Demand for its VOD for television software helped SeaChange International (NASDAQ: SEAC) top Wall Street expectations for the first quarter, bouncing back from a dismal 4Q2009 when it posted a 99 percent drop in profit compared to the like quarter a year earlier, announced that president and COO Ed Dundar was leaving the company (chief strategy officer Yvette Kanouff moved into the president's seat), and saying job cuts were on the way.
The Acton, Mass.-based company said total revenues in the first quarter were $54.1 million, up 11 percent, or $5.2 million, from the first quarter of 2010, topping analyst expectations of $53.7 million. Non-GAAP net income for the quarter was $3.1 million, or 10 cents per share, compared with non-GAAP net income of $2.2 million, or 7 cents per share, for the same period last year. Analysts had expected the company to show a profit of about 8 cents per share.
GAAP net income for the first quarter of fiscal 2011 was $24.6 million, or 78 cents per share compared with GAAP net income of $1 million, or 3 cents per share, for the first quarter of fiscal 2010.
SeaChange ended the quarter with cash equivalents and marketable securities of $85.6 million and no debt. Proceeds of $34.1 million from the Company's divestiture of its investment in Casa Systems, and improved working capital performance driven by increased receivables collections were partially offset by the purchase of VividLogic during the first quarter.
"We're very pleased to report a strong first quarter in our core software business," said Bill Styslinger, Chairman and CEO, SeaChange. "Among the notable contributing factors was our ability to secure a highly strategic VOD back office win to place our Axiom software in all locations at one of our largest North American cable customers. Additionally, our VividLogic acquisition generated contract renewals and extensions with key operators."
Styslinger said SeaChange has grown its software business while reducing overall research and development costs, primarily by offshoring some development and support, by introducing new market advantages from our recent acquisitions, and through the creation of a common software platform comprising interchangeable components.
"We've continued to evaluate our products and take aggressive action, as demonstrated most recently by the divestiture of SeaChange's minority stake in Casa Systems, which resulted in a nearly fourfold return on our investment," he said.
Styslinger said the company expects a second-quarter profit of 10-14 cents per share on revenues of $53 million to $55 million. SeaChange also has reinstated its stock buyback program.
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