SeaChange International Reports Second Quarter Fiscal 2014 ResultsSeptember 05, 2013
Product Revenue of $16.2 Million Increased by 20% Year over Year
Non-GAAP Operating Income of $3.4 Million Increased by 189% Year over Year
GAAP Operating Income of $0.5 Million, Compared to $7.5 Million GAAP Operating Loss in Prior Year
GAAP Gross Margins Exceed 57%
Up to $25 Million Share Repurchase Authorized
ACTON, Mass. (Sept. 5, 2013) SeaChange International, Inc. (NASDAQ: SEAC), a leading global multi-screen video software innovator, today reported second quarter fiscal 2014 revenue of $37.4 million and non-GAAP operating income of $3.4 million, or $0.10 per fully diluted share, from continuing operations. In comparison, second quarter fiscal 2013 revenue was $36.7 million and non-GAAP operating income was $1.2 million, or $0.04 per fully diluted share, from continuing operations. The Company posted a U.S. GAAP operating income of $0.5 million, or $0.01 per diluted share for the second quarter of fiscal 2014, compared to a U.S. GAAP operating loss for the second quarter of fiscal 2013 of $7.5 million, or $0.23 per basic share. The Company's U.S. GAAP second quarter fiscal 2014 results include charges of $2.9 million that are excluded from our non-GAAP results, which consisted primarily of stock-based compensation and amortization of intangible assets from prior acquisitions.
For the first six months of fiscal 2014, the Company posted revenues of $72.9 million and non-GAAP operating income of $4.6 million compared to revenues of $73.4 million and non-GAAP operating income of $3.5 million in the same prior period. The Company posted a GAAP operating loss for the first six months of fiscal 2014 of approximately $1.3 million compared to GAAP operating loss of $8.7 million for the same prior period.
We are pleased that, in the second quarter, we achieved sequential and year over year increases in revenues and operating income and substantial growth in gross margins, which exceeded 57 percent, said Raghu Rau, Chief Executive Officer, SeaChange. Our results would have been even better but for delays in receiving timely acceptance within the quarter for some of our new generation software products because of ongoing custom integrations with third-party products. We continued to make significant market progress including an Adrenalin rollout with one of the largest U.S. cable television operators, and Adrenalin and VOD advertising acceptance by a large European telco. We have also announced a large number of deployments, domestically and internationally, for our market-leading content management solutions. And we continued our Nucleus gateway software momentum with two more design wins.
Commenting on the Company's outlook, Anthony Dias, Chief Financial Officer, stated, We continue to respond to strong demand for our new products and focus on optimizing our cost structure, and we anticipate solid performance in our second half. We expect third quarter revenues to be sequentially higher than the second quarter, and fourth quarter revenues to be sequentially higher than the third quarter. However, due to the uncertainty of timing in customer acceptance of new products, the Company expects its full year revenues to be at the lower end of its previously provided guidance of $165 million to $175 million. The Company continues to expect that its full fiscal 2014 non-GAAP operating income will be in the range of $0.53 to $0.71 per fully diluted share, as previously guided.
SeaChange ended the second quarter of fiscal 2014 with cash, cash equivalents and marketable securities of $126.5 million, compared to $122.3 million for the previous quarter. The Company also announced that its Board of Directors has authorized the repurchase of up to $25 million of its shares through January 31, 2015 by means of open market purchases, privately negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934. Depending on market conditions and other factors, the repurchase may be commenced or suspended at any time, or from time to time, without prior notice.
The Company will host a conference call to discuss its second quarter fiscal 2014 results at 5:00 p.m. ET today, Thursday, September 5. The call may be accessed at 877-407-8037 (U.S.) and 201-689-8037 (international) and via live webcast at www.schange.com/IR. For those unable to listen to the live conference call, a replay will be available through September 19, 2013 and may be accessed by dialing 877-660-6853 (U.S.) or 201-612-7415 (international). Callers will be prompted for replay conference ID number 419491. An archived version of the webcast will also be available on the investor relations section of the Company's website at www.schange.com/IR.
About SeaChange International
Ranked among the top 250 software companies in the world, SeaChange International (NASDAQ: SEAC) enables transformative multi-screen video services through an open, cloud-based, intelligent software platform trusted by cable, IPTV and mobile operators globally. Personalized and fully monetized video experiences anytime on any device, in the home and everywhere, are the product of the Company's superior video back office platform, advertising and in-home gateway offerings.
SeaChange's hundreds of customers are many of the world's most powerful media brands including all major cable operators in the Americas and Europe, and the largest telecom companies in the world. Headquartered in Acton, Massachusetts, SeaChange is TL 9000 certified and has product development, support and sales offices around the world. Visit www.schange.com.
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