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Exhibit 99.1

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 2016 RESULTS

Company Guides for Growth and Profitability for Full Fiscal Year 2017

ACTON, Mass. (April 7, 2016) – SeaChange International, Inc. (NASDAQ: SEAC) today announced results of its operations for the fourth quarter of fiscal 2016 ended January 31, 2016. In a simultaneous announcement made today, Ed Terino has been appointed Chief Executive Officer, effective April 6, 2016.

SeaChange reported fourth quarter fiscal 2016 revenue of $27.2 million and U.S. GAAP loss from operations of $22.1 million, or $0.66 per basic share for the fourth quarter of fiscal 2016, compared to fourth quarter fiscal 2015 revenue of $31.3 million and U.S. GAAP operating loss of $5.3 million, or $0.16 per basic share. The Company’s U.S. GAAP fourth quarter fiscal 2016 results included non-GAAP charges of $22.3 million, which consisted primarily from the loss from impairment of Timeline Labs net assets, severance and other restructuring costs, stock-based compensation, amortization of intangible assets from prior acquisitions, and other non-operating expense professional fees, while the fourth quarter fiscal 2015 results included non-GAAP charges of $3.6 million of similar non-GAAP charges. Non-GAAP income from operations for the fourth quarter of fiscal 2016 was $0.1 million, or break-even per share, compared to non-GAAP loss from operations of $1.7 million, or $0.05 per basic share, in the fourth quarter of fiscal 2015.

For the full fiscal year ended January 31, 2016, the Company posted revenues of $107.0 million and U.S. GAAP operating loss of $48.2 million, or $1.44 per basic share, compared to revenues of $115.4 million and U.S. GAAP operating loss of $26.5 million, or $0.81 per basic share, from operations in the same prior period. The Company posted a non-GAAP loss from operations for fiscal 2016 of $7.5 million, or $0.23 per basic share, compared to a $13.8 million operating loss, or $0.42 per basic share, from continuing operations for the same prior period. Included in the full fiscal 2016 U.S. GAAP results are $40.7 million in non-GAAP charges, which consisted primarily from the loss from impairment of Timeline Labs net assets, severance and other restructuring costs, stock-based compensation, amortization of intangible assets from prior acquisitions, and other non-operating expense professional fees, while the full fiscal 2015 results included $12.7 million of similar non-GAAP charges.


SeaChange Q4 FY16 Results/Page 2

 

“While we are disappointed in our fiscal 2016 financial performance, we did make significant operational improvements during the year. As we enter fiscal 2017, we intend to further increase operational efficiencies and deliver new software product innovations that capitalize on our core competencies in video delivery, content management and monetization,” said Ed Terino, Chief Executive Officer, SeaChange. “Specifically we will be focused on leveraging our R&D investments and becoming more efficient with our spending as we roll out our platforms for current customer commitments and introduce new cloud-based software products that provide opportunities in our core TV service provider segment, as well as adjacent markets. In addition, we are investing in our sales and marketing capabilities in response to these market opportunities. We believe that these actions will enable SeaChange to return to revenue growth and profitability on a full year basis in fiscal 2017.”

Anthony Dias, Chief Financial Officer, SeaChange, said, “As previously disclosed, we have implemented cost-saving actions with respect to restructuring our Timeline operations and the termination of our prior CEO, Jay Samit, which will enable us to achieve annualized cost savings of approximately $7 million.”

Commenting on the Company’s outlook, Dias concluded, “Generally our first quarter tends to be down cyclically, therefore we anticipate our first quarter fiscal 2017 revenue to be in the range of $20 million to $22 million, and non-GAAP operating loss to be in the range of $0.18 to $0.24 per basic share. For full fiscal 2017, we anticipate revenues to be in the range of $110 million to $120 million and non-GAAP operating income to be in the range of $0.05 to $0.15 per fully diluted share.”

SeaChange continues to have a strong balance sheet and ended the fourth quarter of fiscal 2016 with cash, cash equivalents, restricted cash and marketable securities of $71.1 million and no debt outstanding.

The Company will host a conference call to discuss its fourth quarter and full fiscal 2016 results at 5:00 p.m. ET today, Thursday, April 7, 2016. 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 21, 2016 at 877-660-6853 (U.S.) or 201-612-7415 (international), conference ID 1363-1984. The webcast will be archived on the investor relations section of the Company’s website at www.schange.com/IR.

 

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SeaChange Q4 FY16 Results/Page 3

 

About SeaChange International

Enabling our customers to deliver billions of premium video streams across a matrix of pay-TV and OTT platforms, SeaChange (Nasdaq: SEAC) empowers service providers, content owners and brand advertisers to entertain audiences, engage consumers and expand business opportunities. As a three-time Emmy award-winning organization with over 20 years of experience, we give media businesses the content management, delivery, measurement and analytics capabilities they need to craft an individualized branded experience for every viewer that sets the pace for quality and value worldwide. For more information, please visit www.schange.com.

 


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SeaChange Q4 FY16 Results/Page 4

 

Safe Harbor Provision

Any statements contained in this press release that do not describe historical facts, including without limitation statements regarding our products, the preliminary determination of our estimated one-time charge, future financial performance including expenses we may incur in the future in fulfilling customer arrangements, anticipated sales cycles, customer diversification, 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 and expenses we may incur in fulfilling customer arrangements; the continued development of the multiscreen video and OTT market; the inability to meet revenue targets for our SaaS-based multiscreen service offering; 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; the Company’s transition to being a company that primarily provides software solutions; worldwide economic cycles; measures taken to address the variability in the market for our products and services; the loss of or reduction in demand by one of the Company’s large customers; consolidation in the television service providers industry; 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 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 Company’s ability to generate sufficient revenues to reduce its losses or regain profitability; 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; 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 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 Company’s ability to access sufficient funding to finance desired growth and operations; the impact of changes in the market on the value of our investments; any impairment of the Company’s assets; 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; 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; the implementation of restructuring programs; disruptions to the Company’s information technology systems; uncertainties of regulation of Internet and data tracking over the Internet; if securities analysts do not publish favorable research or reports about our business; our use of non-GAAP reporting; the effectiveness of the Company’s disclosure controls and procedures and 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; compliance with conflict minerals regulations; terrorist acts, conflicts, wars and geopolitical uncertainties; the Company’s Delaware anti-takeover provisions; and the effect on revenue and reported results of a change in financial accounting standards.

 


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SeaChange Q4 FY16 Results/Page 5

 

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 7, 2015. 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 FY16 Results/Page 6

 

SeaChange International, Inc.

Preliminary Condensed Consolidated Balance Sheets

(Amounts in thousands)

 

     January 31,
2016
     January 31,
2015
 
     (Unaudited)         

Assets

     

Cash and cash equivalents

   $ 58,733       $ 90,019   

Marketable securities and restricted cash

     12,350         15,382   

Accounts and other receivables, net

     37,011         31,550   

Inventories

     1,682         2,864   

Prepaid expenses and other current assets

     3,827         3,026   

Property and equipment, net

     14,129         15,869   

Goodwill and intangible assets, net

     44,301         48,322   

Other assets

     5,636         5,319   
  

 

 

    

 

 

 

Total assets

   $ 177,669       $ 212,351   
  

 

 

    

 

 

 
     

Liabilities and Stockholders’ Equity

     

Accounts payable and other current liabilities

   $ 23,546       $ 17,636   

Deferred stock consideration

     3,205         —     

Deferred revenues

     17,410         19,088   

Deferred tax liabilities and income taxes payable

     1,389         3,083   

Other liabilities, long-term

     1,101         1,493   
  

 

 

    

 

 

 

Total liabilities

     46,651         41,300   
  

 

 

    

 

 

 

Total stockholders’ equity

     131,018         171,051   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 177,669       $ 212,351   
  

 

 

    

 

 

 

 


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SeaChange Q4 FY16 Results/Page 7

 

SeaChange International, Inc.

Preliminary Condensed Consolidated Statements of Operations

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

 

     Three Months Ended
January 31,
    Twelve Months Ended
January 31,
 
     2016     2015     2016     2015  

Revenues:

        

Product

   $ 5,582      $ 10,398     $ 21,896      $ 31,507   

Service

     21,615        20,881       85,096        83,928   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     27,197        31,279       106,992        115,435   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

        

Product

     1,247        2,657       6,013        8,845   

Service

     10,330        12,302       44,159        48,272   

Provision for loss contract

     —          —          9,162        —     

Amortization of intangible assets

     182        275       739        1,070   

Stock-based compensation expense

     19        9       80        141   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     11,778        15,243       60,153        58,328   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     15,419        16,036       46,839        57,107   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Research and development

     7,520        10,440       33,696        42,169   

Selling and marketing

     3,934        3,411       15,197        13,920   

General and administrative

     4,024        4,119       15,470        16,014   

Amortization of intangible assets

     1,038        759       4,041        4,084   

Stock-based compensation expense

     529        632       3,472        3,079   

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

     (1,475     —          —          —     

Professional fees - other

     492        194       637        671   

Severance and other restructuring costs

     35        1,745       1,061        3,623   

Loss on impairment of TLL, LLC net assets

     21,464        —          21,464     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     37,561        21,300       95,038        83,560   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (22,142     (5,264 )     (48,199     (26,453

Other expenses, net

     (164     (1,567 )     (554     (2,161
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes and equity income in earnings of affiliates

     (22,306     (6,831 )     (48,753     (28,614

Income tax benefit

     (26     (691 )     (1,029     (1,106

Equity income in earnings of affiliates, net of tax

     —          —          27        19   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations

     (22,280     (6,140 )     (47,697     (27,489
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from discontinued operations, net of tax

     —          —          —          5   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (22,280   $ (6,140 )   $ (47,697   $ (27,484
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share:

        

Basic loss per share

   $ (0.66   $ (0.19 )   $ (1.42   $ (0.84
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted loss per share

   $ (0.66   $ (0.19 )   $ (1.42   $ (0.84
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share from continuing operations:

        

Basic loss per share

   $ (0.66   $ (0.19 )   $ (1.42   $ (0.84
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted loss per share

   $ (0.66   $ (0.19 )   $ (1.42   $ (0.84
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income per share from discontinued operations:

        

Basic (loss) income per share

   $ —        $ —        $ —        $ 0.00   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted (loss) income per share

   $ —        $ —        $ —        $ 0.00   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding:

        

Basic

     33,701        32,672       33,506        32,772   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     33,701        32,672       33,506        32,772   
  

 

 

   

 

 

   

 

 

   

 

 

 

 


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SeaChange Q4 FY16 Results/Page 8

 

SeaChange International, Inc.

Preliminary Condensed Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

 

     For the Fiscal Years Ended
January 31,
 
     2016     2015  

Cash flows from operating activities:

    

Net loss

   $ (47,697   $ (27,484

Net income from discontinued operations

     —          (5

Adjustments to reconcile net loss to net cash used in operating activities from continuing operations:

    

Depreciation and amortization of property and equipment

     3,380        3,683  

Provision for loss contract

     9,162        —     

Amortization of intangible assets

     4,780        5,154  

Stock-based compensation expense

     3,552        3,220  

Deferred income taxes

     (985     (372 )

Loss on impairment of TLL, LLC net assets

     21,464        —     

Other non-cash reconciling items, net

     197        512  

Changes in operating assets and liabilities:

    

Accounts receivable

     (1,721     3,567  

Unbilled receivables

     (4,359     (1,993 )

Inventories

     (937     3,183  

Prepaid expenses and other assets

     (1,097     1,570  

Accounts payable

     874        (1,619 )

Accrued expenses

     (2,713     1,650   

Deferred revenues

     (1,431     (5,699

Other operating activities

     (1,132     1,289   
  

 

 

   

 

 

 

Net cash used in operating activities from continuing operations

     (18,663     (13,344

Net cash provided by operating activities from discontinued operations

     —          5   
  

 

 

   

 

 

 

Total cash used in operating activities

     (18,663     (13,339
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of property and equipment

     (1,397     (1,873

Investment in capitalized software

     (2,440     —     

Purchases of marketable securities

     (9,033     (9,193

Proceeds from sale and maturity of marketable securities

     11,043        7,181   

Proceeds from (purchase of) cost method investments, net

     464        (2,000

Proceeds from sale of equity investments

     —          229   

Acquisition of business, net of cash acquired

     (11,686     —     

Advance for TLL, LLC acquisition

     —          (2,500

Other investing activities, net

     (79     —     
  

 

 

   

 

 

 

Total cash used in investing activities

     (13,128     (8,156
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from issuance of common stock relating to stock option exercises

     194        —     

Repurchase of our common stock

     —          (5,504
  

 

 

   

 

 

 

Total cash provided by (used in) financing activities

     194        (5,504
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     311        1,284   
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (31,286     (25,715
  

 

 

   

 

 

 

Cash and cash equivalents, beginning of period

     90,019        115,734   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 58,733      $ 90,019   
  

 

 

   

 

 

 

 


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SeaChange Q4 FY16 Results/Page 9

 

Use of Non-GAAP Financial Information

We define non-GAAP income (loss) from operations as U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) operating 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, severance and other restructuring costs and provision for loss contracts. We discuss non-GAAP income (loss) from operations in our quarterly earnings releases and certain other communications as we believe non-GAAP income (loss) from operations is an important measure that is not calculated according to U.S. GAAP. We use non-GAAP income (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 non-GAAP income (loss) 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 (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 non-GAAP income (loss) 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:

Provision for Loss Contract. We entered into a fixed priced 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 or acceptance by our customer. Delays of customer acceptance on this project require us to recognize a loss on this project in the period the determination is made. As a result, we have recorded an estimated charge of $9.2 million during the third quarter of fiscal 2016. We believe that the exclusion of these expenses allows a comparison of operating results that would otherwise impair comparability between periods. As noted previously, the Company is finalizing the amount of the charge. Variation in this amount is not anticipated to impact the Company’s non-GAAP results in the period ending October 31, 2015. The Company will include the final amount of this estimated loss in its Quarterly Report on Form 10-Q for the period ended October 31, 2015.

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.

 


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SeaChange Q4 FY16 Results/Page 10

 

Stock-based Compensation Expense. We incur expenses related to stock-based compensation included in our U.S. GAAP presentation of cost of revenues and stock-based 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.

Earn-outs and Change in Fair Value of Earn-outs. Earn-outs and the change in the fair value of 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.

Loss on Impairment of TLL, LLC Net Assets. We incurred an impairment charge relating to our February 2015 acquisition of Timeline Labs, based on our decision to undertake a restructuring which may include a winding down of the operations. These charges are considered non-recurring.

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

 


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SeaChange Q4 FY16 Results/Page 11

 

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

SeaChange International, Inc.

Preliminary Reconciliation of GAAP to Non-GAAP

(Unaudited, amounts in thousands)

 

     Three Months Ended
January 31, 2016
    Three Months Ended
January 31, 2015
 
     GAAP
As Reported
    Adjustments     Non-GAAP     GAAP
As Reported
    Adjustments     Non-GAAP  

Revenues:

            

Products

   $ 5,582      $ —        $ 5,582      $ 10,398      $ —        $ 10,398   

Services

     21,615        —          21,615        20,881        —          20,881   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     27,197        —          27,197        31,279        —          31,279   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

            

Products

     1,247        —          1,247        2,657        —          2,657   

Services

     10,330        —          10,330        12,302        —          12,302   

Amortization of intangible assets

     182        (182     —          275        (275     —     

Stock-based compensation

     19        (19     —          9        (9     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     11,778        (201     11,577        15,243        (284     14,959   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     15,419        201        15,620        16,036        284        16,320   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit percentage

     56.7     0.7     57.4     51.3     0.9     52.2

Operating expenses:

            

Research and development

     7,520        —          7,520        10,440        —          10,440   

Selling and marketing

     3,934        —          3,934        3,411        —          3,411   

General and administrative

     4,024        —          4,024        4,119        —          4,119   

Amortization of intangible assets

     1,038        (1,038     —          759        (759     —     

Stock-based compensation expense

     529        (529     —          632        (632     —     

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

     (1,475     1,475        —          —          —          —     

Professional fees - other

     492        (492     —          194        (194     —     

Severance and other restructuring costs

     35        (35     —          1,745        (1,745     —     

Loss from impairment of TLL, LLC net assets

     21,464        (21,464     —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     37,561        (22,083     15,478        21,300        (3,330     17,970   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

   $ (22,142   $ 22,284      $ 142      $ (5,264   $ 3,614      $ (1,650
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations percentage

     (81.4 %)      81.9     0.5     (16.8 %)      11.5     (5.3 %) 

Weighted average common shares outstanding:

            

Basic

     33,701        33,701        33,701        32,672        32,672        32,672   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     33,701        33,937        33,937        32,672        32,928        32,672   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income per share:

            

Basic

   $ (0.66   $ 0.66      $ 0.00      $ (0.16   $ 0.11      $ (0.05
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.66   $ 0.66      $ 0.00      $ (0.16   $ 0.11      $ (0.05
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA:

            

Loss from operations

       $ (22,142       $ (5,264

Depreciation expense

         826            873   

Amortization of intangible assets

         1,220            1,034   

Stock-based compensation expense

         548            641   

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

         (1,475         —     

Professional fees - other

         492            194   

Severance and other restructuring

         35            1,745   

Loss from impairment of TLL, LLC net assets

         21,464            —     
      

 

 

       

 

 

 

Adjusted EBITDA

       $ 968          $ (777
      

 

 

       

 

 

 

Adjusted EBITDA %

         3.6         (2.5 %) 

 


-more-

SeaChange Q4 FY16 Results/Page 12

 

SeaChange International, Inc.

Preliminary Reconciliation of GAAP to Non-GAAP

(Unaudited, amounts in thousands)

 

     Twelve Months Ended
January 31, 2016
    Twelve Months Ended
January 31, 2015
 
     GAAP
As Reported
    Adjustments     Non-GAAP     GAAP
As Reported
    Adjustments     Non-GAAP  

Revenues:

            

Products

   $ 21,896      $ —        $ 21,896      $ 31,507      $ —        $ 31,507   

Services

     85,096        —          85,096        83,928        —          83,928   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     106,992        —          106,992        115,435        —          115,435   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

            

Products

     6,013        —          6,013        8,845        —          8,845   

Services

     44,159        —          44,159        48,272        —          48,272   

Provision for loss contract

     9,162        (9,162     —          —          —          —     

Amortization of intangible assets

     739        (739     —          1,070        (1,070     —     

Stock-based compensation

     80        (80     —          141        (141     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     60,153        (9,981     50,172        58,328        (1,211     57,117   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     46,839        9,981        56,820        57,107        1,211        58,318   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit percentage

     43.8     9.3     53.1     49.5     1.0     50.5

Operating expenses:

            

Research and development

     33,696        —          33,696        42,169        —          42,169   

Selling and marketing

     15,197        —          15,197        13,920        —          13,920   

General and administrative

     15,470        —          15,470        16,014        —          16,014   

Amortization of intangible assets

     4,041        (4,041     —          4,084        (4,084     —     

Stock-based compensation expense

     3,472        (3,472     —          3,079        (3,079     —     

Professional fees - other

     637        (637     —          671        (671     —     

Severance and other restructuring costs

     1,061        (1,061     —          3,623        (3,623     —     

Loss from impairment of TLL, LLC net assets

     21,464        (21,464     —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     95,038        (30,675     64,363        83,560        (11,457     72,103   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

   $ (48,199   $ 40,656      $ (7,543   $ (26,453   $ 12,668      $ (13,785
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations percentage

     (45.0 %)      38.0     (7.1 %)      (22.9 %)      11.0     (11.9 %) 

Weighted average common shares outstanding:

            

Basic

     33,506        33,506        33,506        32,772        32,772        32,772   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     33,506        33,663        33,506        32,772        33,004        32,772   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income per share:

            

Basic

   $ (1.44   $ 1.21      $ (0.23   $ (0.81   $ 0.39      $ (0.42
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (1.44   $ 1.21      $ (0.23   $ (0.81   $ 0.39      $ (0.42
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA:

            

Loss from operations

       $ (48,199       $ (26,453

Depreciation expense

         3,380            4,389   

Provision for loss contract

         9,162            —     

Amortization of intangible assets

         4,780            5,154   

Stock-based compensation expense

         3,552            3,220   

Professional fees - other

         637            671   

Severance and other restructuring

         1,061            3,623   

Loss from impairment of TLL, LLC net assets

         21,464            —     
      

 

 

       

 

 

 

Adjusted EBITDA

       $ (4,163       $ (9,396
      

 

 

       

 

 

 

Adjusted EBITDA %

         (3.9 %)          (8.1 %) 

—end press release and tables—