News Release

<< Back
Printer Friendly Version View printer-friendly version
Zix Corporation CEO Provides Corporate Update; Business Progress Combined with Increased Operational Efficiency Expected to Make for Strong Improvement

DALLAS--(BUSINESS WIRE)--Sept. 14, 2006--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.

"We are on track to complete the previously announced cost-cutting measures targeted at improving operational efficiency," said Spurr. "To date, we have already eliminated more than 50 of the 60 to 70 headcount we targeted in our earlier announcements, and have made the majority of our non-headcount related cuts. These actions allow us to reaffirm our year-end cash guidance of at least $10.5 million and lock in over $2 million per quarter of next year's projected $2.5 million per quarter savings. When these cuts are combined with the forecasted improvement in cash receipts, our total cash burn should drop from $5.5 million from the second quarter of 2006 to $5 million for the entire year 2007, with the company achieving cash flow breakeven in 2008 on the way to profitability."

Regarding the company's e-prescribing business, Spurr said, "Earlier this week we announced an expanded contract with Aetna into three new markets, including the New York City metropolitan area, further validating our leadership position in the e-prescribing industry as we continue to broaden the adoption of our technology. We see a trend of payor willingness to pay a transaction fee for value-added services, and have one such contract now in place, with others anticipated before year-end. This evolution in the market becomes increasingly important as our script volume continues to grow, as we have just hit a record 120,000 e-scripts per week milestone."

"The potential of this technology has been documented by our customers, with the eRx Collaborative recently announcing that their e-prescribing doctors had 3 percent to 3.5 percent lower pharmacy costs than non e-prescribing doctors, and 8,000 prescriptions changed in a month following an alert of a potentially dangerous drug interaction," continued Spurr. "Across the board, our combined e-prescribing programs are experiencing tremendous success with over 70 percent of prescriptions written on formulary, as measured over the most recent four-week period, and nearly 50 percent of prescriptions generated through PocketScript are generic drugs."

On the email encryption business, Spurr said, "Coming off of one of the company's strongest quarters for orders, the third quarter is looking very solid with continued growth of new customers and strong renewals. In addition, the company recently reached a new high of encrypting 6.1 million emails per month, for a total of 160 million encrypted emails to date. The expected solid third quarter results will continue to build on the leading position of our hosted Email Encryption Service."

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(R) e-prescribing service reduces costs and improves patient care by automating the prescription process between payors, doctors, and pharmacies. For more information, visit

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 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.

CONTACT: Zix Corporation, Dallas
Public Relations:
Farrah Corley, 214-370-2175
Investor Relations:
Peter Wilensky, 214-515-7357

SOURCE: Zix Corporation