SOURCE: GlobalSCAPE, Inc.

Globalscape

April 28, 2016 16:15 ET

GlobalSCAPE, Inc. Announces Financial Results for the First Quarter 2016

Revenues Increase Eight Percent Over the Prior Year

SAN ANTONIO, TX--(Marketwired - April 28, 2016) - GlobalSCAPE, Inc. (NYSE MKT: GSB), a pioneer and worldwide leader in the secure and reliable exchange of business information, today announced its financial results for the three months ended March 31, 2016.

Revenue for the first quarter of 2016 was $7.4 million, an increase of eight percent when compared with revenue of $6.9 million for the first quarter of 2015.

Deferred revenue, which can be an indicator of future revenue trends, was $15.4 million at March 31, 2016, compared with $14.3 million at March 31, 2015, which is an increase of eight percent.

For the first quarter of 2016, the Company's net income was $407,000 compared with net income of $815,000 for the first quarter of 2015. Earnings per share was $0.02 for the first quarter of 2016 compared with $0.04 for the first quarter of 2015.

Adjusted EBITDA Excluding Infrequent Items for the first quarter of 2016 was $849,000 compared with $1.5 million for the first quarter of 2015.

The Company had cash, cash equivalents and short-term investments of $19.6 million at March 31, 2016. Other than liabilities for normal trade payables and taxes, the Company has no debt.

Supporting Quote:
James L. Bindseil, President and Chief Executive Officer at Globalscape
"The first quarter of 2016 helped lay a solid foundation for continuing the growth that Globalscape has established over the past two years. Revenue continued to climb, achieving eight percent growth year over year when compared to Q1 2015. Additionally, we saw a 22.5 percent increase in bookings year over year. We view this as an incredibly positive indicator to the health and growth of our business. The first quarter investments made in the Sales and Channel teams continue to put the pieces in place for our growth that is in line with expectations for the following quarters in the year. We remain confident in our sales, marketing and product development strategies and look forward to continuing to execute on the plans we have in place for the remainder of 2016."

Conference Call April 28, 2016 at 4:30 p.m. ET
Globalscape management will hold a conference call on April 28, 2016, at 4:30 p.m. Eastern Time/3:30 p.m. Central Time to discuss financial results and other corporate matters for the first quarter 2016. Those wanting to join may call 888-523-1225 or 719-325-2484 and use Conference ID # 9715704. A live webcast of the conference call will also be available on the Investor Relations page of the company's website at www.globalscape.com. A webcast replay will be made available on the company's website shortly after the call is completed.

About Globalscape
GlobalSCAPE, Inc. (NYSE MKT: GSB) is a pioneer in the reliable exchange of mission-critical business data and intellectual property. Globalscape's leading enterprise suite of solutions delivers military-proven security for achieving best-in-class control and visibility of data across multiple locations. Founded in 1996, Globalscape's software and services are trusted by tens of thousands of customers worldwide, including global enterprises, governments, and small and medium enterprises. 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 2015 calendar year, filed with the Securities and Exchange Commission on March 3, 2016.

 
GlobalSCAPE, Inc.
Condensed Consolidated Balance Sheets
(in thousands except share amounts)
Unaudited
    March 31,   December 31,
    2016   2015
Assets        
Current assets:        
  Cash and cash equivalents   $ 16,324     $ 15,885  
  Short term investments     3,270       3,254  
  Accounts receivable (net of allowance for doubtful accounts of $356 and $325 in 2016 and 2015, respectively)     5,340       6,081  
  Federal income tax receivable     35       290  
  Prepaid expenses     477       511  
    Total current assets     25,446       26,021  
                 
Fixed assets, net     517       498  
Capitalized software development costs     4,040       3,982  
Goodwill     12,712       12,712  
Deferred tax asset     959       940  
Other assets     38       60  
    Total assets   $ 43,712     $ 44,213  
                 
Liabilities and Stockholders' Equity                
Current liabilities:                
  Accounts payable   $ 489     $ 839  
  Accrued expenses     1,621       1,893  
  Deferred revenue     11,672       12,000  
  Income taxes payable     34       127  
    Total current liabilities     13,816       14,859  
                 
Deferred revenue, non-current portion     3,718       3,612  
Other long term liabilities     41       44  
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, 21,435,277 and 21,383,467 shares issued at March 31, 2016, and December 31, 2015, respectively     21       21  
Additional paid-in capital     19,930       19,583  
Treasury stock, 403,581 shares, at cost, at March 31, 2016 and December 31, 2015     (1,452 )     (1,452 )
Retained earnings     7,638       7,546  
    Total stockholders' equity     26,137       25,698  
    Total liabilities and stockholders' equity   $ 43,712     $ 44,213  
 
 
GlobalSCAPE, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
         
    Three months ended March 31,
    2016   2015
         
Operating Revenues:        
  Software licenses   $ 2,299   $ 2,458
  Maintenance and support     4,497     4,034
  Professional services     614     388
    Total Revenues     7,410     6,880
Cost of revenues            
  Software licenses     630     438
  Maintenance and support     394     325
  Professional services     569     317
    Total cost of revenues     1,593     1,080
      Gross profit     5,817     5,800
Operating expenses            
  Sales and marketing     2,901     2,295
  General and administrative     1,733     1,723
  Research and development     627     529
    Total operating expenses     5,261     4,547
      Income from operations     556     1,253
Other income (expense), net     33     11
      Income before income taxes     589     1,264
Income tax expense     182     449
      Net income   $ 407   $ 815
      Comprehensive income   $ 407   $ 815
             
Net income per common share -            
  Basic   $ 0.02   $ 0.04
  Diluted   $ 0.02   $ 0.04
             
Weighted average shares outstanding:            
  Basic     21,032     20,647
  Diluted     21,650     21,099
             
Cash dividends declared per share   $ 0.015   $ 0.015
   
   
GlobalSCAPE, Inc.  
Condensed Consolidated Statements of Cash Flows  
(in thousands)  
(Unaudited)  
    For the Three Months Ended March 31,  
    2016     2015  
Operating Activities:            
Net income   $ 407     $ 815  
Items not involving cash at the time they are recorded in the statement of operations:                
                 
    Bad debt expense     43       87  
    Depreciation and amortization     501       288  
    Share-based compensation     222       148  
    Deferred taxes     (19 )     78  
    Excess tax benefit from share-based compensation     (3 )     (9 )
      Subtotal before changes in operating assets and liabilities     1,151       1,407  
  Changes in operating assets and liabilities:                
    Accounts receivable     698       1,136  
    Prepaid expenses     34       110  
    Deferred revenue     (222 )     (532 )
    Accounts payable     (350 )     (556 )
    Accrued expenses     (272 )     (306 )
    Other Assets     22       -  
    Other long-term liabilities     (3 )     (1 )
    Income tax receivable and payable     165       189  
      Net cash provided by operating activities     1,223       1,447  
Investing Activities:                
  Software development costs capitalized     (488 )     (691 )
  Purchase of property and equipment     (90 )     (52 )
  Interest reinvested in long term investments     (16 )     (16 )
      Net cash (used in) investing activities     (594 )     (759 )
Financing Activities:                
  Proceeds from exercise of stock options     122       290  
  Excess tax benefit from share-based compensation     3       9  
  Dividends paid     (315 )     -  
      Net cash (used in) financing activities     (190 )     299  
Net increase in cash     439       987  
Cash at beginning of period     15,885       11,358  
Cash at end of period   $ 16,324     $ 12,345  
                 
Supplemental disclosure of cash flow information:                
  Cash paid during the period for:                
    Interest   $ -     $ -  
    Income taxes   $ 22     $ 174  
   
   
GlobalSCAPE, Inc.  
Adjusted EBITDA Excluding Infrequent Items  
(in thousands)  
(Unaudited)  
             
    Three Months Ended  
    March 31,  
    2016     2015  
Income from operations   $ 556     $ 1,253  
Add (subtract) items to determine adjusted EBITDA excluding infrequent items:                
  Depreciation and amortization:                
    Total depreciation and amortization     501       288  
    Amortization of capitalized software development costs     (430 )     (218 )
  Stock-based compensation expense     222       148  
    Adjusted EBITDA excluding infrequent items   $ 849     $ 1,471  
                     

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