8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

February 13, 2014

Date of Report (Date of earliest event reported)

GlobalSCAPE, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-33601	74-2785449
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4500 Lockhill Selma Road, Suite 150

San Antonio, Texas 78249

(210) 308-8267

(Address of principal executive offices and Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02             Results of Operations and Financial Condition

On February 13, 2014, GlobalSCAPE, Inc (“GlobalSCAPE” or the “Company”) issued a press release announcing financial results for the Company’s fourth quarter and fiscal year ended December 31, 2013. A copy of the press release is furnished with this report as Exhibit 99.1. Such information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Item 9.01             Financial Statements and Exhibits

(d) Exhibit

99.1     Press Release dated February 13, 2014.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

GLOBALSCAPE, INC.
By:	/s/ Jim Albrecht
	Jim Albrecht, Chief Financial Officer
Dated: February 13, 2014

EXHIBIT INDEX

Exhibit Number		Document Description
	99.1	Press release dated February 13, 2014 announcing GlobalSCAPE’s 2013 fourth quarter and yearend financial results.

EX-99.1

Exhibit 99.1

  NEWS RELEASE Contact:Jim Albrecht, Chief Financial Officer Phone number:  (210) 293-7970 Contact: Jim Fanucchi, Darrow Associates, Inc. Phone number:  (408) 404-5400 Email: ir1@globalscape.com

Globalscape® Announces Financial Results for the Fourth Quarter 2013 and Fiscal 2013

Reports Record Annual Revenue for 2013 of $24.3 Million

SAN ANTONIO, Texas — February 13, 2014 — GlobalSCAPE, Inc. (NYSE MKT: GSB), a leading developer of secure information exchange solutions, today announced its financial results for fiscal year 2013 and the three-month period ended December 31, 2013.

Revenue for fiscal year 2013 was $24.3 million, a 4 percent increase over fiscal year 2012 revenue of $23.4 million.  Revenue for the three months ended December 31, 2013, was $6.2 million, which equaled revenue for the three months ended December 31, 2012.

Deferred revenue, which the Company believes can be an indicator of future revenue trends, grew to $10.8 million at December 31, 2013, compared to $9.8 million at December 31, 2012, a 10% increase.

For fiscal year 2013, the Company had a net income of $3.8 million, or $0.21 per share basic and $0.20 per share diluted. These results compare to a net loss for fiscal year 2012 of $1.8 million, or ($0.10) per share basic and diluted.

For the three months ended December 31, 2013 the Company had net income of $655,000, or $0.03 per share basic and diluted.  For the three months ended December 31, 2012, the Company had a net income of $1.3 million, or $0.07 per share basic and diluted, which included $1.3 million of income resulting from the elimination of a TappIn earnout liability not earned.

Adjusted EBITDA Excluding Infrequent Items was $5.2 million for fiscal year 2013 compared to $2.6 million for fiscal year 2012.  Adjusted EBITDA Excluding Infrequent Items was $1.2 million for the three months ended December 31, 2013, compared to $887,000 for the three months ended December 31, 2012.

Amounts reported on a non-GAAP basis and Adjusted EBITDA Excluding Infrequent Items are not measures of financial performance under GAAP.  Non-GAAP financial measurements and Adjusted EBITDA Excluding Infrequent Items have limitations as analytical tools and when assessing the Company’s operating performance. Non-GAAP financial measurements and 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 $4.5 million for fiscal year 2013 compared to $3.8 million for fiscal year 2012. This cash flow performance allowed the Company to pay a special cash dividend of $0.05 per share in December 2013 and end the year with $9.5 million of cash and $3.1 million of long term investments at December 31, 2013.

 “Our continued revenue growth and strong cash flow performance demonstrates the strength of our solution portfolio, particularly our Enhanced File Transfer platform, and also reflects increased maintenance and support contract revenue across the majority of our product lines.” said James Bindseil, president and chief executive officer of Globalscape.  “I look forward to continued growth for fiscal year 2014.”

Conference Call February 13, 2014 at 4:30 p.m. EST

Globalscape management will hold a conference call Thursday, February 13, 2014, 4:30 p.m. EST/3:30 p.m. CST to discuss financial results for the fourth quarter of 2013, the fiscal year as a whole, and other corporate matters.  A live webcast of the conference call will be available via the investor relations page of the Company's website at www.globalscape.com. A webcast replay of the conference call will be available via that website through March 13, 2014.  Those wishing to join the call by telephone may call 1-877-941-4774 and use Conference ID # 4668384.

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, 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 www.globalscape.com or follow the blog and 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 December 31,						For the Year Ended December 31,
	2013			2012			2013			2012
Operating Revenues:
Software license	$	2,120		$	2,231		$	8,086		$	9,447
Maintenance and support		3,522			3,108			13,650			11,298
Professional services		242			534			1,479			1,547
Others		313			326			1,124			1,080
Total Revenues		6,197			6,199			24,339			23,372
Operating Expenses:
Cost of revenues		229			334			1,011			1,296
Selling, general and administrative expenses		3,744			4,270			14,881			16,761
Research and development expenses		1,113			870			3,766			3,531
Affiliated entity asset impairment		0			0			0			3,264
TappIn intangible asset impairment and earnout liability elimination		0			(1,343	)		(128	)		(1,303	)
Depreciation and amortization		121			266			908			1,217
Total operating expenses		5,207			4,397			20,438			24,766
Income (loss) from operations		990			1,802			3,901			(1,394	)
Other income (expense)		(35	)		(51	)		(165	)		(189	)
Income (loss) before income taxes		955			1,751			3,736			(1,583	)
Provision (benefit) for income taxes		300			444			(104	)		217
Net income (loss)	$	655		$	1,307		$	3,840		$	(1,800	)
Net income (loss) per common share - basic	$	0.03		$	0.07		$	0.21		$	(0.10	)
Net income (loss) per common share - diluted	$	0.03		$	0.07		$	0.20		$	(0.10	)
Average shares outstanding:
Basic		18,873			18,421			18,626			18,358
Diluted		19,461			18,959			19,082			18,358

GlobalSCAPE, Inc.

Balance Sheets

(Unaudited)

In thousands except per share amounts.

	December 31,			December 31,
	2013			2012
Assets
Current assets:
Cash and cash equivalents	$	9,455		$	8,079
Accounts receivable (net of allowance for doubtful accounts     of $154 and $171 on December 31, 2013 and December 31, 2012 respectively)		3,765			3,350
Federal income tax receivable		113			-
Current deferred tax assets		184			177
Prepaid expenses		349			426
Total current assets		13,866			12,032
Fixed assets, net		744			900
Long-term investments		3,122			3,060
Intangible assets, net		1,028			4,308
Goodwill		12,712			12,712
Deferred tax asset		1,476			535
Other assets		144			41
Total assets	$	33,092		$	33,588
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	655		$	432
Accrued expenses		898			1,353
Deferred revenue		9,092			8,293
Income taxes payable		-			46
TappIn earn out, current portion		-			500
Long term debt, current portion		1,397			1,335
Total current liabilities		12,042			11,959
Deferred revenue, non-current portion		1,708			1,480
TappIn earn out, non-current portion		-			3,694
Long-term debt. non-current portion		2,989			4,389
Other long term liabilities		60			62
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, 19,590,797 and 18,846,547 issued December 31, 2013      and December 31, 2012		20			19
Additional paid-in capital		15,834			14,435
Treasury stock, 403,581 shares, at cost, at December 31, 2013     and December 31, 2012.		(1,452	)		(1,452	)
Retained earnings		1,891			(998	)
Total stockholders’ equity		16,293			12,004
Total liabilities and stockholders’ equity	$	33,092		$	33,588

GlobalSCAPE, Inc.

Statements of Cash Flows

(Unaudited)

(in thousands)

	For the year ended December 31,
	2013			2012
Operating Activities:
Net income (loss)	$	3,840		$	(1,800	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Bad debt expense (recoveries)		29			68
Depreciation and amortization		908			1,217
Stock-based compensation		666			915
Deferred taxes		(948	)		(377	)
Excess tax deficiency (benefit) from exercise of share based compensation		156			28
Affiliated entity asset impairment		-			3,264
TappIn intangible asset impairment and earnout liability elimination		(128	)		(1,343	)
Other		-			40
Changes in operating assets and liabilities:
Accounts receivable		(444	)		(60	)
CoreTrace receivable		-			(150	)
Prepaid expenses		77			(187	)
Federal income tax		(315	)		292
Other assets		(103	)		(11	)
Accounts payable		223			(159	)
Accrued expenses		(455	)		(43	)
Deferred revenues		1,027			2,141
Other long-term liabilities		(2	)		9
Net cash provided by operating activities		4,531			3,844
Investing Activities:
Software development costs		(899	)		(330	)
Purchase of property and equipment		(139	)		(213	)
Purchase of TappIn, Inc.		-			(1,500	)
TappIn, Inc. earnout liability paid		(500	)		-
Interest on long-term investments		(62	)		-
Purchase of long-term investments		-			(60	)
Net cash provided by (used in) investing activities		(1,600	)		(2,103	)
Financing Activities:
Proceeds from exercise of stock options		890			70
Tax deficiency (benefit) from stock-based compensation		(156	)		(28	)
Notes payable principle payments		(1,338	)		(1,276	)
Proceeds from note payable		-			-
Dividends paid out		(951	)		(1,289	)
Net cash provided by (used in) financing activities		(1,555	)		(2,523	)
Net (decrease) increase in cash		1,376			(782	)
Cash at beginning of period		8,079			8,861
Cash at end of period	$	9,455		$	8,079
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	234		$	294
Income taxes	$	1,161		$	271

GlobalSCAPE, Inc.

Adjusted EBITDA Excluding Infrequent Items

(Unaudited)

(In thousands)

	Three Months Ended					Twelve Months Ended
	December 31,					December 31,
	2013		2012			2013			2012
Net income (loss)		655		1,307			3,840			(1,800	)
Add (subtract) items to determine adjusted EBITDA excluding infrequent items:
Income tax expense		300		444			(104	)		217
Other expense		35		51			165			189
Depreciation and amortization (excluding amortization of capitalized software development costs)		71		224			734			1,130
Affiliated entity asset impairment		-		-			-			3,264
TappIn intangible asset impairment and earnout liability elimination		-		(1,343	)		(128	)		(1,303	)
Stock-based compensation expense		144		204			666			915
Adjusted EBITDA excluding infrequent items	$	1,205	$	887		$	5,173		$	2,612

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.