SeaChange International Reports Second Quarter Fiscal 2019 Results September 5th, 2018
ACTON, Mass., Sept. 05, 2018 (GLOBE NEWSWIRE) SeaChange International, Inc. (NASDAQ: SEAC) today reported second quarter fiscal 2019 revenue of $11.9 million and a U.S. GAAP loss from operations of $8.3 million, or $0.23 per basic share, compared to second quarter fiscal 2018 revenue of $17.2 million and U.S. GAAP loss from operations of $2.1 million, or $0.06 per basic share.
These results are in line with the preliminary results reported by the Company for the second quarter of fiscal 2019 on August 21, 2018.
The Company's U.S. GAAP second quarter fiscal 2019 results included non-GAAP charges of $1.9 million, which consisted primarily of stock-based compensation of $0.9 million, amortization of intangible assets from prior acquisitions of $0.4 million and severance and other restructuring costs of $0.5 million, while second quarter fiscal 2018 results included non-GAAP charges of $1.1 million. The non-GAAP loss from operations in the second quarter of fiscal 2019 was $6.4 million, or $0.18 per basic share, compared to the second quarter of fiscal 2018 non-GAAP loss from operations of $1.0 million, or $0.03 per basic share.
For the first six months of fiscal 2019, the Company reported revenue of $26.8 million and a U.S. GAAP loss from operations of $13.4 million, or $0.38 per basic share, compared to revenue of $33.9 million and a U.S.GAAP loss from operations of $7.6 million, or $0.22 per basic share in the same period in the prior fiscal year. The non-GAAP loss from operations for the first six months of fiscal 2019 was $10.2 million, or $0.29 per basic share, compared to a non-GAAP loss from operations of $2.7 million, or $0.08 per basic share, in the first half of fiscal 2018.
Ed Terino, Chief Executive Officer, SeaChange, said, While we are disappointed with the second quarter results, we believe that our strategy of pivoting to end-to-end solutions sold on a SaaS business model to video service providers, wireless carriers and ISP's, as well as broadcasters and content owners, is taking hold. As we enter new market segments and expand geographies through partnerships, closing transactions is taking longer to achieve. However, we are very pleased by the market's reaction to our innovative, subscription-based solutions portfolio, cFlow , and our end-to-end cloud-based video solution, PanoramiC. As we noted recently, several new customer transactions were delayed in closing during the second quarter. We expect these transactions to close in Q3. The increased interest in our new products, combined with our expanded traction with partners, especially in Latin and South America as well as Asia Pacific, should position us for improved results in the remainder of this fiscal year.
Peter Faubert, Chief Financial Officer, SeaChange, said, As we recognized that our second quarter results would not meet our expectations, we began taking steps to reduce our costs further, including implementing a cost reduction program expected to save $6 million on an annualized basis, with the goal of returning the Company to profitability and positive cash flow before the end of this fiscal year. While our cash burn in the second quarter was high due to our results of operations, unfavorable working capital changes and one-time uses of cash during the quarter, we expect to return to positive cash flow in the second half of the year as our topline results improve.
SeaChange ended the second quarter of fiscal 2019 with cash, cash equivalents, restricted cash and marketable securities of $35.0 million, and no debt outstanding. In addition, the Company has completed the valuation analysis of its goodwill and other long-lived assets as of July 31, 2018, as required, and determined that no impairment has occurred.
Outlook
SeaChange anticipates third quarter fiscal 2019 revenue to be in the range of $16 million to $20 million, U.S. GAAP operating loss from operations of $0.15 to $0.06 per basic share, and non-GAAP operating results to be in the range of a loss from operations of $0.05 per basic share to operating income of $0.04 per fully diluted share.
For the full fiscal year 2019, the company now expects revenue in the range of $70 million to $75 million, U.S. GAAP operating loss of $0.37 to $0.26 per basic share and a non-GAAP operating loss between $0.15 to $0.04 per basic share. Previously the company had expected revenue between $80 to $90 million, US GAAP operating results between a loss of $0.06 per basic share to operating income of $0.09 per fully diluted share and non-GAAP operating income between $0.10 to $0.25 per fully diluted share.
These GAAP estimates are subject to a number of variables that are outside of management's control, including the size of restructuring expenses, which are influenced by the timing of certain non-U.S. restructuring activities, and stock price fluctuations.
Conference Call
The Company will host a conference call to discuss its second quarter fiscal 2019 results at 5:00 p.m. ET today, Wednesday, September 5, 2018. The call may be accessed by dialing 877-407-8037 (U.S.) and 201-689-8037 (international) and via live webcast on the Events page at investors.seachange.com. The webcast replay will be archived the same location.
About SeaChange International
For 25 years, SeaChange (Nasdaq: SEAC) has pioneered solutions to help video providers around the world manage and monetize their content. As the video industry rapidly evolves to meet the anytime, anywhere demands of today's viewers, SeaChange's comprehensive content, business, advertising, and experience management solutions provide a mature, network-agnostic, cloud-enabled platform of scalable core capabilities that video service providers, broadcasters, content owners and brand advertisers
