Board of Directors Authorizes Up To $2.25 Million Stock Repurchase Program
BOSTON, Nov. 20, 2023 (GLOBE NEWSWIRE) — SeaChange International, Inc. (OTCPK: SEAC) (the “Company”), a leading provider of video delivery, advertising, streaming platforms, and emerging FAST (Free Ad-Supported Streaming TV services) products, has presented estimated and unaudited preliminary financial results for the three and nine months ended October 31, 2023.
Preliminary Fiscal Third Quarter 2024 Financial Highlights
- Total revenue of approximately $6.6 million
- GAAP net loss of approximately $0.1 million
- Adjusted EBITDA of approximately $0.2 million
- Approximately $16.0 million in cash and cash equivalents and marketable securities combined at quarter end
Preliminary Fiscal Nine Month 2024 Financial Highlights
- Total revenue of approximately $20.7 million
- GAAP net loss of approximately $2.1 million
- Adjusted EBITDA loss of approximately $0.3 million
Adjusted EBITDA Reconciliation (preliminary and unaudited)
To supplement the Company’s unaudited consolidated financial statements, which are prepared and presented in accordance with United States generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP measures, such as adjusted EBITDA. The Company defines non-GAAP loss from operations as GAAP net loss plus stock-based compensation expenses, severance and restructuring costs, transaction costs, other expense, net, and income tax provision, and adjusted EBITDA as non-GAAP loss from operations plus depreciation. The Company discusses non-GAAP loss from operations and adjusted EBITDA, as the Company believes non-GAAP operating loss from operations and adjusted EBITDA are important measures that are not calculated according to GAAP. The Company uses non-GAAP loss from operations and adjusted EBITDA in internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to the board of directors (the “Board”) of the Company, determining a component of bonus compensation for Company executive officers and other key employees based on operating performance, and evaluating short-term and long-term operating trends in our operations. The Company believes that the non-GAAP loss from operations and adjusted EBITDA financial measures assist in providing an enhanced understanding of the Company’s underlying operational measures to manage the business, to evaluate performance compared to prior periods and the marketplace, and to establish operational goals. The Company believes that the non-GAAP financial adjustments are useful to investors because they allow investors to evaluate the effectiveness of the methodology and information used by management in our financial and operational decision-making.
Non-GAAP loss from operations and adjusted EBITDA are non-GAAP financial measures and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. These non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies. The Company expects to continue to incur expenses similar to the financial adjustments described above in arriving at non-GAAP loss from operations and adjusted EBITDA and investors should not infer from our presentation of these non-GAAP financial measures that these costs are unusual, infrequent or non-recurring. The following table includes the reconciliations of our GAAP loss from operations, the most directly comparable GAAP financial measure, to our non-GAAP loss from operations and adjusted EBITDA for the three and nine months ended October 31, 2023.
| Estimated Reconciliation of GAAP to Non-GAAP | ||||||||
| (Unaudited) | ||||||||
| (Amounts in thousands) | ||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||
| October 31, 2023 | October 31, 2023 | |||||||
| GAAP net loss | $ | (105 | ) | $ | (2,093 | ) | ||
| Other (income) expense, net | (284 | ) | (434 | ) | ||||
| Income tax provision | 26 | 109 | ||||||
| GAAP loss from operations | $ | (363 | ) | $ | (2,418 | ) | ||
| Stock-based compensation | 294 | 940 | ||||||
| Severance and restructuring costs | 277 | 327 | ||||||
| Transaction costs | (84 | ) | 569 | |||||
| Non-GAAP loss from operations | $ | 124 | $ | (582 | ) | |||
| Depreciation | 117 | 246 | ||||||
| Adjusted EBITDA | $ | 241 | $ | (336 | ) | |||
Management Commentary
The Company continues to execute its plan to generate profitable growth of its recurring revenue streams. In parallel, the Company continues its process to identify potential strategic partnerships to increase stockholder value through M&A transactions, including evaluating preliminary indications of interests from third parties. There can be no assurance that such discussions will result in definitive documentation or a successful closing of a transaction. While the Company is disclosing its quarterly performance and its M&A process in connection with its new stock repurchase program described below, there can be no assurance that it will continue to do so in the future and may discontinue such disclosures in its sole discretion.
Stock Repurchase Program
On November 17, 2023, the Board authorized the repurchase of up to 750,000 shares of the Company’s common stock with a cap of $2.25 million of the Company’s cash. This authorization was made after the Board’s careful consideration of the Company’s current and projected cash balance and determining that (i) there are lawfully available funds to repurchase some of the Company’s common stock and (ii) the repurchase of such common stock will not render the Company’s cash flow or balance sheet insolvent nor impair the ability of the Company to continue as a going concern. The Board believes the stock repurchase program is advisable and in the best interests of the Company and its stockholders and represents a good investment of its excess cash.
About SeaChange International, Inc.
SeaChange International, Inc. (OTCPK: SEAC) is a trusted provider of streaming video services, cable TV broadcast platforms and advanced advertising insertion technology. The Company partners with operators, broadcasters and content owners worldwide to help them deliver the highest quality video experience to consumers. SeaChange’s StreamVid premium streaming platform enables operators and content owners to cost-effectively launch and grow a direct-to-consumer service to manage, curate and monetize their content as well as form a direct relationship with their subscribers, while its Advanced Advertising Platform helps to protect existing and generate new Video Advertising revenues for Broadcast and OTT businesses. SeaChange enjoys a rich heritage of nearly three decades of video hardware, software and advertising technology. Our team includes expert industry professionals with many years of experience, led by our management and board.
Forward-Looking Statements
Certain statements in this press release and any oral statements made regarding the contents of this press release may constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, as amended to date. Forward-looking statements can be identified by words such as “may,” “might,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “seeks,” “intends,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. Examples of forward-looking statements include, among others, statements we make regarding the Company’s plan to generate profitable growth of its recurring revenue streams, process to identify potential strategic partnerships to increase stockholder value through M&A transactions, the stock repurchase program is advisable and in the best interests of the Company and its stockholders and represents a good investment of its excess cash, and other statements that are not purely statements of historical fact. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of the Company and are subject to a number of known and unknown risks and significant business, economic and competitive uncertainties that could cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. Risks that could cause actual results to differ include, but are not limited to: weakened global economic conditions, including inflation; a reduction in spending by customers on video solutions and services would adversely affect our business, financial condition and operating results; the increase in labor, service and supply costs, including as a result of inflationary pressures; the manner in which the multiscreen video and over-the-top markets develop; our efforts to become a company that primarily provides software solutions; the inability to successfully compete in our marketplace; the failure to respond to rapidly changing technologies related to multiscreen video; the variability in the market for our products and services; the loss of or reduction in demand, or the return of product, by one of the Company’s large customers or the failure of revenue acceptance criteria to have been satisfied in a given fiscal quarter; the cancellation or deferral of purchases of our products or final customer acceptance; a decline in demand or average selling prices for our products and services; our entry into fixed-price contracts, which could subject us to losses if we have cost overruns; warranty claims on our products and any significant warranty expense in excess of estimates; the possibility that our software products contain serious errors or defects; turnover in our senior management; our ability to retain key personnel and hire additional personnel; the failure to achieve our financial forecasts due to inaccurate sales forecasts or other factors, including due to expenses we may incur in fulfilling customer arrangements; the impact of our cost-savings and restructuring programs; the Company’s ability to manage its growth; the risks associated with international operations; risks related to public health pandemics, including the COVID-19 pandemic; the impact of the ongoing conflict in Ukraine and the Middle East on our business; the success and timing of regulatory submissions; litigation regarding intellectual property rights; risk related to protection of our intellectual property; changes in the regulatory environment; significant risks to our business when we engage in the outsourcing of engineering work, including outsourcing of software work overseas; fluctuations in foreign currency exchange rates could negatively impact our financial results and cash flows; and weakened global economic conditions that may harm our industry, business and results of operations. Any forward-looking statements should be considered in light of those risk factors. The Company cautions readers that such forward-looking statements speak only as of the date they are made. The Company disclaims any intent or obligation to publicly update or revise any such forward-looking statements to reflect any change in Company expectations or future events, conditions or circumstances on which any such forward-looking statements may be based, or that may affect the likelihood that actual results may differ from those set forth in such forward-looking statements.
SeaChange Investor Contact:
Mark Szynkowski
Chief Financial Officer
T: +1 978-897-0100
E: mark.szynkowski@schange.com
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