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SeaChange boosted by next-gen upgrades

SeaChange International has reported fourth quarter fiscal 2015 revenue of $31.3 million and US GAAP loss from operations of $5.3 million for the fourth quarter of fiscal 2015, compared to fourth quarter fiscal 2014 revenue of $35.6 million and US GAAP operating loss of $0.9 million.  The Company’s US GAAP fourth quarter fiscal 2015 results include non-GAAP charges of $3.6 million, which consisted primarily of severance and other restructuring costs, stock-based compensation, amortidation of intangible assets from prior acquisitions, and professional fees from divestitures and litigation.

For the full fiscal year ended January 31st 2015, the company posted revenues of $115.4 million and US GAAP operating loss of $26.5 million, compared to revenues of $146.3 million and US GAAP operating loss of $1.6 million, from continuing operations in the same prior period.  The company posted a non-GAAP loss from operations for fiscal 2015 of $13.8 million, compared to an $8.4 million operating income, from continuing operations for the same prior period.

“Our Fiscal 2015 was focused intensively on delivering our next generation back office and gateway products to new customers and upgrading existing customers to ensure their new multiscreen revenue and subscriber retention opportunities,” said Jay Samit, Chief Executive Officer, SeaChange.  “In the fourth quarter, we were very pleased to sign a new, large cable service provider customer in Russia for an Adrenalin rollout this year.  We also began shipping Adrenalin to upgrade another North American Axiom video-on-demand customer in support of its multiscreen expansion.  Also during the fourth quarter, our Nucleus video gateway product entered commercial deployment into cable homes in Poland.  We anticipate this success will be followed by Nucleus rollouts in other markets in Europe and the Americas this year.”

“I’m pleased with the speed at which SeaChange has enacted its strategy to bring a comprehensive OTT platform to our existing service provider customers and create engagement with new types of customers including broadcasters, television programmers, studios and other owners and distributors of premium video,” Samit continued.  “Today, SeaChange’s OTT go-to-market activity has been aided by a rapid integration of Timeline Labs into our global organisation.  Further out, I anticipate that an influx of new product capabilities from our Timeline Labs acquisition, particularly in the realm of data analytics, will bolster SeaChange’s competitive strengths and core product value.”

Anthony Dias, Chief Financial Officer, stated, “We are very encouraged by the increasing interest in next generation product upgrades by existing customers, as well as new customer opportunities, particularly for our new cloud-based offerings, including Rave and Timeline.  Our development efforts are focused on products that enable SaaS models for opportunities such as OTT and we expect these initiatives to begin to contribute positively to revenue in fiscal 2016.  Over time, these efforts will increase our recurring revenue base and margins and improve our ability to predict future financial performance.  In the short term, as some of our smaller service provider customers begin to shift to cloud-based models, we expect to see some transition in the timing of revenue recognition, from up-front product revenue recognized at the beginning of a contract under our perpetual software license model, to a more gradual increase in revenue by means of recurring revenue under multi-year contracts.”

Commenting on the Company’s outlook, Dias concluded, “We anticipate first quarter fiscal 2016 revenue to be in the range of $22 million to $24 million, and non-GAAP operating loss to be in the range of $0.25 to $0.19 per basic share.  For full fiscal 2016, we anticipate revenues to be in the range of $105 million to $115 million and non-GAAP operating loss to be in the range of $0.38 to $0.16 per basic share.  Our full year guidance reflects a moderate decrease in product revenue related to our transition to a SaaS model and legacy product revenue declines in the range of $7 million to $10 million.  We’ve successfully transitioned our Company to a point where legacy product revenue will become less than five million dollars starting in fiscal 2017.”

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