SeaChange International (SEAC) 8-K Completion of Acquisition or Disposition of Assets

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.