SeaChange CEO Outlines Growth PlanVendor Counting on Multiscreen Backoffice Upgrades and New Markets to Offset Shrinking Demand for Legacy Products 4/10/2013 8:15 AM Eastern
SeaChange International CEO Raghu Rau spent a good part of the company's fourth quarter call Wednesday morning outlining the company's growth playbook as SeaChange looks to offset waning demand for its legacy portfolio with its new line of multiscreen-focused products.
A big focus going forward as SeaChange looks to achieve "double-digit long-term growth," he said, will be upgrading existing cable customers to Adrenalin, SeaChange's next-gen, multiscreen backoffice platform and Infusion advertising system, and stealing share away from competitors as service providers look to freshen up their systems.
SeaChange will also seek out additional design wins with service providers for its Nucleus software for set-tops and gateways, expand further into the mobile and IPTV service provider markets and pursue more business in Asia, the Middle East and Africa.
SeaChange, which counts Cisco Systems and Ericsson among its key competitors, did see an uptick from new products, which represented 53 percent of total product sales in the fourth quarter, up from 33 percent in the previous period. For the quarter, SeaChange posted net income of $6.9 million, or 21 cents per share, on revenues of $44.57 million. Analysts were expecting earnings of 20 cents per share on revenues of $44.69 million.
Among new product categories, SeaChange says it now has more than 40 design wins for Adrenalin and expects those deployments to come together over the next 18 months. Among them, Liberty Global is using Adrenalin to help power Horizon TV, a hybrid video service that supports both QAM and IP video connections and a cloud-based guide.
SeaChange incurred severance charges of $400,000 in the fourth quarter, noting that it eliminated 17 positions in the period. It ended the quarter with $120.9 million in cash and cash equivalents, up $20.9 million from the end of the third quarter.
Looking ahead, SeaChange expects a first quarter earnings to be in the range of 1 cent to 4 cents per share on revenues in the range of $34 million to $36 million.
SeaChange shares were down 36 cents (3.16%) , to $11.05 each, in mid-day trading Wednesday.