GSB Globalscape Inc

GlobalSCAPE, Inc. (NYSE Amex: GSB), a leading developer of secure information exchange solutions, today announced financial results for its third quarter of fiscal year 2009, ended September 30, 2009.

Revenue was $4.3 million, an increase of 15 percent when compared with revenue of $3.7 million in the same quarter last year. Net income for the third quarter was $576,000, or $0.03 per diluted share. This is an increase of 153 percent compared with net income of $227,000, or $0.01 per diluted share, in the same period a year ago. Cash and short term investments grew to $10.1 million, representing an 11 percent increase from the second quarter of this year and a 60 percent improvement since the end of fiscal 2008.

“We had a tremendous third quarter in all respects,” said Jim Morris, GlobalSCAPE president and CEO. “Our strong performance is undeniable. While many companies continue to contract in this economy, we have grown revenue, improved earnings, and added cash while sustaining our strategic investments in people and product development,” Morris continued. “From our position of financial and market strength, we are continuing to examine and pursue a number of organic and non-organic growth opportunities in our current and adjacent markets as we look to expand our business.”

Quarterly Highlights

During the third quarter, GlobalSCAPE continued to execute its strategy of growth through industry partnerships, certifications, improvements to existing products, and introduction of new products.

In July, GlobalSCAPE announced a partnership with nuBridges, a leading provider of secure eBusiness solutions. Complementing GlobalSCAPE’s solutions for securing data in motion, nuBridges Protect offers protection for sensitive data at rest in databases, applications, and associated backup storage. By strengthening its solution suite with nuBridges products, GlobalSCAPE’s customers can execute a more comprehensive information security strategy that accounts for data in motion and at rest, across multiple enterprise platforms. The relationship with nuBridges also provides GlobalSCAPE with additional cross-selling opportunities into the Company’s considerable enterprise customer base.

During September, GlobalSCAPE announced multiple small business program registrations which the Company believes will allow it greater opportunities to pursue sales to the federal government. By law, the government directs at least 23 percent of all government buying to small firms and federal agencies are required to establish specific small business contracting goals negotiated with the Small Business Administration. As defined by Part 19 of the Federal Acquisition Regulations, the purpose of small business set-asides is to award certain acquisitions exclusively to small business concerns. The SBA also has advisors who assist small businesses in identifying and contracting for certain government business opportunities.

The federal systems integrators confirming GlobalSCAPE's small business registration include Northrop Grumman, Booz Allen Hamilton, Accenture, SAIC, EDS, and ManTech. In addition, GlobalSCAPE announced registration with the Department of the Army Office of Small Business Programs (Washington, D.C.), U.S. Navy Air Systems Command (Patuxent River, MD), U.S. Navy Military Sealift Command (Washington, D.C.), and U.S. Marine Corps Systems Command (Quantico, VA). By coordinating directly with such agencies, GlobalSCAPE is able to identify small business set-aside opportunities and work with designated small business advisors to pursue teaming opportunities for larger contracts.

Throughout the third quarter, GlobalSCAPE also released improved versions of its current products, while continuing to research and develop additional solutions. The enhancements made by GlobalSCAPE’s engineering team have resulted in improved product performance and customer satisfaction, building on the Company’s prior successes in these areas. As a result of these ongoing initiatives, GlobalSCAPE has reduced service call volume and has recorded customer satisfaction, per a formal survey, of greater than 98 percent. GlobalSCAPE declined comment on specific new solutions under development, but referenced an internal product roadmap extending into 2011. “Our go-to-market process has several phases and gates,” said Morris. “We have both internal and external initiatives under way throughout our roadmap for the next 12 to 18 months.”

In late September, Gartner Group positioned GlobalSCAPE as a leader in the Gartner Magic Quadrant for Managed File Transfer. The Gartner report cited GlobalSCAPE’s strengths, such as having a broad solution portfolio including managed and ad hoc file delivery. In addition, the report noted that GlobalSCAPE has won high-profile contracts with the U.S. Army and other government agencies, and obtained industry validations and certifications. “The Gartner Magic Quadrant release was the first in a series of recognitions and awards received by GlobalSCAPE in recent weeks,” continued Morris. “We are firing on all cylinders and appreciate industry recognition of our accomplishments and business outlook.”

Conference Call Today At 4:30 p.m. ET

GlobalSCAPE management will hold a conference call today to discuss the third quarter fiscal 2009 financial results and other corporate matters at 4:30 p.m. Eastern Time/3:30 p.m. Central Time. Those wishing to join should dial 1-800-380-1061 and use Conference ID # 36255701. 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 December 10, 2009.

About GlobalSCAPE

GlobalSCAPE, Inc. (NYSE Amex: GSB), headquartered in San Antonio, TX, 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, visit www.globalscape.com.

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 2008 calendar year, filed with the Securities and Exchange Commission on March 31, 2009.

Summary Financial Data

     

GlobalSCAPE, Inc.

Statements of Operations

(Unaudited)

              Three Months Ended   Nine Months Ended

September30, 2009

 

September30, 2008

September30, 2009

 

September30, 2008

  OPERATING REVENUE: Software product revenues $ 2,632,858 $2,514,188 $7,797,810 $8,414,181 Maintenance and support revenues 1,663,502 1,227,268 4,483,934 3,596,160

Total revenue

4,296,360

3,741,456

12,281,744

12,010,341

  OPERATING EXPENSES: Cost of revenues 102,066 73,749 229,468 148,924 SG&A expenses 2,396,307 2,235,397 7,825,359 7,889,961 R&D expenses 728,685 843,013 2,093,862 2,172,221 Depreciation and amortization 187,202 217,602 537,073 576,247 Total operating expenses 3,414,260 3,369,761 10,685,762 10,787,353   OPERATING INCOME 882,100 371,695 1,595,982 1,222,988   Other income (expense) 3,252 18,899 (38,168) 71,935  

INCOME BEFORE INCOME TAXES

885,352

390,594

1,557,814

1,294,923

 

PROVISION FOR INCOME TAXES

309,485

163,387

283,131

623,464

  NET INCOME $ 575,867 $ 227,207 1,274,683 671,459  

Net income per common share – basic

$ 0.03 $ 0.01 $0.07 $0.04

Net income per common share – diluted

$ 0.03 $ 0.01 $0.07 $0.04 Weighted average shares outstanding: Basic 17,254,138 17,216,638 17,238,139 17,244,637 Diluted   18,243,295   17,765,178   17,799,851   17,849,898

GlobalSCAPE, Inc.

   

Balance Sheets

              September 30, 2009 (Unaudited)   December 31, 2008 Assets Cash and cash equivalents $8,653,903 $6,318,604 Short term investments 1,405,000 - Accounts receivable (net of allowance for doubtful accounts of $152,049 and $330,916 on September 30, 2009 and December 31, 2008, respectively) 2,005,216 2,021,293 Federal income tax receivable - 19,244 Current deferred tax asset 132,182 - Prepaid expenses 170,572 120,162 Total current assets 12,366,873 8,479,303   Fixed assets, net 1,786,785 1,642,776 Intangible assets, net 907,854 1,134,000 Goodwill 619,065 619,065 Deferred tax asset - 297,183 Other assets 54,481 47,581   Total assets $15,735,058 $12,219,908   Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $301,959 $512,256 Accrued expenses 637,363 560,889 Federal income tax payable 299,415 - Deferred revenue 3,738,475 2,755,698 Deferred compensation - 215,858 Total current liabilities 4,977,212 4,044,701   Deferred tax liability 37,743 545,169 Other long term liabilities 1,164,375 151,497 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, 17,674,752 and 17,630,952 issued at September 30, 2009 and December 31, 2008, respectively

17,675

17,631

Additional paid-in capital 10,539,840 9,737,380 Treasury stock, 403,581 shares, at cost, at September 30, 2009 and December 31, 2008 (1,451,805) (1,451,805) Retained earnings (deficit) 450,018 (824,665) Total stockholders’ equity 9,555,728 7,478,541   Total liabilities and stockholders’ equity $15,735,058 $12,219,908