Globalscape (GSB) 8-K GlobalSCAPE Announces Fourth Quarter and 2010 Fiscal Year Financial Results

Exhibit 99.1

NEWS RELEASE   Contact: Mendy Marsh, CFO Phone number: (210) 308-8267   Contact: Jim Fanucchi, Summit IR Group, Inc. Phone number: (408) 404-5400 Email: ir@globalscape.com

GlobalSCAPE Announces Fourth Quarter and 2010 Fiscal Year Financial Results

Reports Record Annual Revenue of $18.6 Million

SAN ANTONIO, Texas — March 29, 2011 —GlobalSCAPE, Inc. (NYSE Amex: GSB), a leading developer of secure information exchange solutions, today announced financial results for its fourth quarter and 2010 fiscal year end.

Revenue for fiscal 2010 was $18.6 million, an increase of 13 percent when compared with revenue of $16.5 million last year, and the highest revenue in the Company’s history. Net income for fiscal 2010 was approximately $0.9 million, or $0.05 per diluted share, compared with net income of $1.4 million, or $0.08 per diluted share in 2009. Cash and short term investments grew to $11.1 million, a 35 percent increase from 2009.

Revenue for the fourth quarter was $4.9 million, an increase of 18 percent compared to the fourth quarter of 2009. “Setting a new high water mark for revenue in 2010 is a significant milestone for GlobalSCAPE,” said Jim Morris, GlobalSCAPE president and CEO. “We grew revenue every quarter while achieving record revenue for the fiscal year. During 2011 we are continuing our transition toward generating additional recurring revenue in the form of subscription services like our Managed Information Xchange solution. This subscription revenue potentially provides us with a growing revenue stream visible into future periods, but will require a transition that I expect to run through the later part of 2011.”

Adjusted EBITDA for the fourth quarter was $723,000, a 15 percent increase compared with the fourth quarter of 2009. For the full year, Adjusted EBITDA was $3.1 million, a decrease of 11 percent relative to 2009. The Adjusted EBITDA margin for the fourth quarter was 14.7 percent, marginally down from 15.2 percent in the fourth quarter of 2009. For the full year, the Adjusted EBITDA margin was 16.9 percent, down from 21.5 percent in 2009. Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures. See the accompanying table for a reconciliation

of net income/loss to Adjusted EBITDA and Adjusted EBITDA margin. “In 2010, cash balances grew and we remained profitable during a period when we continued to invest in our operations to further increase our top-line performance,” Morris continued. “With our new product launches and with increasing subscription revenue, we believe 2011, especially the second half of the year, can take us to new heights.”

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Conference Call March 29, 2011 at 5:00 p.m. ET

GlobalSCAPE management will hold a conference call Tuesday, March 29 to discuss the fourth quarter and fiscal year 2010 financial results and other corporate matters at 5:00 p.m. Eastern Time/4:00 p.m. Central Time. Those wishing to join should dial 1-800-380-1061 and use Conference ID # 41318117. 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 30, 2011.

About GlobalSCAPE

GlobalSCAPE, Inc. (NYSE Amex: GSB), headquartered in San Antonio, Texas, is a global provider of managed file transfer (MFT) and wide area file services (WAFS) solutions for securely exchanging critical information over the Internet, within an enterprise, and with business partners. Since the release of Cute FTP in 1996, GlobalSCAPE’s solutions have continued to evolve to meet the business and technology needs of an increasingly interconnected global marketplace. For more information about GlobalSCAPE’s products, visitwww.globalscape.com or the Company’s Secure Info Exchange blog.

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 2010 calendar year, filed with the Securities and Exchange Commission on March 29, 2011.

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GlobalSCAPE, Inc.

Statements of Operations

	Three months ended December 31,					For the Year Ended December 31,
	2010		2009			2010		2009
Operating Revenues:
Software license	$	2,627	$	2,476		$	10,279	$	10,274
Maintenance and support		2,146		1,670			7,788		6,026
Other		145		23			498		151
Total Revenues		4,918		4,169			18,565		16,451
Operating Expenses:
Cost of revenues		212		106			601		336
Selling, general and administrative expenses		3,366		2,973			12,815		10,798
Research and development expenses		864		711			3,016		2,805
Depreciation and amortization		202		187			852		724
Total operating expenses		4,644		3,977			17,284		14,663
Income from operations		274		192			1,281		1,788
Other income (expense)		4		(29	)		10		(67	)
Income before income taxes		278		163			1,291		1,721
Provision for income taxes		128		38			410		321
Net Income	$	150	$	125		$	881	$	1,400
Net income per common share - basic	$	0.01	$	0.01		$	0.05	$	0.08
Net income per common share - diluted	$	0.01	$	0.01		$	0.05	$	0.08
Average shares outstanding:
Basic		17,863		17,277			17,540		17,248
Diluted		18,508		17,845			18,260		17,691

GlobalSCAPE, Inc.

Balance Sheets

	December 31,			December 31,
	2010			2009
Assets
Current assets:
Cash and cash equivalents	$	11,087		$	7,026
Short term investments		—		$	1,205
Accounts receivable (net of allowance for doubtful accounts of $237 and $217 on December 31, 2010 and 2009, respectively)		3,124			2,162
CoreTrace receivable		298			—
Federal income tax receivable		94			37
Current deferred tax asset		881			130
Prepaid expenses		319			132
Total current assets		15,803			10,692
Fixed assets, net		1,286			1,653
Investment - CoreTrace		2,278			2,278
Intangible assets, net		531			832
Goodwill		619			619
Deferred tax asset		—			46
Other assets		30			53
Total assets	$	20,547		$	16,173
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	250		$	316
Accrued expenses		1,392			764
Deferred revenue		5,554			4,071
Total current liabilities		7,196			5,151
Deferred tax liability		7			—
Other long term liabilities		1,185			1,079
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, 18,346,982 and 17,686,252 shares issued at December 31, 2010 and 2009, respectively		18			18
Additional paid-in capital		12,137			10,802
Treasury stock, 403,581 shares at December 31, 2010 and 2009.		(1,452	)		(1,452	)
Retained earnings		1,456			575
Total stockholders’ equity		12,159			9,943
Total liabilities and stockholders’ equity	$	20,547		$	16,173

GlobalSCAPE, Inc.

Statements of Cash Flows

	For the Year ended December 31,
	2010			2009
Operating Activities:
Net income (loss)		881		$	1,400
Adjustments to reconcile net income to net cash provided by operating activities:
Bad debt expense (recoveries)		121			(60	)
Depreciation and amortization		852			724
Loss on disposition of assets		—			85
Stock-based compensation		1,006			1,021
Deferred taxes		(698	)		(424	)
Excess tax benefit from exercise of share based compensation		(97	)		—
Changes in operating assets and liabilities:
Accounts receivable		(1,083	)		(70	)
CoreTrace receivable		(298	)		—
Prepaid expenses		(187	)		(12	)
Federal income tax receivable		40			(17	)
Other assets		23			(5	)
Accounts payable		(66	)		(197	)
Accrued expenses		628			203
Deferred revenues		1,483			2,225
Deferred compensation		—			(216	)
Other long-term liabilities		106			19
Net cash provided by operating activities		2,711			4,676
Investing Activities:
Proceeds from sale of property and equipment		—			1
Purchase of property and equipment		(184	)		(530	)
Investment in CoreTrace		—			(2,278	)
Purchase of short-term investments		(350	)		(1,705	)
Redemption of short-term investments		1,555			500
Net cash provided by (used in) investing activities		1,021			(4,012	)
Financing Activities:
Proceeds from exercise of stock options		232			43
Tax benefit from stock-based compensation		97			—
Net cash provided by (used in) financing activities		329			43
Net increase in cash		4,061			707
Cash at beginning of period		7,026			6,319
Cash at end of period	$	11,087		$	7,026

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA Margin

We define Adjusted EBITDA as Net Income, plus Income Taxes, Total Other Income (Expense), Depreciation and Amortization, and non-cash charges for share-based compensation and asset impairments.

Adjusted EBITDA and Adjusted EBITDA Margin are metrics that are used in our industry by the investment community for comparative and valuation purposes. We disclose this metric in order to support and facilitate the dialogue with research analysts and investors.

Note that Adjusted EBITDA and Adjusted EBITDA Margin are not measures of financial performance under accounting principles generally accepted in the United States (“GAAP”) and should not be considered a substitute for net income. Adjusted EBITDA and Adjusted EBITDA Margin have limitations as analytical tools, and when assessing our operating performance, you should not consider Adjusted EBITDA and Adjusted EBITDA Margin in isolation, or as a substitute for net income or other income statement data prepared in accordance with GAAP. Other companies may calculate Adjusted EBITDA and Adjusted EBITDA Margin differently than we do, limiting their usefulness as a comparative measure. See our Adjusted EBITDA to net income reconciliations in the table below.

	Three Months Ended
	(Unaudited)
	December 31,			March 31,			June 30,			September 30,			December 31,
	2009			2010			2010			2010			2010
Net Revenue	$	4,170		$	4,413		$	4,466		$	4,768		$	4,918
Income from operations	$	192		$	556		$	185		$	268		$	272
Net income:	$	125		$	364		$	134		$	233		$	150
Plus: Income taxes		37			193			55			35			127
Plus: Total other (income) expense		30			(1	)		(4	)		0			(4	)
Plus: Depreciation and amortization		187			200			250			201			201
Plus: Stock-based compensation expense		253			263			219			275			249
Adjusted EBITDA	$	632		$	1,019		$	654		$	744		$	723
Operating income margin		4.6	%		12.6	%		4.1	%		5.6	%		5.5	%
Adjusted EBITDA margin		15.2	%		23.1	%		14.6	%		15.6	%		14.7	%

	Year Ended
	December 31,			December 31,
	2010			2009
Net Revenue	$	18,565		$	16,451
Income from operations	$	1,281		$	1,788
Net income:	$	881		$	1,400
Plus: Income taxes		410			321
Plus: Total other (income) expense		(10	)		67
Plus: Depreciation and amortization		852			724
Plus: Stock-based compensation expense		1,006			1,021
Adjusted EBITDA	$	3,139		$	3,533
Operating income margin		6.9	%		10.9	%
Adjusted EBITDA margin		16.9	%		21.5	%