SeaChange International Reports Second Quarter Fiscal 2019 Results

ACTON, Mass., Sept. 05, 2018 (GLOBE NEWSWIRE) -- SeaChange International, Inc. (NASDAQ: SEAC) today reported second quarter fiscal 2019 revenue of $11.9 million and a U.S. GAAP loss from operations of $8.3 million, or $0.23 per basic share, compared to second quarter fiscal 2018 revenue of $17.2 million and U.S. GAAP loss from operations of $2.1 million, or $0.06 per basic share. 

These results are in line with the preliminary results reported by the Company for the second quarter of fiscal 2019 on August 21, 2018.

The Company’s U.S. GAAP second quarter fiscal 2019 results included non-GAAP charges of $1.9 million, which consisted primarily of stock-based compensation of $0.9 million, amortization of intangible assets from prior acquisitions of $0.4 million and severance and other restructuring costs of $0.5 million, while second quarter fiscal 2018 results included non-GAAP charges of $1.1 million. The non-GAAP loss from operations in the second quarter of fiscal 2019 was $6.4 million, or $0.18 per basic share, compared to the second quarter of fiscal 2018 non-GAAP loss from operations of $1.0 million, or $0.03 per basic share.

For the first six months of fiscal 2019, the Company reported revenue of $26.8 million and a U.S. GAAP loss from operations of $13.4 million, or $0.38 per basic share, compared to revenue of $33.9 million and a U.S.GAAP loss from operations of $7.6 million, or $0.22 per basic share in the same period in the prior fiscal year.  The non-GAAP loss from operations for the first six months of fiscal 2019 was $10.2 million, or $0.29 per basic share, compared to a non-GAAP loss from operations of $2.7 million, or $0.08 per basic share, in the first half of fiscal 2018.

Ed Terino, Chief Executive Officer, SeaChange, said, “While we are disappointed with the second quarter results, we believe that our strategy of pivoting to end-to-end solutions sold on a SaaS business model to video service providers, wireless carriers and ISP’s, as well as broadcasters and content owners, is taking hold.  As we enter new market segments and expand geographies through partnerships, closing transactions is taking longer to achieve.  However, we are very pleased by the market’s reaction to our innovative, subscription-based solutions portfolio, cFlow™, and our end-to-end cloud-based video solution, PanoramiC.  As we noted recently, several new customer transactions were delayed in closing during the second quarter. We expect these transactions to close in Q3. The increased interest in our new products, combined with our expanded traction with partners, especially in Latin and South America as well as Asia Pacific, should position us for improved results in the remainder of this fiscal year.”

Peter Faubert, Chief Financial Officer, SeaChange, said, “As we recognized that our second quarter results would not meet our expectations, we began taking steps to reduce our costs further, including implementing a cost reduction program expected to save $6 million on an annualized basis, with the goal of returning the Company to profitability and positive cash flow before the end of this fiscal year.  While our cash burn in the second quarter was high due to our results of operations, unfavorable working capital changes and one-time uses of cash during the quarter, we expect to return to positive cash flow in the second half of the year as our topline results improve.”

SeaChange ended the second quarter of fiscal 2019 with cash, cash equivalents, restricted cash and marketable securities of $35.0 million, and no debt outstanding.  In addition, the Company has completed the valuation analysis of its goodwill and other long-lived assets as of July 31, 2018, as required, and determined that no impairment has occurred.

Outlook
SeaChange anticipates third quarter fiscal 2019 revenue to be in the range of $16 million to $20 million, U.S. GAAP operating loss from operations of $0.15 to $0.06 per basic share, and non-GAAP operating results to be in the range of a loss from operations of $0.05 per basic share to operating income of $0.04 per fully diluted share. 

For the full fiscal year 2019, the company now expects 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. Previously the company had expected revenue between $80 to $90 million, US GAAP operating results between a loss of $0.06 per basic share to operating income of $0.09 per fully diluted share and non-GAAP operating income between $0.10 to $0.25 per fully diluted 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 Call
The Company will host a conference call to discuss its second quarter fiscal 2019 results at 5:00 p.m. ET today, Wednesday, September 5, 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.

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. 

 
SeaChange International, Inc.
Preliminary Condensed Consolidated Balance Sheets
(Unaudited, amounts in thousands)
         
  July 31,   January 31,  
   2018    2018  
Assets        
Cash and cash equivalents $ 24,393   $ 43,652  
Restricted cash     547       9  
Marketable securities     10,018       8,440  
Accounts and other receivables, net     11,833       22,537  
Unbilled receivables     5,330       3,101  
Inventories, net      776       666  
Prepaid expenses and other current assets      4,996       3,557  
Property and equipment, net      8,954       9,471  
Goodwill and intangible assets, net      25,433       26,882  
Other assets      1,285       1,015  
Total assets  $   93,565   $   119,330  
         
         
Liabilities and Stockholders’ Equity        
Accounts payable and other current liabilities $   7,115   $   17,810  
Deferred revenues      8,504       14,433  
Deferred tax liabilities and income taxes payable     1,169       1,367  
Other long term liabilities     -       -  
Total liabilities      16,788       33,610  
         
Total stockholders’ equity      76,777       85,720  
Total liabilities and stockholders’ equity  $   93,565   $   119,330  
         

 

SeaChange International, Inc.
Preliminary Condensed Consolidated Statements of Operations
(Unaudited, amounts in thousands, except per share data)
               
  Three Months Ended   Six Months Ended
  July 31,   July 31,
    2018       2017       2018       2017  
Revenues:              
Products $   1,462     $   5,039     $   4,553     $   7,788  
Services      10,439         12,186         22,283         26,104  
Total revenues      11,901         17,225         26,836         33,892  
Cost of revenues:              
Products     483         1,336         802         1,890  
Services      4,955         4,218         10,486         10,198  
Amortization of intangible assets      178         255         356         509  
Stock-based compensation expense      (1 )       -         -         2  
Total cost of revenues      5,615         5,809         11,644         12,599  
Gross profit      6,286         11,416         15,192         21,293  
Operating expenses:              
Research and development     5,157         6,399         10,641         11,777  
Selling and marketing      3,685         2,439         7,071         5,376  
General and administrative      4,021         3,084         8,015         6,727  
Amortization of intangible assets     233         361         459         705  
Stock-based compensation expense     924         653         1,802         1,528  
Professional fees - other     -         -         -         21  
Severance and other restructuring costs     536         563         590         2,710  
Total operating expenses     14,556         13,499         28,578         28,844  
Loss from operations      (8,270 )       (2,083 )       (13,386 )       (7,551 )
Other (expenses) income, net     (1,962 )       589         (2,811 )       955  
Loss before income taxes     (10,232 )       (1,494 )       (16,197 )       (6,596 )
Income tax provision     (1,152 )       35         (1,646 )       304  
Net loss $   (9,080 )   $   (1,529 )   $   (14,551 )   $   (6,900 )
               
Net loss per share:              
Basic $   (0.26 )   $   (0.05 )   $   (0.41 )   $   (0.20 )
Diluted $   (0.26 )   $   (0.05 )   $   (0.41 )   $   (0.20 )
Weighted average common shares outstanding:              
Basic      35,649         35,351         35,628         35,331  
Diluted      35,649         35,351         35,628         35,331  
               

 

SeaChange International, Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited, amounts in thousands)
           
    Six Months Ended  
    July 31,  
      2018       2017    
Cash flows from operating activities:        
  Net loss $   (14,551 )   $   (6,900 )  
  Adjustments to reconcile net loss to net cash used in operating activities:        
  Depreciation and amortization of property and equipment     737         1,198    
  Amortization of intangible assets     815         1,214    
  Stock-based compensation expense     1,802         1,530    
  Deferred income taxes     (758 )       79    
  Other non-cash reconciling items, net     76         8    
  Changes in operating assets and liabilities, excluding impact of acquisition:        
  Accounts receivable      10,115         4,358    
  Unbilled receivables      (2,335 )       2,558    
  Inventories      (165 )       57    
  Prepaid expenses and other assets      (1,584 )       8    
  Accounts payable      371         (2,594 )  
  Accrued expenses      (10,640 )       (3,193 )  
  Deferred revenues      (5,729 )       (870 )  
  Other operating activities     2,430         230    
  Total cash used in operating activities     (19,416 )       (2,317 )  
Cash flows from investing activities:        
  Purchases of property and equipment      (284 )       (274 )  
  Purchases of marketable securities      (4,354 )       (4,501 )  
  Proceeds from sale and maturity of marketable securities     2,761         4,449    
  Other investing activities     (60 )       287    
  Total cash used in investing activities     (1,937 )       (39 )  
Cash flows from financing activities:        
  Proceeds from issuance of common stock     73         26    
  Payments of withholding tax on RSU vesting     (34 )       (36 )  
  Total cash provided by (used in) financing activities     39         (10 )  
Effect of exchange rate changes on cash     2,593         (742 )  
Net decrease in cash, cash equivalents and restricted cash     (18,721 )       (3,108 )  
Cash, cash equivalents and restricted cash, beginning of period      43,661         28,411    
Cash, cash equivalents and restricted cash, end of period  $   24,940     $   25,303    
           

Non-GAAP Measures

We define non-GAAP loss from operations as U.S. GAAP operating loss plus stock-based compensation expenses, amortization of intangible assets, provision for loss contract, non-operating professional fees and severance and other restructuring costs. We discuss non-GAAP loss from operations in our quarterly earnings releases and certain other communications as we believe non-GAAP operating loss from operations is an important measure that is not calculated according to U.S. GAAP. We use non-GAAP loss 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 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 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 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:

Provision for Loss Contract. We entered a fixed-price customer contract on a multi-year arrangement, which included multiple vendors. As the system integrator on the project, we are subject to any cost overruns or increases with these vendors resulting in delays of acceptance by our customer. Delays of customer acceptance on this project result in incremental expenditures and require us to recognize a loss on this project in the period the determination is made. As a result, we recorded an estimated charge of $9.2 million in fiscal 2016. Subsequently, because of changes in the scope of the project and negotiations with the fixed-price customer, we recorded adjustments since fiscal 2016 totaling $4.7 million to reduce this estimated loss. We believe that the exclusion of this line item amount, which is recorded in cost of revenues – services, allows a comparison of operating results that would otherwise impair comparability between periods.

Amortization of Intangible Assets. We incur amortization expense of intangible assets related to various acquisitions that have been made in recent years. These intangible assets are valued at the time of acquisition, are then amortized over a period of several years after the acquisition and generally cannot be changed or influenced by management after the acquisition. We believe that exclusion of these expenses allows comparisons of operating results that are consistent over time for 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 from operations, the most directly comparable U.S. GAAP financial measure, to our non-GAAP loss from operations for the three and six months ended July 31, 2018 and 2017 (amounts in thousands, except per share and percentage data):  

 
SeaChange International, Inc.
Preliminary Reconciliation of GAAP to Non-GAAP
(Unaudited, amounts in thousands, except per share data and percentages)
                         
    Three Months Ended   Three Months Ended
    July 31, 2018   July 31, 2017
    GAAP           GAAP        
    As Reported   Adjustments   Non-GAAP   As Reported   Adjustments   Non-GAAP
Revenues:                        
  Products $   1,462     $   -     $   1,462     $   5,039     $   -     $   5,039  
  Services     10,439         -         10,439         12,186         -         12,186  
  Total revenues     11,901         -         11,901         17,225         -         17,225  
                         
Cost of revenues:                      
  Products     483         -         483         1,336         -         1,336  
  Services     4,955         -         4,955         4,218         766         4,984  
  Amortization of intangible assets     178         (178 )       -         255         (255 )       -  
  Stock-based compensation     (1 )       1         -         -          -         -  
  Total cost of revenues     5,615         (177 )       5,438         5,809         511         6,320  
                         
  Gross profit     6,286         177         6,463         11,416         (511 )       10,905  
  Gross profit percentage   52.8 %     1.5 %     54.3 %     66.3 %     (3.0 %)     63.3 %
                         
Operating expenses:                      
  Research and development     5,157         -         5,157         6,399         -         6,399  
  Selling and marketing     3,685         -         3,685         2,439         -         2,439  
  General and administrative     4,021         -         4,021         3,084         -         3,084  
  Amortization of intangible assets     233         (233 )       -         361         (361 )       -  
  Stock-based compensation expense     924         (924 )       -         653         (653 )       -  
  Severance and other restructuring costs     536         (536 )       -         563         (563 )       -  
  Total operating expenses     14,556         (1,693 )       12,863         13,499         (1,577 )       11,922  
  (Loss) income from operations $   (8,270 )   $   1,870     $   (6,400 )   $   (2,083 )   $   1,066     $   (1,017 )
  (Loss) income from operations percentage   (69.5 %)     15.7 %     (53.8 %)     (12.1 %)     6.2 %     (5.9 %)
                         
Weighted average common shares outstanding:                      
  Basic     35,649         35,649         35,649         35,351         35,351         35,351  
  Diluted     35,649         36,299         35,649         35,351         35,565         35,351  
Non-GAAP operating (loss) income per share:                      
  Basic $   (0.23 )   $   0.05     $   (0.18 )   $   (0.06 )   $   0.03     $   (0.03 )
  Diluted $   (0.23 )   $   0.05     $   (0.18 )   $   (0.06 )   $   0.03     $   (0.03 )
                         

 

SeaChange International, Inc.
Preliminary Reconciliation of GAAP to Non-GAAP
(Unaudited, amounts in thousands, except per share data and percentages)
                         
    Six Months Ended   Six Months Ended
    July 31, 2018   July 31, 2017
    GAAP           GAAP        
    As Reported   Adjustments   Non-GAAP   As Reported   Adjustments   Non-GAAP
Revenues:                        
  Products $   4,553     $   -     $   4,553     $   7,788     $   -     $   7,788  
  Services     22,283         -         22,283         26,104         -         26,104  
  Total revenues     26,836         -         26,836         33,892         -         33,892  
                         
Cost of revenues:                      
  Products     802         -         802         1,890         -         1,890  
  Services     10,486         -         10,486         10,198         593         10,791  
  Amortization of intangible assets     356         (356 )       -         509         (509 )       -  
  Stock-based compensation     -          -          -         2         (2 )       -  
  Total cost of revenues     11,644         (356 )       11,288         12,599         82         12,681  
                         
  Gross profit     15,192         356         15,548         21,293         (82 )       21,211  
  Gross profit percentage   56.6 %     1.3 %     57.9 %     62.8 %     (0.2 %)     62.6 %
                         
Operating expenses:                      
  Research and development     10,641         -         10,641         11,777         -         11,777  
  Selling and marketing     7,071         -         7,071         5,376         -         5,376  
  General and administrative     8,015         -         8,015         6,727         -         6,727  
  Amortization of intangible assets     459         (459 )       -         705         (705 )       -  
  Stock-based compensation expense     1,802         (1,802 )       -         1,528         (1,528 )       -  
  Professional fees - other     -          -         -         21         (21 )       -  
  Severance and other restructuring costs     590         (590 )       -         2,710         (2,710 )       -  
  Total operating expenses     28,578         (2,851 )       25,727         28,844         (4,964 )       23,880  
  (Loss) income from operations $   (13,386 )   $   3,207     $   (10,179 )   $   (7,551 )   $   4,882     $   (2,669 )
  (Loss) income from operations percentage   (49.9 %)     12.0 %     (37.9 %)     (22.3 %)     14.4 %     (7.9 %)
                         
Weighted average common shares outstanding:                      
  Basic     35,628         35,628         35,628         35,331         35,331         35,331  
  Diluted     35,628         36,187         35,628         35,331         35,485         35,331  
Non-GAAP operating (loss) income per share:                      
  Basic $   (0.38 )   $   0.09     $   (0.29 )   $   (0.22 )   $   0.14     $   (0.08 )
  Diluted $   (0.38 )   $   0.09     $   (0.29 )   $   (0.22 )   $   0.14     $   (0.08 )
                         

 

SeaChange International, Inc.
Reconciliation of GAAP to Non-GAAP Gross Margins
(Unaudited, amounts in thousands except percentage data)
               
               
  Three Months Ended   Six Months Ended
  July 31, 2018   July 31, 2018
  Total Product Service   Total Product Service
               
Revenue $   11,901   $   1,462   $   10,439     $   26,836   $   4,553   $   22,283  
               
GAAP gross profit $   6,286   $   972   $   5,314     $   15,192   $   3,737   $   11,455  
Exclude provision for loss contract     -        -        -          -        -        -   
Exclude amortization of intangible assets      178       7       171         356       14       342  
Exclude stock based compensation     (1 )     -        (1 )       -        -        -   
Non-GAAP gross profit $   6,463   $   979   $   5,484     $   15,548   $   3,751   $   11,797  
               
Non-GAAP gross profit, %   54.3 %   67.0 %   52.5 %     57.9 %   82.4 %   52.9 %
               
  Three Months Ended   Six Months Ended
  July 31, 2017   July 31, 2017
  Total Product Service   Total Product Service
               
Revenue $   17,225   $   5,039   $   12,186     $   33,892   $   7,788   $   26,104  
               
GAAP gross profit $   11,416   $   3,677   $   7,739     $   21,293   $   5,846   $   15,447  
Exclude provision for loss contract     (766 )     -        (766 )       (593 )     -        (593 )
Exclude amortization of intangible assets      255       26       229         509       52       457  
Exclude stock based compensation     -        -        -          2       -        2  
Non-GAAP gross profit $   10,905   $   3,703   $   7,202     $   21,211   $   5,898   $   15,313  
               
Non-GAAP gross profit, %   63.3 %   73.5 %   59.1 %     62.6 %   75.7 %   58.7 %
                                       

The following table reconciles the Company’s forecasted U.S. GAAP operating (loss) income per share to the Company’s forecasted non-GAAP operating income per share for the Company’s third 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
  October 31, 2018   January 31, 2019
GAAP revenue guidance  $   16,000   to  $   20,000     $   70,000   to  $   75,000  
GAAP loss from operations per basic share  $   (0.15 )   $   (0.06 )   $   (0.37 )   $   (0.26 )
Exclude stock compensation expense     0.02         0.02         0.08         0.08  
Exclude amortization of intangible assets      0.02         0.02         0.08         0.08  
Exclude professional fees associated with divestitures     -          -          -          -   
Exclude restructuring costs      0.06         0.06         0.06         0.06  
Non-GAAP (loss) income from operations per diluted or basic share  $   (0.05 )   $   0.04     $   (0.15 )   $   (0.04 )
               

 

SeaChange International, Inc. 
Supplemental Schedule - Revenue Breakout 
(Unaudited, amounts in thousands) 
                 
  Three Months Ended   Six Months Ended  
  July 31,   July 31,  
    2018     2017     2018     2017  
                 
Product revenues:                
Video platform $   524   $   3,565   $   3,339   $   5,413  
Advertising     609       -        609       -   
User experience     7       149       24       267  
Hardware     322       914       581       1,598  
Third-party products      -        411       -        510  
Total product revenues     1,462       5,039       4,553       7,788  
                 
Service revenues:                
Maintenance and support     7,017       8,718       14,239       16,982  
SaaS     63       313       193       1,707  
Professional services - video platform     3,359       2,988       7,730       7,170  
User experience     -        167       121       245  
Total service revenues     10,439       12,186       22,283       26,104  
Total revenues $   11,901   $   17,225   $   26,836   $   33,892  
                 

Contact:      
Investors
Mary T. Conway
Conway Communications
1-781-772-1679
marytconway@comcast.net

SeaChange logo.jpg

Source: SeaChange International, Inc.