Provides Positive Earnings Outlook for Fiscal 2013
For the fiscal year ended,
"With intense focus on execution, we ended fiscal 2012 with our
strongest quarterly operating performance of the year," said
The Company ended fiscal year 2012 with cash, cash equivalents and
marketable securities of
"We are excited about the prospects for a transformed
The Company will host its fourth quarter and full year fiscal 2012
conference call on
Ranked among the top 250 software companies in the world,
SeaChange's hundreds of customers are many of the world's most powerful
media brands including all major cable operators in the
Safe Harbor Provision
Any statements contained in this press release that do not describe historical facts, including without limitation statements regarding the divestiture of the Broadcast Servers and Storage business unit, including the potential impact on the Company, the Company's business focus and future financial performance, are neither promises nor guarantees and 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 assumptions and expectations, but are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. Factors that could cause actual future results to differ materially from current expectations include the following: the continued growth, development and acceptance of the multi-screen video market; the loss of one of the Company's large customers; the ability of the Company to transition to a pure-play software company; the effectiveness of the Company's cost-cutting measures; the uncertainties introduced by our evaluation of strategic alternatives; the cancellation or deferral of purchases of the Company's products; the length of our sales cycles; the Company's ability to manage its growth; the ability of the Company to successfully sell its Broadcast Servers and Storage business unit and non-core assets; the effectiveness of the Company's disclosure controls and procedures and internal controls over financial reporting; the Company's ability to protect its intellectual property rights and the expenses that may be incurred by the Company to protect its intellectual property rights; an unfavorable result of current or future litigation; content providers limiting the scope of content licensed for use in the video-on-demand market; the Company's ability to successfully introduce new products or enhancements to existing products on a timely basis; the Company's ability to compete in its marketplace; the Company's ability to respond to changing technologies; the risks associated with international sales and operations; changes in the regulatory environment; the Company's ability to integrate the operations of acquired subsidiaries; the Company's ability to hire and retain highly skilled employees; and increasing social and political turmoil.
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
Use of Non-GAAP Financial Information
To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures that we believe are helpful in understanding our past financial performance and future results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand and manage our business and make operating decisions. Our non-GAAP financial measures include adjustments based on the following items, as well as the related income tax effects and adjustments to the valuation allowance:
Revenue: Business combination accounting rules require us to account for the fair value of customer contracts assumed in connection with our acquisitions. In connection with the acquisitions of eventIS Group B.V. on September 1, 2009, and VividLogic, Inc. on February 1, 2010, the book value of our deferred software revenue was reduced by approximately $6.0 million in the adjustment to fair value. Because these customer contracts may take up to 18 months to complete, our GAAP revenues subsequent to these acquisitions do not reflect the full amount of software revenues on assumed customer contracts that would have otherwise been recorded by eventIS Group B.V. and VividLogic, Inc. In addition, we accelerated revenue recognition on a significant terminated contract in fiscal 2011. We believe these adjustments are useful to investors as a measure of the ongoing performance of our business because we have historically experienced high renewal rates on similar customer contracts, although we cannot be certain that customers will renew these contracts.
Stock-based compensation expenses: We have excluded the effect of stock-based compensation and stock-based payroll expenses from our non-GAAP operating expenses and net income measures. Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods.
Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP operating expenses and net income measures. Amortization of intangibles is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Investors should note that the use of intangible assets contributed to revenues earned during the periods presented and will contribute to future period revenues as well. Amortization of intangibles assets will recur in future periods.
Acquisition related costs: We incurred significant expenses in connection with our acquisitions of eventIS Group B.V. and VividLogic, Inc. and also incurred certain other operating and non-operating expenses, which we generally would not have otherwise incurred in the periods presented. Acquisition related and other expenses consist of transaction costs, costs for transitional employees, other acquired employee related costs, integration of related professional services and changes in contingent liabilities related to estimated earn-out payments. We believe it is useful for investors to understand the effects of these items on our total operating expenses.
Restructuring: We incurred significant expenses in connection with selected headcount reductions, a write-down of inventory to net realizable value reflecting the discontinuance of certain inventory components, and the disposal of fixed assets. We believe it is useful for investors to understand the effects of these items on our total operating expenses.
Strategic alternatives-related costs: We incurred significant legal and other professional fees in connection with the Company's review of strategic alternatives. We believe it is useful for investors to understand the effects of these items on our total operating expenses.
Income from sale of investments in affiliates: For fiscal 2011 only, this reflects the gain, excluding any tax effects, on the sale of our investment in Casa Systems. This is considered a one-time event and not included in the financial results of our continuing operations.
Impairment of asset held for sale: We incurred a significant write-down of an owned property in connection with the divesture of our former servers and storage business segment. We believe it is useful for investors to understand the effects of this item on our other expenses.
Income tax expense (benefit): The income tax adjustment reflects the effective tax rate for the year in which the non-GAAP adjustment occurs and excludes any changes in the tax valuation allowance.
|Condensed Consolidated Balance Sheets|
|(in thousands, except share data)|
|Cash and marketable securities||
|Accounts receivable, net||55,145||54,487|
|Prepaid expenses and other current assets||10,760||10,731|
|Assets held for sale||646||-|
|Property and equipment, net||30,566||34,858|
|Goodwill and intangible assets, net||87,401||94,985|
|Assets related to discontinued operations||5,465||5,769|
|Liabilities and Stockholders' Equity|
|Accounts payable and other current liabilities||$||31,914||$||31,953|
|Other long term liabilities||9,204||12,392|
|Deferred tax liabilities and income taxes payable||7,727||7,735|
|Liabilities related to discontinued operations||2,779||3,326|
|Total stockholders' equity||210,938||209,142|
|Total liabilities and stockholders' equity||$||299,035||$||305,191|
|Condensed Consolidated Statement of Operations - Unaudited|
|(in thousands, except per share data)|
|Three Months Ended||Twelve Months Ended|
|Cost of revenues||25,387||26,312||99,693||98,832|
|Research and development||9,984||10,340||40,692||44,569|
|Selling and marketing||4,812||5,156||21,619||21,055|
|General and administrative||5,623||6,076||24,116||23,647|
|Amortization of intangibles||955||847||3,923||3,359|