Attached files
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| 8-K - 8-K - GLOBALSCAPE INC | globalscape8k051314.htm |
Exhibit 99.1
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NEWS RELEASE
Contact: Jim Albrecht, Chief Financial Officer
Email: ir@Globalscape.com
Contact: Jim Fanucchi, Darrow Associates, Inc.
Phone number: (408) 404-5400
Email: ir@Globalscape.com
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Globalscape Announces Financial Results for the First Quarter 2014
Results in Line with Expectations During Period of Organization and Program Enhancements
SAN ANTONIO, Texas — May 13, 2014 — GlobalSCAPE, Inc. (NYSE MKT: GSB), a leading developer of secure information exchange solutions, today announced its financial results for the three month period ended March 31, 2014.
Revenue for the three months ended March 31, 2014, was $5.7 million compared to revenue of $5.9 million for the three months ended March 31, 2013.
The Company’s deferred revenue, which the Company believes can be an indicator of future revenue trends, was $10.7 million at March 31, 2014, compared to $9.8 million at March 31, 2013, a 9% increase.
For the three months ended March 31, 2014, the Company had net income of $534,000 or $0.03 per share, compared to a net income of $517,000 million, or $0.03 per share, for the three months ended March 31, 2013.
Adjusted EBITDA Excluding Infrequent Items was $1 million for the three months ended March 31, 2014, compared to $1.2 million for the three months ended March 31, 2013. Adjusted EBITDA Excluding Infrequent Items is not a measure of financial performance under GAAP and has limitations as an analytical tool and when assessing the Company’s operating performance. Adjusted EBITDA Excluding Infrequent Items should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with GAAP.
Cash and cash equivalents were $10.7 million at March 31, 2014, up from $9.5 million at December 31, 2013.
“Our bottom line performance in the first quarter was solid with earnings per share and positive Adjusted EBITDA essentially matching the year ago period in spite of slightly weaker revenue. In addition, our cash balances at the end of the first quarter grew by about $1.2 million from the end of the prior quarter,” said James Bindseil, President and Chief Executive Officer of Globalscape. “During the fourth quarter of 2013, we began making several improvements to our sales and engineering organizations, sales and marketing programs and product development initiatives and timelines designed to drive long-term revenue growth. We are confident the sales leadership we have in place, the enhanced sales and marketing programs they are pursuing, and the new product features and functionality we will introduce during 2014 will deliver improved financial results in future quarters.”
Conference Call May 13, 2014 at 4:30 p.m. ET
Globalscape management will hold a conference call Tuesday, May 13, 2014 to discuss financial results for the first quarter of 2014 and other corporate matters at 4:30 p.m. Eastern Time/3:30 p.m. Central Time. Those wanting to join should dial 1-877-941-4775 and use Conference ID # 4682884. 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 June 13, 2014.
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 EFT Server, 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 2013 calendar year, filed with the Securities and Exchange Commission on March 27, 2014.
Summary Financial Data
GlobalSCAPE, Inc.
Statements of Operations
(Unaudited)
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(in thousands, except per share amounts)
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Three months ended March 31,
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2014
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2013
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Operating Revenues:
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Software license
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$ | 1,545 | $ | 1,957 | ||||
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Maintenance and support
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3,568 | 3,283 | ||||||
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Professional services
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237 | 399 | ||||||
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Others
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378 | 240 | ||||||
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Total Revenues
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5,728 | 5,879 | ||||||
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Operating Expenses:
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Cost of revenues
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204 | 263 | ||||||
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Selling, general and administrative
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4,049 | 3,850 | ||||||
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Research and development
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527 | 762 | ||||||
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Depreciation and amortization
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141 | 257 | ||||||
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Total operating expenses
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4,921 | 5,132 | ||||||
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Income from operations
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807 | 747 | ||||||
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Other expense, net
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(20 | ) | (47 | ) | ||||
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Income before income taxes
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787 | 700 | ||||||
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Income tax expense
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253 | 183 | ||||||
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Net income
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$ | 534 | $ | 517 | ||||
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Comprehensive income
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$ | 534 | $ | 517 | ||||
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Net income per common share - basic
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$ | 0.03 | $ | 0.03 | ||||
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Net income per common share - diluted
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$ | 0.03 | $ | 0.03 | ||||
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Average shares outstanding:
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Basic
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19,534 | 18,444 | ||||||
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Diluted
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20,394 | 18,982 | ||||||
GlobalSCAPE, Inc.
Balance Sheets
(Unaudited)
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In thousands except per share amounts.
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March 31,
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December 31,
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2014
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2013
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Assets
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Current assets:
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Cash and cash equivalents
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$ | 10,687 | $ | 9,455 | ||||
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Accounts receivable (net of allowance for doubtful accounts
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of $257 and $154 in 2014 and 2013, respectively)
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3,406 | 3,765 | ||||||
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Income tax receivable
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97 | 113 | ||||||
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Current deferred tax assets
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109 | 184 | ||||||
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Prepaid expenses
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274 | 349 | ||||||
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Total current assets
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14,573 | 13,866 | ||||||
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Fixed assets, net
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734 | 744 | ||||||
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Investment in certificate of deposit
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3,138 | 3,122 | ||||||
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Capitalized software development costs, net
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1,711 | 1,028 | ||||||
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Goodwill
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12,712 | 12,712 | ||||||
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Deferred tax asset
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1,137 | 1,476 | ||||||
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Other assets
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144 | 144 | ||||||
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Total assets
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$ | 34,149 | $ | 33,092 | ||||
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Liabilities and Stockholders’ Equity
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Current liabilities:
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Accounts payable
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$ | 693 | $ | 655 | ||||
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Accrued expenses
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940 | 898 | ||||||
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Deferred revenue
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8,718 | 9,092 | ||||||
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Income taxes payable
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- | - | ||||||
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TappIn earn out, current portion
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- | - | ||||||
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Long term debt, current portion
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1,298 | 1,397 | ||||||
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Total current liabilities
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11,649 | 12,042 | ||||||
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Deferred revenue, non-current portion
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1,998 | 1,708 | ||||||
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TappIn earn out, non-current portion
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- | - | ||||||
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Long-term debt. non-current portion
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2,747 | 2,989 | ||||||
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Other long term liabilities
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56 | 60 | ||||||
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Commitments and contingencies
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- | - | ||||||
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Stockholders’ equity:
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Preferred stock, par value $0.001 per share, 10,000,000
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authorized, no shares issued or outstanding
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- | - | ||||||
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Common stock, par value $0.001 per share, 40,000,000
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authorized, 19,645,236 and 19,592,117 issued March 31, 2014
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and December 31, 2013
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20 | 20 | ||||||
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Additional paid-in capital
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16,706 | 15,834 | ||||||
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Treasury stock, 403,581 shares, at cost, at March 31, 2014
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and December 31, 2013.
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(1,452 | ) | (1,452 | ) | ||||
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Retained earnings
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2,425 | 1,891 | ||||||
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Total stockholders’ equity
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17,699 | 16,293 | ||||||
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Total liabilities and stockholders’ equity
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$ | 34,149 | $ | 33,092 | ||||
GlobalSCAPE, Inc.
Statements of Cash Flows
(Unaudited)
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(in thousands)
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For the three months ended March 31,
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2014
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2013
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Operating Activities:
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Net income
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$ | 534 | $ | 517 | ||||
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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141 | 257 | ||||||
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Stock-based compensation
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126 | 192 | ||||||
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Deferred taxes
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414 | (47 | ) | |||||
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Bad debt expense (recoveries)
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108 | 36 | ||||||
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Excess tax deficiency from share-based
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compensation
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173 | - | ||||||
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Subtotal before changes in operating assets and liabilities
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1,496 | 955 | ||||||
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Changes in operating assets and liabilities:
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Accounts receivable
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251 | 139 | ||||||
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Prepaid expenses
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75 | 9 | ||||||
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Income tax payable
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(157 | ) | 84 | |||||
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Accounts payable
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38 | 115 | ||||||
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Accrued expenses
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42 | (353 | ) | |||||
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Deferred revenue - M&S
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(84 | ) | 59 | |||||
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Other long-term liabilities
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(4 | ) | (1 | ) | ||||
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Net cash provided by (used for) operating activities
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1,657 | 1,007 | ||||||
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Investing Activities:
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Purchase of property and equipment
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(63 | ) | (18 | ) | ||||
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Software development costs
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(751 | ) | (171 | ) | ||||
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Purchase of Tappin, Inc. and earnout payments
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- | (500 | ) | |||||
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Interest reinvested in certificate of deposit
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(16 | ) | (16 | ) | ||||
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Net cash provided by (used for) investing activities
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(830 | ) | (705 | ) | ||||
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Financing Activities:
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Proceeds from exercise of stock options
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919 | 4 | ||||||
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Net tax effect of stock option and restricted stock activity
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(173 | ) | - | |||||
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Notes payable principle payments
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(341 | ) | (329 | ) | ||||
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Net cash provided by (used for) financing activities
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405 | (325 | ) | |||||
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Net increase (decrease) in cash
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1,232 | (23 | ) | |||||
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Cash at beginning of period
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9,455 | 8,079 | ||||||
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Cash at end of period
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$ | 10,687 | $ | 8,056 | ||||
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Supplemental disclosure of cash flow information:
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Cash paid during the period for:
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Interest on notes payable
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$ | 49 | $ | 64 | ||||
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Income taxes
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$ | 45 | $ | 160 | ||||
GlobalSCAPE, Inc.
Adjusted EBITDA Excluding Infrequent Items
(Unaudited)
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(In thousands)
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Three Months Ended
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March 31,
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2014
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2013
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Net income (loss)
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534 | 517 | ||||||
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Add (subtract) items to determine adjusted EBITDA excluding infrequent items:
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Income tax expense
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253 | 183 | ||||||
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Other expense
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20 | 47 | ||||||
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Depreciation and amortization
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Total depreciation and amortization
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141 | 257 | ||||||
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Amortization of capitalized software
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development costs
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(68 | ) | (34 | ) | ||||
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Stock-based compensation expense
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126 | 192 | ||||||
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Infrequent item:
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Adjusted EBITDA excluding infrequent items
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$ | 1,006 | $ | 1,162 | ||||
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Adjusted EBITDA [Earnings before Interest, Taxes, Total Other Income (Expense), Depreciation, and Amortization (including amortized stock-based compensation expense)] Excluding Infrequent Items is not a measure of financial performance under generally accepted accounting principles and should not be considered a substitute for net income. Adjusted EBITDA Excluding Infrequent Items has limitations as an analytical tool and when assessing our operating performance. Adjusted EBITDA Excluding Infrequent Items should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with generally accepted accounting principles.
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