EX-99.1 2 ex99-1.htm EX-99.1 ex99-1.htm
              
   
         
Exhibit 99.1
 
NEWS RELEASE
Contact: Jim Albrecht, Chief Financial Officer
Email: ir@Globalscape.com
 
Contact: Jim Fanucchi, Darrow Associates, Inc.
Phone number:  (408) 404-5400
Email: ir@Globalscape.com
 
 
Globalscape Announces Financial Results for the Third Quarter 2013
 
Reports Strong Earnings Growth Driven by Increased Revenue Combined With Lower Operating Expenses
 
SAN ANTONIO, Texas — November 12, 2013 — GlobalSCAPE, Inc. (NYSE MKT: GSB), a leading developer of secure information exchange solutions, today announced its financial results for the three and nine month periods ended September 30, 2013.
 
Revenue for the three months ended September 30, 2013, was $6.3 million, a 3% increase over revenue of $6.1 million for the three months ended September 30, 2012.  Revenue for the nine months ended September 30, 2013 was $18.1 million, a 5% increase over revenue of $17.2 million for the nine months ended September 30, 2012.
 
The Company’s deferred revenue, which the Company believes can be an indicator of future revenue trends, grew to $10.7 million at September 30, 2013, compared to $9.8 million at September 30, 2012, a 9.2% increase.
 
For the three months ended September 30, 2013, the Company had net income of $2.3 million or $0.12 per share, compared to a net loss of $2.7 million, or ($0.15) per share, for the three months ended September 30, 2012.  For the nine months ended September 30, 2013, the Company had net income of $3.2 million, or $0.17 per share, compared to a net loss of $3.1 million, or ($0.17) per share for the nine months ended September 30, 2012.
 
Adjusted EBITDA Excluding Infrequent Items was $1.9 million for the three months ended September 30, 2013, compared to $1.1 million for the three months ended September 30, 2012, and was $4.1 million for the nine months ended September 30, 2013, compared to $1.7 for the nine months ended September 30, 2012.  Adjusted EBITDA Excluding Infrequent Items is not a measure of financial performance under GAAP and has limitations as an analytical tools and when assessing the Company’s operating performance. Adjusted EBITDA Excluding Infrequent Items should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with GAAP.
 
Net cash provided by operating activities was $3.8 million for the nine months ended September 30, 2013.  This cash flow performance allowed the Company to end the quarter with over $9.8 million of cash and $3.1 million of long term investments.
 
 “Our third quarter results continue the year-long trend toward greater profitability and position us for further growth,” said James Bindseil, interim president of Globalscape.  “Our revenue and deferred revenue continue their consistent pattern of growth between comparable periods, which reflects ongoing customer satisfaction with our solutions. While we intend to remain focused on customer satisfaction, we will also be enhancing our position through marketing growth, competitive displacements, and continued evolution of our products to further enhance our market leadership position.”
 
Conference Call November 12, 2013 at 4:30 p.m. ET
 
Globalscape management will hold a conference call Tuesday, November 12, 2013 to discuss financial results for the third quarter of 2013 and other corporate matters at 4:30 p.m. Eastern Time/3:30 p.m. Central Time. Those wanting to join should dial 1-877-941-4775 and use Conference ID # 4647703. A live webcast of the conference call will also be available in the investor relations page of the company's website at www.Globalscape.com. A webcast replay of the conference call will be available on the Company’s website through December 12, 2013.
 
About Globalscape
 
San Antonio, Texas-based GlobalSCAPE, Inc. (NYSE MKT: GSB) ensures the reliability of mission-critical operations by securing sensitive data and intellectual property. Globalscape’s suite of solutions features EFT Server, the industry-leading enterprise file transfer solution that delivers military-grade security and a customizable platform for achieving best in class control and visibility of data in motion or at rest, across multiple locations. Founded in 1996, Globalscape is a leading enterprise solution provider of secure information exchange software and services to thousands of customers, including global enterprises, governments and small businesses. For more information, visit Globalscape, or subscribe to our Blog or Twitter updates.
 
Safe Harbor Statement
 
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "would," "exceed," "should," "anticipates," "believe," "steady," "dramatic," and variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not a forward-looking statement. These forward-looking statements are based upon the Company’s current expectations and are subject to a number of risks, uncertainties and assumptions. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ significantly from those expressed or implied by such forward-looking statements are risks that are detailed in the Company’s Annual Report on Form 10-K for the 2012 calendar year, filed with the Securities and Exchange Commission on March 28, 2013.
 
 
 
 
 
Summary Financial Data

GlobalSCAPE, Inc.
Statements of Operations
(Unaudited)
(in thousands, except per share amounts)

   
Three months ended September 30,
    
Nine months ended September 30,
  
   
2013
    
2012
    
2013
    
2012
  
                         
Operating Revenues:
                        
Software license
   $ 2,103     $ 2,528     $ 5,966     $ 7,424  
Maintenance and support
     3,478       3,054       10,128       8,294  
Professional services
     412       274       1,237       1,013  
Others
     344       222       811       442  
Total Revenues
     6,337       6,078       18,142       17,173  
Operating Expenses:
                                
Cost of revenues
     250       331       782       962  
Selling, general and administrative expenses
     3,492       4,136       11,137       12,532  
Research and development expenses
     923       822       2,653       2,660  
TappIn intangible asset impairment and earnout
liability elimination
     (128 )     -       (128 )     -  
Affiliated entity asset impairment
     -       3,264       -       3,264  
Depreciation and amortization
     265       314       787       951  
Total operating expenses
     4,802       8,867       15,231       20,369  
Income (loss) from operations
     1,535       (2,789 )     2,911       (3,196 )
Other income (expense), net
     (39 )     (11 )     (130 )     (138 )
Income (loss) before income taxes
     1,496       (2,800 )     2,781       (3,334 )
Provision (benefit) for income taxes
     (791 )     (86 )     (404 )     (227 )
Net income (loss)
   $ 2,287     $ (2,714 )   $ 3,185     $ (3,107 )
Comprehensive income (loss)
   $ 2,287     $ (2,714 )   $ 3,185     $ (3,107 )
                                 
Net income (loss) per common share - basic
   $ 0.12     $ (0.15 )   $ 0.17     $ (0.17 )
Net income (loss) per common share - diluted
   $ 0.12     $ (0.15 )   $ 0.17     $ (0.17 )
Average shares outstanding:
                                
Basic
     18,761       18,398       18,570       18,336  
Diluted
     19,158       18,398       19,001       18,336  
 
 
 
 

GlobalSCAPE, Inc.
Balance Sheets
(Unaudited)
In thousands except per share amounts.
 
   
September 30,
    
December 31,
  
   
2013
    
2012
  
             
Assets
            
Current assets:
            
Cash and cash equivalents
   $ 9,757     $ 8,079  
Accounts receivable (net of allowance for doubtful accounts
of $155 and $171 on September 30, 2013 and
December 31, 2012 respectively)
     3,572       3,350  
Income tax receivable
     -       -  
Current deferred tax assets
     123       177  
Prepaid expenses
     418       426  
Total current assets
     13,870       12,032  
                 
Fixed assets, net
     739       900  
Investment in certificate of deposit
     3,107       3,060  
Intangible assets, net
     867       4,308  
Goodwill
     12,712       12,712  
Deferred tax asset
     1,619       535  
Other assets
     103       41  
Total assets
   $ 33,017     $ 33,588  
                 
Liabilities and Stockholders’ Equity
                
Current liabilities:
                
Accounts payable
   $ 426     $ 432  
Accrued expenses
     1,204       1,353  
Deferred revenue
     9,134       8,293  
Income taxes payable
     22       46  
TappIn earn out, current portion
     -       500  
Long term debt, current portion
     1,381       1,335  
Total current liabilities
     12,167       11,959  
                 
Deferred revenue, non-current portion
     1,587       1,480  
TappIn earn out, non-current portion
     -       3,694  
Long-term debt. non-current portion
     3,344       4,389  
Other long term liabilities
     60       62  
                 
Commitments and contingencies
     -       -  
                 
Stockholders’ equity:
                
Preferred stock, par value $0.001 per share, 10,000,000
authorized, no shares issued or outstanding
     -       -  
Common stock, par value $0.001 per share, 40,000,000
authorized, 19,184,197 and 18,846,547 issued September 30, 2013
and December 31, 2012
     19       19  
Additional paid-in capital
     15,105       14,435  
Treasury stock, 403,581 shares, at cost, at September 30, 2013
and December 31, 2012.
     (1,452 )     (1,452 )
Retained earnings
     2,187       (998 )
Total stockholders’ equity
     15,859       12,004  
Total liabilities and stockholders’ equity
   $ 33,017     $ 33,588  

 
 
 

GlobalSCAPE, Inc.
Statements of Cash Flows
(Unaudited)
(in thousands)
 
   
For the nine months ended September 30,
  
   
2013
    
2012
  
Operating Activities:
            
Net income (loss)
   $ 3,185     $ (3,107 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
  
Depreciation and amortization
     787       951  
Stock-based compensation
     522       711  
Deferred taxes
     (1,030 )     (341 )
Bad debt expense (recoveries)
     29       (55 )
Net tax effect of stock option and restricted
stock activity
     83       2  
TappIn intangible asset impairment and earnout
liability elimination
     (128 )     -  
Affiliated entity asset impairment
     -       3,264  
Other
     -       40  
Subtotal before changes in operating assets and liabilities
     3,448       1,465  
Changes in operating assets and liabilities:
                
Accounts receivable
     (251 )     314  
CoreTrace receivable
     -       (150 )
Prepaid expenses
     8       (65 )
Income tax receivable and payable
     (107 )     (178 )
Other assets
     (62 )     (11 )
Accounts payable
     (6 )     (239 )
Accrued expenses
     (149 )     (202 )
Deferred revenues
     948       1,926  
Other long-term liabilities
     (2 )     6  
Net cash provided by (used for) operating activities
     3,827       2,866  
Investing Activities:
                
Purchase of property and equipment
     (65 )     (210 )
Software development costs
     (686 )     (313 )
TappIn, Inc, earnout liability paid
     (500 )     -  
Interest reinvested in certificate of deposit
     (47 )     (45 )
Net cash provided by (used for) investing activities
     (1,298 )     (568 )
Financing Activities:
                
Proceeds from exercise of stock options
     231       48  
Net tax effect of stock option and restricted stock activity
     (83 )     (2 )
Notes payable principle payments
     (999 )     (952 )
Net cash provided by (used for) financing activities
     (851 )     (906 )
Net increase (decrease) in cash
     1,678       1,392  
Cash at beginning of period
     8,079       8,861  
Cash at end of period
   $ 9,757     $ 10,253  
                 
Supplemental disclosure of cash flow information:
                
Cash paid during the period for:
                
Interest on notes payable
   $ 182     $ 248  
Income taxes
   $ 731     $ 271  
 
 
 
 
 
GlobalSCAPE, Inc.
Adjusted EBITDA Excluding Infrequent Items
(Unaudited)
(In thousands)
 
   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2013
    
2012
    
2013
    
2012
  
Net income (loss)
     2,287       (2,714 )     3,185       (3,107 )
Add (subtract) items to determine adjusted EBITDA excluding infrequent items:
  
Income tax expense
     (791 )     (86 )     (404 )     (227 )
Other expense
     39       11       130       138  
Depreciation and amortization
     265       314       787       951  
Stock-based compensation expense
     225       283       522       711  
Infrequent item:
                                
TappIn intangible asset impairment and earnout
liability elimination
     (128 )     -       (128 )     -  
Affiliated entity asset impairment
     -       3,264       -       3,264  
                                 
Adjusted EBITDA excluding infrequent items
   $ 1,897     $ 1,072     $ 4,092     $ 1,730  
 
Adjusted EBITDA [Earnings before Interest, Taxes, Total Other Income (Expense), Depreciation, and Amortization (including amortized stock-based compensation expense)] Excluding Infrequent Items is not a measure of financial performance under generally accepted accounting principles and should not be considered a substitute for net income.  Adjusted EBITDA Excluding Infrequent Items has limitations as an analytical tool and when assessing our operating performance. Adjusted EBITDA Excluding Infrequent Items should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with generally accepted accounting principles.