Exhibit 99.1
[SEACHANGE LOGO]
NEWS RELEASE
For more information: | Media: John Coulbourn SeaChange International 978/897-0100 x3098 johnc@schange.com |
Investor Relations: Martha Schaefer SeaChange International 978/897-0100 x3030 mschaefer@schange.com |
SEACHANGE INTERNATIONAL CONFIRMS
SECOND QUARTER FISCAL 2006 RESULTS
MAYNARD, Mass. (September 6, 2005) SeaChange International, Inc. (Nasdaq: SEAC) today confirmed its financial results for its second quarter of fiscal 2006 ended July 31, 2005, which the Company had previously announced on August 23, 2005. These results follow the completion of its analysis with respect to its preferred equity investment into Casa Systems, Inc.
As previously reported, revenues for the quarter were $26.2 million compared to revenues of $43.0 million in the second quarter of fiscal 2005, a 39% decrease. The Company recorded a net loss of $6.6 million, or $0.23 per diluted share, for the second quarter of fiscal 2006 versus net income of $3.3 million, or $0.12 per diluted share, for the second quarter of fiscal 2005.
During the quarter, the Company invested $8.3 million in Casa Systems, Inc. representing a 19.8% ownership interest. SeaChange reviewed the financing agreements and the supply agreements with Casa and determined that while Casa was a Variable Interest Entity as defined by the accounting guidance of FIN No. 46R, the Company is not the primary beneficiary in Casa. Consequently, SeaChange accounted for this investment under the cost method of accounting. No charges for in-process research & development or other matters were required in connection with this investment.
The Company plans to file its Form 10-Q for the second quarter on or before Friday, September 9.
Safe Harbor Provision
Any statements contained in this press release that do not describe historical facts, including without limitation statements concerning expected future performance, product introductions and general market conditions, 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 expectations, but are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. The factors that could cause actual future results to differ materially from current
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expectations include the following: the continued growth, development and acceptance of the video-on-demand market; the loss of one of the Companys large customers; the cancellation or deferral of purchases of the Companys products; a decline in demand or average selling price for the Companys broadband products; the Companys ability to manage its growth; the Companys 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, including the Companys current patent litigation with C-COR (as successor to nCube Corp.); content providers limiting the scope of content licensed for use in the video-on-demand market; the Companys ability to introduce new products or enhancements to existing products; the Companys dependence on certain sole source suppliers and third-party manufacturers; the Companys ability to compete in its marketplace; the Companys ability to respond to changing technologies; the risks associated with international sales; changes in the regulatory environment; the performance of companies in which the Company has made equity investments, including the ON Demand Group Limited; the Companys ability to hire and retain highly skilled employees; and increasing social and political turmoil.
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 That May Affect our Business in the Companys Annual Report on Form 10-K filed with the Commission on April 15, 2005. 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.
About SeaChange International, Inc.
SeaChange International, Inc. is a world leader in digital video systems, spanning broadcast and broadband. The Company creates powerful server and software systems that manage, store and distribute professional quality digital video. SeaChanges innovative products are based on a scalable, distributed software architecture and standard technology components to continually deliver exponential improvements in digital video cost-performance. As a result, SeaChange enables broadband, broadcast, satellite and new media companies to streamline operations and reduce costs, allowing for expanded services, new applications and increased revenues. SeaChange is headquartered in Maynard, Massachusetts and has product development, support and sales offices throughout the world. Visit www.schange.com.
MediaCluster and SeaChange are registered trademarks of SeaChange International, Inc.
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SeaChange International, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three months ended |
Six months ended |
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July 31, | July 31, | July 31, | July 31, | |||||||||||||
2005 |
2004 |
2005 |
2004 |
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Revenues |
$ | 26,195 | $ | 43,027 | $ | 57,707 | $ | 84,666 | ||||||||
Cost of revenues |
17,014 | 23,247 | 35,018 | 46,100 | ||||||||||||
Gross profit |
9,181 | 19,780 | 22,689 | 38,566 | ||||||||||||
Operating expenses: |
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Research and development |
8,459 | 7,128 | 16,339 | 14,202 | ||||||||||||
Selling and marketing |
4,584 | 4,450 | 9,590 | 8,625 | ||||||||||||
General and administrative |
3,808 | 2,640 | 6,480 | 5,324 | ||||||||||||
16,851 | 14,218 | 32,409 | 28,151 | |||||||||||||
Income (loss) from operations |
(7,670 | ) | 5,562 | (9,720 | ) | 10,415 | ||||||||||
Interest income, net |
522 | 383 | 1,083 | 905 | ||||||||||||
Income (loss) before income taxes and equity income (loss) in earnings of affiliates |
(7,148 | ) | 5,945 | (8,637 | ) | 11,320 | ||||||||||
Income tax (benefit) expense |
(544 | ) | 2,378 | (1,125 | ) | 4,516 | ||||||||||
Equity income (loss) in earnings of affiliates |
48 | (223 | ) | 378 | (253 | ) | ||||||||||
Net income (loss) |
$ | (6,556 | ) | $ | 3,344 | $ | (7,134 | ) | $ | 6,551 | ||||||
Basic income (loss) per share |
$ | (0.23 | ) | $ | 0.12 | $ | (0.25 | ) | $ | 0.24 | ||||||
Diluted income (loss) per share |
$ | (0.23 | ) | $ | 0.12 | $ | (0.25 | ) | $ | 0.23 | ||||||
Weighted average common shares outstanding- |
||||||||||||||||
Basic |
28,286 | 27,490 | 28,232 | 27,415 | ||||||||||||
Diluted |
28,286 | 28,745 | 28,232 | 28,776 | ||||||||||||
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SeaChange International, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
July 31, | January 31, | |||||||
2005 |
2005 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | 44,214 | $ | 93,561 | ||||
Marketable securities |
16,650 | 26,052 | ||||||
Accounts receivable, net |
21,014 | 25,047 | ||||||
Inventories |
22,953 | 19,458 | ||||||
Prepaid expenses and other current assets |
10,235 | 9,750 | ||||||
Total current assets |
115,066 | 173,868 | ||||||
Property and equipment, net |
25,754 | 15,814 | ||||||
Marketable securities |
20,840 | 14,299 | ||||||
Investments in affiliates |
15,782 | 4,661 | ||||||
Intangibles, net |
14,289 | 480 | ||||||
Goodwill |
11,169 | 1,882 | ||||||
Other assets |
5,056 | 1,301 | ||||||
$ | 207,956 | $ | 212,305 | |||||
Liabilities and Stockholders Equity |
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Current liabilities: |
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Accounts payable and accrued expenses |
$ | 22,077 | $ | 23,009 | ||||
Current portion of line of credit and obligations under capital leases |
| 209 | ||||||
Customer deposits |
6,631 | 165 | ||||||
Deferred revenue |
19,167 | 21,342 | ||||||
Income taxes payable |
1,250 | 2,575 | ||||||
Total current liabilities |
49,125 | 47,300 | ||||||
Long-term debt and other long-term liabilities |
318 | | ||||||
Common stock and other equity |
175,496 | 174,737 | ||||||
Accumulated deficit |
(16,589 | ) | (9,455 | ) | ||||
Accumulated other comprehensive loss |
(394 | ) | (277 | ) | ||||
Total stockholders equity |
158,513 | 165,005 | ||||||
$ | 207,956 | $ | 212,305 | |||||
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