SeaChange revenues up 5.5% thanks to VOD
SeaChange International reported that revenues for the first fiscal quarter of 2007 were $33.2 million, a 5.5% increase from revenues of $31.5 million for the same quarter a year ago.
The net loss for the first quarter was $4.4 million, or $0.15 per share, compared with a net loss of $0.6 million, or $0.02 per share, for the first period last year. Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) in the first quarter of fiscal 2007 was a loss of $1.9 million as compared with a loss of $0.4 million in the first quarter of fiscal 2006.(1)
The Company ended the April 30, 2006 quarter with cash, cash equivalents and short- and long-term investments of $52.1 million and no long-term debt, compared to $60.9 million on January 31, 2006. Included in the Company’s use of cash during the quarter was an $8.0 million payment in April 2006 related to the conclusion of the nCube patent litigation.
Total revenues in the first quarter of fiscal 2007 from the Company’s Broadband segment, which includes Video on Demand (VOD) and Advertising Insertion hardware and software was $16.3 million, which was $2.0 million higher than comparable revenue in the fourth quarter of fiscal 2006. Sequential revenue growth in the Broadband segment in the first quarter was driven by a 71 percent increase in VOD systems revenue to $10.8 million from $6.3 million in the fourth quarter of last year, as the Company saw a significant rise in VOD order activity and revenue from North American cable providers. Partially offsetting this increase was a $2.0 million sequential quarterly reduction in Advertising Insertion revenue resulting from delays in receiving customer acceptance for previously shipped product as well as a lower level of customer orders. Both the Broadcast and Services segments showed $1.0 million sequential revenue declines in the first quarter of fiscal 2007.
“Our VOD systems revenues in the first quarter nearly doubled from the fourth quarter of last year, and have reached their highest level since the second quarter of fiscal 2006,” said Bill Styslinger, president and CEO of SeaChange International. “We expect to see VOD revenues continue to grow significantly in the second quarter, and we believe that SeaChange will have a strong second quarter with a return to positive EBITDA.”
Styslinger continued, “We’ve seen a definite uptick in our North American VOD business evidenced by an increase in our VOD order rate. In fact, shipments and unfilled orders this quarter have already exceeded total VOD system revenue recorded in the fourth quarter of fiscal 2006.”
“We are negotiating several, multi-year software, hardware and service purchase agreements that we believe we will be able to finalize over the remainder of this year,” Styslinger added. “We have also closed a number of significant new international accounts in the first quarter. With our account growth outside of North America, as well as our success in cross-selling content services, middleware, network products and other products and services, we are beginning to see the benefit of our investments in diversifying from an historically North American VOD systems driven revenue base.”
Styslinger concluded, “The strength of our VOD business and an anticipated pick-up in Broadcast product revenues supports our belief that the Company will see significant revenue growth this quarter that will continue for the remainder of the year. We expect the first half of this year will be better than the second half of last year, and the second half of this year will be better still.”