dias, Chief Financial Officer, stated, “We are very encouraged by the increasing interest in next generation product upgrades by existing customers, as well as new customer opportunities, particularly for our new cloud-based offerings, including Rave and Timeline. Our development efforts are focused on products that enable SaaS models for opportunities such as OTT and we expect these initiatives to begin to contribute positively to revenue in fiscal 2016. Over time, these efforts will increase our recurring revenue base and margins and improve our ability to predict future financial performance. In the short term, as some of our smaller service provider customers begin to shift to cloud-based models, we expect to see some transition in the timing of revenue recognition, from up-front product revenue recognized at the beginning of a contract under our perpetual software license model, to a more gradual increase in revenue by means of recurring revenue under multi-year contracts.”

Commenting on the Company’s outlook, Dias concluded, “We anticipate first quarter fiscal 2016 revenue to be in the range of $22 million to $24 million, and non-GAAP operating loss to be in the range of $0.25 to $0.19 per basic share. For full fiscal 2016, we anticipate revenues to be in the range of $105 million to $115 million and non-GAAP operating loss to be in the range of $0.38 to $0.16 per basic share. Our full year guidance reflects a moderate decrease in product revenue related to our transition to a SaaS model and legacy product revenue declines in the range of $7 million to $10 million. We’ve successfully transitioned our Company to a point where legacy product revenue will become less than five million dollars starting in fiscal 2017.”

 

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SeaChange Q4 FY15 Results/Page 3

 

SeaChange continues to have a strong balance sheet and ended the fourth quarter of fiscal 2015 with cash and cash equivalents of $105.4 million and no debt outstanding.

The Company will host a conference call to discuss its fourth quarter and full fiscal 2015 results at 8:00 a.m. ET today, Thursday, April 2, 2015. 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 by phone through April 16, 2015 at 877-660-6853 (U.S.) or 201-612-7415 (international), conference ID 1360-3981. The webcast will be archived 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, Inc. (NASDAQ: SEAC) enables transformative multiscreen video services through an open, cloud-based, intelligent software platform trusted by cable, telco and mobile operators globally and media companies. Personalized and fully monetized video experiences anytime on any device, in the home and everywhere, are the product of the Company’s superior multiscreen, advertising and video gateway software products.

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 Q4 FY15 Results/Page 4

 

Safe Harbor Provision

Any statements contained in this press release that do not describe historical facts, including without limitation statements regarding future financial performance, our products and developments with our customers and the industry, 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 multiscreen video market; 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; worldwide economic cycles; measures 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; the ability of the Company and its intermediaries to comply with the Foreign Corrupt Practices Act; 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 risks associated with purchasing material components from sole suppliers and using a limited number of third-party manufacturers; 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 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; 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 data center hosting facilities; 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 4, 2014. 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 Q4 FY15 Results/Page 5

 

SeaChange International, Inc.

Condensed Consolidated Balance Sheets

(Amounts in thousands)

 

     January 31,      January 31,  
     2015      2014  
     (Unaudited)         

Assets

     

Cash and cash equivalents

   $ 90,019       $ 115,734   

Marketable securities and restricted cash

     15,382         12,369   

Accounts and other receivables, net

     31,550         35,714   

Inventories

     2,864         6,632   

Prepaid expenses and other current assets

     3,026         5,242   

Property and equipment, net

     15,869         18,530   

Goodwill and intangible assets, net

     48,322         58,005   

Other assets

     5,319         1,887   
  

 

 

    

 

 

 

Total assets

$ 212,351    $ 254,113   
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

Accounts payable and other current liabilities

$ 17,636    $ 18,972   

Deferred revenues

  19,088      25,628   

Other liabilities, long-term

  1,493      936   

Deferred tax liabilities and income taxes payable

  3,083      4,136   
  

 

 

    

 

 

 

Total liabilities

  41,300      49,672   
  

 

 

    

 

 

 

Total stockholders’ equity

  171,051      204,441   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

$ 212,351    $ 254,113   
  

 

 

    

 

 

 

 

 

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SeaChange Q4 FY15 Results/Page 6

 

SeaChange International, Inc.

Condensed Consolidated Statements of Operations

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

 

     Three Months Ended     Twelve Months Ended  
     January 31,     January 31,  
     2015     2014     2015     2014  

Revenues:

        

Product

   $ 10,398      $ 9,940      $ 31,507      $ 54,749   

Service

     20,881        25,676        83,928        91,570   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

  31,279      35,616      115,435      146,319   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

Product

  2,657      3,031      8,845      10,526   

Service

  12,302      14,339      48,272      55,075   

Amortization of intangible assets

  275      322      1,070      1,269   

Stock-based compensation expense

  9      59      141      250   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

  15,243      17,751      58,328      67,120   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

  16,036      17,865      57,107      79,199   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

Research and development

  10,440      9,650      42,169      39,657   

Selling and marketing

  3,411      3,735      13,920      15,018   

General and administrative

  4,119      3,954      16,014      17,618   

Amortization of intangible assets

  759      849      4,084      3,361   

Stock-based compensation expense

  632      475      3,079      2,709   

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

  —        —        —        (60

Professional fees - other

  194      90      671      1,614   

Severance and other restructuring costs

  1,745      (11   3,623      911   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

  21,300      18,742      83,560      80,828   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

  (5,264   (877   (26,453   (1,629

Other (expenses) income, net

  (1,567   368      (2,161   (587
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes and equity income in earnings of affiliates

  (6,831   (509   (28,614   (2,216

Income tax (benefit) provision

  (691   839      (1,106   55   

Equity income in earnings of affiliates, net of tax

  —        —        19      44   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations

  (6,140   (1,348   (27,489   (2,227
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from discontinued operations, net of tax

  —        (59   5      (803
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

$ (6,140 $ (1,407 $ (27,484 $ (3,030
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share:

Basic loss per share

$ (0.19 $ (0.04 $ (0.84 $ (0.09
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted loss per share

$ (0.19 $ (0.04 $ (0.84 $ (0.09
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share from continuing operations:

Basic loss per share

$ (0.19 $ (0.04 $ (0.84 $ (0.07
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted loss per share

$ (0.19 $ (0.04 $ (0.84 $ (0.07
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income per share from discontinued operations:

Basic (loss) income per share

$ —      $ (0.00 $ 0.00    $ (0.02
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted (loss) income per share

$ —      $ (0.00 $ 0.00    $ (0.02
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding:

Basic

  32,672      32,963      32,772      32,718   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

  32,672      32,963      32,772      32,718   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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SeaChange Q4 FY15 Results/Page 7

 

SeaChange International, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

 

     For the Fiscal Years Ended  
     January 31,  
     2015     2014  

Cash flows from operating activities:

    

Net loss

   $ (27,484   $ (3,030

Net (income) loss from discontinued operations

     (5     803   

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

    

Depreciation and amortization of property and equipment

     3,683        4,389   

Amortization of intangible assets

     5,154        4,630   

Stock-based compensation expense

     3,220        2,959   

Deferred income taxes

     (372     (684

Other

     512        798   

Changes in operating assets and liabilities:

    

Accounts receivable

     3,567        5,420   

Unbilled receivables

     (1,993     (5,251

Inventories

     3,183        (234

Prepaid expenses and other assets

     1,570        6,724   

Accounts payable

     (1,619     (873

Accrued expenses

     1,650        (3,146

Deferred revenues

     (5,699     (4,877

Other

     1,289        539   
  

 

 

   

 

 

 

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

  (13,344   8,167   

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

  5      (803
  

 

 

   

 

 

 

Total cash (used in) provided by operating activities

  (13,339   7,364   
  

 

 

   

 

 

 

Cash flows from investing activities:

Purchases of property and equipment

  (1,873   (2,315

Purchases of marketable securities

  (9,193   (11,479

Proceeds from sale and maturity of marketable securities

  7,181      12,237   

Proceeds from sale of equity investments

  229      1,128   

Investment in affiliate

  (2,000   —     

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

  —        (4,009

Advance for Timeline Labs acquisition

  (2,500   —     

Other investing activities, net

  —        958   
  

 

 

   

 

 

 

Net cash used in investing activities from continuing operations

  (8,156   (3,480

Net cash provided by investing activities from discontinued operations

  —        4,000   
  

 

 

   

 

 

 

Total cash (used in) provided by investing activities

  (8,156   520   
  

 

 

   

 

 

 

Cash flows from financing activities:

Repurchases of our common stock

  (5,504   —     

Proceeds from issuance of common stock relating to stock option exercises

  —        1,058   
  

 

 

   

 

 

 

Total cash (used in) provided by financing activities

  (5,504   1,058   
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

  1,284      71   
  

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

  (25,715   9,013   
  

 

 

   

 

 

 

Cash and cash equivalents, beginning of period

  115,734      106,721   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

$ 90,019    $ 115,734   
  

 

 

   

 

 

 

 

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SeaChange Q4 FY15 Results/Page 8

 

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) income plus stock-based compensation expenses, amortization of intangible assets, 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 (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, 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 Q4 FY15 Results/Page 9

 

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 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 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.

The following table reconciles the Company’s U.S. GAAP (loss) income from operations to the Company’s non-GAAP (loss) income from operations:

 

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SeaChange Q4 FY15 Results/Page 10

 

SeaChange International, Inc.

Reconciliation of GAAP to Non-GAAP

(Unaudited, amounts in thousands)

 

     Three Months Ended     Three Months Ended  
     January 31, 2015     January 31, 2014  
     GAAP                 GAAP              
     As Reported     Adjustments     Non-GAAP     As Reported     Adjustments     Non-GAAP  

Revenues:

            

Products

   $ 10,398      $ —        $ 10,398      $ 9,940      $ —        $ 9,940   

Services

     20,881        —          20,881        25,676        —          25,676   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

  31,279      —        31,279      35,616      —        35,616   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

Products

  2,657      —        2,657      3,031      —        3,031   

Services

  12,302      —        12,302      14,339      —        14,339   

Amortization of intangible assets

  275      (275   —        322      (322   —     

Stock-based compensation

  9      (9   —        59      (59   —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

  15,243      (284   14,959      17,751      (381   17,370   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

  16,036      284      16,320      17,865      381      18,246   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit percentage

  51.3   0.9   52.2   50.2   1.1   51.2

Operating expenses:

Research and development

  10,440      —        10,440      9,650      —        9,650   

Selling and marketing

  3,411      —        3,411      3,735      —        3,735   

General and administrative

  4,119      —        4,119      3,954      —        3,954   

Amortization of intangible assets

  759      (759   —        849      (849   —     

Stock-based compensation expense

  632      (632   —        475      (475   —     

Professional fees - other

  194      (194   —        90      (90   —     

Severance and other restructuring costs

  1,745      (1,745   —        (11   11      —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

  21,300      (3,330   17,970      18,742      (1,403   17,339   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

$ (5,264 $ 3,614    $ (1,650 $ (877 $ 1,784    $ 907   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations percentage

  (16.8 %)    11.5   (5.3 %)    (2.5 %)    5.0   2.5

Weighted average common shares outstanding:

Basic

  32,672      32,672      32,672      32,963      32,963      32,963   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

  32,672      33,004      32,672      32,963      33,746      33,746   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income per share:

Basic

$ (0.16 $ 0.11    $ (0.05 $ (0.03 $ 0.06    $ 0.03   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

$ (0.16 $ 0.11    $ (0.05 $ (0.03 $ 0.05    $ 0.02   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA:

Loss from operations

$ (5,264 $ (877

Depreciation expense

  873      1,044   

Amortization of intangible assets

  1,034      1,171   

Stock-based compensation expense

  641      534   

Professional fees - other

  194      90   

Severance and other restructuring

  1,745      (11
      

 

 

       

 

 

 

Adjusted EBITDA

$ (777 $ 1,951   
      

 

 

       

 

 

 

Adjusted EBITDA %

  (2.5 %)    5.5

 

-more-


SeaChange Q4 FY15 Results/Page 11

 

SeaChange International, Inc.

Reconciliation of GAAP to Non-GAAP

(Unaudited, amounts in thousands)

 

     Twelve Months Ended     Twelve Months Ended  
     January 31, 2015     January 31, 2014  
     GAAP                 GAAP              
     As Reported     Adjustments     Non-GAAP     As Reported     Adjustments     Non-GAAP  

Revenues:

            

Products

   $ 31,507      $ —        $ 31,507      $ 54,749      $ —        $ 54,749   

Services

     83,928        —          83,928        91,570        —          91,570   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

  115,435      —        115,435      146,319      —        146,319   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

Products

  8,845      —        8,845      10,526      —        10,526   

Services

  48,272      —        48,272      55,075      —        55,075   

Amortization of intangible assets

  1,070      (1,070   —        1,269      (1,269   —     

Stock-based compensation

  141      (141   —        250      (250   —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

  58,328      (1,211   57,117      67,120      (1,519   65,601   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

  57,107      1,211      58,318      79,199      1,519      80,718   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit percentage

  49.5   1.0   50.5   54.1   1.0   55.2

Operating expenses:

Research and development

  42,169      —        42,169      39,657      —        39,657   

Selling and marketing

  13,920      —        13,920      15,018      —        15,018   

General and administrative

  16,014      —        16,014      17,618      —        17,618   

Amortization of intangible assets

  4,084      (4,084   —        3,361      (3,361   —     

Stock-based compensation expense

  3,079      (3,079   —        2,709      (2,709   —     

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

  —        —        —        (60   60      —     

Professional fees - other

  671      (671   —        1,614      (1,614   —     

Severance and other restructuring costs

  3,623      (3,623   —        911      (911   —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

  83,560      (11,457   72,103      80,828      (8,535   72,293   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

$ (26,453 $ 12,668    $ (13,785 $ (1,629 $ 10,054    $ 8,425   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations percentage

  (22.9 %)    11.0   (11.9 %)    (1.1 %)    6.9   5.8

Weighted average common shares outstanding:

Basic

  32,772      32,772      32,772      32,718      32,718      32,718   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

  32,772      33,004      32,772      32,718      33,572      33,572   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income per share:

Basic

$ (0.81 $ 0.39    $ (0.42 $ (0.05 $ 0.31    $ 0.26   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

$ (0.81 $ 0.39    $ (0.42 $ (0.05 $ 0.30    $ 0.25   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA:

Loss from operations

$ (26,453 $ (1,629

Depreciation expense

  3,683      4,389   

Amortization of intangible assets

  5,154      4,630   

Stock-based compensation expense

  3,220      2,959   

Earn-outs and changes in fair value

  —        (60

Professional fees - other

  671      1,614   

Severance and other restructuring

  3,623      911   
      

 

 

       

 

 

 

Adjusted EBITDA

$ (10,102 $ 12,814   
      

 

 

       

 

 

 

Adjusted EBITDA %

  (8.8 %)    8.8

 

—end press release and tables—