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Strong Renewals Drive Record Revenue and Backlog
Third Quarter 2016 Financial Highlights (results compared to the same year-ago quarter)
-
Revenue increased 9% to a record
$15.3 million -
New first year orders decreased 31% to
$1.9 million -
Total quarterly orders increased 13% to
$16.5 million -
Ending backlog increased 10% to a record
$81.6 million -
Annual contract value increased 9% to a record
$60.2 million -
Cash flow generated from operations decreased by
$1.0 million to $5.7 million
Record revenue for the quarter was driven by the addition of recurring
revenue from new customer contracts and strong revenue retention. GAAP
fully diluted earnings per share decreased 1% to
Longer-term, the company is focused on driving profitable growth through its seven key growth pillars, which include: securing new customers, nurturing OEM partnerships, expanding the number of licenses within its installed base, upselling additional products to existing customers, increasing renewal rates, investing in its core email encryption solutions, and exploring adjacent and English-speaking international markets.
Management Commentary
“Our financial performance for the third quarter was strong in terms of
revenue, earnings and renewals. We demonstrated meaningful progress
across our seven key growth pillars, including enhancing our hosted
solutions to meet evolving customer needs and entering a new
international market: South Africa,” said
ZixCorp’s Chief Financial Officer
Third Quarter 2016 Operational Highlights
- Partnered with LAWtrust, a specialist security solutions provider, to enter the South African email encryption market
- Enabled Guardian Mortgage to protect sensitive consumer data in email with Zix Email Encryption, ZixInsight and ZixOne
- Enhanced hosted email encryption solutions to expand user adoption, increase superior ease of use and strengthen customer security and confidence in ZixCorp
Third Quarter 2016 Corporate Financial Summary and Other Operational Metrics |
|||||||||
$ in Millions, except per share data | Q3 2016 | Q3 2015 | Change (1) | ||||||
Revenue | $15.3 | $14.0 | 9.3% | ||||||
GAAP Gross Profit | $12.7 | $11.6 | 9.3% | ||||||
GAAP Net Income | $1.8 | $1.9 | (8.2)% | ||||||
GAAP Net Income Per Share – Diluted | $0.03 | $0.03 | (0.7)% | ||||||
EBITDA (2) | $3.2 | $3.8 | (16.0)% | ||||||
EBITDA Margin | 20.8% | 27.1% | (6.3) pts | ||||||
Non-GAAP Adjusted Gross Profit (3) | $12.7 | $11.6 | 9.4% | ||||||
Non-GAAP Adjusted Net Income (3) | $3.6 | $3.8 | (4.5)% | ||||||
Non-GAAP Adjusted Net Income Per Share – Diluted (3) | $0.07 | $0.07 | 3.2% | ||||||
Adjusted EBITDA (3) | $4.3 | $4.5 | (4.8)% | ||||||
Adjusted EBITDA Margin | 28.1% | 32.3% | (4.1) pts | ||||||
New First Year Orders | $1.9 | $2.7 | (30.6)% | ||||||
Total Orders | $16.5 | $14.7 | 12.6% | ||||||
Backlog (4) | $81.6 | $74.3 | 9.9% | ||||||
Fiscal Nine Months 2016 Corporate Financial Summary and Other Operational Metrics |
|||||||||
$ in Millions, except per share data | YTD 2016 | YTD 2015 | Change (1) | ||||||
Revenue | $44.6 | $40.4 | 10.4% | ||||||
GAAP Gross Profit | $36.7 | $33.3 | 10.3% | ||||||
GAAP Net Income | $3.9 | $4.2 | (7.6)% | ||||||
GAAP Net Income Per Share – Diluted | $0.07 | $0.07 | (2.3)% | ||||||
EBITDA (2) | $7.8 | $8.5 | (7.8)% | ||||||
EBITDA Margin | 17.5% | 21.0% | (3.5) pts | ||||||
Non-GAAP Adjusted Gross Profit (3) | $36.9 | $33.5 | 10.3% | ||||||
Non-GAAP Adjusted Net Income (3) | $10.3 | $8.3 | 24.3% | ||||||
Non-GAAP Adjusted Net Income Per Share – Diluted (3) | $0.19 | $0.14 | 31.3% | ||||||
Adjusted EBITDA (3) | $12.3 | $10.4 | 19.1% | ||||||
Adjusted EBITDA Margin | 27.7% | 25.6% | 2.0 pts | ||||||
New First Year Orders | $6.8 | $7.2 | (6.0)% | ||||||
Total Orders | $52.7 | $46.4 | 13.6% | ||||||
(1) |
Changes are based on actuals versus numbers shown in the columns, which may reflect rounding | |
(2) |
Adjusted earnings before interest, taxes, depreciation and amortization | |
(3) |
A reconciliation of GAAP to non-GAAP adjusted results is included in this press release and available on our investor relations Web page at http://investor.zixcorp.com |
|
(4) |
Service contract commitments that represent future revenue to be recognized as the services are provided | |
Financial Outlook
For the fourth quarter 2016, the company forecasts revenue to range
between
For all of fiscal 2016, the company anticipates revenue to range between
Conference Call Information
Management will discuss these financial results and outlook on a
conference call on
A live webcast of the conference call will be available in the investor
section of ZixCorp’s website here.
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 92807036. If
you have any difficulty connecting with the conference call, please
contact
An audio replay of the conference will be available for seven days, by dialing 1-855-859-2056 (U.S. toll-free) or 1-404-537-3406 (international) and entering the access code 92807036. An archive of the webcast will also be available in the investor section of the company’s website here.
About ZixCorp
ZixCorp is a trusted leader in email data protection. ZixCorp offers
industry-leading email encryption, a unique email data loss prevention
(DLP) solution, and an innovative bring your own device (BYOD) email
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
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, potential benefits of strategic
relationships, 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 filing on Form 10-K with the
ZIX CORPORATION | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
September 30, | ||||||||
2016 | December 31, | |||||||
(unaudited) | 2015 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 24,772,000 | $ | 28,664,000 | ||||
Receivables, net | 1,155,000 | 498,000 | ||||||
Prepaid and other current assets | 2,451,000 | 2,908,000 | ||||||
Total current assets | 28,378,000 | 32,070,000 | ||||||
Property and equipment, net | 4,220,000 | 4,143,000 | ||||||
Goodwill | 2,161,000 | 2,161,000 | ||||||
Deferred tax assets | 47,053,000 | 48,912,000 | ||||||
Total assets | $ | 81,812,000 | $ | 87,286,000 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 4,651,000 | $ | 5,067,000 | ||||
Deferred revenue | 27,347,000 | 23,182,000 | ||||||
Total current liabilities | 31,998,000 | 28,249,000 | ||||||
Long-term liabilities: | ||||||||
Deferred revenue | 1,558,000 | 839,000 | ||||||
Deferred rent | 1,395,000 | 1,426,000 | ||||||
Total long-term liabilities | 2,953,000 | 2,265,000 | ||||||
Total liabilities | 34,951,000 | 30,514,000 | ||||||
Total stockholders’ equity | 46,861,000 | 56,772,000 | ||||||
Total liabilities and stockholders’ equity | $ | 81,812,000 | $ | 87,286,000 | ||||
ZIX CORPORATION | |||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Revenue | $ | 15,308,000 | $ | 14,011,000 | $ | 44,566,000 | $ | 40,386,000 | |||||||||||||
Cost of revenue | 2,652,000 | 2,429,000 | 7,824,000 | 7,071,000 | |||||||||||||||||
Gross profit | 12,656,000 | 11,582,000 | 36,742,000 | 33,315,000 | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Research and development | 2,619,000 | 2,044,000 | 7,118,000 | 6,243,000 | |||||||||||||||||
Selling, general and administrative | 7,484,000 | 6,420,000 | 23,656,000 | 20,381,000 | |||||||||||||||||
Total operating expenses | 10,103,000 | 8,464,000 | 30,774,000 | 26,624,000 | |||||||||||||||||
Operating income | 2,553,000 | 3,118,000 | 5,968,000 | 6,691,000 | |||||||||||||||||
Operating margin | 17 | % | 22 | % | 13 | % | 17 | % | |||||||||||||
Other income, net | 74,000 | 110,000 | 183,000 | 162,000 | |||||||||||||||||
Income before income taxes | 2,627,000 | 3,228,000 | 6,151,000 | 6,853,000 | |||||||||||||||||
Income tax expense | (858,000 | ) | (1,301,000 | ) | (2,252,000 | ) | (2,635,000 | ) | |||||||||||||
Net income | $ | 1,769,000 | $ | 1,927,000 | $ | 3,899,000 | $ | 4,218,000 | |||||||||||||
Basic income per common share: | $ | 0.03 | $ | 0.03 | $ | 0.07 | $ | 0.07 | |||||||||||||
Diluted income per common share: | $ | 0.03 | $ | 0.03 | $ | 0.07 | $ | 0.07 | |||||||||||||
Shares used in per share calculation - basic | 52,717,544 | 56,517,278 | 54,157,050 | 56,719,942 | |||||||||||||||||
Shares used in per share calculation - diluted | 53,262,075 | 57,590,136 | 54,699,207 | 57,786,463 | |||||||||||||||||
ZIX CORPORATION | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(Unaudited) | ||||||||||
Nine Months Ended September 30, | ||||||||||
2016 | 2015 | |||||||||
Operating activities: | ||||||||||
Net income | $ | 3,899,000 | $ | 4,218,000 | ||||||
Non-cash items in net income | 5,053,000 | 4,958,000 | ||||||||
Changes in operating assets and liabilities | 4,272,000 | 2,977,000 | ||||||||
Net cash provided by operating activities | 13,224,000 | 12,153,000 | ||||||||
Investing activities: | ||||||||||
Purchases of property and equipment | (1,772,000 | ) | (1,747,000 | ) | ||||||
Net cash used in investing activities | (1,772,000 | ) | (1,747,000 | ) | ||||||
Financing activities: | ||||||||||
Proceeds from exercise of stock options | 155,000 | 4,328,000 | ||||||||
Purchase of Treasury Stock | (15,499,000 | ) | (12,361,000 | ) | ||||||
Net cash used in financing activities | (15,344,000 | ) | (8,033,000 | ) | ||||||
Increase (Decrease) in cash and cash equivalents | (3,892,000 | ) | 2,373,000 | |||||||
Cash and cash equivalents, beginning of period | 28,664,000 | 21,685,000 | ||||||||
Cash and cash equivalents, end of period | $ | 24,772,000 | $ | 24,058,000 | ||||||
ZIX CORPORATION | ||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||
GAAP revenue | $ | 15,308,000 | $ | 14,011,000 | $ | 44,566,000 | $ | 40,386,000 | ||||||||||||||
Cost of revenue | ||||||||||||||||||||||
GAAP cost of revenue | $ | 2,652,000 | $ | 2,429,000 | $ | 7,824,000 | $ | 7,071,000 | ||||||||||||||
Stock-based compensation charges (1) | (A) | (55,000 | ) | (38,000 | ) | (171,000 | ) | (136,000 | ) | |||||||||||||
Non-GAAP adjusted cost of revenue | $ | 2,597,000 | $ | 2,391,000 | $ | 7,653,000 | $ | 6,935,000 | ||||||||||||||
Gross profit: | ||||||||||||||||||||||
GAAP gross profit | $ | 12,656,000 | $ | 11,582,000 | $ | 36,742,000 | $ | 33,315,000 | ||||||||||||||
Stock-based compensation charges (1) | (A) | 55,000 | 38,000 | 171,000 | 136,000 | |||||||||||||||||
Non-GAAP adjusted gross profit | $ | 12,711,000 | $ | 11,620,000 | $ | 36,913,000 | $ | 33,451,000 | ||||||||||||||
Research and development expense | ||||||||||||||||||||||
GAAP research and development expense | $ | 2,619,000 | $ | 2,044,000 | $ | 7,118,000 | $ | 6,243,000 | ||||||||||||||
Stock-based compensation charges (1) | (A) | (63,000 | ) | (57,000 | ) | (215,000 | ) | (184,000 | ) | |||||||||||||
Non-GAAP adjusted research and development expense | $ | 2,556,000 | $ | 1,987,000 | $ | 6,903,000 | $ | 6,059,000 | ||||||||||||||
Selling and marketing expense | ||||||||||||||||||||||
GAAP selling and marketing expense | $ | 4,705,000 | $ | 4,158,000 | $ | 14,197,000 | $ | 13,811,000 | ||||||||||||||
Stock-based compensation charges (1) | (A) | (156,000 | ) | (113,000 | ) | (460,000 | ) | (387,000 | ) | |||||||||||||
Non-GAAP adjusted selling and marketing expense | $ | 4,549,000 | $ | 4,045,000 | $ | 13,737,000 | $ | 13,424,000 | ||||||||||||||
General and administrative expense | ||||||||||||||||||||||
GAAP general and administrative expense | $ | 2,779,000 | $ | 2,262,000 | $ | 9,459,000 | $ | 6,570,000 | ||||||||||||||
Stock-based compensation charges (1) | (A) | (177,000 | ) | (130,000 | ) | (687,000 | ) | (464,000 | ) | |||||||||||||
Strategic consulting and litigation costs (2) | (B) | (664,000 | ) | (387,000 | ) | (2,636,000 | ) | (716,000 | ) | |||||||||||||
Executive separation payment (3) | (C) | - | - | (358,000 | ) | - | ||||||||||||||||
Non-GAAP adjusted general and administrative expense | $ | 1,938,000 | $ | 1,745,000 | $ | 5,778,000 | $ | 5,390,000 | ||||||||||||||
Operating income: | ||||||||||||||||||||||
GAAP operating income | $ | 2,553,000 | $ | 3,118,000 | $ | 5,968,000 | $ | 6,691,000 | ||||||||||||||
Stock-based compensation charges (1) | (A) | 451,000 | 338,000 | 1,533,000 | 1,171,000 | |||||||||||||||||
Strategic consulting and litigation costs (2) | (B) | 664,000 | 387,000 | 2,636,000 | 716,000 | |||||||||||||||||
Executive separation payment (3) | (C) | - | - | 358,000 | - | |||||||||||||||||
Non-GAAP adjusted operating income | $ | 3,668,000 | $ | 3,843,000 | $ | 10,495,000 | $ | 8,578,000 | ||||||||||||||
Adjusted Operating Margin | 24.0 | % | 27.4 | % | 23.5 | % | 21.2 | % | ||||||||||||||
Net income: | ||||||||||||||||||||||
GAAP net income | $ | 1,769,000 | $ | 1,927,000 | $ | 3,899,000 | $ | 4,218,000 | ||||||||||||||
Stock-based compensation charges (1) | (A) | 451,000 | 338,000 | 1,533,000 | 1,171,000 | |||||||||||||||||
Strategic consulting and litigation costs (2) | (B) | 664,000 | 387,000 | 2,636,000 | 716,000 | |||||||||||||||||
Executive separation payment (3) | (C) | - | - | 358,000 | - | |||||||||||||||||
Income tax impact | (D) | 713,000 | 1,116,000 | 1,859,000 | 2,170,000 | |||||||||||||||||
Non-GAAP adjusted net income | $ | 3,597,000 | $ | 3,768,000 | $ | 10,285,000 | $ | 8,275,000 | ||||||||||||||
Diluted net income per common share: | ||||||||||||||||||||||
GAAP net income | $ | 0.03 | $ | 0.03 | $ | 0.07 | $ | 0.07 | ||||||||||||||
Adjustments per share | (A-D) | $ | 0.04 | $ | 0.04 | $ | 0.12 | $ | 0.07 | |||||||||||||
Non-GAAP adjusted net income | $ | 0.07 | $ | 0.07 | $ | 0.19 | $ | 0.14 | ||||||||||||||
Shares used to compute Non-GAAP adjusted net income per share - diluted | 53,262,075 | 57,590,136 | 54,699,207 | 57,786,463 | ||||||||||||||||||
Reconciliation of Net income to EBITDA and Adjusted EBITDA: | (E) | |||||||||||||||||||||
Net income | $ | 1,769,000 | $ | 1,927,000 | $ | 3,899,000 | $ | 4,218,000 | ||||||||||||||
Income tax provision | 858,000 | 1,301,000 | 2,252,000 | 2,635,000 | ||||||||||||||||||
Depreciation expense | 562,000 | 567,000 | 1,660,000 | 1,619,000 | ||||||||||||||||||
EBITDA | 3,189,000 | 3,795,000 | 7,811,000 | 8,472,000 | ||||||||||||||||||
Adjustments: | ||||||||||||||||||||||
Share-based compensation expense | (A) | 451,000 | 338,000 | 1,533,000 | 1,171,000 | |||||||||||||||||
Strategic consulting and litigation costs (2) | (B) | 664,000 | 387,000 | 2,636,000 | 716,000 | |||||||||||||||||
Executive separation payment (3) | (C) | - | - | 358,000 | - | |||||||||||||||||
Adjusted EBITDA | $ | 4,304,000 | $ | 4,520,000 | $ | 12,338,000 | $ | 10,359,000 | ||||||||||||||
Adjusted EBITDA margin | 28.1 | % | 32.3 | % | 27.7 | % | 25.6 | % | ||||||||||||||
(1) Stock-based compensation charges are included as follows: | ||||||||||||||||||||||
Cost of revenues | $ | 55,000 | $ | 38,000 | $ | 171,000 | $ | 136,000 | ||||||||||||||
Research and development | 63,000 | 57,000 | 215,000 | 184,000 | ||||||||||||||||||
Selling and marketing | 156,000 | 113,000 | 460,000 | 387,000 | ||||||||||||||||||
General and administrative | 177,000 | 130,000 | 687,000 | 464,000 | ||||||||||||||||||
$ | 451,000 | $ | 338,000 | $ | 1,533,000 | $ | 1,171,000 | |||||||||||||||
(2) Strategic consulting and litigation costs are included as follows: | ||||||||||||||||||||||
General and administrative | 664,000 | 387,000 | 2,636,000 | 716,000 | ||||||||||||||||||
$ | 664,000 | $ | 387,000 | $ | 2,636,000 | $ | 716,000 | |||||||||||||||
(3) Executive separation payment is included as follows: | ||||||||||||||||||||||
General and administrative | - | - | 358,000 | - | ||||||||||||||||||
$ | - | $ | - | $ | 358,000 | $ | - | |||||||||||||||
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 Reconciliation of GAAP to Non-GAAP Financial Measures on the next page.
ZIX CORPORATION | |||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES OUTLOOK | |||||||||||||||||
LOW | HIGH | LOW | HIGH | ||||||||||||||
Three Months Ended | Three Months Ended | Twelve Months Ended | Twelve Months Ended | ||||||||||||||
December 31, |
December 31, | December 31, | December 31, | ||||||||||||||
2016 | 2016 | 2016 | 2016 | ||||||||||||||
Revenue: | |||||||||||||||||
GAAP revenue | $ | 15,500,000 | $ | 15,600,000 | $ | 60,100,000 | $ | 60,200,000 | |||||||||
Diluted net income per common share: | |||||||||||||||||
GAAP net income | $ | 0.02 | $ | 0.03 | $ | 0.09 | $ | 0.10 | |||||||||
Stock-based compensation charges | $ | 0.01 | $ | 0.01 | $ | 0.04 | $ | 0.04 | |||||||||
Strategic consulting and litigation costs | $ | 0.02 | $ | 0.01 | $ | 0.06 | $ | 0.05 | |||||||||
Executive separation payment | $ | - | $ | - | $ | 0.01 | $ | 0.01 | |||||||||
Income tax impact | $ | 0.01 | $ | 0.01 | $ | 0.05 | $ | 0.05 | |||||||||
Non-GAAP adjusted net income | $ | 0.06 | $ | 0.06 | $ | 0.25 | $ | 0.25 | |||||||||
Shares used to compute Non-GAAP adjusted net income per share - diluted | 53,442,638 | 53,442,638 | 54,383,186 | 54,383,186 | |||||||||||||
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 Reconciliation 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
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 strategic consulting and litigation costs 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.
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 litigation expenses and non-recurring items that impact our ongoing business. See items (A) through (D) below for further information on the current quarter's reconciling items.
Items (A) through (E) 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 (E).
(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) Strategic consulting and litigation costs. See item (2) on previous page. The Company’s management excludes certain board-directed consulting costs and litigation expenses when evaluating its ongoing performance and/or predicting its earnings trends and therefore excludes these charges on our adjusted operating results.
(C) Executive separation payment relating to CFO employment termination benefits agreement. See item (3) on previous page. 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.
(D) 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.
(E) EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA adds back stock-based compensation charges and litigation expenses.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161025006418/en/
Source:
Company Contact:
ZixCorp
Taylor Johnson, 214-370-2134
tjohnson@zixcorp.com
or
Investor
Contact:
Liolios Group, Inc.
Matt Glover and Najim
Mostamand, 949-574-3860
ZIXI@liolios.com