EX-99.1 2 ex99-1.htm EX-99.1 ex99-1.htm
Exhibit 99.1

 
Globalscape Announces Financial Results for Third Quarter 2014
 
Year to Date Revenue in 2014 is Highest in Company History
 
SAN ANTONIO — November 5, 2014 — GlobalSCAPE, Inc. (NYSE MKT: GSB), a leading developer of secure information exchange solutions, announced today its financial results for the three and nine month periods ended September 30, 2014.
 
Revenue for the third quarter of 2014 was $6.5 million, which is the second highest quarterly revenue in Globalscape’s history. This result is an increase of 2 percent when compared with revenue of $6.3 million for third quarter of 2013.
 
Revenue for the nine months ended September 30, 2014, was $18.9 million, which is the highest combined three consecutive quarter revenue in Globalscape’s history. This result is an increase of 4 percent when compared with revenue of $18.1 million for the nine months ended September 30, 2013.
 
Deferred revenue, which can be an indicator of future revenue trends, was $14.2 million at September 30, 2014, compared with $10.7 million at September 30, 2013, or an increase of 33 percent.
 
For the third quarter of 2014, the Company had net income of $782,000 compared with net income of $2.3 million for the third quarter of 2013. Earnings per share was $0.04 for the third quarter of 2014 compared with $0.12 for the third quarter of 2013.
 
For the nine months ended September 30, 2014, the Company had net income of $1.8 million compared with net income of $3.2 million for the nine months ended September 30, 2013. Earnings per share was $0.09 for the nine months ended September 30, 2014, compared with $0.17 for the nine months ended September 30, 2013.
 
Net income for the three and nine months ended September 30, 2013, included infrequent items resulting from the TappIn intangible impairment and earnout liability elimination which occurred in the third quarter of fiscal 2013.  Net income excluding infrequent items for the three and nine months ended September 30, 2013, was $946,000 and $1.8 million, respectively. Basic and diluted earnings per share excluding infrequent items for the three and nine months ended September 30, 2013, was $0.05 and $0.10, respectively.
 
Adjusted EBITDA Excluding Infrequent Items was $1.5 million for the third quarter of 2014 compared with $1.9 million for the third quarter of 2013.  Adjusted EBITDA Excluding Infrequent Items was $3.4 million for the nine months ended September 30, 2014, compared with $3.9 million for the nine months ended September 30, 2013.
 
Net income excluding infrequent items, and adjusted EBITDA excluding infrequent items, are not measures of financial performance under GAAP and have limitations as analytical tools and when assessing the Company’s operating performance. These measures should not be considered in isolation from or as a substitute for net income or other income statement data prepared in accordance with GAAP.
 
 
 
 
 
Cash, cash equivalents and long-term investments were $12.4 million at September 30, 2014.  During the third quarter of 2014 the Company repaid all its notes payable and no longer has any notes payable or long term debt.
 
“We continue to be pleased with the momentum we are building in 2014. Delivering the second highest revenue quarter in the company’s history, which followed the highest quarter ever in the second quarter of this year, is a powerful indication of the success of our ongoing investments in the sales, channel, demand generation and product development programs that we outlined earlier this year,” said James Bindseil, Globalscape’s President and Chief Executive Officer.   “We remain confident in the plans that we have in place and in our ability to achieve our long-term operational and financial objectives. Our leading edge indicators, such as bookings and the sales pipeline, continue to show a positive trajectory that we believe will begin to mature even more as these initiatives continue to develop.”
 
Conference Call November 5, 2014 at 4:30 p.m. ET
Globalscape management will hold a conference call Wednesday, November 5, 2014, at 4:30 p.m. Eastern Time/3:30 p.m. Central Time to discuss financial results and other corporate matters for the third quarter of 2014. Those wanting to join should call 888-481-2877 or 719-457-2628 and use Conference ID # 9296867. 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 5, 2014.
 
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 the EFT platform, 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 2013 calendar year, filed with the Securities and Exchange Commission on March 27, 2014.
 
INVESTOR RELATIONS CONTACT
Contact: Jim Fanucchi
Phone Number: (408) 404-5400
Email: ir@globalscape.com

PRESS CONTACT
Contact: Christen Gentile
Phone Number: (210) 308-8267
Email: PR@globalscape.com

 
 
 

GlobalSCAPE, Inc.
            
Condensed Consolidated Balance Sheets
            
(in thousands except share amounts)
            
(Unaudited)
            
   
September 30, 2014
    
December 31, 2013
  
Assets
            
Current assets:
            
Cash and cash equivalents
   $ 9,265     $ 9,455  
Accounts receivable (net of allowance for doubtful accounts
of $551 and $154 in 2014 and 2013, respectively)
     6,722       3,765  
Federal income tax receivable
     236       113  
Current deferred tax asset
     174       184  
Prepaid expenses
     264       349  
Total current assets
     16,661       13,866  
                 
Long term investments
     3,169       3,122  
Capitalized software development costs, net
     2,697       1,028  
Deferred tax asset
     745       1,476  
Goodwill
     12,712       12,712  
Fixed assets, net
     738       744  
Other assets
     133       144  
Total assets
   $ 36,855     $ 33,092  
                 
Liabilities and Stockholders’ Equity
                
Current liabilities:
                
Accounts payable
   $ 632     $ 655  
Accrued expenses
     1,296       898  
Deferred revenue
     11,047       9,092  
Long term debt, current portion
     -       1,397  
Total current liabilities
     12,975       12,042  
                 
Deferred revenue, non-current portion
     3,159       1,708  
Long term debt, non-current portion
     -       2,989  
Other long term liabilities
     51       60  
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, 20,967,617  and 19,592,117 shares issued
at September 30, 2014 and December 31, 2013, respectively
     25       20  
Additional paid-in capital
     18,401       15,834  
Treasury stock, 403,581 shares, at cost, at
September 30, 2014 and December 31, 2013
     (1,452 )     (1,452 )
Retained earnings
     3,696       1,891  
Total stockholders’ equity
     20,670       16,293  
Total liabilities and stockholders’ equity
   $ 36,855     $ 33,092  
 
 
 
 
 
GlobalSCAPE, Inc.
                        
Condensed Consolidated Statements of Operations and Comprehensive Income
              
(In thousands, except per share amounts)
                        
(Unaudited)
                        
                         
   
Three months ended September 30,
    
Nine months ended September 30,
  
   
2014
    
2013
    
2014
    
2013
  
                         
Operating Revenues:
                        
Software licenses
   $ 2,291     $ 2,432     $ 6,789     $ 6,752  
Maintenance and support
     3,790       3,493       11,181       10,153  
Professional services
     409       412       933       1,237  
Total Revenues
     6,490       6,337       18,903       18,142  
Operating Expenses:
                                
Cost of revenues
     277       250       679       782  
Selling, general and administrative
     4,173       3,492       13,077       11,137  
Research and development
     513       923       1,722       2,653  
TappIn intangible asset impairment and earnout liability elimination
     -       (128 )     -       (128 )
Depreciation and amortization
     263       265       580       787  
Total operating expenses
     5,226       4,802       16,058       15,231  
Income from operations
     1,264       1,535       2,845       2,911  
Other expense, net
     (11 )     (39 )     (58 )     (130 )
Income before income taxes
     1,253       1,496       2,787       2,781  
Income tax expense
     471       (791 )     982       (404 )
Net income
   $ 782     $ 2,287     $ 1,805     $ 3,185  
Comprehensive income
   $ 782     $ 2,287     $ 1,805     $ 3,185  
                                 
Net income per common share -
                                
Basic
   $ 0.04     $ 0.12     $ 0.09     $ 0.17  
Diluted
   $ 0.04     $ 0.12     $ 0.09     $ 0.17  
 
 
 
 

GlobalSCAPE, Inc.
            
Condensed Consolidated Statements of Cash Flows
        
(in thousands)
            
(Unaudited)
            
   
For the Nine Months Ended September 30,
  
   
2014
    
2013
  
Operating Activities:
            
Net income
   $ 1,805     $ 3,185  
Adjustments to reconcile net income to net cash provided by operating activities:
          
Bad debt expense
     318       29  
Depreciation and amortization
     580       787  
Stock-based compensation
     380       522  
Deferred taxes
     740       (1,030 )
Excess tax deficiency from share-based
compensation
     367       83  
TappIn intangible asset impairment and earnout liability elimination
     -       (128 )
Subtotal before changes in operating assets and liabilities
     4,190       3,448  
Changes in operating assets and liabilities:
                
Deferred revenue
     3,405       948  
Accrued expenses
     398       (149 )
Income tax receivable and payable
     (490 )     (107 )
Prepaid expenses
     85       8  
Other assets
     10       (62 )
Other long-term liabilities
     (6 )     (2 )
Accounts payable
     (24 )     (6 )
Accounts receivable
     (3,275 )     (251 )
Net cash provided by operating activities
     4,293       3,827  
Investing Activities:
                
Software development costs
     (2,028 )     (686 )
Purchase of property and equipment
     (215 )     (65 )
Purchase of TappIn, Inc.  and earnout payments
     -       (500 )
Interest on long term investments
     (47 )     (47 )
Net cash (used in) investing activities
     (2,290 )     (1,298 )
Financing Activities:
                
Proceeds from exercise of stock options
     2,559       231  
Tax deficiency (benefit) from stock-based compensation
     (367 )     (83 )
Notes payable principle payments
     (4,385 )     (999 )
Net cash provided by (used in)  financing activities
     (2,193 )     (851 )
Net increase (decrease) in cash
     (190 )     1,678  
Cash at beginning of period
     9,455       8,079  
Cash at end of period
   $ 9,265     $ 9,757  
                 
Supplemental disclosure of cash flow information:
          
Cash paid during the period for:
                
Interest
   $ 117     $ 182  
Income taxes
   $ 642     $ 731  
 
 
 
 

GlobalSCAPE, Inc.
            
Adjusted EBITDA Excluding Infrequent Items
            
(in thousands)
            
(Unaudited)
            
   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2014
    
2013
    
2014
    
2013
  
Net income (loss)
   $ 782     $ 2,287     $ 1,805     $ 3,185  
Add (subtract) items to determine adjusted EBITDA:
                                
Income tax expense
     471       (791 )     982       (404 )
Interest expense, net
     12       39       59       130  
Depreciation and amortization:
                                
Total depreciation and amortization
     263       265       580       787  
Amortization of capitalized software development costs
     (186 )     (47 )     (359 )     (151 )
Stock-based compensation expense
     120       225       380       522  
Infrequent item:
                                
TappIn intangible asset impairment and earnout liability elimination
     -       (128 )     -       (128 )
Adjusted EBITDA Excluding Infrequent Items
   $ 1,462     $ 1,850     $ 3,447     $ 3,941