MAYNARD, Mass. -- SeaChange International, Inc. (Nasdaq: SEAC - News) today announced financial results for its third quarter of fiscal 2006 ended October 31, 2005. Revenues for the quarter were $35.3 million compared to revenues of $26.2 million for its second fiscal quarter ended July 31, 2005, a 35% increase. Revenues for the fiscal 2006 third quarter were 17% lower than last fiscal year's third quarter revenues of $42.6 million. The Company recorded a net loss of $2.1 million, or $0.07 per share, for the third quarter of fiscal 2006 versus a loss of $6.6 million or $0.23 per share in its second quarter of fiscal 2006, and net income of $5.5 million, or $0.19 per diluted share, for the third quarter of fiscal 2005.

In the third quarter of fiscal 2006, total systems revenues for the quarter were $22.0 million. Video-on-Demand (VOD) systems, hardware and software revenues were $11.7 million, including $3.1 million in software revenues from the licensing of the middleware software technology the Company acquired from Liberate Technologies, Inc. in July. Revenues from Advertising systems and Broadcast systems were $6.3 million and $4.0 million, respectively. Service revenues for the quarter were $13.3 million which included $1.2 million of revenues for the period from September 22, 2005 to October 31, 2005 from SeaChange's newly acquired subsidiary, The ON Demand Group. Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) in the third quarter of fiscal 2006 was a loss of $1.0 million.(1)

"The television industry is facing dramatic new opportunities that are changing the way programming is watched and paid for," said Bill Styslinger, president and CEO, SeaChange International. "It is clear on-demand will play a more significant role in the distribution of all forms of television. With the most VOD systems deployed, SeaChange software and servers will play a key role in this emerging trend.

"To take greater advantage of this opportunity, SeaChange has expanded to eight product lines that are integral to the business of on-demand television," said Styslinger. "Already this quarter we've gained small but important contributions to our revenues through our acquisitions and investments. Our new Media Services line, which we established through our acquisition of The ON Demand Group, represents a proven catalyst to use content to drive new opportunities. Our Middleware line, established in part through our acquisition of Liberate assets, is providing new streams of licensing revenue and strategic advantages to the development of our next-generation products. Likewise, our Network products line, established through our investment in Casa Systems, enables us to offer significant benefits in the hardware that will be required by broadband operators around the world as they upgrade their networks.

"Our advertising and broadcast lines are evolving to meet the new requirements of an on-demand business. We expect to gain new revenues from our VOD software. We are also developing new advances in server technology to maintain our leadership."

SeaChange International Inc.