ZixIt Announces Results for First Quarter 2001
DALLAS--(BUSINESS WIRE)--April 30, 2001--ZixIt Corp.
(Nasdaq:ZIXI), a leading provider of products and services that bring
privacy, security, and convenience to Internet communications,
announced today results for the first quarter ended March 31, 2001,
significant new ZixMail(TM) customers, and a large pipeline of
prospects that the company expects to lead to future business under
its recurring revenue business model.
For the first quarter 2001, ZixIt reported a net loss of
$13,562,000, or $0.80 per share, compared to a net loss of
$11,136,000, or $0.72 per share, for the first quarter of 2000.
Included in these net losses are significant non-cash charges
primarily for stock-based compensation and depreciation and
amortization totaling $6,808,000, or 50% of the net loss for the
three-month period ended March 31, 2001, and $6,496,000, or 58% of the
net loss for the three-month period ended March 31, 2000.
Jeff Papows, chairman of ZixIt Corp., said, "ZixIt has had an
extremely busy quarter, and we expect this momentum to continue. In
the last 60 days, we have hired and trained a highly qualified sales
team, giving us national coverage, and have put into place the
marketing tools needed to support them. I am also happy to announce
that we are starting to ship the new ZixMail plug-in for Lotus(R)
Notes(R) to a select group of initial users, with a generally
available version anticipated to follow shortly. New joint marketing
efforts with our strategic partners are getting underway with a series
of co-sponsored seminars in mid-May.
"These efforts," he continued, "have produced license agreements
with, among others, companies such as Anadarko Petroleum Corp.;
AutoNation, Inc.; Conoco, Inc.; The Miami Dolphins, Ltd., Inc;
7-Eleven, Inc.; PhotonEx Corp.; Star Capital; Brink's Home Security,
Inc.; as well as recognized leaders in the healthcare field such as
the Texas Medical Association. We are pleased that many of our new
customers are implementing a phased-in approach or are expanding their
initial deployments. In addition, the sales team is already working
with a significant list of Fortune 500 companies that are evaluating
ZixMail. In short, all of these sales activities are very positive
results that do not yet show up on our financial statements, and I am
extremely satisfied with the quality and quantity of the prospects in
During the first quarter of 2001, the company began charging for
the use of its ZixMail products and services. As a result, deferred
revenues are beginning to appear on the company's consolidated balance
sheet, representing subscription fees billed or received from
customers in advance of being recognized as revenues on a prorated
basis over the subscription period.
The company's net working capital position at March 31, 2001, is
$41,607,000, including cash and marketable securities of $43,239,000.
Net cash used by continuing operations during the first quarter of
2001 was $6,569,000, while the level of capital expenditures decreased
during the quarter to $525,000, the lowest amount since 1998.
The company has set a goal for its sales team of reaching 600,000
paying users by year end. "As we gain more experience in the market
place, we expect to constantly re-evaluate that goal," said Mr.
Papows. "However, we want to share our internal thinking at this point
with our investors. We will measure our progress against this goal.
Our starting point is a base of several thousand paying users,
generally reflecting the company's previous marketing approach, which
was heavily weighted toward the consumer market. Now that we have
shifted our primary focus toward the corporate market, we expect these
numbers to grow much faster, as evidenced by our year-end goal of
600,000 users. We believe that the average sales cycle for new
corporate customers requires approximately 60 to 90 days."
The company also reaffirmed its previous guidance on two points.
First, the company restated its expectation that it can begin to
become cash-flow positive from operations on a month-to-month basis
when an average of 150,000 new subscribers per month, paying in
advance, are being signed up. This level of order activity is
currently foreseen for sometime in the first half of 2002. Second,
thereafter, once approximately 1.8 million annual susbscribers have
been obtained, the company estimates that it can achieve cash-flow
break even from operations. This 1.8 million users represents only
about 1.3% of the installed base of Lotus Notes(R) and Microsoft(R)
Outlook(R) users. After break-even is achieved, the potential exists
for substantial profit margins on each new ZixMail subscription.
ZixIt Corporation provides products and services that enhance
security, privacy, and convenience for users of the Internet. The
company's ZixMail(TM) product is a secure document delivery and
private email application and service that enables Internet users
worldwide to easily send encrypted and digitally signed communications
using their existing email systems and addresses. For further
information, visit www.zixit.com or contact investor relations at
Safe Harbor Statement
The following is a "Safe Harbor" statement under the Private
Securities Litigation Reform Act of 1995. The "Business Outlook"
section of this release contains forward-looking statements. These
forward-looking statements are not guarantees of future performance
and involve risks and uncertainties, and actual results may differ
materially from those projected in the forward-looking statements.
These risks and uncertainties include, but are not limited to, the
following: the limited operating history of the company in the
Internet arena; the rapid development of competition in the Internet
arena; the company's ability to successfully and timely develop its
products and execute its business strategy; and the company's ability
to achieve broad market acceptance for its products and services.
Further details on such risks and uncertainties may be found in the
company's public filings with the SEC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
March 31, 2001 March 31, 2000
Revenues $ 104 $ 96
Research and development expenses (2,205 ) (2,211 )
Operating costs and general corporate
expenses (12,183 ) (9,595 )
Investment income, net 674 574
Loss from continuing operations (13,610 ) (11,136 )
Discontinued operations 48 --
Net loss $ (13,562 ) $ (11,136 )
Basic and diluted loss per common share:
Continuing operations $ (0.80 ) $ (0.72 )
Discontinued operations -- --
Net loss $ (0.80 ) $ (0.72 )
Weighted average shares outstanding 17,040 15,436
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2001 December 31, 2000
Cash and marketable securities $ 43,239 $ 50,290
Property and equipment, net 17,231 19,400
Other assets 8,440 8,987
$ 68,910 $ 78,677
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued
expenses $ 3,348 $ 3,547
Deferred revenues 35 --
Stockholders' equity 65,527 75,130
$ 68,910 $ 78,677
||ZixIt Corporation, Dallas
||Beverly V. Fuortes, 214/515-7357
||Cindy Lawrence, 212/213-7484