seac-ex991

SeaChange International Reports Fiscal Fourth Quarter 2021 Financial Results; Continued Execution of Strategic Roadmap Positions Company for Success in Fiscal 2022

SeaChange’s Bolstered Balance Sheet with More than $22 Million in Cash, Ideally Positions Company to Capitalize on the Growing Global Demand for OTT Video Streaming Services

WALTHAM, MA – April 13, 2021 – SeaChange International Inc. (NASDAQ: SEAC), a leading provider of video delivery platforms, today reported financial and operational results for the fiscal fourth quarter and year ended January 31, 2021. The Company also provided an update on its recent operational progress on strategic initiatives that have placed the Company in a strong position for fiscal 2022.

“Over the last three months, we have been laser focused on aggressively implementing our long-term strategic roadmap, which is designed to drive scale, capture market share, and create even greater value for both our customers and shareholders,” said Robert Pons, SeaChange’s Executive Chairman. “Our execution is clearly evident by not only the sequential improvements in our top and bottom lines, but also the major customer win we recently secured, a multi-year, multi-million-dollar contract with one of the largest broadband service providers in the U.S. Our building sales momentum validates the effectiveness of our refined go-to-market strategy and our holistic approach to selling the full value of our software and services to the world’s most prominent video providers. The increasing value our technology platform is providing to video and broadband providers globally demonstrates SeaChange’s elevated value proposition and increasingly critical role in the industry. Today, SeaChange is positioned

at the epicenter of the video industry’s transformation to over-the-top (OTT) video streaming services and delivery to the billions of end users globally.

Pons continued, “While we are still in the early innings of our strategic roadmap, I can confidently say that the SeaChange of today is a much stronger and more capable organization, and that the future has never been brighter. With more than $22 million of cash on our balance sheet today, we have the resources to accelerate many key initiatives within our strategic roadmap and better capitalize on the strong secular tailwinds in the growing, multi-billion-dollar video streaming market. Over time, we expect that the successful execution of our plan will translate to sustainable growth and consistent profitability in the years ahead.”

SeaChange will host a conference call today (April 13, 2021) at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss these results.

SeaChange executive management will host the call, followed by a question-and-answer period.

Please call the conference telephone number approximately 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.

The conference call will be broadcast live and available for replay here and via the investor relations section of SeaChange’s website.

SeaChange International (NASDAQ: SEAC) powers hundreds of cloud and on-premises platforms with live TV and video on demand (VOD) for millions of end users worldwide. SeaChange's end-to-end solution enables operators and content owners to cost-effectively launch a direct-to-consumer video streaming service to manage, curate and monetize their linear and on demand content across all major device platforms such as Smart-TVs, mobile devices, and Set-Top-Boxes. A demonstration of SeaChange’s video streaming platform is available here. For more information on SeaChange, please visit www.seachange.com.

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, as amended to date. Forward-looking statements can be identified by words such as "may," "might," "will," "should," "could," "expects," "plans," "anticipates," "believes," "seeks," "intends," "estimates," "predicts," "potential" or "continue," the negative of these terms and other comparable terminology. Examples of forward-looking statements include, among others, statements we make regarding the Company’s ability to execute its strategic roadmap, capture additional market share and capitalize on the growing demand for over-the-top video streaming services globally; the Company’s ability to effectively monotizethe value of its softwareand services; the Company’s ability to accelerate key initiatives and execute on its strategic plan in a manner that translates to sustainable growth and consisten profitability in the years ahead;; and other statements that are not purely statements of historical fact. These forward-looking statements are made on the basis of the current beliefs, expectations, and assumptions of the management of the Company and are subject to a number of known and unknown risks and significant business, economic and competitive uncertainties that could cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. Risks that could cause actual results to differ include, but are not limited to: the impact of COVID-19 on our business and the economies in which we operate; the continued spending by the Company's customers on video solutions and services and expenses we may incur in fulfilling customer arrangements; the manner in which the multiscreen video and over-the-top markets develop; the Company's ability to compete in the software marketplace; the loss of or reduction in demand, or the return of product, by one of the Company's large customers or the failure of revenue acceptance criteria in a given fiscal quarter; the cancellation or deferral of purchases of the Company's products; any decline in demand or average selling prices for our products and services; failure to achieve our financial forecasts due to inaccurate sales forecasts or other factors, including due to expenses we may incur in fulfilling customer arrangements; the impact of our cost-savings and restructuring programs; the Company's ability to manage its growth; the risks associated with international operations; the ability of the Company to use its net operating losses, including the potential impact on these losses resulting from the Coronavirus Aid, Relief, and Economic Security (CARES) Act; the impact of changes in the market on the value of our investments; changes in the regulatory environment; and other risks that are described in further detail in the Company’s reports filed from time to time with the Securities and Exchange Commission (SEC), which are available at www.sec.gov, including but not limited to, such information appearing under the caption "Risk Factors" in the Company's Annual Report on Form 10-K. Any forward-looking statements should be considered in light of those risk factors. The Company cautions readers that such forward-looking statements speak only as of the date they are made. The Company disclaims any intent or obligation to publicly update or revise any such forward-looking statements to reflect any change in

Company expectations or future events, conditions or circumstances on which any such forward-looking statements may be based, or that may affect the likelihood that actual results may differ from those set forth in such forward-looking statements.

	January 31, 2021		January 31, 2020
Assets
Cash and cash equivalents	$	5,856	$	9,013
Marketable securities		252		4,617
Accounts and other receivables, net		6,050		12,127
Unbilled receivables		15,699		23,310
Prepaid expenses and other current assets		4,372		5,112
Property and equipment, net		605		554
Goodwill and intangible assets, net		11,849		12,075
Other assets		5,725		6,082
Total assets	$	50,408	$	72,890
Liabilities and Stockholders' Equity
Accounts payable and other liabilities	$	10,172	$	16,341
Deferred revenue		5,394		6,181
Deferred tax liabilities and income taxes payable		888		436
Promissory note		2,413		—
Total liabilities		18,867		22,958
Total stockholders' equity		31,541		49,932
Total liabilities and stockholders' equity	$	50,408	$	72,890

	For the Three Months Ended January 31,						For the Fiscal Years Ended January 31,
	2021			2020			2021			2020
Revenue:
Product	$	1,396		$	13,243		$	6,608		$	39,914
Service		3,727			6,070			15,391			27,240
Total revenue		5,123			19,313			21,999			67,154
Cost of revenue:
Product		753			1,765			3,556			6,179
Service		1,539			3,534			8,513			17,473
Total cost of revenue		2,292			5,299			12,069			23,652
Gross profit		2,831			14,014			9,930			43,502
Operating expenses:
Research and development		3,258			3,990			13,808			16,050
Selling and marketing		930			2,505			6,420			12,179
General and administrative		2,689			3,547			9,746			15,211
Severance and restructuring costs		395			371			1,477			3,523
Loss on sale of fixed assets		—			5,423			—			5,423
Total operating expenses		7,272			15,836			31,451			52,386
Loss from operations		(4,441	)		(1,822	)		(21,521	)		(8,884	)
Other income (expense), net		154			2,041			(180	)		11
Loss before income taxes		(4,287	)		219			(21,701	)		(8,873	)
Income tax provision		(79	)		(262	)		(58	)		(48	)
Net loss	$	(4,366	)	$	(43	)	$	(21,759	)	$	(8,921	)
Net loss per share, basic	$	(0.12	)	$	—		$	(0.58	)	$	(0.24	)
Net loss per share, diluted	$	(0.12	)	$	—		$	(0.58	)	$	(0.24	)
Weighted average common shares outstanding, basic		37,575			36,974			37,471			36,699
Weighted average common shares outstanding, diluted		37,575			36,974			37,471			36,699

Comprehensive loss:
Net loss	$	(4,366	)	$	(43	)	$	(21,759	)	$	(8,921	)
Other comprehensive income, net of tax:
Foreign currency translation adjustment		616			(187	)		2,114			1,212
Unrealized (losses) gains on marketable securities		(13	)		(47	)		(50	)		44
Total other comprehensive income		603			(234	)		2,064			1,256
Comprehensive loss	$	(3,763	)	$	(277	)	$	(19,695	)	$	(7,665	)

	For the Fiscal Years Ended January 31,
	2021			2020
Cash flows from operating activities:
Net loss	$	(21,759	)	$	(8,921	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		1,667			2,016
Loss on sale of fixed assets		7			5,423
Change in allowance for doubtful accounts		(208	)		628
Stock-based compensation expense		1,247			1,151
Deferred income taxes		—			(203	)
Realized and unrealized foreign currency transaction loss		793			2,126
Gain on sale of investment in affiliate and other investments, net		—			(1,495	)
Other		(40	)		—
Changes in operating assets and liabilities:
Accounts receivable		6,420			7,134
Unbilled receivables		7,967			(17,840	)
Inventory		—			924
Prepaid expenses and other current assets and other assets		1,196			1,609
Accounts payable		(2,233	)		(1,149	)
Accrued expenses and other liabilities		(3,492	)		(170	)
Deferred revenue		(920	)		(4,565	)
Other		—			(1,462	)
Net cash used in operating activities		(9,355	)		(14,794	)
Cash flows from investing activities:
Purchases of property and equipment		(328	)		(281	)
Proceeds from sale of building and land		—			600
Cash paid for acquisitions, net		—			(3,838	)
Purchases of marketable securities		—			(790	)
Proceeds from sales and maturities of marketable securities		4,355			6,576
Proceeds from sale of investment in affiliate, net		—			1,495
Net cash provided by investing activities		4,027			3,762
Cash flows from financing activities:
Proceeds from stock option exercises		119			594
Proceeds from employee stock purchase plan		18			20
Repurchases of common stock		(80	)		(142	)
Proceeds from Paycheck Protection Program		2,413			—
Net cash provided by financing activities		2,470			472
Effect of exchange rate on cash, cash equivalents and restricted cash		(355	)		(460	)
Net decrease in cash, cash equivalents and restricted cash		(3,213	)		(11,020	)
Cash, cash equivalents and restricted cash at beginning of period		9,297			20,317
Cash, cash equivalents and restricted cash at end of period	$	6,084		$	9,297
Supplemental disclosure of cash flow information
Income taxes paid	$	327		$	463
Non-cash activities:
Right-of-use assets obtained in exchange for lease obligations	$	987		$	5,600
Fair value of common stock issued in acquisition	$	—		$	874

We define non-GAAP (loss) income from operations as U.S. GAAP net loss plus stock-based compensation expenses, amortization of intangible assets, non-operating expense professional fees, severance and other restructuring costs, loss on sale of fixed assets, other (expense) income, net, and income tax provision. We discuss non-GAAP (loss) income from operations, including on a per share basis in our quarterly earnings releases and certain other communications, as we believe non-GAAP income (loss) income from operations is an important measure that is not calculated according to U.S. GAAP. We use non-GAAP (loss) 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 the non-GAAP (loss) income from operations financial measure assists in providing an enhanced understanding of our underlying operational measures to manage the business, to evaluate performance compared to prior periods and the marketplace, and to establish operational goals. We believe that the non-GAAP financial adjustments are useful to investors because they allow investors to evaluate the effectiveness of the methodology and information used by management in our financial and operational decision-making.

Non-GAAP (loss) 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 measure may not be computed in the same manner as similarly titled measures used by other companies. We expect to continue to incur expenses similar to the financial adjustments described above in arriving at non-GAAP (loss) income from operations and investors should not infer from our presentation of this non-GAAP financial measure that these costs are unusual, infrequent or non-recurring. The following table includes the reconciliations of our U.S. GAAP loss from operations, the most directly comparable U.S. GAAP financial measure, to our non-GAAP (loss) income from operations for the three and twelve months ended January 31, 2021, including on a per share basis.

	For the Three Months Ended January 31,						For the Twelve Months Ended January 31,
	2021			2020			2021			2020
	(Amounts in thousands)						(Amounts in thousands)
GAAP net loss	$	(4,366	)	$	(43	)	$	(21,759	)	$	(8,921	)
Other income (expense), net		154			2,041			(180	)		11
Income tax provision		(79	)		(262	)		(58	)		(48	)
GAAP loss from operations	$	(4,441	)	$	(1,822	)	$	(21,521	)	$	(8,884	)
Amortization of intangible assets		319			270			1,210			1,163
Stock-based compensation		193			597			1,247			1,151
Professional fees - other		—			—			—			1,180
Severance and other restructuring costs		395			371			1,477			3,523
Loss on sale of fixed assets		—			5,423			—			5,423
Non-GAAP (loss) income from operations	$	(3,534	)	$	4,839		$	(17,587	)	$	3,556

Non-GAAP (loss) income from operations, basic per share		(0.09	)		0.13			(0.47	)		0.10
Non-GAAP (loss) income from operations, diluted per share		(0.09	)		0.13			(0.47	)		0.10
Weighted average common shares outstanding, basic per share		37,575			36,974			37,471			36,699
Weighted average common shares outstanding, diluted per share		37,575			38,469			37,471			37,335

	Three Months Ended January 31,				Twelve Months Ended January 31,
	2021		2020		2021		2020
	(Amounts in thousands)				(Amounts in thousands)
Product revenue:
Framework	$	432	$	11,828	$	1,765	$	33,199
OVP and other		964		883		3,370		4,197
Hardware		—		532		1,473		2,518
Total product revenue		1,396		13,243		6,608		39,914
Service revenue:
Maintenance and support		2,123		4,140		9,755		20,188
Framework and support services		944		694		3,864		1,428
Professional services and other		660		1,236		1,772		5,624
Total service revenue		3,727		6,070		15,391		27,240
Total revenue	$	5,123	$	19,313	$	21,999	$	67,154