Exhibit 99.1
NEWS RELEASE Contact: Desiree Smith, 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 Fourth Quarter and 2011 Fiscal Year Financial Results
Reports Record Annual Revenue of $20.9 Million
SAN ANTONIO, Texas — March 22, 2012 —GlobalSCAPE, Inc. (NYSE Amex: GSB), a leading developer of secure information exchange solutions, today announced financial results for its fourth quarter and 2011 fiscal year end.
Revenue for fiscal 2011 was $20.9 million, an increase of 13 percent when compared with revenue of $18.6 million last year, and the highest revenue in the Company’s history. Net income for fiscal 2011 was approximately $0.6 million, or $0.03 per diluted share, compared with net income of $0.9 million, or $0.05 per diluted share in 2010. Excluding non-recurring expenses related to the Company’s acquisition of TappIn, Inc. in December 2011, the Company’s net income would have been $1.1 million or $0.06 per diluted share in 2011. Cash and short term investments declined to $8.9 million in 2011 from $11.1 million in December 2010, largely attributable to the Company’s acquisition of TappIn which also required investment of $3 million in a long-term certificate of deposit.
Revenue for the fourth quarter was $5.1 million, an increase of 4 percent compared to the fourth quarter of 2010. “We are very pleased to sustain our growth and set another revenue record in 2011,” said Jim Morris, GlobalSCAPE CEO. “We entered 2011 expecting some changes to our quarterly revenue growth trends as we transitioned to more subscription-based revenue. Setting a new revenue record and maintaining 13 percent annual revenue growth in the midst of this transition is a further indicator of our momentum. With our entry into the growing market for secure content mobility, through the acquisition of TappIn, I believe we are poised for additional long-term success.”
Adjusted EBITDA for the fourth quarter was ($115,000), a 116 percent decrease compared with the fourth quarter of 2010. For the full year, Adjusted EBITDA was $2.6 million, a decrease of 18 percent relative to 2010. The Adjusted EBITDA margin for the fourth quarter was (2.3) percent, down from 14.7 percent in the fourth quarter of 2010. For the full year, the Adjusted EBITDA margin was 12.4 percent, down from 16.9 percent in 2010. 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. The decreases in the Company’s adjusted EBITDA and adjusted EBITDA margin for 2011 and for the fourth quarter were mainly due to the TappIn acquisition costs.
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Conference Call March 22, 2011 at 5:00 p.m. ET
GlobalSCAPE management will hold a conference call Thursday, March 22 to discuss the fourth quarter and fiscal year 2011 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 # 58717945. 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, 2012.
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 2011 calendar year, to be filed with the Securities and Exchange Commission on March 29, 2012.
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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, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating Revenues: | ||||||||||||||||
Software license | $ | 2,022 | $ | 2,562 | $ | 9,149 | $ | 10,158 | ||||||||
Maintenance and support | 2,491 | 2,120 | 9,424 | 7,762 | ||||||||||||
Professional services | 406 | 110 | 1,772 | 438 | ||||||||||||
Others | 204 | 126 | 549 | 207 | ||||||||||||
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Total Revenues | 5,123 | 4,918 | 20,894 | 18,565 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Cost of revenues | 374 | 212 | 1,723 | 601 | ||||||||||||
Selling, general and administrative expenses | 4,310 | 3,366 | 14,466 | 12,815 | ||||||||||||
Research and development expenses | 765 | 864 | 3,124 | 3,016 | ||||||||||||
Depreciation and amortization | 220 | 202 | 790 | 852 | ||||||||||||
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Total operating expenses | 5,669 | 4,644 | 20,103 | 17,284 | ||||||||||||
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Income (loss) from operations | (546 | ) | 274 | 791 | 1,281 | |||||||||||
Other income (expense) | (10 | ) | 4 | 13 | 10 | |||||||||||
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Income (loss) before income taxes | (556 | ) | 278 | 804 | 1,291 | |||||||||||
Provision (benefit) for income taxes | (51 | ) | 128 | 169 | 410 | |||||||||||
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Net (loss) income | $ | (505 | ) | $ | 150 | $ | 635 | $ | 881 | |||||||
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Net income (loss) per common share—basic | $ | (0.03 | ) | $ | 0.01 | $ | 0.04 | $ | 0.05 | |||||||
Net income (loss) per common share—diluted | $ | (0.03 | ) | $ | 0.01 | $ | 0.03 | $ | 0.05 | |||||||
Average shares outstanding: | ||||||||||||||||
Basic | 18,262 | 17,863 | 18,081 | 17,540 | ||||||||||||
Diluted | 18,262 | 18,508 | 18,747 | 18,260 |
GlobalSCAPE, Inc.
Balance Sheets
(Unaudited)
(in thousands except share amounts) | ||||||||
December 31, | December 31, | |||||||
2011 | 2010 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 8,861 | $ | 11,087 | ||||
Accounts receivable (net of allowance for doubtful accounts of $170 and $237 on December 31, 2011 and December 31, 2010, respectively) | 3,433 | 3,124 | ||||||
CoreTrace receivable | 761 | 298 | ||||||
Federal income tax receivable | 244 | 94 | ||||||
Current deferred tax assets | 938 | 881 | ||||||
Prepaid expenses | 239 | 319 | ||||||
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Total current assets | 14,476 | 15,803 | ||||||
Fixed assets, net | 1,067 | 1,286 | ||||||
Long-term investments | 3,000 | — | ||||||
Investment—CoreTrace | 2,278 | 2,278 | ||||||
Intangible assets, net | 4,815 | 531 | ||||||
Goodwill | 12,712 | 619 | ||||||
Other assets | 30 | 30 | ||||||
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Total assets | $ | 38,378 | $ | 20,547 | ||||
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Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 591 | $ | 250 | ||||
Accrued expenses | 1,396 | 1,392 | ||||||
TappIn earn out, current portion | 3,303 | — | ||||||
Long-term debt, current portion | 1,276 | — | ||||||
Deferred revenue | 6,248 | 5,554 | ||||||
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Total current liabilities | 12,814 | 7,196 | ||||||
Deferred tax liabilities | 573 | 7 | ||||||
Other long term liabilities | 1,437 | 1,185 | ||||||
TappIn earn out, non-current portion | 3,694 | |||||||
Long-term debt | 5,724 | |||||||
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, 18,691,947 and 17,686,252 issued December 31, 2011 and 2010 | 19 | 18 | ||||||
Additional paid-in capital | 13,478 | 12,137 | ||||||
Treasury stock, 403,581 shares, at cost, at December 31, 2011 and 2010. | (1,452 | ) | (1,452 | ) | ||||
Retained earnings | 2,091 | 1,456 | ||||||
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Total stockholders’ equity | 14,136 | 12,159 | ||||||
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Total liabilities and stockholders’ equity | $ | 38,378 | $ | 20,547 | ||||
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GlobalSCAPE, Inc.
Statements of Cash Flows
(Unaudited)
(in thousands) | ||||||||
For the year ended December 31, | ||||||||
2011 | 2010 | |||||||
Operating Activities: | ||||||||
Net income | $ | 635 | $ | 881 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Bad debt expense (recoveries) | (62 | ) | 121 | |||||
Depreciation and amortization | 790 | 852 | ||||||
Stock-based compensation | 1,003 | 1,006 | ||||||
Deferred taxes | (241 | ) | (698 | ) | ||||
Excess tax benefits from exercise of stock-based compensation | (13 | ) | (97 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (78 | ) | (1,083 | ) | ||||
CoreTrace receivable | (463 | ) | (298 | ) | ||||
Prepaid expenses | 108 | (187 | ) | |||||
Federal income tax | (163 | ) | 40 | |||||
Other assets | — | 23 | ||||||
Accounts payable | 341 | (66 | ) | |||||
Accrued expenses | 1 | 628 | ||||||
Deferred revenues | 690 | 1,483 | ||||||
Other long-term liabilities | 252 | 106 | ||||||
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Net cash provided by operating activities | 2,800 | 2,711 | ||||||
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Investing Activities: | ||||||||
Proceeds from sale of property and equipment | — | — | ||||||
Purchase of property and equipment | (201 | ) | (184 | ) | ||||
Purchase of TappIn, Inc. | (9,190 | ) | ||||||
Purchase of short-term investments | — | (350 | ) | |||||
Purchase of long-term investments | (3,000 | ) | — | |||||
Redemption of short-term investments | — | 1,555 | ||||||
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Net cash provided by (used in) investing activities | (12,391 | ) | 1,021 | |||||
Financing Activities: | ||||||||
Proceeds from exercise of stock options | 352 | 232 | ||||||
Tax benefit from stock-based compensation | 13 | 97 | ||||||
Proceeds from note payable | 7,000 | — | ||||||
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Net cash provided by financing activities | 7,365 | 329 | ||||||
Net (decrease) increase in cash | (2,226 | ) | 4,061 | |||||
Cash at beginning of period | 11,087 | 7,026 | ||||||
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Cash at end of period | $ | 8,861 | $ | 11,087 | ||||
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Supplemental disclosure of cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Income taxes | $ | 1,225 | $ | 1,128 | ||||
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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.
(in thousands) | Three Months Ended | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2011 | 2011 | 2011 | 2011 | 2010 | ||||||||||||||||
Net Revenue | $ | 5,123 | $ | 5,417 | $ | 5,710 | $ | 4,644 | $ | 4,918 | ||||||||||
Income from operations | $ | (546 | ) | $ | 540 | $ | 715 | $ | 92 | $ | 272 | |||||||||
Net income: | $ | (505 | ) | $ | 611 | $ | 471 | $ | 59 | $ | 150 | |||||||||
Plus: Income taxes | (51 | ) | (71 | ) | 257 | 33 | 128 | |||||||||||||
Plus: Total other (income) expense | 10 | (9 | ) | (13 | ) | 0 | (4 | ) | ||||||||||||
Plus: Depreciation and amortization | 220 | 174 | 193 | 204 | 202 | |||||||||||||||
Plus: Stock-based compensation expense | 211 | 275 | 259 | 258 | 249 | |||||||||||||||
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Adjusted EBITDA | $ | (115 | ) | $ | 980 | $ | 1,167 | $ | 554 | $ | 725 | |||||||||
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Operating income margin | -10.7 | % | 10.0 | % | 12.5 | % | 2.0 | % | 5.5 | % | ||||||||||
Adjusted EBITDA margin | -2.3 | % | 18.1 | % | 20.4 | % | 11.9 | % | 14.7 | % |
(Unaudited) | ||||||||
(In thousands) | Year Ended | |||||||
December 31, | December 31, | |||||||
2011 | 2010 | |||||||
Net Revenue | $ | 20,894 | $ | 18,565 | ||||
Income from operations | $ | 791 | $ | 1,281 | ||||
Net income: | $ | 635 | $ | 881 | ||||
Plus: Income taxes | 169 | 410 | ||||||
Plus: Total other (income) expense | (13 | ) | (10 | ) | ||||
Plus: Depreciation and amortization | 790 | 852 | ||||||
Plus: Stock-based compensation expense | 1,003 | 1,006 | ||||||
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Adjusted EBITDA | $ | 2,584 | $ | 3,139 | ||||
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Operating income margin | 3.8 | % | 6.9 | % | ||||
Adjusted EBITDA margin | 12.4 | % | 16.9 | % |