Exhibit 99.1

 

SeaChange International Reports Fiscal First Quarter 2022 Financial Results

 

Boston, MA – June 10, 2021 SeaChange International, Inc. (NASDAQ: SEAC), a leading provider of video delivery platforms, today reported financial and operational results for the fiscal first quarter ended April 30, 2021.

 

Fiscal First Quarter 2022 and Recent Highlights

 

Implemented and began executing a multi-phased strategic roadmap designed to increase scale, capture market share, and create even greater value for both our customers and shareholders.

 

Launched a new product marketing strategy focused on three product platforms: Cable Video Delivery Platform, OTT Streaming Platform, and Advanced Advertising Platform.

 

Strong balance sheet with $21.3 million in cash and cash equivalents.

 

Operating expenses decreased 9% in the fiscal first quarter of 2022 compared to fiscal fourth quarter of 2021 due to ongoing efficiency measures.

 

Management Commentary

“During the fiscal first quarter, we successfully completed the initial phase of our strategic roadmap, which has optimized our operations, solidified our financial foundation, and positioned us to drive scale, capture market share and create even greater value for both our customers and shareholders,” said Robert Pons, SeaChange’s Executive Chairman. “The initial phase of our plan involved refining our growth strategy and technology positioning to capitalize on the explosive growth in video streaming, a market that industry analysts expect to surpass $140 billion in annual revenues by 2026. SeaChange’s turnkey enablement platform and advertising insertion technology provides us with a distinct competitive advantage and gives us confidence in our ability to capitalize on streaming industry growth. We are actively marketing our OTT Streaming Platform to cable operators and content owners globally, including film and TV producers, who are looking to launch their own streaming channels and platforms. A major part of our success is expected to come through strategic partners who recognize the value of SeaChange’s ‘full stack’ streaming enablement platform to seamlessly launch a new streaming service.  

 

“SeaChange sits at the epicenter of the video industry’s transformation to OTT video streaming services and delivery to the billions of end users globally. Our favorable competitive positioning, robust market dynamics, and performance thus far gives us confidence that fiscal 2022 will be a year of growth and transformation. Longer term, we expect that the successful execution of our strategic roadmap will translate to sustainable growth and consistent profitability in the years ahead.”

 

Fiscal First Quarter 2022 Financial Results

 

Total revenue was $5.1 million, compared to $5.1 million in the fourth quarter of fiscal 2021. Product revenue was $1.6 million (or 32% of total revenue), an improvement compared to $1.4 million (or 27% of total revenue) in the fourth quarter of fiscal 2021. Service revenue was $3.4


 

 

million (or 68% of total revenue) compared to $3.7 million (or 73% of total revenue) in the fourth quarter of fiscal 2021.

 

Revenue backlog at quarter end remained strong at $20.1 million.

 

Gross profit was $2.8 million (or 56% of total revenue), compared to $2.8 million (or 55% of total revenue) in the fourth quarter of fiscal 2021.

 

Total operating expenses decreased to $6.6 million compared to $7.3 million in the fourth quarter of fiscal 2021.

 

GAAP loss from operations totaled $3.8 million, an improvement compared to a GAAP loss from operations of $4.4 million in the fourth quarter of fiscal 2021.

 

GAAP net loss totaled $4.1 million, or $(0.10) per basic share, an improvement from GAAP net loss $4.4 million, or $(0.12) per basic share, in the fourth quarter of fiscal 2021.

 

 

Non-GAAP loss from operations totaled $2.8 million, or $(0.07) per basic share, an improvement from non-GAAP loss from operations of $3.5 million, or $(0.09) per basic share, in the fourth quarter of fiscal 2021.

 

Conference Call

SeaChange will host a conference call today (June 10, 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.

 

U.S. dial-in number: 877-407-8037

International number: 201-689-8037

Meeting Number: 13720348

 

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.

 

About SeaChange International, Inc.

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.

 

Safe Harbor Provision

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 monetize the value of its software and services; the Company’s ability to accelerate key initiatives and execute on its strategic plan in a manner that translates to sustainable growth and consistent 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.

 

SeaChange Contact:

Matt Glover
Gateway Investor Relations
949-574-3860
SEAC@gatewayir.com

 

 



 

 

SeaChange International, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, amounts in thousands)

 

 

 

April 30, 2021

 

 

January 31, 2021

 

Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

21,278

 

 

$

5,856

 

Marketable securities

 

 

 

 

 

252

 

Accounts and other receivables, net

 

 

6,249

 

 

 

6,050

 

Unbilled receivables

 

 

14,262

 

 

 

15,699

 

Prepaid expenses and other current assets

 

 

4,427

 

 

 

4,372

 

Property and equipment, net

 

 

478

 

 

 

605

 

Goodwill and intangible assets, net

 

 

11,519

 

 

 

11,849

 

Other assets

 

 

3,805

 

 

 

5,725

 

Total assets

 

$

62,018

 

 

$

50,408

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Accounts payable and other liabilities

 

$

7,777

 

 

$

10,172

 

Deferred revenue

 

 

5,609

 

 

 

5,394

 

Deferred tax liabilities and income taxes payable

 

 

897

 

 

 

888

 

Promissory note

 

 

2,413

 

 

 

2,413

 

Total liabilities

 

 

16,696

 

 

 

18,867

 

Total stockholders' equity

 

 

45,322

 

 

 

31,541

 

Total liabilities and stockholders' equity

 

$

62,018

 

 

$

50,408

 



 

SeaChange International, Inc.

Consolidated Statements of Operations

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

 

 

 

For the Three Months

Ended April 30,

 

 

 

2021

 

 

2020

 

Revenue:

 

 

 

 

 

 

 

 

Product

 

$

1,620

 

 

$

3,098

 

Service

 

 

3,432

 

 

 

3,817

 

Total revenue

 

 

5,052

 

 

 

6,915

 

Cost of revenue:

 

 

 

 

 

 

 

 

Product

 

 

406

 

 

 

1,580

 

Service

 

 

1,815

 

 

 

2,826

 

Total cost of revenue

 

 

2,221

 

 

 

4,406

 

Gross profit

 

 

2,831

 

 

 

2,509

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

2,668

 

 

 

4,166

 

Selling and marketing

 

 

1,380

 

 

 

2,126

 

General and administrative

 

 

2,105

 

 

 

2,054

 

Severance and restructuring costs

 

 

484

 

 

 

486

 

Total operating expenses

 

 

6,637

 

 

 

8,832

 

Loss from operations

 

 

(3,806

)

 

 

(6,323

)

Other expense, net

 

 

(228

)

 

 

(208

)

Loss before income taxes

 

 

(4,034

)

 

 

(6,531

)

Income tax provision (benefit)

 

 

34

 

 

 

(21

)

Net loss

 

$

(4,068

)

 

$

(6,510

)

Net loss per share, basic

 

$

(0.10

)

 

$

(0.17

)

Net loss per share, diluted

 

$

(0.10

)

 

$

(0.17

)

Weighted average common shares outstanding, basic

 

 

41,307

 

 

 

37,521

 

Weighted average common shares outstanding, diluted

 

 

41,307

 

 

 

37,521

 

Comprehensive loss:

 

 

 

 

 

 

 

 

Net loss

 

$

(4,068

)

 

$

(6,510

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

41

 

 

 

(24

)

Unrealized gains on marketable securities

 

 

1

 

 

 

9

 

Total other comprehensive income (loss)

 

 

42

 

 

 

(15

)

Comprehensive loss

 

$

(4,026

)

 

$

(6,525

)

 



 

 

SeaChange International, Inc.

Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

 

 

 

For the Three Months Ended April 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(4,068

)

 

$

(6,510

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

376

 

 

 

357

 

Loss on disposal of fixed assets

 

 

77

 

 

 

 

Gain on write-off of operating lease right-of-use assets and liabilities

     related to termination

 

 

(328

)

 

 

 

Change in allowance for doubtful accounts

 

 

 

 

 

(316

)

Stock-based compensation expense

 

 

208

 

 

 

357

 

Realized and unrealized foreign currency transaction loss (gain)

 

 

263

 

 

 

(29

)

Other

 

 

1

 

 

 

14

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(208

)

 

 

3,111

 

Unbilled receivables

 

 

1,431

 

 

 

589

 

Prepaid expenses and other current assets and other assets

 

 

 

 

 

(554

)

Accounts payable

 

 

34

 

 

 

417

 

Accrued expenses and other liabilities

 

 

173

 

 

 

(1,689

)

Deferred revenue

 

 

221

 

 

 

(10

)

Net cash used in operating activities

 

 

(1,820

)

 

 

(4,263

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(7

)

 

 

(138

)

Proceeds from sales and maturities of marketable securities

 

 

252

 

 

 

1,201

 

Net cash provided by investing activities

 

 

245

 

 

 

1,063

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from stock option exercises

 

 

137

 

 

 

119

 

Proceeds from employee stock purchase plan

 

 

 

 

 

18

 

Proceeds from issuance of common stock, net of issuance costs

 

 

17,462

 

 

 

 

Net cash provided by financing activities

 

 

17,599

 

 

 

137

 

Effect of exchange rate on cash, cash equivalents and restricted cash

 

 

(199

)

 

 

153

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

15,825

 

 

 

(2,910

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

6,084

 

 

 

9,297

 

Cash, cash equivalents and restricted cash at end of period

 

$

21,909

 

 

$

6,387

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

 

Income taxes paid

 

$

101

 

 

$

11

 

Non-cash activities:

 

 

 

 

 

 

 

 

Right-of-use assets obtained in exchange for lease obligations

 

$

 

 

$

402

 



 

Non-GAAP Measures

We define non-GAAP loss from operations as U.S. GAAP net loss plus stock-based compensation expenses, amortization of intangible assets, severance and other restructuring costs, other expense, net, and income tax (benefit) provision. We discuss non-GAAP loss from operations, including on a per share basis, in our quarterly earnings releases and certain other communications, as we believe non-GAAP operating loss from operations is an important measure that is not calculated according to U.S. GAAP. We use non-GAAP 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 the non-GAAP loss 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 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 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 from operations for the three months ended April 30, 2021.


 

SeaChange International, Inc.

Fiscal First Quarter Reconciliation of GAAP to Non-GAAP

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

 

 

 

For the Three Months

Ended April 30,

 

 

 

2021

 

 

2020

 

 

 

(Amounts in thousands)

 

GAAP net loss

 

$

(4,068

)

 

$

(6,510

)

Other expense, net

 

 

(228

)

 

 

(208

)

Income tax provision (benefit)

 

 

34

 

 

 

(21

)

GAAP loss from operations

 

$

(3,806

)

 

$

(6,323

)

Amortization of intangible assets

 

 

316

 

 

 

284

 

Stock-based compensation

 

 

208

 

 

 

357

 

Severance and restructuring costs

 

 

484

 

 

 

486

 

Non-GAAP loss from operations

 

$

(2,798

)

 

$

(5,196

)

 

 

 

 

 

 

 

 

 

Non-GAAP loss from operations, basic per share

 

 

(0.07

)

 

 

(0.14

)

Non-GAAP loss from operations, diluted per share

 

 

(0.07

)

 

 

(0.14

)

Weighted average common shares outstanding, basic per share

 

 

41,307

 

 

 

37,521

 

Weighted average common shares outstanding, diluted per share

 

 

41,307

 

 

 

37,521

 

 



 

 

SeaChange International, Inc.

Supplemental Schedule - Revenue Breakout

(Unaudited, amounts in thousands)

 

 

 

Three Months Ended April 30,

 

 

 

2021

 

 

2020

 

 

 

(Amounts in thousands)

 

Product revenue:

 

 

 

 

 

 

 

 

Framework

 

$

1,016

 

 

$

968

 

OVP and other

 

 

604

 

 

 

837

 

Hardware

 

 

 

 

 

1,293

 

Total product revenue

 

 

1,620

 

 

 

3,098

 

Service revenue:

 

 

 

 

 

 

 

 

Maintenance and support

 

 

2,038

 

 

 

2,605

 

Framework and support services

 

 

939

 

 

 

931

 

Professional services and other

 

 

455

 

 

 

281

 

Total service revenue

 

 

3,432

 

 

 

3,817

 

Total revenue

 

$

5,052

 

 

$

6,915