SeaChange International, Inc. (SEAC)
F3Q10 Earnings Call
December 2, 2009 5:00 pm ET
Martha Schaefer – Investor Relations
William C. Styslinger, III – Chairman of the Board & Chief Executive Officer
Edward Dunbar – President, Chief Operating Officer
Kevin M. Bisson – Chief Financial Officer, Senior Vice President Finance and Administration, Treasurer & Secretary
Yvette Kanouff – Chief Strategy Officer
Anthony William Kelly – Senior Vice President
Blair King – Avondale Partners, LLC
Todd Mitchell – Kaufman Bros.
[John Zoro – Bergeron Capital]
Greg Mesniaeff – Needham & Company
Previous Statements by SEAC
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SeaChange released results for the third quarter fiscal 2010 today after the market closed. We also publically distributed our prepared remarks with our earnings release and will focus on your questions on this call today. If you do not have the material please go to the investor page on our website to download both the press release and the remarks. I welcome your comments and suggestions related to this format for our earnings calls and anything else that we can do to improve our communications with you.
As always, I’d like to remind you that the information we’re about to discuss today may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations but are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. These risks are outlined in our SEC filings including our annual report on Form 10K filed April 14, 2009.
Any forward-looking statements should be considered in light of those factors. Any redistribution, retransmission or rebroadcast of this presentation in any form without the express written consent of SeaChange International is prohibited. Here today with me I have Bill Styslinger, our Chairman and CEO; Ed Dunbar, our President; Kevin Bisson, our CFO; Yvette Kanouff, our Chief Strategy Officer; and joining us on the phone from the UK we have Tony Kelly, President of our On-Demand Group. Bill has a few opening comments and then we’re going to go straight to your questions.
William C. Styslinger, III
To start with let me say I’m happy with our $53 million of revenue in the quarter especially considering the poor climate for the sale of systems we’re advertising. I like what I see looking forward so we’ve provided you a preliminary outlook of $225 to $235 million of revenue for next year. Our third quarter results were somewhat colored by the accounting for our acquisition of eventIS so we provided a non-GAAP view and we will continue to provide a non-GAAP view.
eventIS was with us just 60 days in the quarter but in that time they’ve continued to pace winning of new European accounts such as UPC Netherlands and also finding prospects for other SeaChange products within their existing accounts. So, the integration of the two companies is going quite well.
The SeaChange strategy is to provide video systems and services to service providers for their networks and for their clients’ homes as they provide television services to the TV, PC and local devices. We do this via three business segments: media services; software; and service and storage. Media services continues to grow rapidly so on the call with us today is Tony Kelly, President of that operation [ODG to take questions you might have about his ability to continue that growth and I assure you he has excellent prospects. Yvette is here as well to help you with your questions concerning the very good growth prospects we see in software and storage and servers.
We are now happy to take your questions.
(Operator Instructions) Your first question comes from Blair King – Avondale Partners, LLC.
Blair King – Avondale Partners, LLC
I just have a few questions, you had mentioned media services I was going to ask you about that, if you could give some progress update on Turk Telekom and OCE in Greece and any other content service contracts that you think might help drive the top line, that would be really helpful for us.
Anthony William Kelly
A couple of things really, it’s been a really interesting year for us. If you look at where we were probably about three years ago we were in one territory and on one platform now we’re in six territories and on 10 platforms which is indicative of how we are growing. But, to give you some idea Virgin one of our main accounts, had its record year for the use of subscription video on-demand so the rate of usage that the customers used the content is growing almost exponentially, it’s grown 700% in three years.
That’s quite a mature market and we’ve just recently launched OTE which is a Greek national telco with an IPTV service and the early trends on that service are exactly the same as what we see in some of our other markets so we’re very encouraged by what that can mean. Interesting for us, unlike Virgin services we own the content services on OTE so for every subscriber that signs up to the service we are in a variable revenue every time somebody signs up as opposed to Virgin where we just got a service fee for the year.