ZixIt Corp. (ZIXI, Financial) filed Quarterly Report for the period ended 2009-03-31.
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 $76.7 million; its shares were traded at around $1.21 with and P/S ratio of 2.8.
Email Encryption Orders Total orders for Email Encryption were $7,399,000 and $8,700,000 for the three-month periods ended March 31, 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 $1,130,000 and $1,432,000 for the three months ended March 31, 2009 and 2008, respectively. We believe the softness in our NFYOs was driven in large part by the slow economy, as well as competition.
Provision for income taxes was $20,000 and $77,000 for the three-month periods ended March 31, 2009 and 2008, respectively. 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 $112,214,000 reserve because of the uncertainty of future taxable income. As a result, our 2009 provision of $20,000 consists of taxes on our Canadian operation totaling $51,000, a small amount of state taxes based on gross revenues and a $35,000 refund for historical U.S. tax credits under certain provisions of the American Recovery and Reinvestment Act of 2009. The 2008 provision relates to taxes on our Canadian operation.
Prior to the adoption of FIN 48, we had recorded a $327,000 tax contingency liability and that amount and the specifics therein have remained unchanged. As of March 31, 2009, the gross amount of our unrecognized tax benefits, inclusive of the $327,000 tax liability was approximately $369,000. Included in this balance are tax positions which, if recognized, would impact our effective tax rate.
Cash and cash equivalents at March 31, 2009 were $12,228,000 down $1,017,000 from the December 31, 2008 balance, reflecting a timing difference in payments of $1,100,000 from two long-time customers expected in the first quarter 2009, but not received until the middle of April 2009. We consider the temporary decline in cash of $1,017,000 a normal part of the payment and receipt cycle. We believe we will end 2009 with at least as much cash as we ended 2008 and we continue to manage our overall cash flow in an effort to achieve breakeven or positive cash flow. We believe a significant portion of our spending is discretionary and flexible and that we have the ability to adjust overall cash spending to react, as needed, to any shortfalls in projected cash.
Related to our investing activities in the first quarter of 2009, we utilized $144,000 to purchase various computing equipment primarily to satisfy customer contracts. Approximately 40% of these capital purchases were for computer servers for our Email Encryption segment, which are required to deliver our services. In first quarter 2008, purchases of $71,000 were offset by cash inflow from proceeds for a maturing $1,700,000 certificate of deposit.
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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 $76.7 million; its shares were traded at around $1.21 with and P/S ratio of 2.8.
Highlight of Business Operations:
Company-wide backlog Our end-user order backlog totals $38,354,000 and is comprised of contractually bound agreements that we expect to fully amortize into revenue. As of March 31, 2009, the backlog was comprised of the following elements: $16,965,000 of deferred revenue that has been billed and paid, $4,429,000 billed but unpaid, and approximately $16,960,000 of unbilled contracts. The total backlog divided by segment was $35,599,000 for Email Encryption and $2,755,000 for e-Prescribing.Email Encryption Orders Total orders for Email Encryption were $7,399,000 and $8,700,000 for the three-month periods ended March 31, 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 $1,130,000 and $1,432,000 for the three months ended March 31, 2009 and 2008, respectively. We believe the softness in our NFYOs was driven in large part by the slow economy, as well as competition.
Provision for income taxes was $20,000 and $77,000 for the three-month periods ended March 31, 2009 and 2008, respectively. 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 $112,214,000 reserve because of the uncertainty of future taxable income. As a result, our 2009 provision of $20,000 consists of taxes on our Canadian operation totaling $51,000, a small amount of state taxes based on gross revenues and a $35,000 refund for historical U.S. tax credits under certain provisions of the American Recovery and Reinvestment Act of 2009. The 2008 provision relates to taxes on our Canadian operation.
Prior to the adoption of FIN 48, we had recorded a $327,000 tax contingency liability and that amount and the specifics therein have remained unchanged. As of March 31, 2009, the gross amount of our unrecognized tax benefits, inclusive of the $327,000 tax liability was approximately $369,000. Included in this balance are tax positions which, if recognized, would impact our effective tax rate.
Cash and cash equivalents at March 31, 2009 were $12,228,000 down $1,017,000 from the December 31, 2008 balance, reflecting a timing difference in payments of $1,100,000 from two long-time customers expected in the first quarter 2009, but not received until the middle of April 2009. We consider the temporary decline in cash of $1,017,000 a normal part of the payment and receipt cycle. We believe we will end 2009 with at least as much cash as we ended 2008 and we continue to manage our overall cash flow in an effort to achieve breakeven or positive cash flow. We believe a significant portion of our spending is discretionary and flexible and that we have the ability to adjust overall cash spending to react, as needed, to any shortfalls in projected cash.
Related to our investing activities in the first quarter of 2009, we utilized $144,000 to purchase various computing equipment primarily to satisfy customer contracts. Approximately 40% of these capital purchases were for computer servers for our Email Encryption segment, which are required to deliver our services. In first quarter 2008, purchases of $71,000 were offset by cash inflow from proceeds for a maturing $1,700,000 certificate of deposit.
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