SAN ANTONIO, Oct. 29, 2018 /PRNewswire/
-- GlobalSCAPE, Inc. (NYSE American: GSB), a worldwide
leader in the secure movement and integration of data, today
announced its financial results for the three months ended
September 30, 2018.
Revenue for the third quarter of 2018 was $9.0 million, an increase of nine percent when
compared with revenue of $8.2 million
for the third quarter of 2017. The increase in revenue is
attributable to continued demand for the Company's flagship EFT
platform product. Gross profit was $7.5
million, or eighty-three percent of total revenue, compared
to $6.6 million, or eighty percent of
total revenue in the same quarter a year ago.
Operating expenses for the third quarter decreased to
$6.1 million, compared to
$6.2 million in the same period a
year ago.
For the third quarter of 2018, the Company's net income was
$998,000 compared with net income of
$276,000 for the third quarter of
2017. Earnings per share was $0.05
for the third quarter of 2018 compared with $0.01 for the third quarter of 2017.
Adjusted EBITDA1 for the third quarter of 2018 was
$1.5 million compared with
$839,000 for the third quarter of
2017.
The Company had cash, cash equivalents and certificates of
deposit of $11.2 million at
September 30, 2018 compared to
$27.4 million at December 31, 2017. The smaller cash balance is
primarily due to the $17.3 million
(including expenses) used to purchase 4,011,013 of the Company's
common shares in a modified Dutch auction tender offer. As a result
of the buyback, the Company has 17,968,268 shares outstanding as of
September 30, 2018.
Management Commentary from Matt
Goulet, President and CEO of Globalscape
"In the third quarter, we continued to execute on our strategy
to increase revenue, reduce operating expenses and deliver
increased profitability. Revenue grew six percent compared to last
quarter, while operating expenses declined five percent, excluding
the one time severance charges related to our reduction in force.
Our EFT product platform continues to evolve. With over two decades
of experience in the managed file transfer space, Globalscape is
uniquely positioned to develop product enhancements that strengthen
customer relationships and win new business. We had some
particulary large deals in the quarter and continue to expand our
focus on enterprise customers."
"The modified Dutch auction tender offer was a success with the
Company buying back 18.2% of our shares outstanding. The Company
continues to evaluate the most efficient use of its quarterly free
cash flow and strong balance sheet."
In October, Robert Alpert and
Clark Webb were elected as directors
to serve three year terms, with Mr. Alpert serving as chairman.
Together with other board members and the management team, insider
beneficial ownership is approximately 34%. We are aligned with
long-term shareholders and dedicated to growing revenue and
profitability.
The Company also announced that its Board of Directors has
authorized a stock repurchase program. Under the program, the
Company may purchase up to $5,000,000
of its outstanding common stock. Under the stock repurchase
program, the Company intends to repurchase shares through
authorized Rule 10b5-1 plans (which would permit the Company to
repurchase shares when the Company might otherwise be precluded
from doing so under insider trading laws), open market purchases,
privately-negotiated transactions, block purchases or otherwise in
accordance with applicable federal securities laws, including Rule
10b-18 of the Securities Exchange Act
of 1934, as amended.
The Company anticipates filing during the fourth quarter a
registration statement with the SEC to register for resale certain
shares owned by 210/GSB Acquisition Partners, LLC ("210/GSB"),
Robert Alpert, C. Clark Webb, Thomas W.
Brown and David L. Mann. As
of October 29, 2018, 210/GSB,
Robert Alpert, C. Clark Webb, Thomas W.
Brown and David L. Mann own
an aggregate of 7,089,986 shares of common stock. Any sale of
shares by such parties will also be required to be in compliance
with all applicable Company policies and procedures. There can be
no assurance as to the timing of any such registration statement
and the forgoing does not constitute an offer for the sale of
securities. Absent an available exemption from registration
requirements, no resale of these shares will be made until a
registration statement is declared effective by the SEC.
About Globalscape
GlobalSCAPE, Inc. (NYSE American:
GSB) is a pioneer in securing and automating the movement and
integration of data seamlessly in, around and outside your
business, between applications, people and places, in and out of
the cloud. GlobalSCAPE provides cloud services that automate your
work, secure your data, and integrate your applications – while
giving visibility to those who need it. GlobalSCAPE makes business
flow brilliantly. Visit 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," "expect," 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 the actual results of the operations or
financial condition of the Company to differ materially from those
expressed or implied by forward-looking statements include, but are
not limited to, the overall level of consumer spending on our
products; general economic conditions and other factors affecting
consumer confidence; disruption and volatility in the global
capital and credit markets; the Company's ability to protect
patents, trademarks and other intellectual property rights; any
breaches of, or interruptions in, our information systems; legal,
regulatory, political and economic risks in international markets;
the results of our reduction in force; the discovery of additional
information relevant to the internal investigation; the possibility
that additional errors relevant to the recently completed
restatement may be identified; pending litigation and other
proceedings and the possibility of further legal proceedings
adverse to the Company resulting from the restatement or related
matters; the costs associated with the restatement and the
investigation, pending litigation and other proceedings and
possible future legal proceedings; reduction in our cash and cash
equivalents as a result of the recently completed tender offer; and
our decreased "public float" (the number of Shares owned by
non-affiliate stockholders and available for trading in the
securities markets) as a result of the tender offer and other share
repurchases. More information on potential risks and other factors
that could affect the Company's financial results is included from
time to time in the Company's public reports filed with the SEC,
including the Company's Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, and Current Reports on Form 8-K. All
forward-looking statements included in this press release are based
upon information available to the Company as of the date of this
press release and speak only as of the date hereof.
Use of Non-GAAP Measures
The Company uses Adjusted
EBITDA (Earnings Before Interest, Taxes, Total Other
Income/Expense, Depreciation, Amortization, other than amortization
of capitalized software development costs, and Share-Based
Compensation Expense) to provide a view of income and expenses that
is supplemental and secondary to the primary assessment of net
income as presented in the consolidated statement of operations and
comprehensive income.
Adjusted EBITDA is not a measure of financial performance under
GAAP. It should not be considered as a substitute for net income
presented on our condensed consolidated statement of operations and
comprehensive income. Adjusted EBITDA has limitations as an
analytical tool and when assessing our operating performance.
Adjusted EBITDA should not be considered in isolation or without a
simultaneous reading and consideration of our financial statements
prepared in accordance with GAAP. A reconciliation of net income
(loss) to Adjusted EBITDA is provided at the end of this
release.
1 Adjusted EBITDA is not a measure of financial
performance under GAAP. It should not be considered as a substitute
for net income presented on our consolidated statement of
operations and comprehensive income. Adjusted EBITDA has
limitations as an analytical tool when assessing our operating
performance. Adjusted EBITDA should not be considered in isolation
or without a simultaneous reading and consideration of our
consolidated financial statements prepared in accordance with GAAP.
See note regarding "Use of Non-GAAP Measures," below for further
discussion of this non-GAAP measure and the reconciliation of this
non-GAAP measure below.
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net
Income
|
$
998
|
|
$ 276
|
|
$
656
|
|
$ 1,564
|
Add (subtract) items
to determine Adjusted EBITDA:
|
|
|
|
|
|
|
|
Income tax
expense
|
281
|
|
194
|
|
386
|
|
870
|
Interest (income)
expense, net
|
93
|
|
(75)
|
|
(63)
|
|
(221)
|
Depreciation and
amortization:
|
|
|
|
|
|
|
|
Total depreciation
and amortization
|
522
|
|
547
|
|
1,641
|
|
1,604
|
Amortization of
capitalized software development costs
|
(460)
|
|
(484)
|
|
(1,459)
|
|
(1,404)
|
Share-based
compensation expense
|
110
|
|
381
|
|
972
|
|
1,053
|
Adjusted
EBITDA
|
$ 1,544
|
|
$ 839
|
|
$ 2,133
|
|
$ 3,466
|
GlobalSCAPE Investor Relations Contact
ir@GlobalSCAPE.com
GlobalSCAPE Public Relations Contact
Zintel Public Relations
Matthew Zintel
matthew.zintel@zintelpr.com
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SOURCE GlobalSCAPE, Inc.