Tuesday February 1, 5:14 pm Eastern Time
Company Press Release
SeaChange International Announces Strong Fourth Quarter 1999 Results
Leader in Digital Television Systems Continues to Gain New Customers, Strengthen Technology and Market Position
MAYNARD, Mass.--(BUSINESS WIRE)--Feb. 1, 2000-- SeaChange International, Inc. (Nasdaq:SEAC - news) today announced strong financial results for its fourth quarter ended December 31, 1999. Revenues for the quarter were $21 million, up 8% compared to $19.5 million for the fourth quarter of 1998. Net income for the quarter was $505,000, or $.02 per share, excluding the operating results and merger costs related to the acquisition of Digital Video Arts, Ltd. on December 30, 1999. This compares favorably to a net loss of $921,000, or $.04 loss per share, in the fourth quarter of 1998. Including the operating results and merger costs relating to the Digital Video Arts acquisition, the Company had a net loss for the quarter of $163,000, or $.01 per share, compared to a net loss of $956,000 or $.05 per share in the fourth quarter of 1998.
For the year ended December 31, 1999, revenues were $85.2 million, an increase of 17% over revenues of $72.9 for the year ended December 31, 1998. Net income for the year was $1.1 million, or $.05 per share, as compared to a net loss of $4.7 million, or $.22 loss per share, in 1998, excluding the operating results and merger costs related to the acquisition of Digital Video Arts. Including the operating results and merger costs relating to the acquisition, the net income for the year was $497,000 or $.02 per share, compared to a net loss of $4.6 million or $.22 per share in 1998. As of December 31, 1999, the Company's cash position improved to $11.3 million, its highest cash balance since December 31, 1997.
''In 1999 SeaChange prepared to support the rapid digital evolution taking place in television around the world,'' said Bill Styslinger, president and CEO, SeaChange International. ''We made significant strides in strengthening our company and market position, through technology investments, industry collaboration and new customer relationships. With growing revenue from a broad line of products for broadband and broadcast applications, SeaChange has developed the unparalleled expertise in digital video systems that will help television operators gain new efficiencies in their operations and to embrace exciting new applications.''
Styslinger continued, ''I was also pleased to announce that in response to a number of recommendations from our investors, SeaChange's board approved a three-for-two stock split in December to improve overall investor liquidity.''
As broadband operators prepare for the advent of interactive television, advertising stands out as a critical revenue stream and a significant opportunity for further growth through interactivity. With the industry's largest market share, approximately 26,000 channels installed, and a customer base comprised of the top broadband operators, SeaChange has distinguished its capabilities in this technology and continues to maintain its leadership position. In the fourth quarter, SeaChange continued to install new systems and support ongoing channel expansion for a number of operators, including AT&T's TCI Media Services, Cox Communications, Cablevision, Comcast Cable Communications, Cabletime, Time Warner, and Cablevision Buenos Aires.
Additionally in the fourth quarter, SeaChange expanded its interactive television business for hotels. Time Warner's Myrtle Beach operation installed a new system to serve its hotel base, and in Hawaii, Oceanic Cable expanded its system to serve additional hotel rooms on that state's largest island.
Fourth quarter progress also continued with SeaChange's Interactive Television System, which is the platform for video-on-demand (VOD), interactive advertising and other interactive applications for cable and telecommunications operators. SeaChange is supporting a number of publicly announced VOD trials and deployments in the fourth quarter, and in the fourth quarter announced the addition of Comcast Cable Communications, as a trial, to its list that includes Time Warner, Canada's Rogers Cablesystems, the U.K.'s Telewest, China's Guandong Cable TV, and also Encore Media for subscription VOD development.
A further milestone in the company's interactive television development was the acquisition of Digital Video Arts, which provides significant resources for the development of digital settop applications. The company continued to expand its development relationships, announcing partnerships with Liberate, Microsoft, Wink, Cisco's V-Bits and others.
In the broadcast television market, where digital video technology is also providing new opportunities, SeaChange continued to leverage its expertise and gained a number of new customers. New customers added during the fourth quarter included Sony Pictures Entertainment, Connecticut Public Television, Australia's WIN TV Network and Channel 10, the U.K.'s Cable and Satellite Transmissions (CAST) Ltd., M-NET in South Korea, the Hispanic Television Network in Texas, and others.
Founded in 1993, SeaChange International (www.schange.com), of Maynard, Mass., is a leading provider of software-based products to manage, store and distribute digital video for television operators and telecommunications companies. The Company's products automate the management and distribution of short- and long-form video streams including advertisements, movies, news updates and other video programming requiring precise, accurate and continuous execution.
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 as that term is defined in the Private Securities Litigation Reform Act 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 Company's ability to integrate the operations of acquired subsidiaries; fluctuations in demand for the Company's products and services; the Company's ability to manage its growth; the Company's ability to develop, market and introduce new and enhanced products and services on a timely basis; the rapid technological change which characterizes the Company's markets; the Company's significant concentration of customers; the Company's dependence on certain sole source suppliers and third-party manufacturers; the risks associated with international sales as the Company expands its markets; the Company's ability to identify and resolve material Y2K issues; and the ability of the Company to compete successfully in the future. 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 dated March 22, 1999. Any forward-looking statements should be considered in light of those factors. SeaChange Spot System, GuestServe Network and MediaCluster are trademarks of SeaChange International, Inc.
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SeaChange International,Inc.
Condensed Consolidated Statement of Operations
(In thousands, except share and per share data)
Three months ended Twelve months ended
December 31, December 31,
1998 1999 1998 1999
(unaudited) (unaudited)
Revenues $ 19,487 $ 21,027 $ 72,924 $ 85,221
Cost of revenues 13,137 13,113 49,383 53,851
Gross profit 6,350 7,914 23,541 31,370
Operating expenses:
Research and development 3,963 3,929 15,763 16,302
Selling and marketing 2,474 2,414 8,566 8,595
General and
administrative 1,435 1,255 6,132 5,335
Restructuring
of operations -- -- 676 --
Merger Costs 684 684
7,872 8,282 31,137 30,916
Income (loss) from
operations (1,522) (368) (7,596) 454
Interest income, net 25 22 235 28
Income (loss) before
income taxes (1,497) (346) (7,361) 482
Benefit for income taxes (541) (183) (2,789) (15)
Net Income (loss) $ (956) $ (163) $ (4,572) $ 497
Basic and diluted net
income (loss) per
share $ (.05) $ (.01) $ (.22) $ .02
Weighted average
common shares
outstanding -
Basic 20,900,000 21,138,000 20,791,000 20,981,000
Diluted 20,900,000 21,138,000 20,791,000 21,871,000
SeaChange International, Inc.
Condensed Consolidated Balance Sheet
(In thousands)
December 31, December 31,
1998 1999
Assets
Current assets:
Cash, cash equivalents and
marketable securities $ 5,442 $ 11,318
Accounts receivable, net 17,663 17,840
Inventories 16,157 17,128
Prepaid expenses 1,705 1,508
Income taxes receivable 2,117 60
Deferred income taxes 1,967 2,243
Total current assets 45,051 50,097
Property and equipment, net 8,050 10,538
Other assets 229 884
Goodwill and other intangibles, net 1,197 785
$ 54,527 $ 62,304
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings under line of credit $ 2,000 $ --
Accounts payable and accrued expenses 13,507 18,396
Current portion of equipment
line of credit obligations
under capital leases 555 1,048
Customer deposits 1,704 2,092
Deferred revenue 3,939 4,380
Income taxes payable and other
current liabilities 475 816
Total current liabilities 22,180 26,732
Long-term debt and other liabilities 1,027 1,231
Common stock and additional paid-in capital 33,316 35,846
Retained earnings (deficit) (1,937) (1,440)
Accumulated other comprehensive income (59) (65)
Total stockholders' equity 31,320 34,341
$ 54,527 $ 62,304
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Contact:
SeaChange International
John Coulbourn, 978/897-0100 x3098
johnc@schange.com |
