In an unexpected move, multiscreen video company SeaChange International announced Thursday that company vet Edward Terino has been named CEO after the board of directors terminated the employment of prior CEO Jay Samit.
Terino had been serving as SeaChange’s COO since June 2015, and will continue to serve on the company board, which he joined in 2010, the company said.
Samit’s exit comes less than two years after he was named CEO in the fall of 2014. At the time, Samit, a self-described serial entrepreneur and former president of social video chat company ooVoo, had succeeded Raghu Rau. Samit also came on board as SeaChange pushed ahead with a strategy to become more software-focused and next-gen multiscreen products.
SeaChange shares were down 7.55% (42 cents) to $5.14 each in after-hours trading Thursday.
Update: Speaking on SeaChange’s earnings call Thursday, Steve Craddock, the company’s board chairman, said Samit “was terminated without cause by the Board of Directors. On behalf of the Board, I wish Jay well in his future endeavors.”
Craddock, elected chairman of SeaChange in July 2015, added that the board stepped up its review of initiatives that Samit undertook at SeaChange, particularly its acquisition of Timeline Labs, as well as developments involving NewCoin LLC (a data-focused venture with Fox, Tribune Media, Univision and Timeline Labs, that looked to improve local market TV audience measurement across linear and digital platforms) and SeaChange’s expansion into the over-the-top market (via a platform called Rave), and concluded that “we were not getting the financial results that we expected from many of these initiatives and that the capital required to continue to fund Timeline and NewCoin in 2016 would not be in the best interest of the shareholders.
"In addition, the Board determined that the opportunity for SeaChange in terms of revenue growth and profitability was much stronger with our core business," he said.
SeaChange said it's prepared to move forward with Terino at the helm.
“Since joining the team as COO, Ed’s performed a crucial role in driving SeaChange’s operations to far greater efficiency, quality and strategic orientation toward profitability and growth,” Craddock said in a statement. “This rigorous commitment to strengthening our fundamentals has translated into increasing customer success and assurance for SeaChange’s long-term position as provider of the premier delivery, management and monetization software solutions for television service providers and emerging video markets.”
“We’ve built a strong management team that’s well matched to the global opportunity for empowering service providers and content owners to fully leverage their video across multiple business models,” Terino added. “We’re eager to complete the work of optimizing our focus on software products and ramping up go-to-market initiatives to capture a larger share of our core market and new sectors.”
SeaChange also posted fiscal Q4 results Thursday. The company posted revenues of $27.2 million, down from 31.3 million in year-ago quarter, and a GAAP loss from operations of $22.1 million, or 66 cents per basic share, widened from a loss of $5.3 million, or 16 cents per basic share.
SeaChange said its GAAP fourth quarter fiscal 2016 results included non-GAAP charges of $22.3 million, which consisted primarily from the loss from impairment of Timeline Labs net assets, severance and other restructuring costs, stock-based compensation, amortization of intangible assets from prior acquisitions, and other non-operating expense professional fees.
SeaChange, then under Samit, acquired Timeline Labs, a company focused on social TV data, in December 2014.
“While we are disappointed in our fiscal 2016 financial performance, we did make significant operational improvements during the year,” Terino said. “As we enter fiscal 2017, we intend to further increase operational efficiencies and deliver new software product innovations that capitalize on our core competencies in video delivery, content management and monetization.
He added that SeaChange is looking to leverage R&D investments, to spend more efficiently and to introduce new cloud-based software products that will provide opportunities in its core TV service provider segment and adjacent markets. The company also plans to boost sales and marketing capabilities as it seeks those market opportunities.
“We believe that these actions will enable SeaChange to return to revenue growth and profitability on a full year basis in fiscal 2017,” Terino said.
“As previously disclosed, we have implemented cost-saving actions with respect to restructuring our Timeline operations and the termination of our prior CEO, Jay Samit, which will enable us to achieve annualized cost savings of approximately $7 million,” SeaChange CFO Anthony Dias said.