Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT FORM 8-K - SEACHANGE INTERNATIONAL INC | v314495_8k.htm |
| EX-2.1 - EXHIBIT 2.1 - SEACHANGE INTERNATIONAL INC | v314495_ex2-1.htm |
Exhibit 99.1
SEACHANGE INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
(in thousands, except per share data)
| For the Year Ended January 31, 2012 | ||||||||||||||||
| Sale of | Other | |||||||||||||||
| Company | On Demand | Pro Forma | Company | |||||||||||||
| Historical (1) | Group Limited (2) | Adjustments | Pro Forma | |||||||||||||
| Assets | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash and cash equivalents | $ | 80,585 | $ | (2,849 | ) | $ | 21,849 | (a) | $ | 99,585 | ||||||
| Restricted cash | 1,200 | - | - | 1,200 | ||||||||||||
| Marketable securities | 7,855 | - | - | 7,855 | ||||||||||||
| Escrow receivable | - | - | 4,218 | (b) | 4,218 | |||||||||||
| Accounts receivable, net of allowance for doubtful accounts of $972 in 2012 and $995 in 2011, respectively | 49,079 | (8,371 | ) | - | 40,708 | |||||||||||
| Unbilled receivables | 6,066 | - | - | 6,066 | ||||||||||||
| Inventories, net | 10,218 | - | - | 10,218 | ||||||||||||
| Prepaid expenses and other current assets | 8,695 | (2,725 | ) | 54 | (c) | 6,024 | ||||||||||
| Assets held for sale | 646 | - | - | 646 | ||||||||||||
| Deferred tax assets | 2,065 | - | - | 2,065 | ||||||||||||
| Current assets related to discontinued operations | 3,110 | - | - | 3,110 | ||||||||||||
| Total current assets | 169,519 | (13,945 | ) | 26,121 | 181,695 | |||||||||||
| Property and equipment, net | 30,566 | (10,404 | ) | - | 20,162 | |||||||||||
| Marketable securities, long-term | 4,140 | - | - | 4,140 | ||||||||||||
| Investments in affiliates | 3,013 | - | - | 3,013 | ||||||||||||
| Intangible assets, net | 23,761 | (1,329 | ) | - | 22,432 | |||||||||||
| Goodwill | 63,640 | (19,226 | ) | - | 44,414 | |||||||||||
| Other assets | 1,515 | - | - | 1,515 | ||||||||||||
| Deferred tax assets, long-term | 526 | (343 | ) | 343 | (c) | 526 | ||||||||||
| Non-current assets related to discontinued operations | 2,355 | - | - | 2,355 | ||||||||||||
| Total assets | $ | 299,035 | $ | (45,247 | ) | $ | 26,464 | $ | 280,252 | |||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable | $ | 9,362 | $ | (1,148 | ) | $ | - | $ | 8,214 | |||||||
| Other accrued expenses | 19,271 | (5,926 | ) | - | 13,345 | |||||||||||
| Customer deposits | 3,067 | - | - | 3,067 | ||||||||||||
| Deferred revenues | 31,835 | (738 | ) | - | 31,097 | |||||||||||
| Deferred tax liabilities | 214 | (214 | ) | 214 | (d) | 214 | ||||||||||
| Current liabilities related to discontinued operations | 2,779 | - | - | 2,779 | ||||||||||||
| Total current liabilities | 66,528 | (8,026 | ) | 214 | 58,716 | |||||||||||
| Deferred revenue, long-term | 4,638 | - | - | 4,638 | ||||||||||||
| Other liabilities, long-term | 8,461 | (622 | ) | 622 | (d) | 8,461 | ||||||||||
| Distributions and losses in excess of investment | 743 | (738 | ) | - | 5 | |||||||||||
| Taxes payable, long-term | 3,043 | - | - | 3,043 | ||||||||||||
| Deferred tax liabilities, long-term | 4,684 | - | - | 4,684 | ||||||||||||
| Total liabilities | 88,097 | (9,386 | ) | 836 | 79,547 | |||||||||||
| Commitments and contingencies | ||||||||||||||||
| Stockholders' Equity: | ||||||||||||||||
| Common stock, $0.01 par value; 100,000,000 shares authorized; 32,534,444 and 31,876,815 shares issued; 32,494,660 and 31,837,031 shares outstanding, respectively | 326 | (22,208 | ) | 22,208 | 326 | |||||||||||
| Additional paid-in capital | 213,880 | (8,094 | ) | 8,094 | 213,880 | |||||||||||
| Treasury stock, at cost 39,784 and 39,784 common shares, respectively | (1 | ) | - | - | (1 | ) | ||||||||||
| Accumulated income (deficit) | 6,507 | (5,559 | ) | (11,705 | ) | (10,757 | ) | |||||||||
| Accumulated other comprehensive loss | (9,774 | ) | - | 7,031 | (2,743 | ) | ||||||||||
| Total stockholders' equity | 210,938 | (35,861 | ) | 25,628 | (e) | 200,705 | ||||||||||
| Total liabilities and stockholders' equity | $ | 299,035 | $ | (45,247 | ) | $ | 26,464 | $ | 280,252 | |||||||
| (1) | As reported in SeaChange International, Inc.'s audited financial statements contained in its Annual Report on Form 10-K for the Year Ended January 31, 2012. |
| (2) | Derived from On Demand Group Limited's historical financial position as of January 31, 2012 and its historical operating results for the years ended January 31, 2012, 2011 and 2010. |
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
Pro forma adjustments reflect only those adjustments which are supportable and directly attributable to the transaction and do not include the impact of contingencies. Pro forma adjustments include the following ($ in thousands):
| (a) | To record cash proceeds net of transaction costs of $21,849 for the sale of On Demand Group Limited (ODG). |
| (b) | To reflect $5,717 of monies placed in escrow to cover potential contingencies, warranties, and indemnifications provided in the agreement, offset by management's estimation of $1,500 for potential post-closing expenses for which we have agreed to reimburse Avail Media, Inc. |
| (c) | To add back certain assets of ODG which will be retained by SeaChange International, Inc. |
| (d) | To add back certain liabilities of ODG which will be retained by SeaChange International, Inc. |
| (e) | Adjustment to Equity of $25,628 consists of net assets of ODG sold to Avail Media, Inc. of $35,861, net assets remaining with SeaChange International, Inc. of $(439), reduction in On Demand Group's CTA of $7,031 and the estimated loss on sale of net assets of $(17,264). |
| (f) | The pro forma financial statements do not include interest income on the estimated net proceeds. Assuming a 2.25% annual rate of return on the estimated net proceeds from the transaction of $21,849, the following is the estimated interest income: |
| Twelve Months Ended: | ||||
| 1/31/12 | $ | 514 | ||
| 1/31/11 | 503 | |||
| 1/31/10 | 492 |
SEACHANGE INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
(in thousands, except per share data)
| For the Year Ended January 31, 2012 | ||||||||||||||||
| Sale of | Other | |||||||||||||||
| Company | On Demand | Pro Forma | Company | |||||||||||||
| Historical (1) | Group Limited (2) | Adjustments | Pro Forma | |||||||||||||
| Revenues: | ||||||||||||||||
| Products | $ | 73,157 | $ | - | $ | - | $ | 73,157 | ||||||||
| Services | 124,548 | (32,900 | ) | - | 91,648 | |||||||||||
| Total revenues | 197,705 | (32,900 | ) | - | 164,805 | |||||||||||
| Cost of revenues: | ||||||||||||||||
| Products | 22,774 | - | - | 22,774 | ||||||||||||
| Services | 76,919 | (27,298 | ) | - | 49,621 | |||||||||||
| Total cost of revenues | 99,693 | (27,298 | ) | - | 72,395 | |||||||||||
| Gross profit | 98,012 | (5,602 | ) | - | 92,410 | |||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 40,692 | - | - | 40,692 | ||||||||||||
| Selling and amrketing | 21,619 | - | - | 21,619 | ||||||||||||
| General and administrative | 24,116 | (3,421 | ) | - | 20,695 | |||||||||||
| Amortization of intangibles | 3,923 | (139 | ) | - | 3,784 | |||||||||||
| Acquisition costs | 3,312 | - | - | 3,312 | ||||||||||||
| Restructuring costs | 3,316 | - | - | 3,316 | ||||||||||||
| Total operating expenses | 96,978 | (3,560 | ) | - | 93,418 | |||||||||||
| Income (loss) from operations | 1,034 | (2,042 | ) | - | (1,008 | ) | ||||||||||
| Interest income | 352 | (60 | ) | - | 292 | |||||||||||
| Interest expense | (55 | ) | 15 | - | (40 | ) | ||||||||||
| Other expense, net | (655 | ) | (40 | ) | - | (695 | ) | |||||||||
| Income (loss) before income taxes and equity income (loss) in earnings of affiliates | 676 | (2,127 | ) | - | (1,451 | ) | ||||||||||
| Income tax expense (benefit) | 2,193 | (312 | ) | - | 1,881 | |||||||||||
| Equity income (loss) in earnings of affiliates, net of tax | 233 | (92 | ) | - | 141 | |||||||||||
| Loss from continuing operations | (1,284 | ) | (1,907 | ) | - | (3,191 | ) | |||||||||
| Earnings per share from continuing operations: | ||||||||||||||||
| Basic loss per share | $ | (0.04 | ) | $ | (0.10 | ) | ||||||||||
| Diluted loss per share | $ | (0.04 | ) | $ | (0.10 | ) | ||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 32,093 | 32,093 | ||||||||||||||
| Diluted | 32,093 | 32,093 | ||||||||||||||
| (1) | As reported in SeaChange International, Inc.'s audited financial statements contained in its Annual Report on Form 10-K for the Year Ended January 31, 2012. |
| (2) | Derived from On Demand Group Limited's historical financial position as of January 31, 2012 and its historical operating results for the years ended January 31, 2012, 2011 and 2010. |
SEACHANGE INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
(in thousands, except per share data)
| For the Year Ended January 31, 2011 | ||||||||||||||||
| Sale of | Other | |||||||||||||||
| Company | On Demand | Pro Forma | Company | |||||||||||||
| Historical (1) | Group Limited (2) | Adjustments | Pro Forma | |||||||||||||
| Revenues: | ||||||||||||||||
| Products | $ | 82,155 | $ | - | $ | - | $ | 82,155 | ||||||||
| Services | 119,532 | (27,951 | ) | - | 91,581 | |||||||||||
| Total revenues | 201,687 | (27,951 | ) | - | 173,736 | |||||||||||
| Cost of revenues: | ||||||||||||||||
| Products | 30,256 | - | - | 30,256 | ||||||||||||
| Services | 68,576 | (23,342 | ) | - | 45,234 | |||||||||||
| Total cost of revenues | 98,832 | (23,342 | ) | - | 75,490 | |||||||||||
| Gross profit | 102,855 | (4,609 | ) | - | 98,246 | |||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 44,569 | - | - | 44,569 | ||||||||||||
| Selling and amrketing | 21,055 | - | - | 21,055 | ||||||||||||
| General and administrative | 23,647 | (4,025 | ) | - | 19,622 | |||||||||||
| Amortization of intangibles | 3,359 | (285 | ) | - | 3,074 | |||||||||||
| Acquisition costs | 764 | - | - | 764 | ||||||||||||
| Restructuring costs | 6,997 | - | - | 6,997 | ||||||||||||
| Total operating expenses | 100,391 | (4,310 | ) | - | 96,081 | |||||||||||
| Income from operations | 2,464 | (299 | ) | - | 2,165 | |||||||||||
| Interest income | 307 | (3 | ) | - | 304 | |||||||||||
| Interest expense | (38 | ) | 15 | - | (23 | ) | ||||||||||
| Other expense, net | (687 | ) | (516 | ) | - | (1,203 | ) | |||||||||
| Gain on sale of investment in affiliates | 27,071 | - | - | 27,071 | ||||||||||||
| Income before income taxes and equity income in earnings of affiliates | 29,117 | (803 | ) | - | 28,314 | |||||||||||
| Income tax expense (benefit) | (2,438 | ) | 210 | - | (2,228 | ) | ||||||||||
| Equity income in earnings of affiliates, net of tax | 85 | 82 | - | 167 | ||||||||||||
| (Loss) income from continuing operations | 31,640 | (931 | ) | - | 30,709 | |||||||||||
| Earnings per share from continuing operations: | ||||||||||||||||
| Basic income per share | $ | 1.01 | $ | 0.98 | ||||||||||||
| Diluted income per share | $ | 0.99 | $ | 0.96 | ||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 31,434 | 31,434 | ||||||||||||||
| Diluted | 31,986 | 31,986 | ||||||||||||||
| (1) | As reported in SeaChange International, Inc.'s audited financial statements contained in its Annual Report on Form 10-K for the Year Ended January 31, 2012. |
| (2) | Derived from On Demand Group Limited's historical financial position as of January 31, 2012 and its historical operating results for the years ended January 31, 2012, 2011 and 2010. |
SEACHANGE INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
(in thousands, except per share data)
| For the Year Ended January 31, 2010 | ||||||||||||||||
| Sale of | Other | |||||||||||||||
| Company | On Demand | Pro Forma | Company | |||||||||||||
| Historical (1) | Group Limited (2) | Adjustments | Pro Forma | |||||||||||||
| Revenues: | ||||||||||||||||
| Products | $ | 97,005 | $ | - | $ | - | $ | 97,005 | ||||||||
| Services | 92,935 | (19,793 | ) | - | 73,142 | |||||||||||
| Total revenues | 189,940 | (19,793 | ) | - | 170,147 | |||||||||||
| Cost of revenues: | ||||||||||||||||
| Products | 35,929 | (414 | ) | - | 35,515 | |||||||||||
| Services | 54,941 | (16,118 | ) | - | 38,823 | |||||||||||
| Total cost of revenues | 90,870 | (16,532 | ) | - | 74,338 | |||||||||||
| Gross profit | 99,070 | (3,261 | ) | - | 95,809 | |||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 45,104 | - | - | 45,104 | ||||||||||||
| Selling and amrketing | 22,425 | - | - | 22,425 | ||||||||||||
| General and administrative | 20,823 | (2,918 | ) | - | 17,905 | |||||||||||
| Amortization of intangibles | 2,826 | (678 | ) | - | 2,148 | |||||||||||
| Acquisition costs | - | - | - | - | ||||||||||||
| Restructuring costs | - | - | - | - | ||||||||||||
| Total operating expenses | 91,178 | (3,596 | ) | - | 87,582 | |||||||||||
| Income from operations | 7,892 | 335 | - | 8,227 | ||||||||||||
| Interest income | 763 | (40 | ) | - | 723 | |||||||||||
| Interest expense | (156 | ) | 3 | - | (153 | ) | ||||||||||
| Other expense, net | (462 | ) | 155 | - | (307 | ) | ||||||||||
| Income before income taxes and equity income (loss) in earnings of affiliates | 8,037 | 453 | - | 8,490 | ||||||||||||
| Income tax expense | 271 | 105 | - | 376 | ||||||||||||
| Equity income (loss) in earnings of affiliates, net of tax | (653 | ) | 654 | - | 1 | |||||||||||
| Income from continuing operations | 7,113 | 1,002 | - | 8,115 | ||||||||||||
| Earnings per share from continuing operations: | ||||||||||||||||
| Basic income per share | $ | 0.23 | $ | 0.26 | ||||||||||||
| Diluted income per share | $ | 0.23 | $ | 0.26 | ||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 30,860 | 30,860 | ||||||||||||||
| Diluted | 31,433 | 31,433 | ||||||||||||||
| (1) | As reported in SeaChange International, Inc.'s audited financial statements contained in its Annual Report on Form 10-K for the Year Ended January 31, 2012. |
| (2) | Derived from On Demand Group Limited's historical financial position as of January 31, 2012 and its historical operating results for the years ended January 31, 2012, 2011 and 2010. |