Stocks/Earnings

SeaChange Pushes Back Restructuring Wrap Up

Now expects to complete the process a quarter or two later than originally expected 6/07/2017 10:43 AM Eastern

Multiscreen video specialist SeaChange International expects to wrap up a restructuring program a quarter or two later than originally expected, but doesn’t believe the delay will affect its grander plan to return to profitability.

“We now anticipate that some restructuring actions will be delayed into Q3 and Q4 of fiscal 2018,” Ed Terino, SeaChange’s CEO, said Tuesday on the company’s fiscal Q1 call.

Originally, SeaChange hoped to complete the restructuring by the end of fiscal Q2.

RELATED: SeaChange Eyes End of Restructuring Process

“While there may be some slippage in cost savings in fiscal 2018, we do not believe that our goal of achieving profitability in the second half of fiscal 2018 is in risk due to these delays,” he said.

When the program is complete, SeaChange expects to have about 300 employees (versus the 660 it had at the end of fiscal 2016), and to have transferred more of its engineering responsibilities from the Philippines to Poland and shift to some of our professional services capacity to third parties.

SeaChange posted fiscal Q1 revenues of $16.7 million and a GAAP loss of $5.5 million (16 cents per share), versus year-ago revenues  $21.6 million and a loss of $9.6 million (28 cents per share). Q1 GAAP result  included charges of $3.8 million, primarily comprised of severance and other restructuring costs.

Liberty Global was SeaChange’s lone 10% or greater revenue customer in the quarter, representing 28% of revenues in the period. International revenues accounted for 58% of total revenues.

On the product front, Terino said SeaChange is ahead of schedule for NitroX, its multiscreen user experience for set-tops and connected devices that was introduced last year.

The first half of the year, NitroX wrapped support for the iPad, Android tablets, certain smart TVs, Chromecast and Amazon Fire TV, with support for Apple TV, Roku and web browsers on deck for the second half of SeaChange’s fiscal year.

The exec said SeaChange is also moving ahead with upgrades to Adrenalin, its multiscreen backoffice platform, to include time-shift TV and network DVR.

Bigger picture, Terino said SeaChange is seeing more opportunities with mobile carriers and expects to “close several of these greenfield opportunities in the next several quarters.” He said the company also has about 30 opportunities in the pipeline for OTT deals, with quotes out for about half of them.

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