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August 30, 2005

SeaChange financials worsen; blames VOD

ITVT reports that VOD equipment provider, SeaChange International, has released preliminary financial results for its fiscal second quarter (2006), ended July 31st. SeaChange says that the results are preliminary, because it is currently completing an analysis of how to properly account for an $8.3 million investment in cable edge device manufacturer, Casa Systems.

    • Revenues totaled $26.2 million, compared to $43 million for the year- ago quarter, a 39% decrease.

    • Net losses totaled $6.6 million, or $0.23 per diluted share, compared to net income of $3.3 million, or $0.12 per diluted share, for the year- ago quarter.

    • VOD systems revenues totaled $12 million, compared to $25.2 million for the year-ago quarter.

    • Service revenues totaled $11.8 million, compared to $10.6 million for the year-ago quarter.

    • The company anticipates its revenues for the fiscal year as a whole will be lower than guidance issued previously at $160 million. However, it says it believes that the second half of the fiscal year will see better financial results, and that the results for the first half of next year will improve upon those results.

Bill Styslinger blamed the decline in its revenues and earnings on a slowdown in demand for VOD equipment on the part of cable operators and that telco demand for VOD equipment has not grown as quickly as had been anticipated:

"Although telco initiatives are moving forward around the world, their VOD deployments are later than we anticipated. In the US, cable operators' VOD system spending has slowed, however we do expect that demand will increase as they extend their digital simulcast installations."

I recall reporting a similar dynamic in the first quarter; that is, lower than expected revenue and hope for the future.

SeaChange's telco customers include NTT in Japan, Telus and Manitoba Telecom in Canada, and Verizon in the US. Its cable customers include Comcast and Time Warner in the US, and ntl and Telewest in the UK.

Posted by Martino Mingione on August 30, 2005 09:28 AM

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