SeaChange’s third quarter fiscal 2010 results
ACTON, Mass. (Dec. 2, 2009) – SeaChange International, Inc. (NASDAQ: SEAC), a leading provider of software and hardware solutions for video-on-demand (VOD) television, announced financial results for its fiscal 2010 third quarter ended Oct. 31, 2009. Total revenues under generally accepted accounting principles (GAAP) were $53.3 million, which were $1.5 million higher than total revenues of $51.8 million for the third quarter of last year.
Total non-GAAP revenues for the third quarter of $54.0 million were $2.2 million or 4% higher than last year’s third quarter revenues. GAAP net income for this year’s third quarter was $0.7 million or $0.02 per share compared with GAAP net income of $3.4 million or $0.11 per share for the third quarter of fiscal 2009. Non-GAAP net income for this year’s third quarter was $3.4 million or $0.11 per share compared to non-GAAP net income of $4.5 million or $0.14 per share for the third quarter of fiscal 2009.
Total revenues for the first nine months of fiscal 2010 ended Oct. 31, 2009, were $148.7 million, which were $0.8 million higher than total revenues of $147.9 million for the first nine months of fiscal 2009. GAAP net income for the first nine months of fiscal 2010 was $1.3 million or $0.04 per share compared with GAAP net income of $5.2 million or $0.17 per share for the same period last year. Non-GAAP net income for the first nine months of this year was $6.7 million or $0.21 per share compared with non-GAAP net income of $8.4 million or $0.27 per share for the first nine months of fiscal 2009.
The Company ended the third quarter of fiscal 2010 with cash, cash equivalents and marketable securities of $53.4 million and no debt compared with $93.5 million and no debt at the end of the second quarter of fiscal 2010. $36.6 million in cash was used during the third quarter to purchase eventIS Group B.V. The remaining use of cash during this year’s third quarter was driven by higher accounts receivable and lower accounts payable that was partially offset by net income and non-cash expenses of $3.8 million.
Total revenues from the Company’s Software segment in the third quarter of fiscal 2010 were $35.7 million, which were $1.9 million lower than Software segment revenues of $37.6 million generated in last year’s third quarter. The decrease in Software segment revenues between years was attributable mainly to lower Advertising and Broadcast software revenue due to the soft advertising market impacting capital spending for customers of these two product lines. VOD software product revenue in this year’s third quarter increased 8% compared to the third quarter of last year driven by strong growth in VOD software licensing revenue from U.S. cable television providers and the inclusion of eventIS for a portion of the quarter.
The Servers and Storage segment generated revenues of $12.4 million in the third quarter of fiscal 2010, which was $2.0 million or 19% higher than revenues of $10.4 million for the third quarter of fiscal 2009. A near doubling of VOD server revenue in this year’s third quarter compared to the third quarter of last year was due primarily to increased server shipments to Comcast in support of its next-generation VOD architecture roll-out. Partially offsetting the increase in VOD server revenues was lower Broadcast server revenues due to the soft advertising market as noted.
The Media Services operating segment revenue for the third quarter of fiscal 2010 of $5.2 million was $1.3 million or 35% higher than comparable revenue from last year’s third quarter. Excluding the impact of currency exchange rate differences between years, Media Services revenue grew 48% in the third quarter of fiscal 2010 compared to the third quarter of last year due to increased VOD content services revenue from Virgin Media along with customers from Greece and Turkey, as well as revenue from the Company’s acquisition of Mobix Interactive during the fourth quarter of last year.
“We are pleased to report a solid quarter of financial performance marked by double-digit percentage revenue increases in our VOD product lines and Media Services business segment,” said Bill Styslinger, Chairman and CEO, SeaChange International. “We saw continued strength in VOD software and server spending by our largest North American service provider customer during the third quarter, as well as encouraging results from our customer diversification strategy for our Media Services business.”
Commenting on guidance for the fourth quarter of fiscal 2010, Styslinger noted, “We are maintaining our revenue forecast for fiscal 2010 to be approximately equivalent to fiscal 2009 revenue resulting in fourth quarter revenues that are forecasted to be comparable to the third quarter. We expect GAAP net income between $0.02 per share and $0.05 per share and non-GAAP net income between $0.09 per share and $0.13 per share. Our fourth quarter guidance assumes a continued strong spending environment for VOD software from North American service providers and further revenue increases from Media Services combined with a focus on containment of operating expense growth.”
Providing a preliminary outlook for fiscal 2011, Styslinger remarked, “We are targeting revenue for the next fiscal year to be in the range of $225-$235 million. Growth is expected to derive from increased VOD software shipments to North American customers and additional contract wins for Media Services. A full year’s inclusion of eventIS is also expected to be a significant contributor to revenue growth next year.”
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