SeaChange Posts Higher Revenues, Swings to a Profit

Submitted by itvt on October 9, 2008 - 4:18am

seachange

VOD technology provider, SeaChange International, has released financial results for its fiscal second quarter (2009), ended July 31st:

Combined revenues totaled $50.7 million, compared to $44.2 million for the year-ago quarter.
Revenues from the company's Software segment totaled $32 million, representing a 17% increase over the year-ago quarter. The company said that the revenue growth was driven by higher advertising-insertion revenues from North American service providers, which were the result of increased HD television channel requirements. In addition, it said, higher license and maintenance revenues for its SeaChange Axiom software, derived primarily from North American cable and telco customers, contributed to the segment's growth.
Revenues from the company's Servers and Storage segment totaled $14.9 million, representing a 20% increase over the year-ago quarter. The company attributed the growth to increased VOD server shipments to several domestic customers and to higher installation and maintenance revenues related to increased year-over-year server deployments.
Revenues from the company's Media Services segment totaled $3.9 million, representing a $0.6 million decline from the year-ago quarter. The company attributed the decline to non-recurring professional services revenue generated in the year-ago quarter.
Net income totaled $1.5 million, or $0.05 per share, compared to a net loss of $7.9 million, or $0.27 per share, for the year-ago quarter (note: the company said that last year's Q2 loss included $6 million, or $0.20 per share, of expenses related to severance charges in connection with headcount reductions and impairment charges related primarily to capitalized software licenses).
At the end of the quarter, the company's cash, cash-equivalents and marketable securities totaled $78.1 million and no debt, compared to $79 million and no debt at the end of the first quarter. The company said that net income and non-cash expenses of $4.6 million, along with improvements in working capital, were offset by capital expenditures of $7.2 million in the second quarter; it said that those capital expenditures were due primarily to a facility purchase for its Media Services operation and to its repurchase of 551,000 shares at a cost of $4 million under its previously announced stock buyback program.

"We exceeded $50 million in quarterly revenue for the first time in the company's history on continued strong North American service provider spending for VOD server and software products," SeaChange president and CEO, Bill Styslinger, said in a prepared statement. "We're particularly pleased that the first commercial deployment of flash memory servers by two of our largest North American cable television customers significantly contributed to our VOD server revenue this quarter. Solid, top-line performance, improved margins and control of operating expense growth all contributed to the company's fourth consecutive quarter of profitability. We aggressively redeployed cash generated during the second quarter by repurchasing $4 million of the company's stock, in addition to the facility purchase. Our cash position at the end of the second quarter, however, was essentially unchanged from the first quarter demonstrating the cash-generation power of our business." Styslinger also provided some guidance for the remainder of fiscal 2009: "We continue to expect that revenue for all of fiscal 2009 will be approximately 10% higher than fiscal 2008 revenue and that we will be profitable for the second half of the year," he said. "Our confidence in our financial expectations for the rest of fiscal 2009 lies in continued strong spending on VOD and advertising insertion software-related products by our core North American cable and telephone customers, as well as continued focus on controlling our selling, general and administrative expenses."