SeaChange Revenues Plummet in Q1
ACTON, Mass. -- SeaChange International, Inc. (NASDAQ: SEAC) today reported first quarter fiscal 2020 revenue of $8.5 million and a net loss of $10.8 million, or $0.30 per basic share, compared to first quarter fiscal 2019 revenue of $14.9 million and a net loss of $5.5 million, or $0.15 per basic share.
Mark J. Bonney, Executive Chairman, SeaChange, said, "Our fiscal first quarter involved numerous significant changes including the acquisition of Xstream, settlement with our largest shareholder, the addition of two new independent directors, the addition of industry veteran Yossi Aloni as our Chief Commercial officer, the adoption of a new go-to-market strategy and migration to a comprehensive end-to-end product offering, our Framework offering, for our customers, as well as the departure of our CEO. While I am not satisfied with the Company's financial performance during the quarter, I am pleased with our progress towards achieving our annual goals of generating revenue growth and returning to positive cash flow in the second half of this fiscal year."
The Company's U.S. GAAP first quarter fiscal 2020 results included non-GAAP charges of $1.2 million, which consisted primarily of professional fees of $1.1 million associated with the acquisition of Xstream A/S, the resignation of the Company's CEO and the re-alignment of the Board of Directors. Also included was amortization of intangible assets from prior acquisitions of $0.3 million, and severance and other restructuring costs of $0.2 million.
Update on the Company's key metrics for fiscal 2020:
- Goal: Close 20-25 significant deals for multiple product/service offerings on an annual basis. Progress: Closed five significant deals since the beginning of the fiscal year.
- Goal: Increase total annual revenue in the low to mid double digits percentage range to $70-80 million, despite lower year-over-year service revenues. Progress: Despite the impact of significantly cleansing the backlog in Q1, the Company is encouraged by the growth of the Framework deal pipeline and remains confident in the full year revenue target.
- Goal: Maintain GAAP gross margins in the low 60 percentage range. Progress: Margins produced in the initial Framework deals are consistent with this goal.
- Goal: Complete the development of three significant new product offerings. Progress: Product development efforts are on track to achieve this goal.
- Goal: Continue to reduce costs by focusing on reducing essential third-party costs and eliminating non-essential costs. Progress: Efforts to reduce third-party costs are ahead of plan and will largely be completed in Q2 with full quarterly impact beginning in Q3.
- Goal: Deliver GAAP operating results between a loss of $0.09 per basic share to income of $0.07 per fully diluted share and non-GAAP operating income between $0.03 to $0.19 per fully diluted share. Progress: Management continues to believe this goal can be met for the full year.
- Goal: Increase cash by $3-6 million to $33-36 million, from approximately $30 million at the end of fiscal year 2019. Current outlook: The overall cash goal has not changed but is being altered to reflect the newly-announced $5 Million Share Repurchase Program. The new goal is a cash balance of $28-31 million at year-end.