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Form 8-K GLOBALSCAPE INC For: Apr 30

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April 30, 2015 4:26 PM EDT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
April 30, 2015
Date of Report (Date of earliest event reported)
 
GlobalSCAPE, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
001-33601
74-2785449
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
 
4500 Lockhill Selma Road, Suite 150
San Antonio, Texas 78249
(210) 308-8267
(Address of principal executive offices and Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
Item 2.02
Results of Operations and Financial Condition
 
On April 30, 2015, GlobalSCAPE, Inc. (“Globalscape” or the “Company”) issued a press release announcing financial results for the Company’s first quarter of 2015 and the declaration of an initial quarterly cash dividend. A copy of the press release is furnished with this report as Exhibit 99.1. Such information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
 
Item 9.01
Financial Statements and Exhibits
 
(d) Exhibit
 
99.1  Press release dated April 30, 2015.
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
GLOBALSCAPE, INC.
  
       
 
By:
/s/ James W. Albrecht, Jr.
  
   
James W. Albrecht, Jr., Chief Financial Officer
  
   
Dated: April 30, 2015
  
       
 
 
 
 
 
EXHIBIT INDEX
 
Exhibit
Number        
   Document Description
99.1    Press release dated April 30, 2015 announcing Globalscape’s 2015 first quarter financial results and the declaration of an initial quarterly cash dividend.
 
 

 
 
 

Exhibit 99.1
 
GRAPHIC


GlobalSCAPE, Inc. Announces Financial Results for the First Quarter 2015 and Declares Initial Quarterly Cash Dividend
 
Revenue Increases 20 Percent Compared with Q1 2014
 
SAN ANTONIO — April 30, 2015 — GlobalSCAPE, Inc. (NYSE MKT: GSB), a leading developer of secure information exchange solutions, today announced its financial results for the three months ended March 31, 2015. The Company also declared a quarterly cash dividend.
 
Revenue for the first quarter of 2015 was $6.9 million, which is an increase of 20 percent when compared with revenue of $5.7 million for the first quarter of 2014.
 
Deferred revenue, which can be an indicator of future revenue trends, was $14.3 million at March 31, 2015, compared with $10.7 million at March 31, 2014, or an increase of 33 percent.
 
For the first quarter of 2015, the Company had net income of $815,000 compared with net income of $534,000 for the first quarter of 2014. Earnings per share was $0.04 for the first quarter of 2015 compared with $0.03 for the first quarter of 2014.
 
Adjusted EBITDA Excluding Infrequent Items was $1.5 million for the first quarter of 2015 compared with $1.0 million for the first quarter of 2014.
 
The Company had cash, cash equivalents and long-term investments of $15.5 million at March 31, 2015, an increase of $1.0 million over the total of the same items at December 31, 2014.
 
“The 20 percent revenue growth we achieved for the quarter is a direct result of our ongoing investments in product development, channel sales and marketing initiatives, and demand generation programs,” said James Bindseil, Globalscape’s President and Chief Executive Officer. “We remain confident that the plans we have in place will result in us continuing to achieve our near-term objectives that support our long-term operational and financial goals.”
 
Globalscape also declared a quarterly dividend of $0.015 per share of common stock payable on June 3, 2015, to shareholders of record at the close of business on May 19, 2015.
 
 
 
 
 
GlobalSCAPE, Inc.
  
Condensed Consolidated Statements of Operations and Comprehensive Income
  
(In thousands, except per share amounts)
  
(Unaudited)
  
             
   
Three months ended March 31
  
   
2015
    
2014
  
             
Operating Revenues:
            
Software licenses
   $ 2,458     $ 1,912  
Maintenance and support
     4,034       3,579  
Professional services
     388       237  
Total Revenues
     6,880       5,728  
Operating Expenses:
                
Cost of revenues
     248       204  
Selling, general and administrative
     4,578       4,049  
Research and development
     513       527  
Depreciation and amortization
     288       141  
Total operating expenses
     5,627       4,921  
Income from operations
     1,253       807  
Other income (expense), net
     11       (20 )
Income before income taxes
     1,264       787  
Income tax expense
     449       253  
Net income
   $ 815     $ 534  
Comprehensive income
   $ 815     $ 534  
                 
Net income per common share -
                
Basic
   $ 0.04     $ 0.03  
Diluted
   $ 0.04     $ 0.03  
                 
Weighted average shares outstanding:
                
Basic
     20,647       19,534  
Diluted
     21,099       20,394  
 
 
 
 
 
GlobalSCAPE, Inc.
  
Condensed Consolidated Balance Sheets
  
(in thousands except share amounts)
  
Unaudited
  
   
March 31,
    
December 31,
  
   
2015
    
2014
  
Assets
            
Current assets:
            
Cash and cash equivalents
   $ 12,345     $ 11,358  
Accounts receivable (net of allowance for doubtful accounts
      of $500 and $511 in 2015 and 2014, respectively)
     4,715       5,938  
Current deferred tax asset
     312       402  
Prepaid expenses
     378       488  
Total current assets
     17,750       18,186  
                 
Fixed assets, net
     598       616  
Long term investments
     3,201       3,185  
Intangible assets, net
     3,771       3,298  
Goodwill
     12,712       12,712  
Deferred tax asset
     302       290  
Other assets
     100       100  
Total assets
   $ 38,434     $ 38,387  
                 
 Liabilities and Stockholders’ Equity
                
Current liabilities:
                
Accounts payable
   $ 555     $ 1,111  
Accrued expenses
     1,284       1,590  
Deferred revenue
     10,962       11,411  
Income taxes payable
     182       2  
Total current liabilities
     12,983       14,114  
                 
Deferred revenue, non-current portion
     3,310       3,393  
Other long term liabilities
     51       52  
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, 21,163,767 and 20,989,267 shares issued
at March 31, 2015, and December 31, 2014, respectively
     21       21  
Additional paid-in capital
     18,817       18,370  
Treasury stock, 403,581 shares, at cost, at
March 31, 2015 and December 31, 2014
     (1,452 )     (1,452 )
Retained earnings
     4,704       3,889  
Total stockholders’ equity
     22,090       20,828  
Total liabilities and stockholders’ equity
   $ 38,434     $ 38,387  
 
 
 
 
 
GlobalSCAPE, Inc.
  
Condensed Consolidated Statements of Cash Flows
  
(in thousands)
  
(Unaudited)
  
   
For the Three Months Ended March 31,
  
   
2015
    
2014
  
Operating Activities:
            
Net income
   $ 815     $ 534  
Adjustments to reconcile net income to net cash provided by operating activities:
          
Bad debt expense
     87       108  
Depreciation and amortization
     288       141  
Stock-based compensation
     148       126  
Deferred taxes
     78       414  
Excess tax benefit from share-based compensation
     (9 )     173  
Subtotal before changes in operating assets and liabilities
     1,407       1,496  
Changes in operating assets and liabilities:
                
Accounts receivable
     1,136       251  
Prepaid expenses
     110       75  
Deferred revenue
     (532 )     (84 )
Accounts payable
     (556 )     38  
Accrued expenses
     (306 )     42  
Other long-term liabilities
     (1 )     (4 )
Income tax receivable and payable
     189       (157 )
Net cash provided by operating activities
     1,447       1,657  
Investing Activities:
                
Software development costs capitalized
     (691 )     (751 )
Purchase of property and equipment
     (52 )     (63 )
Interest reinvested in long term investments
     (16 )     (16 )
Net cash (used in) investing activities
     (759 )     (830 )
Financing Activities:
                
Proceeds from exercise of stock options
     290       919  
Excess tax benefit from share-based compensation
     9       (173 )
Notes payable principal payments
     -       (341 )
Net cash used in financing activities
     299       405  
Net increase (decrease) in cash
     987       1,232  
Cash at beginning of period
     11,358       9,455  
Cash at end of period
   $ 12,345     $ 10,687  
                 
Supplemental disclosure of cash flow information:
                
Cash paid during the period for:
                
Interest
   $ -     $ 49  
Income taxes
   $ 174     $ 45  
 
 
 
 
 
GlobalSCAPE, Inc.
  
Consolidated Statements of EBITDA
  
(in thousands)
  
(Unaudited)
  
             
   
Three Months Ended
  
   
March 31,
  
   
2015
    
2014
  
Net income (loss)
   $ 815     $ 534  
Add (subtract) items to determine adjusted EBITDA:
          
Income tax expense
     449       253  
Interest expense, net
     (11 )     20  
Depreciation and amortization:
                
Total depreciation and amortization
     288       141  
Amortization of capitalized software development costs
     (218 )     (68 )
Stock-based compensation expense
     148       126  
Adjusted EBITDA
   $ 1,471     $ 1,006  
 
 
 
 
 
Conference Call April 30, 2015 at 4:30 p.m. ET
 
Globalscape management will hold a conference call on April 30, 2015, 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 2015. Those wanting to join should call 888-505-4368 or 719-325-2376 and use Conference ID # 1817286. 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
 
San Antonio, Texas-based GlobalSCAPE, Inc. (NYSE MKT: GSB) ensures the reliability of mission-critical operations by securing sensitive data and intellectual property. Globalscape’s suite of solutions features the EFT platform, the industry-leading enterprise file transfer solution that delivers military-grade security and a customizable platform for achieving best-in-class control and visibility of data in motion or at rest, across multiple locations. Founded in 1996, Globalscape is a leading enterprise solution provider of secure information exchange software and services to thousands of customers, including global enterprises, governments, and small businesses. 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 2014 calendar year, filed with the Securities and Exchange Commission on March 30, 2015.


INVESTOR RELATIONS CONTACT
Contact: Jim Fanucchi
Phone Number: (408) 404-5400

PRESS CONTACT
Contact: Ciri Haugh
Phone Number: (210) 308-8267


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