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Zix Corporation Reports Another Record-High Revenue Quarter as Company Announces Second Quarter 2009 Financial Results
Date:7/28/2009

egative 20 percent) from e-Prescribing. The gross profit improvement for the quarter came from solid revenue growth in Email Encryption on a largely fixed cost structure, partially offset by the decline in e-Prescribing revenues.

R&D and SG&A Expenditures: On an adjusted basis, the Company's R&D expenses were $1.7 million and $1.3 million in the second quarter of 2009 and 2008, respectively, with the increase in 2009 due to investment in further adapting our service for international customers and enhancing the platform for our OEM partners in Email Encryption and ongoing workflow improvements and certification requirements for e-Prescribing. SG&A expenses on an adjusted basis were $4.3 million and $4.1 million in the second quarter of 2009 and 2008, respectively, with the increase in 2009 due to higher expenses for outside service providers.

Adjusted Earnings: The Company recorded an adjusted net loss of $0.8 million, or $0.01 loss per share for the second quarter of 2009, compared with an adjusted net loss of $0.7 million or $0.01 loss per share for the comparable quarter in 2008. The increase in adjusted net loss was driven by a decline in investment and other income due primarily to a decrease in interest rates in 2009 compared with 2008. See the attached "Reconciliation of GAAP and Non-GAAP Financial Measures" for a reconciliation of GAAP to non-GAAP line items.

Outlook: The Company forecasts revenue for the third quarter to be between $7.5 and $7.8 million. e-Prescribing deployments for the third quarter are expected to be between 200 and 250 deployments. Our adjusted basic earnings per share is expected to be between $0.00 and $0.01.

Corporate Governance: ZixCorp announced that, in accordance with Nasdaq Stock Market Rule 5635, over the past 15 months the Company has awarded 96,552 stock options to 28 newly hired employees for a
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