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GlobalSCAPE, Inc. Announces Financial Results for the Second Quarter 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 second quarter 2016, which ended June 30, 2016.

Second Quarter 2016 Financial Highlights:

  • Revenue for the second quarter of 2016 was $8.3 million, an increase of five percent when compared with revenue of $7.9 million for the second quarter of 2015.
  • Revenue for the first six months of 2016 was $15.7 million, a six percent increase over the same time period last year.
  • For the second quarter of 2016, the Company’s net income was $954,000 compared with net income of $1.3 million for the second quarter of 2015, marking 15 consecutive quarters of profitability.
  • Earnings per share was $0.05 for the second quarter of 2016 compared with $0.06 for the second quarter of 2015.
  • Adjusted EBITDA for the second quarter of 2016 was $1.8 million compared with $2.1 million for the second quarter of 2015.
  • The Company had cash, cash equivalents and short-term investments of $20.3 million at June 30, 2016. Other than liabilities for normal trade payables and taxes, the Company has no debt.

Recent Business Highlights:

Supporting Quote:

Matt Goulet, President and Chief Executive Officer at Globalscape

“The secure management and movement of data is a significant challenge that a number of organizations face on a regular basis. It is also an issue that Globalscape confronts head on, and is a driver for our increasing growth along with the basis for the evolution of our products. As such, we saw a five percent increase in revenue in the second quarter of 2016 and a six percent increase in year to date revenue, compared to the same periods last year. The second quarter was also the first time in company history that we reported $8 million in revenue outside of the fourth quarter. We believe that our re-focused product strategy, which is concentrated on our core technology, our award-winning Enhanced File Transfer technology platform, will ultimately further our continued success and growth.”

Conference Call July 28, 2016 at 4:30 p.m. ET

Globalscape management will hold a conference call on July 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 second quarter 2016. Those wanting to join may call 888-539-3696 or 719-325-2495 and use Conference ID # 4393517. 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," “expect,” 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 fiscal year, filed with the Securities and Exchange Commission on March 3, 2016.

GlobalSCAPE, Inc.
Condensed Consolidated Balance Sheets
(in thousands except share amounts)
Unaudited
  June 30, December 31,
  2016 2015
Assets
Current assets:
Cash and cash equivalents   $ 16,990  $ 15,885
Short term investments 3,287 3,254
Accounts receivable (net of allowance for doubtful accounts of $335 and $325 in 2016 and 2015, respectively) 5,673 6,081
Federal income tax receivable 55 290
Prepaid and other expenses   777 511
Total current assets  26,782 26,021
Fixed assets, net 473 498
Capitalized software development costs 3,960 3,982
Goodwill 12,712 12,712
Deferred tax asset 893 940
Other assets 31 60
Total assets   $ 44,851  $ 44,213
 Liabilities and Stockholders' Equity 
Current liabilities:
   Accounts payable   $ 742  $ 839
   Accrued expenses  1,478 1,893
   Deferred revenue  11,344 12,000
   Income taxes payable    - 127

Total current liabilities 

13,564 14,859
Deferred revenue, non-current portion 3,825 3,612
Other long term liabilities 37 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, 21,584,582 and 21,383,467 shares issued at June 30, 2016, and December 31, 2015, respectively 21 21
Additional paid-in capital  20,580 19,583
Treasury stock, 403,581 shares, at cost, at
June 30, 2016 and December 31, 2015 (1,452) (1,452)
Retained earnings 8,276 7,546
Total stockholders' equity  27,425 25,698
Total liabilities and stockholders' equity   $ 44,851  $ 44,213

GlobalSCAPE, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
  Three months ended June 30, Six months ended June 30,
  2016 2015 2016 2015
Operating Revenues:
   Software licenses  $  2,893  $  3,280  $ 5,192  $  5,738
   Maintenance and support    4,632    4,093   9,129   8,127
   Professional services 731 490   1,345    878
Total Revenues    8,256    7,863   15,666    14,743
Cost of revenues 
   Software licenses 800 651   1,430   1,089
   Maintenance and support 387 391   781    716
   Professional services 587 335   1,156    652
Total cost of revenues    1,774    1,377   3,367   2,457
Gross profit    6,482    6,486   12,299    12,286
Operating expenses
   Sales and marketing    2,792    2,476   5,693   4,771
   General and administrative    1,712    1,457   3,445   3,180
   Research and development 572 657   1,199   1,186
   Total operating expenses    5,076    4,590   10,337   9,137
   Income from operations    1,406    1,896   1,962   3,149
Other income (expense), net    27    23   60 34
   Income before income taxes    1,433    1,919   2,022   3,183
Income tax expense 479 594   661   1,043
Net income   $   954  $  1,325  $ 1,361  $  2,140
Comprehensive income   $   954  $  1,325  $ 1,361  $  2,140
Net income per common share - 
   Basic  $  0.05  $  0.06  $ 0.07  $ 0.10
   Diluted  $  0.04  $  0.06  $ 0.06  $ 0.10
Weighted average shares outstanding:
   Basic 21,105 20,804 21,056 20,726
   Diluted 21,689 21,324 21,655 21,201
Cash dividends declared per share  $  0.015  $  0.015  $ 0.030  $  0.015

GlobalSCAPE, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
  For the Six Months Ended June 30,
  2016 2015
Operating Activities:
Net income  $   1,361  $   2,140
Items not involving cash at the time they are recorded in the statement of operations:
   Bad debt expense  52    127
   Depreciation and amortization  1,006    682
   Share-based compensation    500    315
   Deferred taxes  47    (60)
   Excess tax benefit from share-based
   compensation    (12)    (35)
Subtotal before changes in operating assets and liabilities 2,954 3,169
Changes in operating assets and liabilities:
   Accounts receivable     356 1,130
   Prepaid expenses     (40)    190
   Deferred revenue    (443) (1,247)
   Accounts payable    (108)   (600)
   Accrued expenses    (404)   (292)
   Other Assets 29    5
   Other long-term liabilities  (7) (1)
   Income tax receivable and payable    120    340
Net cash provided by operating activities 2,457 2,694
Investing Activities:
   Software development costs capitalized   (846) (1,107)
   Purchase of property and equipment    (113)    (90)
   Interest reinvested in long term investments    (33)    (32)
Net cash (used in) investing activities    (992) (1,229)
Financing Activities:
   Proceeds from exercise of stock options    259    307
   Excess tax benefit from share-based compensation 12 35
   Dividends paid   (631)   (312)
Net cash provided by (used in) financing activities    (360) 30
Net increase in cash  1,105 1,495
Cash at beginning of period  15,885 11,358
Cash at end of period   $ 16,990  $ 12,853
Supplemental disclosure of cash flow information:
Cash paid during the period for:
   Interest   $ -  $ -
   Income taxes   $  468  $  696

GlobalSCAPE, Inc.
Adjusted EBITDA 
(in thousands)
(Unaudited)
  Three Months Ended Six Months Ended
  June 30, June 30,
  2016 2015 2016 2015
Income from operations  $ 1,406  $ 1,896  $ 1,962  $ 3,149
Add (subtract) items to determine adjusted EBITDA:
   Depreciation and amortization:
   Total depreciation and amortization   511   394   1,006   682
   Amortization of capitalized software development costs (438) (327) (868) (545)
   Stock-based compensation expense   278   167   500   315
Adjusted EBITDA  $ 1,757  $ 2,130  $ 2,600  $ 3,601

Globalscape Press Contact

Ciri Haugh
Senior Marketing Communications Manager
pr (at) globalscape (dot) com

Phone Number: (210) 308-8267