seac-10q_20191031.htm

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): YES ☐ NO ☒

The number of shares outstanding of the registrant’s Common Stock on November 29, 2019 was 36,842,985.

	October 31,			January 31,
	2019			2019
Assets
Current assets:
Cash, cash equivalents and restricted cash	$	5,887		$	20,317
Marketable securities		5,332			4,020
Accounts receivable, net of allowance for doubtful accounts of $659 and $577 at October 31, 2019 and January 31, 2019, respectively		13,953			19,267
Unbilled receivables		5,962			5,448
Inventory		204			924
Prepaid expenses and other current assets		6,213			6,033
Total current assets		37,551			56,009
Property and equipment, net		6,577			7,192
Operating lease right-of-use assets		2,438			—
Marketable securities, long-term		2,536			6,339
Intangible assets, net		2,682			—
Goodwill		9,795			8,753
Unbilled receivables, long-term		10,723			—
Other assets		237			450
Total assets	$	72,539		$	78,743
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	4,077		$	4,503
Accrued expenses		9,151			7,762
Deferred revenue		6,045			8,104
Total current liabilities		19,273			20,369
Deferred revenue, long-term		1,724			2,642
Operating lease liabilities, long-term		2,056			—
Taxes payable, long-term		422			429
Deferred tax liabilities, long-term		—			203
Total liabilities		23,475			23,643
Commitments and contingencies (Note 7)
Stockholders' equity:
Common stock, $0.01 par value; 100,000,000 shares authorized at October 31, 2019 and January 31, 2019; 36,970,975 shares issued and 36,830,485 shares outstanding at October 31, 2019, 35,946,100 shares issued and 35,905,610 outstanding at January 31, 2019		369			359
Additional paid-in capital		243,926			242,442
Treasury stock, at cost; 140,490 shares at October 31, 2019 and 40,490 shares at January 31, 2019		(147	)		(5	)
Accumulated other comprehensive loss		(1,903	)		(3,393	)
Accumulated deficit		(193,181	)		(184,303	)
Total stockholders' equity		49,064			55,100
Total liabilities and stockholders' equity	$	72,539		$	78,743

The accompanying notes are an integral part of these unaudited, consolidated financial statements.

	For the Three Months Ended October 31,						For the Nine Months Ended October 31,
	2019			2018			2019			2018
Revenue:
Product	$	13,524		$	8,268		$	26,671		$	12,821
Service		7,020			10,343			21,170			32,626
Total revenue		20,544			18,611			47,841			45,447
Cost of revenue:
Product		466			1,723			4,414			2,539
Service		4,386			5,600			13,939			16,428
Total cost of revenue		4,852			7,323			18,353			18,967
Gross profit		15,692			11,288			29,488			26,480
Operating expenses:
Research and development		4,033			4,727			12,060			15,770
Selling and marketing		3,859			4,165			9,674			11,635
General and administrative		3,265			3,881			11,664			13,356
Severance and restructuring costs		2,282			1,030			3,152			1,620
Total operating expenses		13,439			13,803			36,550			42,381
Income (loss) from operations		2,253			(2,515	)		(7,062	)		(15,901	)
Other expense, net		(161	)		(2,087	)		(2,030	)		(4,898	)
Income (loss) before income taxes		2,092			(4,602	)		(9,092	)		(20,799	)
Income tax benefit		(53	)		(775	)		(214	)		(2,421	)
Net income (loss)	$	2,145		$	(3,827	)	$	(8,878	)	$	(18,378	)
Net income (loss) per share, basic	$	0.06		$	(0.11	)	$	(0.24	)	$	(0.52	)
Net income (loss) per share, diluted	$	0.06		$	(0.11	)	$	(0.24	)	$	(0.52	)
Weighted average common shares outstanding, basic		36,751			35,747			36,606			35,668
Weighted average common shares outstanding, diluted		37,752			35,747			36,606			35,668

Comprehensive income (loss):
Net income (loss)	$	2,145		$	(3,827	)	$	(8,878	)	$	(18,378	)
Other comprehensive income, net of tax:
Foreign currency translation adjustment		59			923			1,399			2,354
Unrealized gains (losses) on marketable securities		31			3			91			(15	)
Total other comprehensive income		90			926			1,490			2,339
Comprehensive income (loss)	$	2,235		$	(2,901	)	$	(7,388	)	$	(16,039	)

The accompanying notes are an integral part of these unaudited, consolidated financial statements.

	Common Stock				Additional						Accumulated Other						Total
	Number of Shares		Par Value		Paid-in Capital			Treasury Stock			Comprehensive Loss			Accumulated Deficit			Stockholders' Equity
Balances at July 31, 2019		36,811,061	$	367	$	243,514		$	(147	)	$	(1,993	)	$	(195,326	)	$	46,415
Issuance of common stock pursuant to vesting of restricted stock units		138,134		1		(1	)		—			—			—			—
Issuance of common stock pursuant to ESPP purchases		4,634		—		11			—			—			—			11
Issuance of common stock pursuant to exercise of stock options		17,146		1		45			-			-			-			46
Stock-based compensation expense		—		—		357			—			—			—			357
Unrealized gains on marketable securities		—		—		—			—			31			—			31
Foreign currency translation adjustment		—		—		—			—			59			—			59
Net income		—		—		—			—			—			2,145			2,145
Balances at October 31, 2019		36,970,975	$	369	$	243,926		$	(147	)	$	(1,903	)	$	(193,181	)	$	49,064

Balances at July 31, 2018		35,769,447	$	358	$	241,297		$	(5	)	$	(4,021	)	$	(160,852	)	$	76,777
Issuance of common stock pursuant to vesting of restricted stock units		20,675		—		—			—			—			—			—
Issuance of common stock pursuant to ESPP purchases		4,977		-		8			-			-			-			8
Stock-based compensation expense		—		—		769			—			—			—			769
Unrealized gains on marketable securities		—		—		—			—			3			—			3
Foreign currency translation adjustment		—		—		—			—			923			—			923
Net loss		—		—		—			—			—			(3,827	)		(3,827	)
Balances at October 31, 2018		35,795,099	$	358	$	242,074		$	(5	)	$	(3,095	)	$	(164,679	)	$	74,653

	Common Stock				Additional						Accumulated Other						Total
	Number of Shares		Par Value		Paid-in Capital			Treasury Stock			Comprehensive Loss			Accumulated Deficit			Stockholders' Equity
Balances at January 31, 2019		35,946,100	$	359	$	242,442		$	(5	)	$	(3,393	)	$	(184,303	)	$	55,100
Issuance of common stock pursuant to acquisition of Xstream		541,738		5		869			-			-			-			874
Issuance of common stock pursuant to vesting of restricted stock units		453,538		4		(4	)		-			-			-			—
Issuance of common stock pursuant to ESPP purchases		12,453		-		20			-			-			-			20
Issuance of common stock pursuant to exercise of stock options		17,146		1		45			-			-			-			46
Repurchases of common stock		—		—		—			(142	)		—			—			(142	)
Stock-based compensation expense		—		—		554			—			—			—			554
Unrealized gains on marketable securities		—		—		—			—			91			—			91
Foreign currency translation adjustment		—		—		—			—			1,399			—			1,399
Net loss		—		—		—			—			—			(8,878	)		(8,878	)
Balances at October 31, 2019		36,970,975	$	369	$	243,926		$	(147	)	$	(1,903	)	$	(193,181	)	$	49,064

	Common Stock				Additional						Accumulated Other						Total
	Number of Shares		Par Value		Paid-in Capital			Treasury Stock			Comprehensive Loss			Accumulated Deficit			Stockholders' Equity
Balances at January 31, 2018		35,634,984	$	356	$	239,423		$	(5	)	$	(5,434	)	$	(148,620	)	$	85,720
Adjustment resulting from the adoption of ASC 606		—		—		—			—			—			2,319			2,319
Issuance of common stock pursuant to exercise of stock options		20,937		—		56			—			—			—			56
Issuance of common stock pursuant to vesting of restricted stock units		126,384		1		(1	)		—			—			—			—
Issuance of common stock pursuant to ESPP purchases		12,794		1		25			—			—			—			26
Stock-based compensation expense		—		—		2,571			—			—			—			2,571
Unrealized losses on marketable securities		—		—		—			—			(15	)		—			(15	)
Foreign currency translation adjustment		—		—		—			—			2,354			—			2,354
Net loss		—		—		—			—			—			(18,378	)		(18,378	)
Balances at October 31, 2018		35,795,099	$	358	$	242,074		$	(5	)	$	(3,095	)	$	(164,679	)	$	74,653

The accompanying notes are an integral part of these unaudited, consolidated financial statements.

	For the Nine Months Ended October 31,
	2019			2018
Cash flows from operating activities:
Net loss	$	(8,878	)	$	(18,378	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		1,622			2,251
Provision for bad debts		480			—
Stock-based compensation expense		554			2,571
Deferred income taxes		(203	)		(702	)
Unrealized foreign currency transaction gain		1,399			2,354
Other		97			27
Changes in operating assets and liabilities:
Accounts receivable		5,456			9,100
Unbilled receivables		(11,215	)		(4,957	)
Inventory		720			(43	)
Prepaid expenses and other current assets and other assets		469			(2,107	)
Accounts payable		(1,079	)		2,401
Accrued expenses and other liabilities		535			(9,153	)
Deferred revenue		(2,977	)		(7,060	)
Other operating activities		—			2,424
Net cash used in operating activities		(13,020	)		(21,272	)
Cash flows from investing activities:
Purchases of property and equipment		(252	)		(328	)
Cash paid for acquisitions, net		(3,838	)		—
Purchases of marketable securities		(852	)		(8,510	)
Proceeds from sales and maturities of marketable securities		3,343			6,649
Net cash used in investing activities		(1,599	)		(2,189	)
Cash flows from financing activities:
Proceeds from issuance of common stock		66			82
Repurchases of common stock		(142	)		—
Other financing activities		—

Delaware		04-3197974
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

50 Nagog Park, Acton, MA		01720
Address of Principal Executive Offices		Zip Code

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	SEAC	The Nasdaq Global Select Market
Series A Participating Preferred Stock Purchase Rights	SEAC	The Nasdaq Global Select Market

		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets	2

	Consolidated Statements of Operations and Comprehensive Income (Loss)	3

	Consolidated Statements of Stockholders’ Equity	4

	Consolidated Statements of Cash Flows	6

	Notes to Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32

Item 4.	Controls and Procedures	32

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 5.	Other Information	33

Item 6.	Exhibits	33

SIGNATURES		34

Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☒

		Emerging growth company	☐