SeaChange rolls to 7th consecutive quarter of profitability
SeaChange International cited strong demand for its products by Comcast, Verizon and Virgin Media as one of the reasons the company was able to increase its 2010 first-quarter results by 8 percent when compared with the same quarter in 2009.
Total revenues for the recently completed fiscal first quarter, which ended April 30, were $48.9 million, which was $3.5 million higher than the total revenues for the first quarter of fiscal 2009.
SeaChange’s net income for the quarter was $1 million, or 3 cents per share, compared with $300,000, or 1 cent per share, in the same quarter in 2009.
SeaChange ended the first quarter of fiscal 2010 with cash, cash equivalents and marketable securities of $90.7 million and no debt, compared with $85.8 million and no debt at the end of the fourth quarter of fiscal 2009.
Net income and non-cash expenses for depreciation, amortization and stock compensation of $4.1 million, combined with $4.4 million of improved working capital performance, were partially offset by $2.4 million of capital expenditures. SeaChange also repurchased 298,000 shares of its common stock during the quarter, at a cost of $1.7 million under its previously disclosed stock buyback program.
Breaking down SeaChange’s first quarter by its products, total revenues from the company’s software segment were $30.6 million, which was $600,000 higher than software segment revenues in the first quarter of last year.
SeaChange said year-over-year revenue growth in the software segment was largely driven by increased Comcast video-on-demand software subscription revenue, as well as higher VOD maintenance, installation and professional services revenue.
The servers and storage segment generated $14.1 million of revenue for the first quarter of fiscal 2010, which was $2.7 million, or 24 percent, higher than comparable revenue for the first quarter of fiscal 2009.
The increase was largely due to higher shipments of VOD servers to SeaChange’s largest North American telecommunications customer, as well as increased VOD server shipments to several North American cable television providers. Segment revenue for this year’s first quarter also benefited from increased VOD server maintenance and installation revenue.
Media services segment revenue for this year’s first quarter of $4.2 million was $200,000 higher than the first quarter of last year. Subtracting the impact of currency exchange rate differences between years, media services revenue grew a robust 44 percent compared with last year’s first quarter, due mainly to multi-year content services contracts secured from customers in Greece and Turkey, as well as the inclusion of revenue from the company’s acquisition of Mobix Interactive in the fourth quarter of last year (story here).
“We are pleased with our financial performance in the first quarter, which marked our seventh consecutive quarter of profitability for the company,” said SeaChange Chairman and CEO Bill Styslinger. “We cemented our strong competitive position with our largest and growing telecommunications customer on the heels of signing a multi-year VOD and advertising purchase agreement early in the first quarter, which produced substantial VOD server and software order strength throughout.”
Styslinger also cited two multi-year contracts that were extended with Virgin Media in the first quarter (for more on Virgin Media and SeaChange, click here).
“We continue to see a challenging near-term capital expenditure environment for many of our customers, particularly in the broadcast and advertising-insertion sectors,” Styslinger said about the rest of fiscal 2010. “With that, we continue to believe that revenues for the first half of fiscal 2010 will be comparable to revenues generated in the first half of last year.
“Also, we are cautiously optimistic that second-half revenues for fiscal 2010 will be higher than first-half revenues based on domestic VOD software upgrade opportunities, additional media services VOD content processing contracts, and increased professional services and maintenance revenue. In addition, we expect to be profitable for the second quarter.”