ZIXI Zix Corp

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

July 21, 2015

 

 

ZIX CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Texas		0-17995		75-2216818
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

2711 North Haskell Avenue

Suite 2200, LB 36

Dallas, Texas 75204-2960

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (214) 370-2000

Not Applicable

(Former name or former address, if changed since last report.)

 

 

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:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

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 July 21, 2015, Zix Corporation (“ZixCorp”) issued a press release announcing financial results for the second quarter ended June 30, 2015. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 2.02 and in the attached Exhibit 99.1 are deemed to be “furnished” and shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On July 21, 2015, ZixCorp announced that Richard D. Spurr, its President and Chief Executive Officer, will step down from those positions upon the appointment of his successor following a national executive search process. Mr. Spurr will continue to serve as President and CEO until his successor is employed by ZixCorp (the “Transition Date”), and will continue to serve on the board of directors of ZixCorp.

In connection with the foregoing, ZixCorp entered into a Transition Agreement with Mr. Spurr, dated as of July 21, 2015. In connection with the Transition Agreement, ZixCorp also entered into a Second Amended and Restated Employment Termination Benefits Agreement (the “Amended ETBA”), dated as of July 21, 2015, with Mr. Spurr.

Under the Transition Agreement, Mr. Spurr will use his best efforts to cooperate with and assist ZixCorp, its board and their respective representatives, in good faith, to recruit, hire and appoint his successor as President and CEO, and to transition his duties and responsibilities to such successor, including providing assistance for a period of up to nine months following the Transition Date. Until the Transition Date, Mr. Spurr will continue to serve as President and CEO of ZixCorp at his current level of salary and benefits. ZixCorp has also agreed, subject to certain limitations, to nominate Mr. Spurr to stand for re-election as a director and to recommend that shareholders vote for his re-election at each of the 2016 and 2017 annual meetings of the company’s shareholders.

Under the Amended ETBA, Mr. Spurr will, upon the Transition Date, be entitled to receive 24 equal monthly cash payments in an aggregate amount equal to (i) two times his current base salary plus (ii) two times his target cash bonus for the fiscal year during which the Transition Date occurs plus (iii) any excess costs to continue his health, dental and other employee benefits under COBRA over the price Mr. Spurr would have paid for such benefits had he remained employed by ZixCorp during such 24-month payment period. In addition, all of Mr. Spurr’s outstanding equity awards will immediately vest in full on the Transition Date, and Mr. Spurr will generally have until the earlier of 12 months from the Transition Date or the grants’ original expiration date by which to exercise outstanding stock options. Under the Amended ETBA, Mr. Spurr will be subject to certain covenants regarding noncompetition and nonsolicitation of employees and customers for a period of 24 months after the Transition Date.

Item 7.01 Regulation FD Disclosure

On July 21, 2015, ZixCorp issued a press release announcing the planned CEO transition disclosed in Item 5.02 above. A copy of the press release is furnished as Exhibit 99.2 to this

 

2

---

Current Report on Form 8-K. In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 7.01 and in the attached Exhibit 99.2 shall be deemed to be “furnished” and shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press Release, dated July 21, 2015, titled “ZixCorp Sets Record in Total Orders for First Half of 2015”.
99.2		Press Release, dated July 21, 2015, titled “ZixCorp CEO Announces Plans to Step Down After 11 Years of Leadership”.

 

3

---

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.

 

						ZIX CORPORATION
Date: July 21, 2015				By:		/s/ Michael W. English
						Michael W. English
						Vice President and Chief Financial Officer

 

4

---

INDEX TO EXHIBITS

 

Exhibit No.		Description
99.1		Press Release, dated July 21, 2015, titled “ZixCorp Sets Record in Total Orders for First Half of 2015”.
99.2		Press Release, dated July 21, 2015, titled “ZixCorp CEO Announces Plans to Step Down After 11 Years of Leadership”.

 

5

Exhibit 99.1

 

ZixCorp Sets Record in Total Orders for First Half of 2015

Revenue and earnings per share meet quarterly guidance

DALLAS — July 21, 2015 — Zix Corporation (ZixCorp), (Nasdaq: ZIXI), a leader in email data protection, today announced financial results for the second quarter ended June 30, 2015.

Second Quarter 2015 Financial Highlights

 

•

Ending backlog of $73.9 million, an increase of 8.1% year-over-year and the Company’s 13th consecutive quarterly record in backlog

 

•

Total orders of $17.4 million, an increase of 10.6% year-over-year

 

•

New first year orders of $2.5 million, an increase of 5.5% year-over-year

 

•

Revenue of $13.3 million, an increase of 5.4% year-over-year

 

•

GAAP net income of $0.02 per share, an increase of 16.3% year-over-year (1)

 

•

Non-GAAP adjusted net income of $0.04 per share, an increase of 0.9% year-over-year (1) (3)

 

•

Cash flow from operations was approximately $3.0 million, a decrease of $1.1 million year-over-year, due to normal timing of cash receipts on the statement of cash flows

 

•

Cash and cash equivalents totaled $28.0 million at June 30, 2015, an increase of $1.8 million from the June 30, 2014, balance

“Our first half of 2015 was a great start to the year,” said Rick Spurr, ZixCorp’s Chief Executive Officer. “Our sales teams delivered a record level of total orders for the first half, resulting in another record backlog at quarter end and providing a healthy outlook for our company. Building on this success is the increasing demand for our DLP and BYOD products and the excitement around our recent partnership with Cisco.”

Second Quarter 2015 Corporate Financial Summary and Other Operational Metrics

 

$ in Millions, except per share and % data		Q2 2015				Q2 2014				% or $ Change (1)
Revenue		$	13.3			$	12.6				5.4	%
GAAP Gross Profit		$	10.9			$	10.6				2.7	%
GAAP Net Income		$	1.1			$	1.0				14.1	%
GAAP Net Income Per Share – Diluted		$	0.02			$	0.02				16.3	%
Non-GAAP Adjusted Gross Profit(2)		$	10.9			$	10.6				2.7	%
Non-GAAP Adjusted Net Income (2)		$	2.2			$	2.2				(0.9	)%
Non-GAAP Adjusted Net Income Per Share-Diluted (2)		$	0.04			$	0.04				0.9	%
Adjusted EBITDA (2) (3)		$	2.8			$	2.7				6.4	%
Adjusted EBITDA Margin (2) (3)			21.3	%			21.1	%			0.2pt
New First Year Orders		$	2.5			$	2.4				5.5	%
Total Orders		$	17.4			$	15.7				10.6	%
Bookings Backlog (4)		$	73.9			$	68.4				8.1	%

 

---

 

(1)	Changes are based on actual financial results versus numbers shown in the table which may reflect rounding

(2)	A reconciliation of GAAP to Non-GAAP adjusted results is attached to this press release and is available on our investor relations Web site at http://investor.zixcorp.com

(3)	Adjusted earnings before interest, taxes, depreciation and amortization

(4)	Service contract commitments that represent future revenue to be recognized as the services are provided

Business Highlights

 

•

As previously disclosed, ZixCorp’s board of directors approved a share repurchase program in May that enables the company to purchase up to $15 million of its shares of common stock from time to time in the open market or in block purchase transactions. The share repurchase program is scheduled to expire on Oct. 31, 2015.

 

•

The first of two products to be released in 2015 as part of ZixCorp’s new partnership with Cisco was made available through the Cisco sales and reseller channels at the end of June 2015.

 

•

ZixCorp is in the final stages of negotiating a “go-to-market” referral agreement with a major U.S. information technology vendor.

Outlook

For the third quarter 2015, the Company forecasts revenue to be between $13.6 million and $13.9 million and Non-GAAP fully diluted adjusted earnings per share to be between $0.04 and $0.05. For the full-year 2015, the Company reaffirms previously issued revenue guidance of $54 million to $56 million and fully diluted Non-GAAP adjusted earnings per share of $0.19 to $0.21.

 

---

 

Conference Call Information

The Company will discuss its financial results and outlook on a conference call on Tuesday, July 21, 2015, at 5 p.m. ET. A live webcast of the conference call will be available on our investor relations Web site at http://investor.zixcorp.com. Alternatively, participants can access the conference call by dialing 1-855-853-6940 (U.S. toll-free) or 1-720-634-2906 (international) at least 15 minutes before the call and entering access code 75476822. An audio replay of the conference will be available until July 28, 2015, by dialing 1-855-859-2056 (U.S. toll-free) or 1-404-537-3406 (international) and entering the access code 75476822. An archive for the webcast will also be available on the ZixCorp investor relations Web site.

About Zix Corporation

ZixCorp is a leader in email data protection. ZixCorp offers industry-leading email encryption, a unique email DLP solution and an innovative email BYOD solution to meet your company’s data protection and compliance needs. ZixCorp is trusted by the nation’s most influential institutions in healthcare, finance and government for easy to use secure email solutions. ZixCorp is publicly traded on the Nasdaq Global Market under the symbol ZIXI, and its headquarters are in Dallas, Texas. For more information, visit www.zixcorp.com.

SOURCE Zix Corporation

 

ZixCorp Contacts
Investor Relations		Public Relations
Todd Kehrli or Jim Byers		Taylor Stansbury Johnson
(323) 468-2300		(214) 370-2134
zixi@mkr-group.com		tjohnson@zixcorp.com

Statements in this release that are not purely historical facts or that necessarily depend upon future events, including statements about forecasts of sales, revenue or earnings, or other statements about anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on forward-looking statements. All forward-looking statements are based upon information available to ZixCorp on the date this release was issued. ZixCorp undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including risks or uncertainties related to market acceptance of new ZixCorp solutions and how privacy and data security laws may affect demand for ZixCorp email data protection solutions. ZixCorp may not succeed in addressing these and other risks. Further information regarding factors that could affect ZixCorp financial and other results can be found in the risk factors section of ZixCorp’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission.

 

---

ZIX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		June 30, 2015 (unaudited)				December 31, 2014
ASSETS
Current assets:
Cash and cash equivalents		$	27,974,000			$	21,685,000
Receivables, net			1,259,000				1,452,000
Prepaid and other current assets			2,361,000				2,372,000
Deferred tax assets			1,324,000				1,763,000
Total current assets			32,918,000				27,272,000
Property and equipment, net			4,595,000				4,399,000
Goodwill			2,161,000				2,161,000
Deferred tax assets			49,278,000				49,892,000
Total assets		$	88,952,000			$	83,724,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses		$	3,689,000			$	3,436,000
Deferred revenue			21,159,000				21,587,000
Total current liabilities			24,848,000				25,023,000
Long-term liabilities:
Deferred revenue			1,107,000				898,000
Deferred rent			1,479,000				1,533,000
Total long-term liabilities			2,586,000				2,431,000
Total liabilities			27,434,000				27,454,000
Total stockholders’ equity			61,518,000				56,270,000
Total liabilities and stockholders’ equity		$	88,952,000			$	83,724,000

---

ZIX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2015				2014				2015				2014
Revenue		$	13,302,000			$	12,615,000			$	26,375,000			$	24,777,000
Cost of revenue			2,429,000				2,032,000				4,642,000				4,057,000
Gross profit			10,873,000				10,583,000				21,733,000				20,720,000
Operating expenses:
Research and development			2,094,000				2,218,000				4,199,000				4,419,000
Selling, general and administrative			7,046,000				6,778,000				13,961,000				13,067,000
Total operating expenses			9,140,000				8,996,000				18,160,000				17,486,000
Operating income			1,733,000				1,587,000				3,573,000				3,234,000
Operating margin			13	%			13	%			14	%			13	%
Other income, net			29,000				12,000				52,000				74,000
Income before income taxes			1,762,000				1,599,000				3,625,000				3,308,000
Income tax benefit (expense)			(647,000	)			(622,000	)			(1,334,000	)			(1,272,000	)
Net income		$	1,115,000			$	977,000			$	2,291,000			$	2,036,000
Basic income per common share:		$	0.02			$	0.02			$	0.04			$	0.03
Diluted income per common share:		$	0.02			$	0.02			$	0.04			$	0.03
Shares used in per share calculation - basic			57,146,014				58,565,002				56,822,953				58,967,904
Shares used in per share calculation - diluted			58,373,407				59,466,867				57,886,307				60,176,977

---

ZIX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

		Six Months Ended June 30,
		2015				2014
Operating activities:
Net income		$	2,291,000			$	2,036,000
Non-cash items in net income			2,937,000				2,772,000
Changes in operating assets and liabilities			337,000				1,032,000
Net cash provided by operating activities			5,565,000				5,840,000
Investing activities:
Purchases of property and equipment			(1,400,000	)			(857,000	)
Net cash used in investing activities			(1,400,000	)			(857,000	)
Financing activities:
Proceeds from exercise of stock options			3,642,000				62,000
Purchase of Treasury Stock			(1,518,000	)			(6,403,000	)
Net cash used in financing activities			2,124,000				(6,341,000	)
Increase (Decrease) in cash and cash equivalents			6,289,000				(1,358,000	)
Cash and cash equivalents, beginning of period			21,685,000				27,518,000
Cash and cash equivalents, end of period		$	27,974,000			$	26,160,000

---

ZIX CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)

 

						Three Months Ended June 30,								Six Months Ended June 30,
						2015				2014				2015				2014
Revenue:
GAAP revenue						$	13,302,000			$	12,615,000			$	26,375,000			$	24,777,000
Cost of revenue
GAAP cost of revenue						$	2,429,000			$	2,032,000			$	4,642,000			$	4,057,000
Stock-based compensation charges (1)			(A)				(47,000	)			(49,000	)			(98,000	)			(101,000	)
Non-GAAP adjusted cost of revenue						$	2,382,000			$	1,983,000			$	4,544,000			$	3,956,000
Gross profit:
GAAP gross profit						$	10,873,000			$	10,583,000			$	21,733,000			$	20,720,000
Stock-based compensation charges (1)			(A)				47,000				49,000				98,000				101,000
Non-GAAP adjusted gross profit						$	10,920,000			$	10,632,000			$	21,831,000			$	20,821,000
Research and development expense
GAAP research and development expense						$	2,094,000			$	2,218,000			$	4,199,000			$	4,419,000
Stock-based compensation charges (1)			(A)				(61,000	)			(64,000	)			(127,000	)			(124,000	)
Non-GAAP adjusted research and development expense						$	2,033,000			$	2,154,000			$	4,072,000			$	4,295,000
Selling and marketing expense
GAAP selling and marketing expense						$	4,859,000			$	4,713,000			$	9,653,000			$	8,930,000
Stock-based compensation charges (1)			(A)				(123,000	)			(150,000	)			(274,000	)			(294,000	)
Non-GAAP adjusted selling and marketing expense						$	4,736,000			$	4,563,000			$	9,379,000			$	8,636,000
General and administrative expense
GAAP general and administrative expense						$	2,187,000			$	2,065,000			$	4,308,000			$	4,137,000
Stock-based compensation charges (1)			(A)				(134,000	)			(173,000	)			(334,000	)			(398,000	)
Non-recurring consulting and legal costs (2)			(B)				(163,000	)			(236,000	)			(329,000	)			(269,000	)
Non-GAAP adjusted general and administrative expense						$	1,890,000			$	1,656,000			$	3,645,000			$	3,470,000
Operating income:
GAAP operating income						$	1,733,000			$	1,587,000			$	3,573,000			$	3,234,000
Stock-based compensation charges (1)			(A)				365,000				436,000				833,000				917,000
Non-recurring litigation costs (2)			(B)				163,000				236,000				329,000				269,000
Non-GAAP adjusted operating income						$	2,261,000			$	2,259,000			$	4,735,000			$	4,420,000
Adjusted Operating Margin							17.0	%			17.9	%			18.0	%			17.8	%
Net income:
GAAP net income						$	1,115,000			$	977,000			$	2,291,000			$	2,036,000
Stock-based compensation charges (1)			(A)				365,000				436,000				833,000				917,000
Non-recurring consulting and legal costs (2)			(B)				163,000				236,000				329,000				269,000
Income tax impact			(C)				511,000				525,000				1,054,000				1,061,000
Non-GAAP adjusted net income						$	2,154,000			$	2,174,000			$	4,507,000			$	4,283,000
Diluted net income per common share:
GAAP net income						$	0.02			$	0.02			$	0.04			$	0.03
Adjustments per share			(A-C)			$	0.02			$	0.02			$	0.04			$	0.04
Non-GAAP adjusted net income						$	0.04			$	0.04			$	0.08			$	0.07
Shares used to compute Non-GAAP adjusted net income per share - diluted							58,373,407				59,466,867				57,886,307				60,176,977
Reconciliation of Net income to EBITDA and Adjusted EBITDA:			(D)
Net income						$	1,115,000			$	977,000			$	2,291,000			$	2,036,000
Income tax provision							647,000				622,000				1,334,000				1,272,000
Interest expense							—				—				—				—
Depreciation expense							547,000				395,000				1,052,000				794,000
EBITDA							2,309,000				1,994,000				4,677,000				4,102,000
Adjustments:
Share-based compensation expense			(A	)			365,000				436,000				833,000				917,000
Non-recurring litigation costs			(B	)			163,000				236,000				329,000				269,000
Adjusted EBITDA						$	2,837,000			$	2,666,000			$	5,839,000			$	5,288,000
Adjusted EBITDA margin							21.3	%			21.1	%			22.1	%			21.3	%
(1)    Stock-based compensation charges are included as follows:
Cost of revenues						$	47,000			$	49,000			$	98,000			$	101,000
Research and development							61,000				64,000				127,000				124,000
Selling and marketing							123,000				150,000				274,000				294,000
General and administrative							134,000				173,000				334,000				398,000
						$	365,000			$	436,000			$	833,000			$	917,000
(2)    Non-recurring litigation costs are included as follows:
General and administrative							163,000				236,000				329,000				269,000
						$	163,000			$	236,000			$	329,000			$	269,000

This presentation includes Non-GAAP measures. Our Non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For a detailed explanation of the adjustments made to comparable GAAP measures, the reasons why management uses these measures, the usefulness of these measures and the material limitations of these measures, see Notes to Reconcilation of GAAP to Non-GAAP Financial Measures on the next page.

---

ZIX CORPORATION

NOTES TO RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

USE OF NON-GAAP FINANCIAL INFORMATION

The Company occasionally utilizes financial measures and terms not calculated in accordance with generally accepted accounting principles in the United States (“GAAP”) in order to provide investors with an alternative method for assessing our operating results in a manner that enables investors to more thoroughly evaluate our current performance as compared to past performance. We also believe these Non-GAAP measures provide investors with a more informed baseline for modeling the Company’s future financial performance. Management uses these Non-GAAP financial measures to make operational and investment decisions, to evaluate the Company’s performance, to forecast and to determine compensation. Further, management utilizes these performance measures for purposes of comparison with its business plan and individual operating budgets and allocation of resources. We believe that our investors should have access to, and that we are obligated to provide, the same set of tools that we use in analyzing our results. These Non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. We have provided definitions below for certain Non-GAAP financial measures, together with an explanation of why management uses these measures and why management believes that these Non-GAAP financial measures are useful to investors. In addition, in our earnings release we have provided tables to reconcile the Non-GAAP financial measures utilized to GAAP financial measures.

ADJUSTED NON-GAAP MEASURES

Our Non-GAAP measures adjust GAAP Cost of revenue, Gross profit, Research and development expense, Selling and marketing expense, General and administrative expense, Operating income, Net income, Net income per share - diluted, and EBITDA for non-cash stock-based compensation expense, and non-recurring litigation expense to derive Non-GAAP adjusted Cost of revenue, adjusted Gross profit, adjusted Research and development expense, adjusted Selling and marketing expense, adjusted General and administrative expense, adjusted Operating income, adjusted Net income, adjusted Net income per share - diluted and adjusted EBITDA. We provide a reconciliation of these adjusted Non-GAAP measures to GAAP Gross profit, Operating income, Net income, Net income per share - diluted and EBITDA.

We do not provide a reconciliation of forward-looking adjusted Non-GAAP earnings per share to GAAP earnings per share. Our forward-looking adjusted Non-GAAP earnings per share information consistently excludes non-cash stock-based compensation expense. Additionally, the adjusted Non-GAAP earnings per share will consistently exclude non-recurring items that impact our ongoing business. See items (A) through (C) below for further information on the current quarter’s reconciling items.

Items (A) through (D) on the “Reconciliation of GAAP to Non-GAAP Financial Measures” table are listed to the right of certain categories under “Gross profit,” “Operating income,” “Net income,” “Net income per share - diluted” and “EBITDA” and correspond to the categories explained in further detail below under (A) through (D).

(A) Non-cash stock-based compensation charges relating to stock option grants, restricted stock, and restricted stock units awarded to and accounted for in accordance with Share-Based Payment accounting guidance. See (1) on previous page for breakdown of stock-based compensation. Because of varying valuation methodologies, subjective assumptions and varying award types, the Company believes that the exclusion of stock-based compensation charges provides for more accurate comparisons to our peer companies and for a more accurate comparison of our financial results to previous periods. Additionally, the Company believes it is useful to investors to understand the specific impact of non-cash stock-based compensation charges on our operating results.

(B) Non-recurring litigation costs. See item (2) on previous page for breakdown of non-recurring litigation costs. The Company’s management excludes these costs when evaluating its ongoing performance and/or predicting its earnings trends and therefore excludes these charges on our adjusted operating results.

(C) The Non-GAAP adjustment to the tax provision represents the non-cash tax expense included in the GAAP tax provision, including the current period utilization of deferred tax assets created in previous periods. The remaining provision for income taxes represents expected cash taxes to be paid.

(D) EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA adds back stock-based compensation charges and non-recurring litigation expenses.

Exhibit 99.2

 

ZixCorp CEO Announces Plans to Step Down after 11 Years of Leadership

Will Remain as President and CEO during Search and Transition

DALLAS — July 21, 2015 — Zix Corporation (ZixCorp), (Nasdaq: ZIXI), a leader in email data protection, today announced that long-serving President and Chief Executive Officer (CEO) Rick Spurr has decided to step down from those roles after 11 years of successful leadership to pursue personal and charitable interests outside of the company. The company’s board of directors has engaged a nationally recognized executive search firm to conduct a search for the new president and CEO. Mr. Spurr has agreed to assist in the search process and to remain as president and CEO to ensure a smooth transition until the employment of his successor. He will continue to serve as a member of ZixCorp’s board of directors.

ZixCorp’s Board Chairman Bob Hausmann said, “Rick has provided ZixCorp with over a decade of outstanding leadership, and we are extremely grateful for his many contributions to the success of the company. We are appreciative of Rick’s willingness to play an active role in the transition to his successor, and the board is committed to recruiting and employing a dynamic and highly qualified president and CEO to lead the company into the future. We are hopeful that this transition can be completed within the next six to nine months.”

Mr. Spurr said, “ZixCorp’s market opportunities, products, people and strategic partners have never been stronger. It is against that backdrop, and after personal reflection, that I have decided the time is right for me to turn a greater focus to my family and charitable service and step down as president and CEO. I am tremendously grateful to the board and our exceptional management team and employees for 11 wonderful years, and I will remain in my current position to assist in the transition to new leadership. Until the appointment of my successor, I am fully committed to delivering outstanding results for our customers, employees and shareholders.”

Mr. Spurr joined ZixCorp in January 2004 as president and chief operating officer. In March 2005, Mr. Spurr was promoted to his current position as chief executive officer, and, in May 2005, he was elected to the board of directors. Mr. Spurr served as chairman of the board from February 2006 to December 2014. Mr. Spurr brings more than 30 years of IT experience in building sales, marketing and operations departments in corporate environments. Prior to joining ZixCorp, he served in leadership positions at Securify, Inc., Entrust, Inc., and SEER Technologies, Inc. Mr. Spurr began his career with IBM Corporation in 1974, and he finished his tenure with the company in 1990 after leadership roles as regional manager and group director in Tokyo.

 

---

 

About Zix Corporation

ZixCorp is a leader in email data protection. ZixCorp offers industry-leading email encryption, a unique email DLP solution and an innovative email BYOD solution to meet your company’s data protection and compliance needs. ZixCorp is trusted by the nation’s most influential institutions in healthcare, finance and government for easy to use secure email solutions. ZixCorp is publicly traded on the Nasdaq Global Market under the symbol ZIXI, and its headquarters are in Dallas, Texas. For more information, visit www.zixcorp.com.

###

ZixCorp Contacts

Investor Relations

Todd Kehrli or Jim Byers

(323) 468-2300

zixi@mkr-group.com

Statements in this release that are not purely historical facts or that necessarily depend upon future events, including statements regarding Mr. Spurr’s anticipated retirement, the search for a new President and CEO and the timing of the foregoing, may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are based upon information available to ZixCorp on the date this release was issued. ZixCorp undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including risks or uncertainties related to Mr. Spurr’s anticipated retirement, the search for a new President and CEO or the timing of the foregoing. ZixCorp may not succeed in addressing these and other risks. Further information regarding factors that could affect ZixCorp can be found in the risk factors section of ZixCorp’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission and in subsequently filed quarterly reports on Form 10-Q.