SeaChange International, Inc. (NASDAQ:SEAC) Q4 2019 Earnings Conference Call Transcript

Apr 10, 2019 • 05:00 pm ET

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SeaChange International, Inc. (NASDAQ:SEAC) Q4 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Great, thank you. At this time we will be conducting a question-and-answer session. (Operator Instructions) Our first question is from Steven Frankel from Dougherty & Company. Please go ahead.

Analyst
Steven Frankel

Good afternoon, Mark, maybe I want to start with some perspectives on this guidance. So you talk about scoring 20 to 25 significant deals. How many significant deals did you -- the Company win in fiscal '18 and fiscal '17 each, give us an idea of scale.

Executive
Mark Bonney

Sure. So, first, thanks Steve. I appreciate the question. But first we have to think in terms of this being a new go-to-market strategy. So when we think about the 20 to 25 deals, it's within the framework structure. We haven't had the framework structure before and maybe last year when you think about size and scale of the deals we did, there were what, two or three that might fall into that category of significant deals in terms of the framework. Yossi, anything you want to add to on that?

Executive
Yossi Aloni

Thanks, Mark. I think the key point here is that last year we were trying to sell standalone product in each and every opportunity which is a bit more challenging in terms of winning strategy and also in terms of delivery. Selling an interim solution under the framework umbrella is probably easier, both in terms of defining and executing on winning strategy, and also in terms of delivering.

Executive
Peter Faubert

Yes, and this is Peter. I'll just add to that. In fiscal '17, by far our most significant deal was LG's one back office licenses for $13 million. In fiscal '18, we did sell a few Adrenalin upgrades and some advertising upgrades, the largest being with Rogers and with Alteez (ph). Rogers was an Adrenalin upgrade and Alteez was an advertising upgrade and we also sold a new deal to a team with Tech-Savvy (ph) and partner and both of those were pretty significant deals for us (inaudible) deals.

Analyst
Steven Frankel

Okay. And while we're still on the subject of guidance, translate the gross margin for me into its non-GAAP equivalent and what assumption are you making in the growth or shrinkage of OpEx in fiscal '19?

Executive
Peter Faubert

So, this is Peter. In terms of GAAP...

Analyst
Steven Frankel

Fiscal '20, sorry.

Executive
Peter Faubert

Yes. In terms of GAAP versus non-GAAP gross profit, there isn't really a lot of non-GAAP or GAAP charges that we would reverse out of gross margin at this point. The most significant GAAP charge that was reversed out historically was a loss on contract amortization charge. So those are fairly consistent between GAAP and non-GAAP going forward. In terms of OpEx, as Mark said in his statements, we are looking to continue to streamline the organization and eliminate any unnecessary costs in the organization.

We've talked on previous calls about operating somewhat inefficiently in terms of having disparate systems in place which may create some inefficiencies in how we process things and we continue to try to consolidate those tools and streamline those processes to be able to do