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8-K - FORM 8-K - GLOBALSCAPE INCd501349d8k.htm

Exhibit 99.1

 

LOGO   

NEWS RELEASE

Contact: Jim Albrecht, Chief Financial Officer

Email: ir@Globalscape.com

 

Contact: Jim Fanucchi, Summit IR Group, Inc.

Phone number: (408) 404-5400

Email: ir@Globalscape.com

Globalscape Announces Financial Results for the Fourth Quarter 2012 and 2012 Fiscal Year

Reports Record Annual Revenue of $23.4 Million

SAN ANTONIO, Texas — March 12, 2013 — GlobalSCAPE, Inc. (NYSE MKT: GSB), a leading developer of secure information exchange solutions, today announced its financial results for fiscal year 2012 and the three month period ended December 31, 2012.

Revenue for fiscal year 2012 was $23.4 million, a 12 percent increase over fiscal year 2011 revenue of $20.9 million. Revenue for the three months ended December 31, 2012, was $6.2 million, a 21% increase over revenue of $5.1 million for the three months ended December 31, 2011.

The Company’s deferred revenue, which the Company believes can be an indicator of future revenue trends, grew to $9.8 million at December 31, 2012, compared to $7.6 million at December 31, 2011, a 28% increase.

For fiscal year 2012, the Company had a net loss of $1.8 million, or ($0.10) per share. This net loss resulted primarily from a $3.3 million, non-cash impairment charge related to the Company’s investment in and notes receivable from CoreTrace Corporation, which was partially offset by a $1.3 million non-cash credit to income related to a previously recorded liability for a potential earn out payment associated with the acquisition of TappIn, Inc. that will not have to be paid. Excluding these infrequent items that occurred only in fiscal year 2012, the Company had non-GAAP net income of $121,000, or $0.01 per share. The Company’s comparable net income for fiscal year 2011 on both a GAAP and non-GAAP basis was $635,000, or $0.04 per basic common share.

For the three months ended December 31, 2012, the Company had net income of $1.3 million, or $0.07 per share. This result includes the $1.3 million non-cash credit to income, which is an infrequent item related to the previously recorded liability for a potential earn out payment associated with the acquisition of TappIn, Inc. that will not have to be paid. Excluding this infrequent item, the Company had a net loss on a non-GAAP basis for the three months ended December 31, 2012, of $36,000, or ($0.00) per share. For the three months ended December 31, 2011, the Company had a net loss of $505,000, or ($0.03) per share.


Adjusted EBITDA Excluding Infrequent Items was $2.7 million for fiscal year 2012 compared to $2.6 million for fiscal year 2011. Adjusted EBITDA Excluding Infrequent Items was $929,000 for the three months ended December 31, 2012, compared to ($115,000) for the three months ended December 31, 2011.

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 $3.8 million for fiscal year 2012 compared to $2.8 million for fiscal year 2011. This cash flow performance allowed the Company to pay a special cash dividend of $0.07 per share in December 2012 and end the year with over $8 million of cash and $3 million of long term investments at December 31, 2012.

“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 Craig Robinson, President and Chief Executive Officer of Globalscape. “I look forward to continued growth and increased profitability for fiscal year 2013.”

Conference Call March 12, 2013 at 4:30 p.m. ET

Globalscape management will hold a conference call Tuesday, March 12, 2013 to discuss financial results for the fourth quarter of 2012 and the fiscal year as a whole as well as other corporate matters at 4:30 p.m. Eastern Time/3:30 p.m. Central Time. Those wishing to join should dial 1-877-941-8416 and use Conference ID # 4606251. 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 April 13, 2013.

About Globalscape

San Antonio, Texas-based GlobalSCAPE, Inc. (NYSE MKT: GSB) is a leading provider of secure information exchange capabilities for enterprises and consumers through the development and distribution of software, delivery of managed and hosted solutions, and provision of associated services. The Company’s solution portfolio facilitates transmission of critical information such as financial data, medical records, customer files, vendor files, personnel files and other similar documents between diverse and geographically separated network infrastructures while supporting a range of information protection approaches to meet privacy and other security requirements. These products provide the ability to monitor these activities, as well as access the underlying data, securely and flexibly through a wide range of network-enabled, mobile devices, including tablets and smartphones. The Company has thousands of enterprise customers and more than one million individual consumers in over 150 countries. 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 2011 calendar year, filed with the Securities and Exchange Commission on March 29, 2012.


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,
 
     2012     2011     2012     2011  

Operating Revenues:

        

Software license

   $ 2,231      $ 2,022      $ 9,447      $ 9,149   

Maintenance and support

     3,108        2,491        11,298        9,424   

Professional services

     534        406        1,547        1,772   

Others

     326        204        1,080        549   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Revenues

     6,199        5,123        23,372        20,894   

Operating Expenses:

        

Cost of revenues

     334        374        1,296        1,723   

Selling, general and administrative expenses

     4,270        4,310        16,801        14,466   

Research and development expenses

     870        765        3,531        3,124   

Affiliated entity asset impairment

     0        0        3,264        0   

TappIn earnout liability not earned

     (1,343     0        (1,343     0   

Depreciation and amortization

     266        220        1,217        790   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     4,397        5,669        24,766        20,103   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     1,802        (546     (1,394     791   

Other income (expense)

     (51     (10     (189     13   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     1,751        (556     (1,583     804   

Provision (benefit) for income taxes

     444        (51     217        169   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

   $ 1,307      $ (505   $ (1,800   $ 635   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per common share—basic

   $ 0.07      $ (0.03   $ (0.10   $ 0.04   

Net income (loss) per common share—diluted

   $ 0.07      $ (0.03   $ (0.10   $ 0.03   

Average shares outstanding:

        

Basic

     18,421        18,262        18,358        18,081   

Diluted

     18,959        18,262        18,358        18,747   


GlobalSCAPE, Inc.

Balance Sheets

(Unaudited)

In thousands except per share amounts.

 

     December 31,     December 31,  
     2012     2011  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 8,079      $ 8,861   

Accounts receivable (net of allowance for doubtful accounts of $171 and $170 on December 31, 2012 and December 31, 2011 respectively)

     3,350        3,433   

CoreTrace receivable

     —          761   

Federal income tax receivable

     —          244   

Current deferred tax assets

     177        938   

Prepaid expenses

     426        239   
  

 

 

   

 

 

 

Total current assets

     12,032        14,476   

Fixed assets, net

     1,202        1,067   

Long-term investments

     3,060        3,000   

Investment in affiliated entity

     —          2,278   

Intangible assets, net

     4,006        4,815   

Goodwill

     12,712        12,712   

Deferred tax asset

     535        —     

Other assets

     41        30   
  

 

 

   

 

 

 

Total assets

   $ 33,588      $ 38,378   
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current liabilities:

    

Accounts payable

   $ 432      $ 591   

Accrued expenses

     1,353        1,396   

Deferred revenue

     8,293        6,248   

Income taxes payable

     46        —     

Tappin earn out, current portion

     500        3,303   

Long term debt, current portion

     1,335        1,276   
  

 

 

   

 

 

 

Total current liabilities

     11,959        12,814   

Deferred revenue, non-current portion

     1,480        1,384   

TappIn earn out, non-current portion

     3,694        3,694   

Long-term debt. non-current portion

     4,389        5,724   

Deferred tax liability

     —          573   

Other long term liabilities

     62        53   

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, 18,846,547 and 18,691,947 issued December 31, 2012 and December 31, 2011

     19        19   

Additional paid-in capital

     14,435        13,478   

Treasury stock, 403,581 shares, at cost, at December 31, 2012 and December 31, 2011

     (1,452     (1,452

Retained earnings

     (998     2,091   
  

 

 

   

 

 

 

Total stockholders’ equity

     12,004        14,136   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 33,588      $ 38,378   
  

 

 

   

 

 

 


GlobalSCAPE, Inc.

Statements of Cash Flows

(Unaudited)

(in thousands)

 

     For the year ended December 31,  
     2012     2011  

Operating Activities:

    

Net (loss) income

   $ (1,800   $ 635   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Bad debt expense (recoveries)

     68        (62

Depreciation and amortization

     1,217        790   

Stock-based compensation

     915        1,003   

Deferred taxes

     (347     (352

Excess tax deficiency (benefit) from exercise of share based compensation

     28        13   

Affiliated entity asset impairment

     3,264        —     

TappIn earnout liability not earned

     (1,343     —     

Other

     40        —     

Changes in operating assets and liabilities:

    

Accounts receivable

     (60     (78

CoreTrace receivable

     (150     (463

Prepaid expenses

     (187     108   

Federal income tax

     262        (52

Other assets

     (11     —     

Accounts payable

     (159     341   

Accrued expenses

     (43     1   

Deferred revenues

     2,141        690   

Other long-term liabilities

     9        252   
  

 

 

   

 

 

 

Net cash provided by operating activities

     3,844        2,826   
  

 

 

   

 

 

 

Investing Activities:

    

Software development costs

     (330     —     

Purchase of property and equipment

     (213     (201

Purchase of TappIn, Inc.

     (1,500     (9,190

Purchase of short-term investments

     —          —     

Interest on long-term investments

     (60     —     

Purchase of long-term investments

     —          (3,000
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     (2,103     (12,391

Financing Activities:

    

Proceeds from exercise of stock options

     70        352   

Tax deficiency (benefit) from stock-based compensation

     (28     (13

Notes payable principle payments

     (1,276     —     

Proceeds from note payable

       7,000   

Dividends paid out

     (1,289     —     
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (2,523     7,339   

Net (decrease) increase in cash

     (782     (2,226

Cash at beginning of period

     8,861        11,087   
  

 

 

   

 

 

 

Cash at end of period

   $ 8,079      $ 8,861   
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information:

    

Cash paid during the period for:

    

Interest

   $ 294      $ —     
  

 

 

   

 

 

 

Income taxes

   $ 271      $ 1,225   
  

 

 

   

 

 

 

Noncash—TappIn earn out

   $ —        $ 6,997   
  

 

 

   

 

 

 


GlobalSCAPE, Inc.

Adjusted EBITDA Excluding Infrequent Items

(Unaudited)

(In thousands)

 

     Three Months Ended     Twelve Months Ended  
     December 31,     December 31,  
     2012     2011     2012     2011  

Net income (loss)

     1,307        (505     (1,800     635   

Add (subtract) items to determine adjusted EBITDA excluding infrequent items:

        

Income tax expense

     444        (51     217        169   

Other expense

     51        10        189        (13

Depreciation and amortization

     266        220        1,217        790   

Affiliated entity asset impairment

     —          —          3,264        —     

TappIn earnout liability

     (1,343     —          (1,343     —     

Stock-based compensation expense

     204        211        915        1,003   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA excluding infrequent items

   $ 929      $ (115   $ 2,659      $ 2,584   
  

 

 

   

 

 

   

 

 

   

 

 

 

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.


GlobalSCAPE, Inc.

Reconciliation of GAAP Net Loss to Non-GAAP

Net Loss:

(Unaudited)

(In thousands)

 

     Three Months Ended     Twelve Months Ended  
     December 31,     December 31,  
     2012     2011     2012     2011  

Non-GAAP Net Income (Loss)

        

GAAP net income (loss)

     1,307        (505     (1,800     635   

Affiliated entity asset impairment

     0        0        3,264        0   

TappIn earnout liability not earned

     (1,343     0        (1,343     0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

   $ (36   $ (505   $ 121      $ 635   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Earnings Per Share

        

Non-GAAP net income (loss)

   $ (36   $ (505   $ 121      $ 635   

Weighted average share outstanding:

        

Basic

     18,421        18,262        18,358        18,081   

Diluted

     18,959        18,262        19,016        18,747   

Non-GAAP net income (loss) per common share:

        

Basic

   $ (0.00   $ (0.03   $ 0.01      $ 0.04   

Diluted

   $ (0.00   $ (0.03   $ 0.01      $ 0.03   

Non-GAAP net income is not a measure of financial performance under generally accepted accounting principles and should not be considered a substitute for net income. Non-GAAP net income has limitations as an analytical tool and when assessing our operating performance. Non-GAAP net income 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.