GSB Globalscape Inc

GlobalSCAPE, Inc. (AMEX: GSB), a leading developer of file centric software for the Internet, announced its financial results today for the quarter ended March 31, 2008. Revenues for the first quarter of 2008 were $4,055,819 compared to $3,623,147 for the same quarter in 2007, which is an 11% increase. Net income in Q1 2008 was $175,411, or $0.01 per fully diluted share, compared to net income of $473,214 in Q1 2007, or $0.03 per share on a GAAP (�Generally Accepted Accounting Principles�) basis. Non-GAAP net income for the Q1 2008 was $499,275, or $0.03 per fully diluted share compared to $620,623 or $0.03 per share in Q1 2007. Non-GAAP net income does not include stock-based compensation from stock options, amortization from acquisitions, and the net tax effect of both of these. Kelly E. Simmons, GlobalSCAPE�s Chief Financial Officer, stated, �This is another solid quarter for the company and revenue is consistent with our previous announcements. We reported on March 26 that we believed that our core business revenue would remain steady in a range of $4.0 million to $4.5 million per quarter for the first three quarters of this year, and we still believe that this will be the case. We are focused on bringing new products and new markets to our brand name, which is associated around the world with smart, easy-to-use software for the Internet. We really like the opportunities in front of us and we will discuss them more openly as they are introduced during 2008.� GlobalSCAPE will host a conference call this afternoon at 4 p.m. CDT to discuss 2008 1st Quarter results. To register for the conference call, attendees must visit http://audioevent.mshow.com/343974/. The live conference call will also be available via the Internet by accessing the GlobalSCAPE Web site at http://www.globalscape.com/company/ir.aspx. Please go to the Website at least fifteen minutes prior to the call to register, download and install any necessary audio software. Please note that those interested in asking questions during the call should use the dial-in access and not the Webcast. The call bridge can be accessed by dialing 800-380-1061 in the U.S. and Canada and 706-679-5282 internationally. Participants are asked to use the following Conference ID number when joining the call: 43975562. Those individuals who wish to access the call should do so 10 minutes prior to the beginning of the call. For those who would prefer to access the call via the Web, please visit http://audioevent.mshow.com/343974 About GlobalSCAPE GlobalSCAPE, a provider of Global Managed File Transfer (MFT) solutions and wide-area file services (WAFS) technologies, delivers a modular approach to solving the enterprise challenges of security, bandwidth, latency and regulatory compliance. GlobalSCAPE�s products securely and efficiently move files such as financial data, medical records, customer files, intellectual property, and other sensitive documents of any size between supply chain partners and branch offices. GlobalSCAPE�s products are used by mid-sized and large enterprise companies, including virtually all of the Fortune 100, leading technology, banking, healthcare, and public sector organizations. Headquartered in San Antonio, TX, GlobalSCAPE is also the developer of CuteFTP, the most popular file transfer protocol application on the market. For more information on our risk-free purchase options, visit www.globalscape.com or call 800-290-5054 (US) or 210-308-8267 (international). Use of Non-GAAP Financial Measures Non-GAAP net income and net income per common share discussed in this press release exclude stock-based compensation, amortization of purchased intangible assets and the related tax impact of the applicable items. These non-GAAP financial measures are not prepared in accordance with accounting principles generally accepted in the United States (�GAAP�) and may differ from the non-GAAP information used by other companies. Management presents non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for internal reporting, for planning purposes, including analysis of the Company's performance against prior periods, for the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool, and are not intended to be an alternative to financial measures prepared in accordance with GAAP. A reconciliation between the Company's GAAP and non-GAAP financial results is provided at the end of this press release. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in the Company's SEC filings. 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," "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 2007 calendar year, filed on March 26, 2008 with the Securities and Exchange Commission. GlobalSCAPE, Inc.Condensed Consolidated Statement of Operations(Unaudited) � � Three months ended March 31, 2007 2008 � Operating Revenues: Software product revenues $ 2,946,822 $ 2,889,058 Maintenance and support (net of deferred revenues) 676,325 1,166,761 Total Revenues 3,623,147 4,055,819 Operating Expenses: Cost of revenues 58,942 30,025 Selling, general and administrative expenses 2,298,146 2,981,809 Research and development expenses 437,544 543,270 Depreciation and amortization 31,585 174,019 Total operating expenses 2,826,217 3,729,123 Income from operations 796,930 326,696 Other income (expense) (62,902) 30,310 Income before income taxes 734,028 357,007 Provision for income taxes 260,814 181,596 Net Income $ 473,214 $ 175,411 � Net income per common share - basic $ 0.03 $ 0.01 Net income per common share - assuming dilution $ 0.03 $ 0.01 Average shares outstanding: Basic 17,138,780 17,322,827 Diluted 17,950,681 18,099,028 GlobalSCAPE, Inc.Reconciliation of GAAP Net Income to Non-GAAP Net Income(Unaudited) � � Three months ended March 31, 2007 2008 � GAAP net income $ 473,214 $ 175,411 Stock-based compensation from stock options 223,347 287,126 Amortization of purchased intangible assets 0 134,361 Tax impact of above (75,938) (97,623) Non-GAAP net income $ 620,623 $ 499,275 � Basic non-GAAP net income per common share excluding amortization of purchased intangible assets, stock-based compensation, net of taxes $ 0.04 $ 0.03 � Diluted non-GAAP net income per common share excluding amortization of purchased intangible assets, stock-based compensation, net of taxes $ 0.03 $ 0.03 � Average shares outstanding used for non-GAAP: Basic 17,138,780 17,322,827 Diluted 17,950,681 18,099,028 GlobalSCAPE, Inc.Condensed Consolidated Balance Sheets � � December 31, March 31, 2007 2008 (unaudited) Assets Current assets: Cash and cash equivalents $ 5,214,479 $ 5,622,830 Accounts receivable (net of allowance for doubtful accounts) 2,232,927 1,573,197 Federal income tax receivable 122,984 - Prepaid expenses 87,654 72,438 Total current assets 7,658,044 7,268,465 � Fixed assets, net 262,745 361,616 Intangible assets, net 5,071,640 4,937,278 Goodwill 4,595,755 4,595,755 Deferred tax asset 440,632 568,193 Other assets 79,967 79,969 � Total assets $ 18,108,783 $ 17,811,276 � Liabilities and Stockholders� Equity Current liabilities: Accounts payable $ 329,817 $ 382,416 Accrued expenses 742,946 672,502 Federal income tax payable - 159,222 Deferred revenue 2,329,117 2,377,593 Deferred compensation - 141,596 Total current liabilities 3,401,880 3,733,329 � Long-term liabilities, net of current portion 119,711 - Total Liabilities 3,521,591 3,733,329 � Stockholders� equity: Common stock, par value $0.001 per share, 40,000,000 authorized, 17,432,352 and 17,184,584 shares outstanding at December 31, 2007 and March 31, 2008, respectively 17,432 17,184 Treasury Stock, 159,873 and 423,581 shares at December 31, 2007 and March 31, 2008, respectively (527,398) (1,505,516) Additional paid-in capital 7,981,620 8,275,330 Retained earnings 7,115,538 7,290,949 Total stockholders� equity 14,587,192 14,077,947 Total liabilities and stockholders� equity $ 18,108,783 $ 17,811,276 GlobalSCAPE, Inc.Condensed Consolidated Statements of Cash Flows(Unaudited) � � For the three months ended March 31, 2007 � � 2008 Operating Activities: Net income $ 473,214 $ 175,411 Adjustments to reconcile net income to net cash provided by operating activities: Bad debt expense (11,995) 56,387 Depreciation and amortization 31,585 174,020 Amortization of deferred loan costs 36,345 - (Gain) loss on disposition of assets - (221) Stock-based compensation 223,347 287,126 Deferred taxes (102,474) (127,561) Changes in operating assets and liabilities: Accounts receivable (3,571) 603,343 Prepaid expenses (627) 15,216 Accounts payable (103,289) 52,599 Accrued expenses 21,842 (70,446) Federal income tax payable 338,591 282,206 Deferred revenues 165,191 48,476 Deferred compensation 13,670 21,885 Other long-term liabilities (3,130) - Net cash provided by operating activities 1,078,699 1,518,441 Investing Activities: Proceeds from sale of property and equipment - 221 Purchase of property and equipment (72,428) (138,529) Net cash used in investing activities (72,428) (138,308) Financing Activities: Issuance of common stock 326,758 (248) Loan payments (4,610,212) - Proceeds from exercise of stock options - 6,584 Purchase of treasury stock - (978,118) Net cash used in financing activities (4,283,454) (971,782) Net increase (decrease) in cash (3,277,183) 408,351 Cash at beginning of period 4,632,666 5,214,479 Cash at end of period $ 1,355,483 $ 5,622,830