SeaChange International Announces First Quarter Fiscal 2003 Results and Record Revenues.Business/Technology Editors MAYNARD, Mass.--(BUSINESS WIRE)--June 5, 2002 Comcast Selects SeaChange for VOD See video-on-demand. VoD - video on demand in Philadelphia SeaChange Deploys 226,000th VOD Stream SeaChange International  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . , Inc. (Nasdaq: SEAC SEAC Student Environmental Action Coalition SEAC Spongiform Encephalopathy Advisory Committee SEAC Southeast Archeological Center (National Park Service) SEAC South East Asia Command (Allies WWII) ) today announced financial results for the quarter ended April 30, 2002. Revenues for the quarter were $33.7 million, up 12% as compared with revenues of $30.2 million for the comparable period last year. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 5, "Accounting for Contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. ," the Company recorded certain one-time charges and adjustments to reflect the results of the unfavorable jury verdict against the Company in its patent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with nCube Corp. (Civil Action No. 01-011-JJF) delivered on May 29, 2002. Principally as a result of these one-time charges and adjustments described in detail below, the Company recorded a net loss of $21.8 million, or $0.82 per share, compared to net income of $182,000, or $0.01 per share, in the comparable period last year. Video-on-Demand (VOD) system revenues for the quarter were $16.1 million, the Company's highest ever and up 37% compared to $11.8 million in the comparable period last year. Total systems revenues for the quarter were $26.5 million, which in addition to VOD, included revenues of $6.2 million from broadcast systems and $4.2 million from advertising systems. Service revenues for the quarter were $7.2 million. The Company's total revenues and VOD system revenues exceeded the Company's projections, and excluding the one-time charges and adjustments related to the jury verdict and a provision to offset outstanding Adelphia receivables, net income was $270,000, or $0.01 per share, which was within the range provided in the Company's earnings release dated March 5, 2002. The one-time charges recorded in conjunction with the unfavorable jury verdict totaled $14.4 million and included provisions for estimated damages and treble damages A recovery of three times the amount of actual financial losses suffered which is provided by statute for certain kinds of cases. The statute authorizing treble damages directs the judge to multiply by three the amount of monetary damages awarded by the jury in those cases relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc shipments of certain VOD systems made through April 30, 2002, legal expenses, and accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. on total damages. These provisions reflect the Company's best estimate of its exposure based on information currently available. Approximately $12.3 million of the provisions were non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. to operations and only legal expenses incurred of approximately $2.1 million have or will be paid currently. The ultimate settlement of the liability will only occur in the event that the treble damages are awarded and that both the jury's verdict and the treble damages award are upheld. In addition to the above provisions recorded in the quarter, the Company will incur on-going legal fees associated with this dispute and accrue To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; falling due; made or executed; matured; occurred; received; vested; was created; was incurred. interest on awarded damages until the matter is resolved. On a quarterly basis, the incremental costs Costs which are additional costs to the Service appropriations that would not have been incurred absent support of the contingency operation. See also financial management. are estimated to be: Quarter ending 7/31/02 10/31/02 1/31/02 Legal expenses $600,000 $400,000 $500,000 Interest Expense 150,000 150,000 150,000 Total $750,000 $550,000 $650,000 The Company also recorded a $500,000 provision to its allowance for doubtful accounts Allowance for Doubtful Accounts An estimation made by a company and documented on its balance sheet for receivables that might go uncollected. Notes: It is standard practice for a company to have funds set aside for money that cannot be collected. to offset outstanding balances owed by Adelphia based upon recent press announcements regarding Adelphia's financial outlook and potential bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most . As disclosed in the Company's form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed for the fiscal year ended January 31, 2002 and 10-Q filings for the fiscal year then ended, the amount of deferred tax assets considered realizable could be reduced in the near term if it does not generate sufficient taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. in future periods. Principally as the result of the $14.4 million charge to operations related to the jury's verdict, the Company has determined that its deferred tax assets will not be currently realized and has recorded a valuation allowance of approximately $7.4 million, equal to the deferred tax asset balance as of April 30, 2002. The Company still will be able to offset future pre-tax income by utilizing these deferred tax assets as the Company generates sustained profits. For the quarter ending July 31, 2002, the Company expects total revenue of approximately $33.0 million, including $15.0 million in VOD systems, $5.0 million in advertising systems, $6.0 million in broadcast systems and $7.0 million in service revenues. It expects a net loss of $0.02 per share including the estimated on-going legal expenses and accrued interest related to the jury verdict. SeaChange Wins Comcast Philadelphia; Leads in VOD Market Share "In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite last week's jury verdict and its affect on this quarter's financial results, this past quarter was very significant for us in video-on-demand," said Bill Styslinger, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , SeaChange International. "I'm very proud to announce that SeaChange has been selected by Comcast to help the country's third-largest cable company achieve its recently announced goal of providing video-on-demand to the Philadelphia area later this year. The Comcast on-demand service in the Philadelphia area will offer digital customers movies-on-demand and Subscription VOD as well as on-demand content from cable and broadcast networks. This win attests to the quality of our VOD systems, our organization and our collective vision in fulfilling the promise in on-demand television. "This quarter we shipped 60,000 residential VOD streams (3.75 Megabits/second quality) and achieved record VOD systems revenues of more than $16 million," said Styslinger. "In addition, SeaChange installed major VOD systems across the country for Cablevision, Comcast, Cox's Hospitality Network, Rogers and Time Warner. Our VOD deployments, comprised of six of the eight largest cable system operators in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , planned for 11.5 million basic subscribers, represent the largest number to be served by any VOD system vendor. We continue to lead the industry in streams shipped, VOD systems revenues, and planned basic subscribers." Styslinger continued, "Our broadcast systems revenues were strong, in spite of economic challenges in broadcast television. New orders in the U.S. and Asia this quarter bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. our continuing momentum and increased our market share position throughout the industry. At the National Association of Broadcasters show in April we introduced our new Broadcast MediaLibrary, an on-line video storage system of unprecedented capacity that will ship later this year. It's a strategic addition to our product line that will empower empower verb To encourage or provide a person with the means or information to become involved in solving his/her own problems content providers of all types to better leverage their video assets in traditional broadcasting, Internet and on-demand television. "We expect our advertising systems sales to continue to reflect the softness in the television advertising market for the next several quarters. In the longer term, we expect this high-margin segment of our business to rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective as customers' advertising revenues improve, their capital expenditures increase and further deployments of our interconnectivity solution occur," said Styslinger. Basic Subscribers in systems planned for SeaChange VOD by North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. cable operators
Oct. 31, 2001 Jan. 31, 2002 April 30, 2002
Basic Basic Basic
Cable Operator Subscribers Subscribers Subscribers
AOL Time Warner 2,259,000 3,442,000 3,580,800
Comcast 1,132,000 1,132,000 1,388,000
Cablevision 2,900,000 2,900,000 2,900,000
Adelphia 1,877,000 1,877,000 1,877,000
Rogers 570,000 570,000
Other 291,000 1,218,000
Total basic cable
subscribers 8,168,000 10,212,000 11,533,800
The Company will discuss its financial results and business outlook in more detail today during its web cast conference call at 5:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT , which will be available live and archived at www.seachangeinternational.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Provision Any statements contained in this press release that do not describe historical facts, including without limitation statements concerning expected revenues, earnings, product introductions and general market conditions, may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as that term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Any such forward-looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. The factors that could cause actual future results to differ materially from current expectations include the following: the emergence and acceptance of the video-on-demand market; the loss of one of the Company's large customers; the cancellation or deferral deferral - Waiting for quiet on the Ethernet. of purchases of the Company's products; a decline in demand or average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. for the Company's broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). products; the Company's ability to manage its growth; content providers limiting the scope of content licensed for use in the video-on-demand market; the Company's ability to introduce new products or enhancements to existing products; the Company's dependence on certain sole source suppliers and third-party manufacturers; the Company's ability to compete in its marketplace; the Company's ability to respond to changing technologies; 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, including our current patent litigation with nCube Corp.; the risks associated with international sales; the Company's ability to integrate the operations of acquired subsidiaries; changes in the regulatory environment; the Company's ability to hire and retain highly skilled employees; and increasing social and political turmoil. 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 with the Commission on April 30, 2002. 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or 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. SeaChange International, Inc. is a world leader in digital video systems, spanning broadcast and broadband. The Company creates powerful server and software systems that manage, store and distribute professional quality digital video. SeaChange's innovative products are based on a scalable, distributed software architecture and standard technology components to continually deliver exponential 1. (mathematics) exponential - A function which raises some given constant (the "base") to the power of its argument. I.e. f x = b^x If no base is specified, e, the base of natural logarthims, is assumed. 2. improvements in digital video cost-performance. As a result, SeaChange enables broadband, broadcast, satellite and new media companies to streamline operations and reduce costs, allowing for expanded services, new applications and increased revenues. SeaChange is headquartered in Maynard, Massachusetts Maynard is a town in Middlesex County, Massachusetts, United States. As of the 2001 census, the town population was 10,037. History Maynard, located on the Assabet River, was first settled in 1638 and was officially incorporated in 1871. and has product development, support and sales offices throughout the world. Visit www.seachangeinternational.com. MediaCluster is a patent and trademark of SeaChange International, Inc.
SeaChange International, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three months ended
April 30, April 30,
2002 2001
Revenues $33,743 $30,156
Cost of revenues 21,583 18,696
Gross profit 12,160 11,460
Operating expenses:
Research and development 6,210 5,584
Selling and marketing 3,906 3,606
General and administrative 16,882 1,838
26,998 11,028
Income (loss) from operations (14,838) 432
Interest income (expense), net 367 (164)
Income (loss) before income taxes (14,471) 268
Income tax expense 7,364 86
Net income (loss) $(21,835) $182
Basic earnings (loss) per share $(0.82) $0.01
Diluted earnings (loss) per share $(0.82) $0.01
Weighted average common shares outstanding-
Basic 26,537 22,555
Diluted 26,537 23,389
SeaChange International, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
April 30, January 31,
2002 2002
Assets
Current assets:
Cash and cash equivalents $92,996 $103,898
Accounts receivable, net 33,808 29,916
Inventories 26,044 23,990
Prepaid expenses and other current assets 4,241 2,311
Deferred income taxes - 7,294
Total current assets 157,089 167,409
Property and equipment, net 16,975 17,652
Other assets 803 3,733
Goodwill and intangibles, net 3,942 4,183
$178,809 $192,977
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $28,312 $16,572
Current portion of line of credit and
obligations under capital leases 264 291
Customer deposits 2,331 2,484
Deferred revenue 14,260 13,071
Income taxes payable and other current
liabilities 55 70
Total current liabilities 45,222 32,488
Long-term debt and other long-term liabilities 910 6,363
Common stock and additional paid-in capital 159,263 158,893
Retained deficit (26,359) (4,524)
Accumulated other comprehensive loss (227) (243)
Total stockholders' equity 132,677 154,126
$178,809 $192,977
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