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SeaChange Posts Solid Q1

Video-on-demand hardware and software provider SeaChange International announced strong financial results for its fiscal 2011 first quarter ended April 30, 2010, recording total revenues of $54.1 million, 11% higher than total revenues of $48.9 million for the same period in fiscal 2010.

SeaChange recorded net income for the quarter of $24.6 million, or $0.78 per share, compared with net income of $1.0 million, or $0.03 per share, for the first quarter of fiscal 2010.  That was in driven in large part by the sale of SeaChange’s equity investment in CMTS vendor Casa Systems, which generated proceeds of $34.1 million.

Non-GAAP net income for the first quarter was $3.1 million, or $0.10 per share, compared with non-GAAP net income of $2.2 million, or $0.07 per share, for the same period last year.

SeaChange ended the first quarter of fiscal 2011 with cash, cash equivalents and marketable securities of $85.6 million and no debt compared to $48.5 million and no debt at the end of the fourth quarter of fiscal 2010.

The company experienced continued growth in its Software segment as it is becoming less and less reliant on sales of VOD server and commercial insertion hardware, once the mainstay of its business. Total revenues from the Software segment were $40.9 million, which were $10.3 million or 34% higher than Software segment revenues in the first quarter of last year, driven mainly by higher Axiom and VOD Advertising product revenue from a large North American cable television provider.

SeaChange’s Servers and Storage segment, which includes both VOD and broadcast playout hardware, generated $6.8 million of revenue for the first quarter of fiscal 2011, which was $7.3 million lower than comparable revenue for the first quarter of fiscal 2010.  SeaChange said the decrease in Servers and Storage revenues between years was due to lower shipments of VOD servers to North American service providers when compared to an unusually high level of shipments in last year’s first quarter.

The company also recorded Media Services segment revenues of $6.4 million, which was $2.2 million, or 51% higher than the first quarter of last year. That growth was spurred by new content services contracts from customers in France and Dubai and increased content processing revenues from customers in Greece and Turkey, said the company.

“We’re very pleased to report a strong first quarter in our core software business,” said SeaChange Chairman/CEO Bill Styslinger in a statement. “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 [a set-top software provider] acquisition generated contract renewals and extensions with key operators.”