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 ANNOUNCES FOURTH QUARTER

AND FULL FISCAL YEAR 2014 RESULTS

ACTON, Mass. (April 3, 2014) – SeaChange International, Inc. (NASDAQ: SEAC), a leading global multi-screen video software innovator, today reported fourth quarter fiscal 2014 revenue of $35.6 million and non-GAAP operating income of $0.9 million, or $0.02 per fully diluted share, from continuing operations, consistent with the Company’s preliminary results announced on Feb. 25, 2014. In comparison, fourth quarter fiscal 2013 revenue was $44.6 million and non-GAAP operating income was $9.5 million, or $0.28 per fully diluted share, from continuing operations. The Company posted a U.S. GAAP operating loss of $0.9 million, or $0.03 per basic share, for the fourth quarter of fiscal 2014 compared to a U.S. GAAP operating income for the fourth quarter of fiscal 2013 of $4.9 million, or $0.15 per fully diluted share. The Company’s U.S. GAAP fourth quarter fiscal 2014 results include charges of $1.8 million that are excluded from our non-GAAP results, which consisted primarily of stock-based compensation and amortization of intangible assets from prior acquisitions, while the fourth quarter fiscal 2013 results include non-GAAP charges of $4.6 million consisting of stock-based compensation and amortization of intangible assets and earn-out costs from prior acquisitions.

For the full fiscal year ended January 31, 2014, the Company posted revenues of $146.3 million and non-GAAP operating income of $8.4 million, or $0.25 per fully diluted share, compared to revenues of $157.2 million and non-GAAP operating income of $15.9 million, or $0.48 per fully diluted share, in the same prior period. The Company posted a U.S. GAAP loss from operations for fiscal 2014 of $1.6 million, compared to a $5.3 million operating loss for the same prior period. Included in the full fiscal 2014 results are $10.1 million in non-GAAP charges related to stock-based compensation and amortization of intangible assets from prior acquisitions, professional fees from divestitures and litigation, severance and other restructuring charges, while the full fiscal 2013 results included $21.2 million of similar non-GAAP charges.

 

-more-


SeaChange Q4 and Full Fiscal 2014 Results/Page 2

 

“Fiscal 2014 was a transitional year for SeaChange,” said Raghu Rau, CEO, SeaChange. “We established our next generation Adrenalin multi-screen television platform and Reference Design Kit-based Nucleus video gateway software as leaders in the market, while managing the decline of our legacy products. Over the course of fiscal 2014, we continued to make significant progress with our strategic growth initiatives as demonstrated by our expansion into telcos with multi-screen deployments by two new service providers in Europe, upgrades of our legacy video-on-demand and advertising customers to Adrenalin and Infusion, and further design wins for Nucleus. Our next generation products accounted for two-thirds of total product revenue in the fourth quarter.”

Rau continued, “We believe that fiscal 2015 will be the third and final year of our transition. During this time, we anticipate that declines in sales of our legacy products will offset the growth in our new products due to extended lead times in customer orders and acceptances. We expect these legacy declines to be most significant during the first quarter of fiscal 2015, which is our lowest quarter typically. As such, we continue to expect that revenue will likely grow only in the second half of fiscal 2015 and remain flat to down for the full year relative to fiscal 2014.”

Anthony Dias, CFO, SeaChange, said, “While revenues and operating margins in the first half of fiscal 2015 are expected to be lower than the corresponding period in fiscal 2014, we are targeting higher profitability for the full fiscal year, driven by the growth in our next generation products and the reduction in incremental costs related to the rollout of large development projects.”

SeaChange ended its fourth quarter fiscal 2014 with cash, cash equivalents and marketable securities of $128.1 million and no debt outstanding, compared to $126.4 million at the end of the third quarter of fiscal 2014. Toward the end of the fourth quarter, SeaChange implemented a 10b5-1 plan to execute on its $25 million stock buyback authorization.

SeaChange will host a conference call today at 5:00 p.m. to discuss its fourth quarter and full fiscal 2014 results, which will be accessible at 877-407-8037 (U.S.) and 201-689-8037 (international) and via webcast at www.schange.com/IR. The replay will be available by phone through April 17, 2014 at 877-660-6853 (U.S.) or 201-612-7415 (international), conference ID 1357-9019, and on the investor relations section of the Company’s website at www.schange.com/IR.

 

-more-


SeaChange Q4 and Full Fiscal 2014 Results/Page 3

 

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, telco 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 multi-screen, advertising and video gateway software 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.

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 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.

 

-more-


SeaChange Q4 and Full Fiscal 2014 Results/Page 4

 

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.

SeaChange International, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, amounts in thousands)

 

     January 31,
2014
     January 31,
2013
 

Assets

     

Cash and cash equivalents

   $ 115,734       $ 106,721   

Marketable securities and restricted cash

     12,369         14,157   

Accounts and other receivables, net

     35,714         40,157   

Inventories, net

     6,632         7,372   

Prepaid expenses and other current assets

     5,449         9,879   

Assets held for sale

     —           465   

Property and equipment, net

     18,530         18,399   

Goodwill and intangible assets, net

     58,005         62,617   

Other assets

     1,887         4,909   
  

 

 

    

 

 

 

Total assets

   $ 254,320       $ 264,676   
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

     

Accounts payable and other current liabilities

   $ 19,179       $ 25,930   

Deferred revenues

     25,628         30,603   

Other long term liabilities

     936         904   

Deferred tax liabilities and income taxes payable

     4,136         5,038   
  

 

 

    

 

 

 

Total liabilities

     49,879         62,475   
  

 

 

    

 

 

 

Total stockholders’ equity

     204,441         202,201   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 254,320       $ 264,676   
  

 

 

    

 

 

 

 

-more-


SeaChange Q4 and Full Fiscal 2014 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
January 31,
    Twelve Months Ended
January 31,
 
     2014     2013     2014     2013  

Revenues:

        

Products

   $ 9,940      $ 23,593      $ 54,749      $ 64,274   

Services

     25,676        20,982        91,570        92,914   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     35,616        44,575        146,319        157,188   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

        

Products

     3,031        3,810        10,526        17,397   

Services

     14,339        13,770        55,075        52,162   

Amortization of intangible assets

     322        881        1,269        2,429   

Stock-based compensation expense

     59        48        250        157   

Inventory write-down

     —          —          —          1,752   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     17,751        18,509        67,120        73,897   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     17,865        26,066        79,199        83,291   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Research and development

     9,650        10,363        39,657        38,667   

Selling and marketing

     3,735        3,576        15,018        15,398   

General and administrative

     3,954        3,566        17,618        17,674   

Amortization of intangible assets

     849        1,075        3,361        3,966   

Stock-based compensation expense

     475        1,417        2,709        5,772   

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

     —          768        (60     2,435   

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

     90        174        1,614        1,619   

Severance and other restructuring costs

     (11     188        911        3,106   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     18,742        21,127        80,828        88,637   
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

     (877     4,939        (1,629     (5,346

Other income (expenses), net

     368        6        (224     (86

Gain (loss) on sale of investment in affiliates

     —          71        (363     885   
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before income taxes and equity income in earnings of affiliates

     (509     5,016        (2,216     (4,547

Income tax provision (benefit)

     839        (789     55        (1,555

Equity income in earnings of affiliates, net of tax

     —          118        44        193   
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from continuing operations

     (1,348     5,923        (2,227     (2,799
  

 

 

   

 

 

   

 

 

   

 

 

 

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

     —          251        —          (14,073

(Loss) income from discontinued operations, net of tax

     (59     362        (803     (2,293
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

   $ (1,407   $ 6,536      $ (3,030   $ (19,165
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income per share:

        

Basic (loss) income per share

   $ (0.04   $ 0.20      $ (0.09   $ (0.59
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted (loss) income per share

   $ (0.04   $ 0.20      $ (0.09   $ (0.59
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income per share from continuing operations:

        

Basic (loss) income per share

   $ (0.04   $ 0.18      $ (0.07   $ (0.09
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted (loss) income per share

   $ (0.04   $ 0.18      $ (0.07   $ (0.09
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share from discontinued operations:

        

Basic income (loss) per share

   $ 0.00      $ 0.02      $ (0.02   $ (0.50
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted income (loss) per share

   $ 0.00      $ 0.02      $ (0.02   $ (0.50
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding:

        

Basic

     32,963        32,636        32,718        32,494   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     32,963        33,451        32,718        32,494   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

-more-


SeaChange Q4 and Full Fiscal 2014 Results/Page 6

SeaChange International, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

 

     For the Fiscal Years Ended
January 31,
 
     2014     2013  

Cash flows from operating activities:

    

Net loss

   $ (3,030   $ (19,165

Net loss from discontinued operations

     803        16,366   

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

    

Depreciation of property and equipment

     4,389        4,671   

Amortization of intangible assets

     4,630        6,395   

Impairment of long-lived asset

     —          967   

Loss (gain) on sale of investment in affiliates

     363        (885

Stock-based compensation expense

     2,959        5,929   

Change in contingent consideration related to acquisitions

     (60     2,435   

Deferred income taxes

     (684     (132

Other

     495        79   

Changes in operating assets and liabilities:

    

Accounts receivable

     5,420        1,676   

Unbilled receivables

     (5,251     4,637   

Inventories

     (234     2,563   

Prepaid expenses and other assets

     6,724        (5,045

Accounts payable

     (873     (236

Accrued expenses

     1,080        (347

Customer deposits

     (4,226     1,777   

Deferred revenues

     (4,877     (6,283

Other

     539        568   
  

 

 

   

 

 

 

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

     8,167        15,970   

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

     (803     1,387   
  

 

 

   

 

 

 

Total cash provided by operating actvities

     7,364        17,357   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of property and equipment

     (2,315     (3,972

Purchases of marketable securities

     (11,479     (15,642

Proceeds from sale and maturity of marketable securities

     12,237        14,214   

Additional proceeds from sale of equity investment

     1,128        885   

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

     (4,009     (8,175

Decrease in restricted cash

     938        262   

Other

     20        190   
  

 

 

   

 

 

 

Net cash used in investing activities from continuing operations

     (3,480     (12,238

Net cash provided by investing activities from discontinued operations

     4,000        25,232   
  

 

 

   

 

 

 

Total cash provided by investing actvities

     520        12,994   
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Repurchases of our common stock

     —          (6,200

Proceeds from issuance of common stock relating to stock option exercises

     1,058        2,191   
  

 

 

   

 

 

 

Total cash provided by (used in) financing activities

     1,058        (4,009
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     71        (206
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     9,013        26,136   
  

 

 

   

 

 

 

Cash and cash equivalents, beginning of period

     106,721        80,585   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 115,734      $ 106,721   
  

 

 

   

 

 

 

-more-


SeaChange Q4 and Full Fiscal 2014 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, 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 is an important measure that is not calculated according to U.S. GAAP. We use non-GAAP 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 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 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 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 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.

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.

 

-more-


SeaChange Q4 and Full Fiscal 2014 Results/Page 8

 

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.

The following table reconciles the Company’s GAAP loss from operations to the Company’s non-GAAP income from operations:

SeaChange International, Inc.

Reconciliation of GAAP to Non-GAAP

(Unaudited, amounts in thousands)

 

     Three Months Ended     Three Months Ended  
     January 31, 2014     January 31, 2013  
     GAAP
As Reported
    Adjustments     Non-GAAP     GAAP
As Reported
    Adjustments     Non-GAAP  

Revenues:

            

Products

   $ 9,940      $ —        $ 9,940      $ 23,593      $ —        $ 23,593   

Services

     25,676        —          25,676        20,982        —          20,982   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     35,616        —          35,616        44,575        —          44,575   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

            

Products

     3,031        —          3,031        3,810        —          3,810   

Services

     14,339        —          14,339        13,770        —          13,770   

Amortization of intangible assets

     322        (322     —          881        (881     —     

Stock-based compensation

     59        (59     —          48        (48     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     17,751        (381     17,370        18,509        (929     17,580   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     17,865        381        18,246        26,066        929        26,995   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit percentage

     50.2     1.1     51.2     58.5     2.1     60.6

Operating expenses:

            

Research and development

     9,650        —          9,650        10,363        —          10,363   

Selling and marketing

     3,735        —          3,735        3,576        —          3,576   

General and administrative

     3,954        —          3,954        3,566        —          3,566   

Amortization of intangible assets

     849        (849     —          1,075        (1,075     —     

Stock-based compensation expense

     475        (475     —          1,417        (1,417     —     

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

     —          —          —          768        (768     —     

Professional fees: acquisitions, divestitures, litigation and strategic alternatives

     90        (90     —          174        (174     —     

Severance and other restructuring costs

     (11     11        —          188        (188     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     18,742        (1,403     17,339        21,127        (3,622     17,505   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

   $ (877   $ 1,784      $ 907      $ 4,939      $ 4,551      $ 9,490   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations percentage

     (2.5 %)      4.9     2.5     11.1     10.2     21.3

Weighted average common shares outstanding:

            

Basic

     32,963        32,963        32,963        32,274        32,274        32,274   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     32,963        33,746        33,746        32,922        32,922        32,922   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating (loss) income per share:

            

Basic

   $ (0.03   $ 0.06      $ 0.03      $ 0.15      $ 0.14      $ 0.29   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.03   $ 0.05      $ 0.02      $ 0.15      $ 0.13      $ 0.28   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA:

            

(Loss) income from operations

       $ (877       $ 4,939   

Depreciation expense

         1,044            1,330   

Amortization of intangible assets

         1,171            1,956   

Stock-based compensation expense

         534            1,465   

Earn-outs and changes in fair value

         —              768   

Professional fees: acquisitions, divestitures, etc.

         90            174   

Severance and other restructuring

         (11         188   
      

 

 

       

 

 

 

Adjusted EBITDA

       $ 1,951          $ 10,820   
      

 

 

       

 

 

 

Adjusted EBITDA %

         5.5         24.3

 

-more-


SeaChange Q4 and Full Fiscal 2014 Results/Page 9

 

SeaChange International, Inc.

Reconciliation of GAAP to Non-GAAP

(Unaudited, amounts in thousands)

 

     Twelve Months Ended     Twelve Months Ended  
     January 31, 2014     January 31, 2013  
     GAAP                 GAAP              
     As Reported     Adjustments     Non-GAAP     As Reported     Adjustments     Non-GAAP  

Revenues:

            

Products

   $ 54,749      $ —        $ 54,749      $ 64,274      $ —        $ 64,274   

Services

     91,570        —          91,570        92,914        —          92,914   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     146,319        —          146,319        157,188        —          157,188   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

            

Products

     10,526        —          10,526        17,397        —          17,397   

Services

     55,075        —          55,075        52,162        —          52,162   

Amortization of intangible assets

     1,269        (1,269     —          2,429        (2,429     —     

Stock-based compensation

     250        (250     —          157        (157     —     

Inventory write-down

     —          —            1,752        (1,752     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     67,120        (1,519     65,601        73,897        (4,338     69,559   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     79,199        1,519        80,718        83,291        4,338        87,629   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit percentage

     54.1     1.0     55.2     53.0     2.8     55.7

Operating expenses:

            

Research and development

     39,657        —          39,657        38,667        —          38,667   

Selling and marketing

     15,018        —          15,018        15,398        —          15,398   

General and administrative

     17,618        —          17,618        17,674        —          17,674   

Amortization of intangible assets

     3,361        (3,361     —          3,966        (3,966     —     

Stock-based compensation expense

     2,709        (2,709     —          5,772        (5,772     —     

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

     (60     60        —          2,435        (2,435     —     

Professional fees: acquisitions, divestitures, litigation and strategic alternatives

     1,614        (1,614     —          1,619        (1,619     —     

Severance and other restructuring costs

     911        (911     —          3,106        (3,106     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     80,828        (8,535     72,293        88,637        (16,898     71,739   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

   $ (1,629   $ 10,054      $ 8,425      $ (5,346   $ 21,236      $ 15,890   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations percentage

     (1.1 %)      6.8     5.8     (3.4 %)      13.5     10.1

Weighted average common shares outstanding:

            

Basic

     32,718        32,718        32,718        32,494        32,494        32,494   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     32,718        33,572        33,572        32,494        32,989        32,989   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating (loss) income per share:

            

Basic

   $ (0.05   $ 0.31      $ 0.26      $ (0.16   $ 0.65      $ 0.49   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.05   $ 0.30      $ 0.25      $ (0.16   $ 0.64      $ 0.48   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA:

            

Loss from operations

       $ (1,629       $ (5,346

Depreciation expense

         4,389            4,671   

Amortization of intangible assets

         4,630            6,395   

Stock-based compensation expense

         2,959            5,929   

Earn-outs and changes in fair value

         (60         2,435   

Professional fees: acquisitions, divestitures, etc.

         1,614            1,619   

Inventory write-down

         —              1,752   

Severance and other restructuring

         911            3,106   
      

 

 

       

 

 

 

Adjusted EBITDA

       $ 12,814          $ 20,561   
      

 

 

       

 

 

 

Adjusted EBITDA %

         8.8         13.1

 

—end press release and tables—