SeaChange International Announces Third Quarter Fiscal 2005 Results; Company Diversifies with New International and Telco Customers.MAYNARD Maynard can refer to: It is a surname used across the English-speaking world. Places in the United States of America:
 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 its third quarter of fiscal 2005 ended October October: see month. 31, 2004. Revenues for the quarter were $42.6 million compared to revenues of $38.2 million in the third quarter of fiscal 2004, a 12% increase. The Company recorded net income of $5.5 million, or $0.19 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the third quarter of fiscal 2005 versus net income of $1.5 million, or $0.05 per diluted share, for the third quarter of fiscal 2004. Net income for the third quarter of fiscal 2005 included an adjustment in the Company's tax provision which increased net income by $1.9 million or $0.06 per diluted share, reflecting the recent change in the law regarding the tax treatment of deferred revenues. Revenues and net income per share for the third quarter of fiscal 2005 were in line with the guidance of revenues of $43.0 million and diluted net income per share of $0.12 that the Company had previously provided in its press release dated August 24, 2004. Video-on-Demand The ability to deliver a movie, sports event or other video program to a TV set whenever the customer requests it. Video-on-demand (VOD) typically refers to free and paid programs from the cable TV companies or the telephone companies that offer video over DSL lines. (VOD See video-on-demand. VoD - video on demand ) systems revenues for the third quarter of fiscal 2005 were $23.8 million, up 6% compared to $22.5 million in the comparable period last year. Total systems revenues for the quarter were $31.3 million, which, in addition to VOD, included revenues of $3.2 million from advertising systems and $4.3 million from broadcast systems. Service revenues for the quarter were a record $11.3 million. For the quarter ended October 31, 2004, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become was $7.1 million, or $0.24 per diluted share, as compared to $5.9 million, or $0.21 per share, in the comparable period last year. (1) The continued improvement in EBITDA helped to increase the Company's cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has balance by $7.5 million from the prior quarter of this fiscal year to a record $139.1 million at quarter end. For the quarter ending January January: see month. 31, 2005, the Company expects total revenues of approximately $41.0 million and net income of $0.10 per share. "There's a seasonality to domestic cable spending that we've we've Contraction of we have. we've have seen for our 11 years in this business, nevertheless, based on our fourth quarter guidance, the Company is on track to grow total revenues 14% and earnings 160% in fiscal 2005, compared to the previous fiscal year," 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. "This quarter we shipped to a number of new customers, further diversifying our customer base with new telco operators and international cable operators. International revenues for this quarter climbed to 23% and are anticipated to grow further as a proportion of our business. "We've installed over 1.3 million streams to date, including 139,000 in this quarter," said Styslinger. "This quarter we've begun delivering to two of the top telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. operators in the world - one 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. and one in Japan. Our new international cable customers include ntl, representing Europe's largest commercial on-demand deployment; as well as Golden Channels, Matav and Tevel in Israel. And in South Korea, we're now working with three cable operators as the proliferation proliferation /pro·lif·er·a·tion/ (pro-lif?er-a´shun) the reproduction or multiplication of similar forms, especially of cells.prolif´erativeprolif´erous pro·lif·er·a·tion n. of broadband access See broadband and wireless broadband. in that country drives new video applications." Styslinger continued, "We achieved yet another record quarter in service revenues, which includes significant contribution from our Digital Video Arts Video Arts is a British based video production company which produces training videos for companies. It was founded in 1972 by John Cleese and a group of other television professionals. subsidiary where our software developers helped Music Choice to usher in Verb 1. usher in - be a precursor of; "The fall of the Berlin Wall ushered in the post-Cold War period" inaugurate, introduce commence, lead off, start, begin - set in motion, cause to start; "The U.S. breakthrough capabilities in music on demand. "Our new broadcast systems also play an important role in the business of television as broadcasters repurpose To change the media format; for example, to go from print to online. their content and seek new efficiencies. This quarter we sold additional systems to China Central Television, and gained new customers that include Hang Zhou TV in China, JBS JBS John Birch Society JBS Journal of Biosocial Science JBS Journal of Business Strategies JBS Johnson Behavioral System JBS Johanson-Blizzard Syndrome JBS Journal of British Studies JBS Jamaica Bureau of Standards JBS Journal of Biomolecular Screening in Japan, and Vietnam's largest broadcaster, HTV HTV H-II Transfer Vehicle HTV Harlech Television (Wales, UK) HTV Hrvatska Televizija (Croatian television) HTV Heidenheimer Tarifverbund (German) HTV Habitual Traffic Violator . "I'm also proud to note that this month SeaChange received an Emmy Award Emmy award Annual presentation for outstanding achievement in U.S. television. Its name is taken from the nickname “immy” for the image orthicon, a television camera tube. from the National Television Academy for our contribution to on-demand television. This is our second Emmy and we appreciate the validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. of our technical contribution to television."
Potential subscribers in systems planned for SeaChange VOD (estimates)
Worldwide Telcos
ESTIMATED
COUNTRY SUBSCRIBERS
----------------------------------------------
Canada 2,500,000
Asia 3,000,000
U.S. 3,000,000
----------------------------------------------
TOTAL TELCO OPERATORS: 5 8,500,000
International Cable Operators
ESTIMATED
OPERATOR BASIC SUBSCRIBERS
---------------------------------------------
Guandong CATV China 6,000,000
HOT:
Golden Channels, MATAV,
Tevel Israel 1,000,000
Intercable Venezuela 1,200,000
Ntl United Kingdom 2,400,000
QRIX So. Korea 450,000
Unannounced (7) 3,600,000
---------------------------------------------
TOTAL CABLE OPERATORS: 14 14,650,000
North American Cable Operators
ESTIMATED
OPERATOR BASIC SUBSCRIBERS
---------------------------------------------
Adelphia 1,877,000
Cablevision 2,952,000
Comcast 12,062,000
Cox 704,000
Insight 1,283,000
Mediacom 282,000
Rogers 2,200,000
Time Warner & Bright House 3,590,000
Other 706,000
---------------------------------------------
TOTAL CABLE OPERATORS: 17 25,656,000
SeaChange Total On-Demand Customers Worldwide
OPERATORS ESTIMATED CUSTOMER
BASE
------------------------------------------------------------
N. American Cable 17 25,656,000
International Cable 14 14,650,000
Worldwide Telcos 4 8,500,000
------------------------------------------------------------
TOTAL: 31 48,806,000
SEAC Revenues and Streams
(Trailing Five Quarters)
Q3 Q2 Q1 Q4 Q3
(Oct.'04)(July'04)(April'04)(Jan.'04)(Oct.'03)
------------------------ -------- -------- -------- -------- --------
Total Revenue
(in millions) $42.6 $43.0 $41.6 $38.9 $38.2
VOD Revenue
(in millions) $23.8 $25.2 $25.2 $25.4 $22.5
Streams Shipped 139,000 178,000 179,000 124,000 123,000
Diluted EPS $0.19 $0.12 $0.11 $0.09 $0.05
The Company will discuss its financial results and business outlook in more detail today during its webcast 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.schange.com. (1) EBITDA is a non-GAAP number that the Company defines as operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. excluding depreciation and amortization. A reconciliation of EBITDA to net income for these periods is contained in the financial schedules that accompany this release. EBITDA is an important measurement used by management to measure the operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. or losses of the business. EBITDA is one of several metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. used by management to measure the cash generated from operations, excluding the operating cash requirements of interest and income taxes. The Company believes that inclusion of this non-GAAP measure enhances investors' overall understanding of the Company's current financial performance. EBITDA should be considered in addition to, but not as a substitute for, other measures of financial performance reported 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 accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, . 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 continued growth, development 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; 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 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. , including the Company's current patent litigation with nCube Corp. and the securities class action lawsuits class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax ; 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 risks associated with international sales; changes in the regulatory environment; the performance of companies in which the Company has made equity investments, including the ON Demand Group Limited; 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 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 with the Commission on April 14, 2004. 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. About SeaChange 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 con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. 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.schange.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 Nine months ended
----------------- -------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
2004 2003 2004 2003
-------- -------- --------- ---------
Revenues $42,597 $38,157 $127,263 $109,278
Cost of revenues 21,692 22,823 67,792 65,376
-------- -------- --------- ---------
Gross profit 20,905 15,334 59,471 43,902
Operating expenses:
Research and development 7,570 6,646 21,772 19,355
Selling and marketing 4,254 4,180 12,879 12,531
General and administrative 3,383 2,650 8,707 8,355
-------- -------- --------- ---------
15,207 13,476 43,358 40,241
-------- -------- --------- ---------
Income from operations 5,698 1,858 16,113 3,661
Interest income (expense), net (371) 404 534 1,235
Other expense -- -- -- (313)
-------- -------- --------- ---------
Income before income taxes and
equity loss in earnings of
affiliates 5,327 2,262 16,647 4,583
Income tax (benefit) expense (112) 789 4,404 1,566
Equity income (loss) in
earnings of affiliates 110 (9) (143) (49)
-------- -------- --------- ---------
Net income $5,549 $1,464 $12,100 $2,968
======== ======== ========= =========
Basic income per share $0.20 $0.05 $0.44 $0.11
======== ======== ========= =========
Diluted income per share $0.19 $0.05 $0.42 $0.11
======== ======== ========= =========
Weighted average common shares
outstanding-
Basic 27,652 27,006 27,494 26,892
======== ======== ========= =========
Diluted 29,097 28,117 28,854 27,669
======== ======== ========= =========
SeaChange International, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
October 31, January 31,
2004 2004
------------- -----------
Assets
Current assets:
Cash and cash equivalents $104,609 $87,597
Marketable securities 18,066 7,777
Accounts receivable, net 27,728 16,572
Inventories 17,535 19,738
Prepaid expenses and other current
assets 3,285 3,640
------------- -----------
Total current assets 171,223 135,324
Property and equipment, net 14,389 14,757
Marketable securities 16,420 26,669
Investments in affiliates 3,666 3,809
Intangibles, net 821 1,293
Goodwill 1,629 253
Other assets 114 151
------------- -----------
$208,262 $182,256
============= ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $23,301 $17,587
Current portion of line of credit and
obligations under capital leases 311 399
Customer deposits 262 401
Deferred revenue 18,733 16,437
Income taxes payable 860 1,336
------------- -----------
Total current liabilities 43,467 36,160
Long-term debt and other long-term
liabilities -- 209
------------- -----------
Common stock and other equity 172,331 165,683
Accumulated deficit (7,293) (19,393)
Accumulated other comprehensive loss (243) (403)
------------- -----------
Total stockholders' equity 164,795 145,887
------------- -----------
$208,262 $182,256
============= ===========
SeaChange International, Inc.
Reconciliation Between Condensed Consolidated Statements of Operations
and Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA)
(In thousands, except per share data)
Three months ended
------------------------------
October 31, October 31,
2004 2003
------------------------------
Net income $5,549 $1,464
Income tax expense (benefit) (113) 789
Interest (income) expense, net 371 (404)
Equity (income) loss in earnings of
affiliates (110) 9
Depreciation and amortization 1,410 3,993
--------------- --------------
EBITDA $7,107 $5,851
=============== ==============
Net income per share- diluted $0.19 $0.05
Income tax expense (benefit) -- 0.03
Interest (income) expense, net 0.01 (0.01)
Equity (income) loss in earnings of
affiliates -- --
Depreciation and amortization 0.04 0.14
--------------- --------------
EBITDA per share- diluted
$0.24 $0.21
=============== ==============
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