Zix Corporation 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. ZixIt Corp. has a market cap of $126.6 million; its shares were traded at around $2 with and P/S ratio of 4.6. Highlight of Business Operations: Company-wide backlog Our end-user order backlog totals $41,427,000 and is comprised of contractually bound agreements that we expect to fully amortize into revenue. As of June 30, 2009, the backlog was comprised of the following elements: $17,425,000 of deferred revenue that has been billed and paid, $4,548,000 billed but unpaid, and approximately $19,454,000 of unbilled contracts. The total backlog distributed by segment was $39,170,000 for Email Encryption and $2,257,000 for e-Prescribing.
Email Encryption Orders Total orders for Email Encryption were $9,966,000 and $8,503,000 for the three-month periods ended June 30, 2009 and 2008, respectively. Total orders include customer orders that management separates into three components for measurement purposes: contract renewals, NFYOs, and in the case of new multi-year contracts, the years beyond the first year of service. NFYOs were $1,650,000 and $1,375,000 for the three months ended June 30, 2009 and 2008, respectively. Regulatory compliance with specific measures including the expansion of HIPAA in the American Recovery and Reinvestment Act and new state laws led to strong demand for our services from new customers. Despite the lower renewal rate, we believe demand will remain strong in the next two quarters.
product. The cost of revenues improvement for the six months ended June 30, 2009 compared to the same period in 2008, resulted primarily from (i) a $230,000 decrease in salary and benefits for individuals performing deployment activities due to a decrease in average headcount, primarily in the e-Prescribing product line, (ii) a $53,000 decrease in the cost of performing the annual audit to maintain AICPA SysTrust certification in the Companys data center, and (iii) a $26,000 decrease in travel expenses, partially offset by increased stock based compensation expense.
Other income, net consists primarily of investment income. Investment income was $79,000 and $222,000 for the quarters ended June 30, 2009 and 2008, respectively. The decrease was primarily due to slightly lower cash balances in 2009 and a drop in interest rates between periods. Also included in the second quarter 2009 is interest expense of $6,000 which resulted from a third party note for a 36 month Microsoft license subscription. For the six month period ended June 30, 2009 versus the same period in 2008, Other income, net was $141,000 compared to $338,000. The decrease between periods resulted from a lower cash balance in 2009 plus lower interest rates.
Provision for income taxes was $26,000 and zero for the three-month periods ended June 30, 2009 and 2008, respectively and $46,000 and $77,000 for the six-month periods ended June 30, 2009 and 2008, respectively. The provision relates primarily to the Companys state income taxes and Canadian Federal and Provincial tax liabilities. The operating losses incurred by the Companys U.S. operations and the resulting net operating losses for U.S. Federal tax purposes are subject to a $112,734,000 reserve because of the uncertainty of future taxable income. As a result, our 2009 provision for the six-month period ending June 30, 2009 of $46,000 consists of taxes on our Canadian operation totaling $96,000, a small amount of state taxes based on gross revenues and a $56,000 refund for historical U.S. tax credits under certain provisions of the American Recovery and Reinvestment Act of 2009. The 2008 provision consisted of $67,000 for taxes on our Canadian operation and $10,000 for state taxes based on gross revenues.
The Net loss for the second quarter 2009 of $1,925,000 increased $575,000 compared to the loss of $1,350,000 for the same period last year. Gross profit improvement of approximately $600,000 resulting from higher revenue and lower cost of revenue was offset by
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