SeaChange International Reports Fiscal First Quarter 2021 Financial Results Download as PDF June 11, 2020 4:05pm EDT Related Documents Audio
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WALTHAM, MA / ACCESSWIRE / June 11, 2020 / SeaChange International Inc. (NASDAQ:SEAC), a leading provider of video delivery platforms, today reported financial results for the fiscal first quarter ended April 30, 2020.
Management Commentary
As we previously communicated on May 21, 2020, our business was impacted by the COVID-19 pandemic in the fiscal first quarter, but weve acted swiftly and confronted these headwinds directly, said SeaChange CEO Yossi Aloni. During the period, a majority of our customers temporarily paused technology purchasing and deployment decisions to focus on their internal operations, including servicing the surging demand for bandwidth due to higher overall network usage. In response to the pandemic and the shift in our customers behavior, we have shifted to a leaner, more focused operation which has allowed us to reduce our cost structure and more fully align our strategy with current market demands. We anticipate that these optimization measures, coupled with our quarter-end cash position of nearly $10 million, provide us with sufficient resources to execute our growth strategy.
Despite the recent challenges, we have been encouraged by our initial success and recently secured our first Framework win that included our new Ad Insertion module. We believe that monetizing unsold ad inventory during this difficult time is a tremendous value-add that our Framework platform can provide. SeaChanges unique technology offers TV providers a digital-like workflow for all platforms, including linear, video on demand and Over-the-Top. COVID-19 has also dramatically accelerated the TV and video industrys shift in how content is being consumed at home, which has resulted in a robust pipeline of new opportunities as well as continued interest in our Framework solution as operators look to preserve their revenue base and reduce operating expenses. We believe that our industry-leading solutions and disruptive go-to-market strategy will enable us to capitalize on the disruption-in-process and the accelerating demand for streaming services.
Looking ahead, we believe that the decisive measures we took over the last several months have allowed us to not only mitigate the present macro risks, but also will better position us to capitalize on the anticipated demand for our solutions in the second half of fiscal 2021. Based on our current pipeline of opportunities and customer engagement, we expect to generate growth and profitability in the second of half of the fiscal year.
First Quarter Fiscal 2021 and Recent Operational Highlights
Expanded our relationship with Amazon Web Services (AWS) to provide new functionalities for SeaChanges Framework platform with AWS machine learning (ML) services. The enhanced functionality is designed to enable SeaChanges customers to reduce subscriber churn by improving viewer engagement and to increase revenues through better monetization of advertising inventory.
In response to COVID-19, in late March through May the Company implemented permanent and temporary cost-optimization measures, which are in addition to the actions the Company took in fiscal 2020, which are expected to result in more than $5 million in annualized cost savings.
Secured two new customer wins with multi-year commitments for the Framework video delivery platform, bringing the total number of Framework customers secured since March 2019 to 28 with more than $60 million in total contract value.
First Quarter Fiscal 2021 Financial Results
Total revenue decreased 19% to $6.9 million from $8.5 million in the same period last year. Product revenue increased 163% to $3.1 million (or 45% of total revenue) from $1.2 million (or 14% of revenue) in the same period last year. Service revenue decreased 48% to $3.8 million (or 55% of total revenue) from $7.3 million (or 86% of total revenue) in the same period last year.
Revenue backlog at quarter end increased 97% to $21.7 million from $11.0 million at the end of the first quarter of fiscal 2020.
Gross profit decreased by 14% to $2.5 million (or 36% of total revenue) from $2.9 million (or 34% of total revenue) in the same period last year.
Total operating expenses decreased by 24% to $8.8 million from $11.6 million in the same period last year.
GAAP loss from operations totaled $6.3 million, an improvement from a loss of $8.7 million in the same period last year.
Non-GAAP loss from operations totaled $5.2 million, or $(0.14) per basic share, an improvement from a loss of $7.5 million, or $(0.20) per basic share, in the same period last year.
GAAP net loss totaled $6.5 million, or $(0.17) per basic share, an improvement from a loss of $10.8 million, or $(0.30) per basic share, in the same period last year.
Cash, cash equivalents, restricted cash and marketable securities totaled $9.8 million at quarter-end. Also, the Company had no debt at quarter-end. Management currently believes the Companys liquidity position coupled with the recent cost-reduction measures enable the company to execute its growth strategy.
Business Outlook
The Company intends to provide financial guidance for fiscal 2021 when management has greater visibility with respect to returning to a more normal operating environment.
Conference Call
SeaChange will host a conference call today (June 11, 2020) at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss these results.
SeaChange 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: 13704490
Please call the conference telephone num
