On March 14, video-on-demand provisioner SeaChange International (NASDAQ:SEAC) released fourth-quarter earnings for fiscal 2007, ended Jan. 31.

  • Revenue growth is coming along nicely, though you might expect a hastier rise from a small company in such an immature, high-stakes industry.
  • Sales and earnings for a tiny company like this one can be lumpy, and it's often a mistake to read too much into a single quarter's numbers. On that note, management recited a litany of orders that arrived after the quarter's end. Sometimes, it's just a matter of timing.
  • That bumpy track should smooth out somewhat in a year or two, as the company diversifies its customer base. Its far-and-away biggest client to date has been Comcast (NASDAQ:CMCSA), and that company's share of SeaChange revenues has declined from more 50% three years ago to 25% a year ago.
  • When we get the company's 10-K statement -- probably around mid-May -- we'll see the current Comcast share. We'll also get a cash flow statement explaining exactly where that fresh cash came from, after a year of steady quarterly losses, only moderate share dilution, and still no debt on the books.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q4 2007

Q4 2006

Change

Sales

$40,073

$33,236

20.6%

Net Profit

($3,745)

($3,073)

(21.9%)

EPS

($0.13)

($0.11)

(18.2%)

Diluted Shares

$29,235

$28,438

2.8%


Get back to basics with the income statement.

Margin Checkup

Q4 2007

Q4 2006

Change*

Gross Margin

42.6%

44.6%

(2.0)

Operating Margin

(12.6%)

(12.0%)

(0.6)

Net Margin

(9.4%)

(9.3%)

(0.1)
*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q4 2007

Q4 2006

Change

Cash + ST Invest.

$42,410

$36,190

17.2%

Accounts Rec.

$34,416

$34,472

(0.2%)

Inventory

$19,350

$19,299

0.3%


Liabilities

Q4 2007

Q4 2006

Change

Accounts Payable

$15,887

$26,410

(39.8%)

Long-Term Debt

$0

$0

N/A


The balance sheet reflects the company's health.

Cash Flow Highlights
We don't have a cash flow at this point, and have to wait for the 10-K filing. Darn it.

Free cash flow is a Fool's best friend.

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

SeaChange isn't exactly a Motley Fool Rule Breaker, but the company certainly operates on the bleeding edge of tomorrow's entertainment technology. Find more companies like that with a free 30-day trial pass to our ultimate growth stock newsletter.

At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.