Zix Corporation CEO Provides Corporate Update
January 09 2007 - 1:30PM
Business Wire
Zix Corporation (ZixCorp�), (Nasdaq:ZIXI), the leader in hosted
services for email encryption and e-prescribing, today offered a
corporate update by its chief executive officer, Rick Spurr.
�ZixCorp had a strong finish to what was a record year in several
areas, including company-wide revenues and gross margins,� said
Spurr. �Preliminary estimates indicate that we are within guidance
on revenue, previously projected to be between $18 and $18.2
million, and I am very pleased with the significant improvement
we�ve made in cash consumption from operations this year. We cut
the cash burn in the fourth quarter to $2.1 million, approximately
one-third the level in Q1 of 2006, leading to an ending cash
balance of $12.8 million, both of which were ahead of our most
recent guidance of $2.5 to $3.0 million and $12.0 to $12.5 million,
respectively. By focusing the majority of our cost cutting efforts
on general and administrative line items and non-headcount related
costs, we are confident that we have a platform in place for
continued growth and we anticipate no need for further reductions
in headcount. The projected additional improvement in our cash
usage in 2007 reinforces our belief that we have sufficient cash on
hand to reach profitability, as the full impact of the cost cutting
measures takes effect and the predictable increase in cash receipts
inherent in our subscription model is realized. We expect to
maintain a minimum cash balance of $7 million before the company
turns cash flow positive in 2008.� �We had a good end to the year
in each of our core businesses � Email Encryption and
e-Prescribing,� continued Spurr. �In our Email Encryption business,
we had another solid quarter in Q4 with estimated new first-year
orders of $1.1 million and estimated total orders of $3.8 million,
powered by continued progress in the financial services sector and
strong customer renewals for our service. In addition, the company
announced the availability of ZixVPM 3.1, which provides improved
performance in scanning and encrypting large emails, and enhanced
security and ease-of-use in the ZixDirect "push" delivery option.
The solid fourth quarter results reinforce our position as the
leading hosted Email Encryption Service available in the market
today.� Regarding the company�s e-prescribing business, Spurr said,
�We had a strong quarter in our PocketScript business as well. Cash
collections were up significantly, we had solid deployments of 520
for the quarter, and the quarterly e-script count in Q4 was the
highest of the year, bringing the total to 5.3 million scripts for
the year, which is almost double the previous years� volume. We
also announced expansions in our programs at L.A. Care and Blue
Cross Blue Shield of Massachusetts (BCBSMA), as well as our
participation in an innovative new state-wide initiative, about
which we will provide additional details in an upcoming press
release.� �More importantly, the payors� tangible ROI assessments
are driving an evolution in the economic model in this industry,�
continued Spurr. �Including two of the deals that we announced last
quarter, we now have three contracts where we collect a $1 per
qualified script fee or equivalent from the payor on top of the
base e-prescribing program fees. Given these recent developments,
we can now see a clear path to achieving the $1,200 per prescriber
per year revenue target that we have indicated is necessary to
achieve our goals for contribution to fixed costs and
profitability. We believe that the willingness to pay transaction
fees on top of the base subscription cost is a significant
statement regarding the value of this technology.� About Zix
Corporation ZixCorp is the leading provider of hosted email
encryption and e-prescribing services. ZixCorp's hosted Email
Encryption Service provides an easy and cost-effective way to
ensure customer privacy and regulatory compliance for corporate
email. Its PocketScript� e-prescribing service reduces costs and
improves patient care by automating the prescription process
between payors, doctors, and pharmacies. For more information,
visit www.zixcorp.com. Safe Harbor Statement for ZixCorp The
following is a "Safe Harbor" statement under the Private Securities
Litigation Reform Act of 1995. The forward-looking statements
contained in this release are not guarantees of future performance
and involve risks and uncertainties. Actual results may differ
materially from those projected in the forward-looking statements.
These risks and uncertainties include, but are not limited to, the
following: the company�s estimated fourth quarter results are
preliminary and subject to final confirmation; the company's
continued operating losses and substantial utilization of cash
resources; the company's ability to achieve broad market acceptance
for the company's products and services, including the company's
ability to enter into new sponsorship agreements for the electronic
prescribing services offered by its PocketScript, Inc. subsidiary;
the company's ability to maintain existing and generate other
revenue opportunities, including fees for scripts written, from its
PocketScript e-prescription business; reliance on establishing and
maintaining strategic relationships to gain customers and grow
revenues; the expected increase in competition in the company's
e-messaging and e-prescription businesses; and the company's
ability to successfully and timely introduce new e-messaging and
electronic prescription products and services or related products
and services and implement technological changes. Further details
on such risks and uncertainties may be found in the company's
public filings with the SEC.
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