ZixIt Corp. (ZIXI, Financial) filed Quarterly Report for the period ended 2012-06-30.
Zix Corporation has a market cap of $150 million; its shares were traded at around $2.44 with a P/E ratio of 15.4 and P/S ratio of 3.9.
Cost of revenues is comprised of costs related to operating and maintaining the ZixData Center, a field deployment team, customer service and support and the amortization of Company-owned, customer-based computer appliances. A significant portion of the total cost of revenues relates to the ZixData Center, which currently has excess capacity. The three percent increase in the second quarter of 2012 compared to the same quarter last year as well as the three percent increase for the year to date comparative periods, resulted primarily from increases in average wages and benefits for existing staff plus minor increases in software maintenance and software license expenses. These increases were partially offset by a second quarter non-recurring reduction in value added tax of approximately $86,000 for our co-location site in the United Kingdom.
Selling, general and administrative expenses consist primarily of salary, stock-based compensation and benefit costs for marketing, sales, executive and administrative personnel as well as costs associated with advertising, promotions, professional services and general corporate activities. The increase of $574,000 in the second quarter of 2012 compared to 2011 resulted primarily from; (i) higher sales commissions and incentive plan bonus accruals of $125,000, (ii) an increase in professional fees, primarily outside legal fees of $215,000, (iii) an increase in stock based compensation expense of $129,000, (iv) salary and benefit increases of $69,000 and other miscellaneous increases totaling $36,000. For the six month period ended June 30, 2012 compared to the same period last year, SG&A expenses increased $1.1 million. This increase resulted primarily from; (i) higher sales commissions and incentive bonus accruals of approximately $363,000, (ii) an increase in wages and benefits of approximately $121,000 resulting from an increase in average headcount, (iii) an increase in stock-based compensation expense of approximately $196,000, and (iv) an increase in professional fees, primarily outside legal counsel of $375,000.
The net income for the quarter ended June 30, 2012, of $2,643,000 is a slight improvement of $26,000 compared to the net income of $2,617,000 for the same period last year. Our increased revenue and resulting higher gross margin was offset by increased R&D and SG&A spending, and a higher tax expense, as discussed above.
Based on our performance over the last four quarters and current expectations, we believe our cash, cash equivalents, commercial paper and cash generated from operations, will satisfy our working capital needs, capital expenditures, investment requirements, contractual obligations, commitments, future customer financings, and other liquidity requirements associated with our operations through at least the next twelve months. We plan for and measure our liquidity and capital resources through an annual budgeting process. At June 30, 2012, our cash, cash equivalents, and commercial paper totaled $18,787,000 and we held no debt. Our revenue growth is expected at approximately 10% to 15% for the full year 2012 compared to 2011.
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Zix Corporation has a market cap of $150 million; its shares were traded at around $2.44 with a P/E ratio of 15.4 and P/S ratio of 3.9.
Highlight of Business Operations:
As of June 30, 2012, total backlog was $55,549,000 and we expect approximately 58% of the total backlog to be recognized as revenue during the next twelve months. The backlog as of June 30, 2012, was comprised of the following elements: $18,602,000 of deferred revenue that has been billed and paid, $6,331,000 billed but unpaid, and approximately $30,616,000 of unbilled contracts.Cost of revenues is comprised of costs related to operating and maintaining the ZixData Center, a field deployment team, customer service and support and the amortization of Company-owned, customer-based computer appliances. A significant portion of the total cost of revenues relates to the ZixData Center, which currently has excess capacity. The three percent increase in the second quarter of 2012 compared to the same quarter last year as well as the three percent increase for the year to date comparative periods, resulted primarily from increases in average wages and benefits for existing staff plus minor increases in software maintenance and software license expenses. These increases were partially offset by a second quarter non-recurring reduction in value added tax of approximately $86,000 for our co-location site in the United Kingdom.
Selling, general and administrative expenses consist primarily of salary, stock-based compensation and benefit costs for marketing, sales, executive and administrative personnel as well as costs associated with advertising, promotions, professional services and general corporate activities. The increase of $574,000 in the second quarter of 2012 compared to 2011 resulted primarily from; (i) higher sales commissions and incentive plan bonus accruals of $125,000, (ii) an increase in professional fees, primarily outside legal fees of $215,000, (iii) an increase in stock based compensation expense of $129,000, (iv) salary and benefit increases of $69,000 and other miscellaneous increases totaling $36,000. For the six month period ended June 30, 2012 compared to the same period last year, SG&A expenses increased $1.1 million. This increase resulted primarily from; (i) higher sales commissions and incentive bonus accruals of approximately $363,000, (ii) an increase in wages and benefits of approximately $121,000 resulting from an increase in average headcount, (iii) an increase in stock-based compensation expense of approximately $196,000, and (iv) an increase in professional fees, primarily outside legal counsel of $375,000.
The net income for the quarter ended June 30, 2012, of $2,643,000 is a slight improvement of $26,000 compared to the net income of $2,617,000 for the same period last year. Our increased revenue and resulting higher gross margin was offset by increased R&D and SG&A spending, and a higher tax expense, as discussed above.
Based on our performance over the last four quarters and current expectations, we believe our cash, cash equivalents, commercial paper and cash generated from operations, will satisfy our working capital needs, capital expenditures, investment requirements, contractual obligations, commitments, future customer financings, and other liquidity requirements associated with our operations through at least the next twelve months. We plan for and measure our liquidity and capital resources through an annual budgeting process. At June 30, 2012, our cash, cash equivalents, and commercial paper totaled $18,787,000 and we held no debt. Our revenue growth is expected at approximately 10% to 15% for the full year 2012 compared to 2011.
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