ZixIt Corp. (ZIXI, Financial) filed Quarterly Report for the period ended 2010-09-30.
Zixit Corp. has a market cap of $258.7 million; its shares were traded at around $4.06 with a P/E ratio of 134.5 and P/S ratio of 8.4. ZIXI is in the portfolios of Steven Cohen of SAC Capital Advisors.
For both the three and nine month periods ended September 30, 2010, the consolidated Cost of revenues improvement reflected the impact of expense reductions resulting from the wind down of our e-Prescribing business. For the three month period ended September 30, 2010 the Cost of revenues improvement compared to the same period last year resulted primarily from (i) a $215,000 decrease in salary and benefits for individuals performing deployment activities due primarily to a decrease in average headcount in the e-Prescribing product line, (ii) a $40,000 decrease in e-Prescribing device costs, (iii) a $32,000 decrease in travel costs, and (iv) a $99,000 decrease in stock-based compensation expense. These reductions were partially offset by a $25,000 net increase in other various non-people costs.
For the nine month period ended September 30, 2010, the Cost of revenues improvement compared to the same period last year resulted primarily from (i) an $845,000 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 $228,000 decrease in e-Prescribing device costs, (iii) a $122,000 decrease in travel costs, (iv) a $182,000 decrease in stock-based compensation expense. These reductions were partially offset by a $3,000 net increase in other various non-people costs.
Other income, net consists primarily of investment income. Investment income was $27,000 and $43,000 for the quarters ended September 30, 2010 and 2009, respectively. The change was primarily due to sublease income of $20,000 related to an operating lease in Ohio that expired in 2009 and a decrease in interest rates between periods. Also included in the three month periods ended September 30, 2010 and 2009, is interest expense of $5,000 and $8,000, respectively, which resulted from a third party note for a 36 month Microsoft license subscription.
Other income, net, consists of $83,000 investment income and $17,000 interest expense for the nine month period ended September 30, 2010. For the same period in 2009, Other income, net consists of $189,000 investment income and $13,000 interest expense. Included in 2009 investment income is sublease income of $59,000. In the second quarter of 2009 we also recognized $36,000 of investment income related to an e-Prescribing project which was not generally released and was discontinued by customer request. The remaining variance is due to a decrease in interest rates between periods.
The Provision for income tax expense (benefit) was $3,000 and ($39,000) for the three month periods ended September 30, 2010 and 2009, respectively and $141,000 and $7,000 for the nine month periods ended September 30, 2010 and 2009, respectively. The Companys U.S. operations historically incurred operating losses that resulted in net operating loss carry-forwards (NOLs), which potentially could reduce the Companys future taxable income for U.S. Federal tax purposes. These NOLs and other deferred tax assets are subject to a $111,477,000 valuation allowance (NOL Reserve) due to uncertainty about whether the Company will be able to use them to offset future taxable income. Our 2010 provision of $141,000 for the nine month period ended September 30, 2010, consists of taxes on our U.S. operations totaling $7,000, and Canadian operation totaling $101,000, and $33,000 in state taxes based on gross revenues. The 2009 provision for income tax of $7,000 consisted of taxes on our Canadian operation totaling $129,000, a $27,000 benefit for over-accrual of prior year state taxes based on gross revenues and a $95,000 refund for historical U.S. tax credits.
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Zixit Corp. has a market cap of $258.7 million; its shares were traded at around $4.06 with a P/E ratio of 134.5 and P/S ratio of 8.4. ZIXI is in the portfolios of Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
As of September 30, 2010, Email Encryption backlog was $46,583,000 and we expect approximately 57% of the backlog to be recognized as revenue during the next twelve months. As of September 30, 2010, the Email Encryption backlog was comprised of the following elements: $17,755,000 of deferred revenue that has been billed and paid, $4,175,000 billed but unpaid, and approximately $24,653,000 of unbilled backlog relating primarily to the second and third years of multi-year contracts.For both the three and nine month periods ended September 30, 2010, the consolidated Cost of revenues improvement reflected the impact of expense reductions resulting from the wind down of our e-Prescribing business. For the three month period ended September 30, 2010 the Cost of revenues improvement compared to the same period last year resulted primarily from (i) a $215,000 decrease in salary and benefits for individuals performing deployment activities due primarily to a decrease in average headcount in the e-Prescribing product line, (ii) a $40,000 decrease in e-Prescribing device costs, (iii) a $32,000 decrease in travel costs, and (iv) a $99,000 decrease in stock-based compensation expense. These reductions were partially offset by a $25,000 net increase in other various non-people costs.
For the nine month period ended September 30, 2010, the Cost of revenues improvement compared to the same period last year resulted primarily from (i) an $845,000 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 $228,000 decrease in e-Prescribing device costs, (iii) a $122,000 decrease in travel costs, (iv) a $182,000 decrease in stock-based compensation expense. These reductions were partially offset by a $3,000 net increase in other various non-people costs.
Other income, net consists primarily of investment income. Investment income was $27,000 and $43,000 for the quarters ended September 30, 2010 and 2009, respectively. The change was primarily due to sublease income of $20,000 related to an operating lease in Ohio that expired in 2009 and a decrease in interest rates between periods. Also included in the three month periods ended September 30, 2010 and 2009, is interest expense of $5,000 and $8,000, respectively, which resulted from a third party note for a 36 month Microsoft license subscription.
Other income, net, consists of $83,000 investment income and $17,000 interest expense for the nine month period ended September 30, 2010. For the same period in 2009, Other income, net consists of $189,000 investment income and $13,000 interest expense. Included in 2009 investment income is sublease income of $59,000. In the second quarter of 2009 we also recognized $36,000 of investment income related to an e-Prescribing project which was not generally released and was discontinued by customer request. The remaining variance is due to a decrease in interest rates between periods.
The Provision for income tax expense (benefit) was $3,000 and ($39,000) for the three month periods ended September 30, 2010 and 2009, respectively and $141,000 and $7,000 for the nine month periods ended September 30, 2010 and 2009, respectively. The Companys U.S. operations historically incurred operating losses that resulted in net operating loss carry-forwards (NOLs), which potentially could reduce the Companys future taxable income for U.S. Federal tax purposes. These NOLs and other deferred tax assets are subject to a $111,477,000 valuation allowance (NOL Reserve) due to uncertainty about whether the Company will be able to use them to offset future taxable income. Our 2010 provision of $141,000 for the nine month period ended September 30, 2010, consists of taxes on our U.S. operations totaling $7,000, and Canadian operation totaling $101,000, and $33,000 in state taxes based on gross revenues. The 2009 provision for income tax of $7,000 consisted of taxes on our Canadian operation totaling $129,000, a $27,000 benefit for over-accrual of prior year state taxes based on gross revenues and a $95,000 refund for historical U.S. tax credits.
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