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
May 8, 2012
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 Registrants 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):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-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 May 8, 2012, GlobalSCAPE, Inc (GlobalSCAPE or the Company) issued a press release announcing financial results for the Companys first quarter of fiscal year 2012. 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 May 8, 2012.
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/ Desiree Smith | |
Desiree Smith, Controller and Interim Principal Financial and Accounting Officer |
Dated: May 8, 2012
EXHIBIT INDEX
Exhibit Number |
Document Description | |
99.1 | Press release dated May 8, 2012 announcing GlobalSCAPEs 2012 first quarter financial results. |
Exhibit 99.1
|
NEWS RELEASE
Contact: Desiree Smith, Controller and Interim Principal Financial and Accounting Officer Phone number: (210) 293-7972
Contact: Jim Fanucchi, Summit IR Group, Inc. Phone number: (408) 404-5400 Email: ir@globalscape.com |
GlobalSCAPE Announces First Quarter 2012 Financial Results
Increases Revenue 16% Compared with Q1 Fiscal 2011
SAN ANTONIO, Texas May 8, 2012 GlobalSCAPE, Inc. (NYSE Amex: GSB), a leading developer of secure information exchange solutions, today announced financial results for its first quarter of fiscal year 2012, ending March 31, 2012.
Revenue was $5.4 million for the first quarter of fiscal year 2012, an increase of 16 percent when compared with revenue of $4.6 million in the same quarter last year. The Company reported the increase in revenue was largely due to an increase in maintenance and support (M&S) contract renewal sales, an increase in EFT Server Enterprise license revenue, and an increased contribution from the Companys managed solutions business. The increase in M&S renewals resulted in a 19 percent increase in the Companys deferred revenue, to $7.8 million at the end of the first quarter of 2012, up from $6.5 million at the end of the first quarter of 2011.
The Company reported a loss of $253,000, or ($0.01) per diluted share, in the first quarter of 2012, compared with net income of $59,000, or $0.00 per diluted share, in the same quarter last year. In line with the decrease in net income, Adjusted EBITDA declined to $180,000 in the first quarter of 2012, from $555,000 in the same period last year.
Net cash (used in) provided by operating activities for the three months ended March 31, 2012 and 2011 was approximately ($663,000) and $374,000, respectively. The increase in net cash used in operating activities in the first quarter 2012 was due to the decrease in net income and decreases in accrued expenses of $448,000 and other long-term liabilities of $319,000. These decreases were somewhat offset by an increase in accounts receivable of $226,000.
Our first quarter revenue performance reflects continued growth in our core business, plus the short-term effects of the TappIn acquisition, said Jim Morris, GlobalSCAPE Chief Executive Officer. We increased sales of our enterprise solutions and significantly grew recurring revenue from our managed solutions line of business during the quarter, Morris continued. Our net loss in the quarter was primarily the result of increased operating expenses associated with the TappIn acquisition. TappIn has established and is actively pursuing additional arrangements with original equipment manufacturers, known as OEMs, and other companies that will directly integrate TappIn into their hardware devices or participate in joint marketing and promotion activities, Morris said. We expect to increase net income, particularly in the second half of 2012, as we recognize additional revenue from the TappIn OEM arrangements and potentially continue to increase our core revenue.
Quarterly Highlights
During the first quarter, GlobalSCAPE announced a new addition to the Companys solution portfolio and gained additional industry recognitions.
In February, GlobalSCAPE announced development of a Secure Mobile Access module, combining TappIn, Inc.s mobile file access with GlobalSCAPEs proven Enhanced File Transfer (EFT) Server solution. This new solution allows users to securely access their business files from any popular smartphone or mobile device. The Secure Mobile Access module also allows businesses and IT departments to respond to the rapidly growing Bring Your Own Device (BYOD) trend, in which employees increasingly desire to use the same devices to access personal and business data. The BYOD trend previously has been problematic for IT departments as they worked to resolve conflicting demands for security and convenience. The new module represents the first significant product integration with TappIn since it was acquired by GlobalSCAPE last December.
In March, GlobalSCAPE was recognized by Info Security Products Guide as a Global Excellence Award winner for the second consecutive year. GlobalSCAPEs Mail Express took top honors for 2012 in the Email Management and Security category. TappIn by GlobalSCAPE® also was recognized as a Global Excellence Award winner, taking top honors in the Software as a Service (SaaS)/Cloud Solutions category. This double award came one year after GlobalSCAPEs Managed Information Xchange solution captured the SaaS/Cloud Solution award in 2011. The Global Excellence Awards recognize excellence in all areas of information security including the industrys best products, people, and companies. A panel of more than 50 judges from a broad spectrum of industries around the world determines the finalists and winners. Winners this year were announced during an awards dinner and presentation on February 29, 2012 in San Francisco.
# # #
Conference Call May 8, 2012 At 4:30 p.m. ET
GlobalSCAPE management will hold a conference call Tuesday, May 8, 2012 to discuss the first quarter 2012 financial results and other corporate matters at 4:30 p.m. Eastern Time/3:30 p.m. Central Time. Those wishing to join should dial 1-800-380-1061and use Conference ID # 76132578. A live webcast of the conference call will also be available in the investor relations page of the companys website at www.globalscape.com. A webcast replay of the conference call will be available on the Companys website through June 8, 2012.
About GlobalSCAPE
San Antonio, Texas-based GlobalSCAPE, Inc. (NYSE Amex: GSB) is a leading provider of software and services that enable customers to access and share information quickly, securely, and reliably. Beginning in 1996 with its CuteFTP® product, GlobalSCAPE has been helping businesses and consumers including 15,000 companies in more than 150 countries facilitate cost-effective, secure information exchange. With its 2011 acquisition of Seattle-based TappIn Inc., GlobalSCAPE also offers customers the ability to access and share documents, pictures, videos, and music anytime, from anywhere easily and securely, without the need for uploading, syncing, or paying for cloud storage. 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 Companys 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 Companys Annual Report on Form 10-K for the 2011 calendar year, filed with the Securities and Exchange Commission on March 29, 2012.
# # #
Summary Financial Data
GlobalSCAPE, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended March 31, | ||||||||
(In thousands, except per share data) | 2012 | 2011 | ||||||
Operating Revenues: |
||||||||
Software licenses |
$ | 2,343 | $ | 1,981 | ||||
Maintenance and support |
2,640 | 2,230 | ||||||
Professional services |
329 | 404 | ||||||
Other |
81 | 29 | ||||||
|
|
|
|
|||||
Total Revenues |
5,393 | 4,644 | ||||||
Operating Expenses: |
||||||||
Cost of revenues |
318 | 369 | ||||||
Selling, general and administrative expenses |
4,152 | 3,194 | ||||||
Research and development expenses |
942 | 785 | ||||||
Depreciation and amortization |
316 | 204 | ||||||
|
|
|
|
|||||
Total operating expenses |
5,728 | 4,552 | ||||||
|
|
|
|
|||||
(Loss) income from operations |
(335 | ) | 92 | |||||
Other (expense) income, net |
(66 | ) | | |||||
|
|
|
|
|||||
(Loss) income before income taxes |
(401 | ) | 92 | |||||
(Benefit) provision for income taxes |
(148 | ) | 33 | |||||
|
|
|
|
|||||
Net (loss) income |
$ | (253 | ) | $ | 59 | |||
|
|
|
|
|||||
Net (loss) income per common sharebasic |
(0.01 | ) | 0.00 | |||||
Net (loss) income per common sharediluted |
||||||||
(0.01 | ) | 0.00 | ||||||
Weighted average shares outstanding: |
||||||||
Basic |
18,288 | 17,943 | ||||||
Diluted |
18,288 | 18,699 |
GlobalSCAPE, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
March 31, 2012 (unaudited) |
December 31, 2011 | |||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 7,746 | $ | 8,861 | ||||
Accounts receivable (net of allowance for doubtful accounts of $164 and $170 on March 31, 2012 and December 31, 2011, respectively) |
3,648 | 3,433 | ||||||
CoreTrace receivable |
911 | 761 | ||||||
Federal income tax receivable |
267 | 244 | ||||||
Current deferred tax assets |
553 | 938 | ||||||
Prepaid expenses |
284 | 239 | ||||||
|
|
|
|
|||||
Total current assets |
13,409 | 14,476 | ||||||
Fixed assets, net |
1,092 | 1,067 | ||||||
Long term investments |
3,000 | 3,000 | ||||||
InvestmentCoreTrace |
2,278 | 2,278 | ||||||
Intangible assets, net |
4,594 | 4,815 | ||||||
Goodwill |
12,712 | 12,712 | ||||||
Other assets |
41 | 30 | ||||||
|
|
|
|
|||||
Total assets |
$ | 37,126 | $ | 38,378 | ||||
|
|
|
|
|||||
Liabilities and Stockholders Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 515 | $ | 591 | ||||
Accrued expenses |
948 | 1,396 | ||||||
TappIn earn out, current portion |
3,303 | 3,303 | ||||||
Long term debt, current portion |
1,291 | 1,276 | ||||||
Deferred revenue |
6,325 | 6,248 | ||||||
|
|
|
|
|||||
Total current liabilities |
12,382 | 12,814 | ||||||
Deferred tax liabilities |
68 | 573 | ||||||
Deferred revenue, non-current portion |
1,457 | 1,383 | ||||||
Other long term liabilities |
56 | 54 | ||||||
TappIn earn out, non-current portion |
3,694 | 3,694 | ||||||
Long term debt, non-current portion |
5,394 | 5,724 | ||||||
Commitments and contingencies |
| | ||||||
Stockholders equity: |
||||||||
Preferred stock, par value $0.001 per share, 10,000,000 authorized, no shares issued and outstanding |
| | ||||||
Common stock, par value $0.001 per share, 40,000,000 authorized, 18,691,947 issued at March 31, 2012 and December 31, 2011 |
19 | 19 | ||||||
Additional paid-in capital |
13,670 | 13,478 | ||||||
Treasury stock, 403,581 shares, at cost, at March 31, 2012 and December 31, 2011 |
(1,452 | ) | (1,452 | ) | ||||
Retained earnings |
1,838 | 2,091 | ||||||
|
|
|
|
|||||
Total stockholders equity |
14,075 | 14,136 | ||||||
|
|
|
|
|||||
Total liabilities and stockholders equity |
$ | 37,126 | $ | 38,378 | ||||
|
|
|
|
GlobalSCAPE, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31, | ||||||||
(In thousands) | 2012 | 2011 | ||||||
Operating Activities: |
||||||||
Net (loss) income |
$ | (253 | ) | $ | 59 | |||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Bad debt expense (recoveries) |
11 | (79 | ) | |||||
Depreciation and amortization |
326 | 204 | ||||||
Stock-based compensation |
199 | 258 | ||||||
Deferred taxes |
(120 | ) | (48 | ) | ||||
Excess tax deficiency from exercise of share-based compensation |
7 | 19 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(226 | ) | 691 | |||||
CoreTrace receivable |
(150 | ) | (298 | ) | ||||
Prepaid expenses |
(45 | ) | (24 | ) | ||||
Federal income tax |
(30 | ) | 80 | |||||
Other assets |
(11 | ) | (7 | ) | ||||
Accounts payable |
(76 | ) | 290 | |||||
Accrued expenses |
(448 | ) | (583 | ) | ||||
Deferred revenues |
472 | (112 | ) | |||||
Other long-term liabilities |
(319 | ) | (76 | ) | ||||
|
|
|
|
|||||
Net cash (used in) provided by operating activities |
(663 | ) | 374 | |||||
|
|
|
|
|||||
Investing Activities: |
||||||||
Purchase of property and equipment |
(50 | ) | (29 | ) | ||||
Software development costs |
(80 | ) | | |||||
|
|
|
|
|||||
Net cash (used in) investing activities |
(130 | ) | (29 | ) | ||||
Financing Activities: |
||||||||
Tax (deficiency) from stock-based compensation |
(7 | ) | (19 | ) | ||||
Repayment of notes payable |
(315 | ) | | |||||
|
|
|
|
|||||
Net cash (used in) financing activities |
(322 | ) | (19 | ) | ||||
|
|
|
|
|||||
Net (decrease) increase in cash |
(1,115 | ) | 326 | |||||
Cash at beginning of period |
8,861 | 11,087 | ||||||
|
|
|
|
|||||
Cash at end of period |
$ | 7,746 | $ | 11,413 | ||||
|
|
|
|
|||||
Cash paid during the period for: |
||||||||
Income taxes |
$ | | $ | | ||||
|
|
|
|
Non-GAAP Financial Measures
Adjusted EBITDA
(In thousands)
Three Months Ended | ||||||||
(Unaudited) | ||||||||
March 31, 2012 | March 31, 2011 | |||||||
Net Revenue |
$ | 5,393 | $ | 4,644 | ||||
(Loss) income from operations |
$ | (335 | ) | $ | 92 | |||
Net (loss) income: |
$ | (253 | ) | $ | 59 | |||
Plus: Income tax (benefit) provision |
(148 | ) | 33 | |||||
Plus: Total other expense |
66 | 0 | ||||||
Plus: Depreciation and amortization |
316 | 204 | ||||||
Plus: Stock-based compensation expense |
199 | 259 | ||||||
|
|
|
|
|||||
Adjusted EBITDA |
$ | 180 | $ | 555 | ||||
|
|
|
|
|||||
Operating income margin |
(6.2 | %) | 2.0 | % | ||||
Adjusted EBITDA margin |
3.3 | % | 12.0 | % |
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