Zix Corporation's CEO Provides Corporate Update
October 07 2008 - 12:25PM
PR Newswire (US)
Company's Subscription Email Encryption Business Continues Positive
Cash Flow DALLAS, Oct. 7 /PRNewswire-FirstCall/ -- Zix Corporation
(ZixCorp(R)), (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. "Despite the
slowing economy, ZixCorp continued to remain cash flow positive in
Q3 2008, again driven by the reliability and strength of our Email
Encryption business, while developments in our core markets
position the company for growth in the future," said Spurr.
"Preliminary revenue estimates are that we will meet our guidance
of $6.6 to $7.0 million for the third quarter. The Q3 ending cash
balance of $13.1 million met our projected guidance for total cash
by exceeding Q2's ending balance of $13.0 million. The positive
cash flow from operations for the third quarter 2008 highlights the
corner we've turned this year when compared with the over $550,000
cash burn for the third quarter of last year. This growing track
record of positive cash flow from operations forms the strong
foundation for growth that we believe will enable us to take
advantage of recent catalysts in our core markets to achieve
acceleration in our businesses." "Our Email Encryption business
continues to drive the performance for ZixCorp," continued Spurr.
"We had an estimated $5.2 million in total orders, including $1.2
million in new first-year orders. Our renewals were strong in Q3
with 95 percent renewal rate in the quarter. As expected, we saw a
significant increase in orders through our OEM partners in Q3, and
we remain optimistic about the contribution of the channels going
forward, especially in 2009. To that end, we are pleased to have
announced a new partner in Code Green Networks, which should add to
the business generated from this channel next year. However, this
progress was offset by softness in our enterprise direct sales
efforts this quarter. Despite potential impacts of the current
economy, we remain confident in ZixCorp's subscription model which
is designed to deliver ever-increasing revenues with a high degree
of predictability. As the only Email Encryption vendor operating
completely in a SaaS model combined with the immediate and seamless
connection to the largest network of secure identities in the
industry through the ZixDirectory, which surpassed 12 million
members in Q3, we will continue to be well-positioned for growth."
Of the Company's e-prescribing business, Spurr said, "In our
PocketScript business, our 138 e-prescribing deployments exceeded
our guidance of approximately 100 for the quarter. More
importantly, we believe the passage of the Medicare Improvements
for Patients and Providers Act of 2008 (MIPPA) will be a catalyst
for growth in the e-prescribing industry and will induce payors to
begin to move more aggressively to fund e-prescribing programs.
ZixCorp has an unmatched reputation in the industry for achieving
adoption and utilization of this technology, and is viewed as the
premier partner for payor-sponsored programs. We believe that the
structure of the MIPPA legislation, which provides back-end
payments to physicians but still leaves the question of funding for
the upfront costs unaddressed, combined with our successful
payor-sponsorship model which can deal with these upfront costs,
will lead to success. And, our high-touch, turnkey approach,
particularly suited to physicians in practices of 5 or fewer
doctors, puts us in an enviable position to maintain and expand
upon our leadership position in this very large, low-end segment of
the market representing 75 percent of the total market
opportunity." ZixCorp to Announce Second Quarter 2008 Results on
October 28 The Company's third quarter 2008 operating results will
be released after close of the U.S. financial markets on October
28, 2008. The Company will hold a conference call to discuss this
information on October 28 at 5:00 p.m. ET. A live Webcast of the
conference call will be available on the investor relations portion
of ZixCorp's Web site at http://investor.zixcorp.com/.
Alternatively, participants can listen to the conference call by
dialing 617-847-8704 or toll-free 800-265-0241 and entering access
code 77991202. An audio replay of the conference will be available
until November 4, by dialing 617-801-6888 or toll-free
888-286-8010, and entering the access code 48567745, and after that
date via Webcast on the Company's Web site. About Zix Corporation
ZixCorp is the leading provider of easy-to-use-and-deploy email
encryption and e-prescribing services that Connect entities with
their customers and partners to Protect and Deliver sensitive
information in the healthcare, finance, insurance and government
industries. 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(R)
e-prescribing service reduces costs and improves patient care by
automating the prescription process between payors, doctors, and
pharmacies. For more information, visit http://www.zixcorp.com/.
The following is a "Safe Harbor" statement under the Private
Securities Litigation Reform Act of 1995. This release contains
forward-looking statements, including the following: -- " ... while
developments in our core markets position the company for growth in
the future," -- "This growing track record of positive cash flow
from operations forms the strong foundation for growth that we
believe will enable us to take advantage of recent catalysts in our
core markets to achieve acceleration in our businesses." -- "More
importantly, we believe the passage of the Medicare Improvements
for Patients and Providers Act of 2008 (MIPPA) will be a catalyst
for growth in the e-prescribing industry and will induce payors to
begin to move more aggressively to fund e-prescribing programs.
ZixCorp has an unmatched reputation in the industry for achieving
adoption and utilization of this technology, and is viewed as the
premier partner for payor-sponsored programs. We believe that the
structure of the MIPPA legislation, which provides back- end
payments to physicians but still leaves the question of funding for
the upfront costs unaddressed, combined with our successful
payor-sponsorship model which can deal with these upfront costs,
will lead to success. And, our high-touch, turnkey approach,
particularly suited to physicians in practices of 5 or fewer
doctors, puts us in an enviable position to maintain and expand
upon our leadership position in this very large, low-end segment of
the market representing 75 percent of the total market
opportunity.", The forward looking statements contained in this
release, including those statements specifically listed above, are
not a guarantee 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 continued operating losses and use of cash resources in
its PocketScript e-Prescription business; 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 its PocketScript e-Prescribing business
and the Company's ability to continue realizing acceptance of its
Email Encryption business in its core markets of healthcare and
financial and to achieve market acceptance of its Email Encryption
business in other markets; the Company's ability to maintain
existing revenue streams and generate other revenue opportunities,
including fees for scripts written, from its PocketScript
e-Prescription business; the Company's ability to establish and
maintain strategic relationships to gain customers and grow
revenues, including in particular, its ability to grow Email
Encryption revenues from its OEM resellers; the expected increase
in competition in the Company's Email Encryption and e-Prescription
businesses; the Company's ability to successfully and timely
introduce new Email Encryption and e-Prescription products and
services or related products and services and implement
technological changes; and impacts to the Company's business
arising from slowing economic conditions. Further details
pertaining to such risks and uncertainties may be found from
time-to-time in the Company's public filings with the SEC.
DATASOURCE: Zix Corporation CONTACT: Public Relations, Farrah
Corley, +1-214-370-2175, , or Investor Relations, Peter Wilensky,
+1-214-515-7357, , both of Zix Corporation Web site:
http://www.zixcorp.com/
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