Continued Strong Adoption of Secure Cloud
Platform Drives 14% Increase in Revenue and ARR, 20% Growth in
Cloud ARR and $10.7 million in Cash Flow from Operations
Zix Corporation (Zix) (NASDAQ: ZIXI), a leading provider
of cloud email security, productivity, and compliance solutions,
today announced financial results for the first quarter ended March
31, 2021.
First Quarter 2021 Financial Highlights (results compared to
the same year-ago quarter)
- Revenue increased 14% to $60.0 million.
- Annual recurring revenue (ARR) increased 14% to $243.6 million.
Cloud ARR increased 20% to $214.3 million or 88% of total ARR.
- GAAP net loss totaled ($2.5) million compared to a year ago net
loss of ($0.9) million.
- GAAP net loss attributable to common stockholders totaled
($4.8) million compared to a year ago net loss attributable to
common stockholders of ($3.1) million. The company’s Q1 2021 net
loss attributable to common shareholders includes the effect of a
deemed dividend to preferred shareholders of $2.3 million and
acquisition-related expenses of $0.4 million.
- GAAP fully diluted earnings (loss) per share attributable to
common stockholders totaled ($0.09) compared to ($0.06).
- Non-GAAP adjusted net income before deemed dividends and
excluding deferred tax (benefit) expense totaled $7.9 million
compared to $6.7 million.
- Non-GAAP adjusted net income per share before deemed dividends
and excluding deferred tax (benefit) expense increased 16% to
$0.15.
- Adjusted EBITDA increased 18% or $2.0 million to $13.1 million,
representing an adjusted EBITDA margin of 22%.
- The company ended the quarter with $23.7 million in cash. Cash
flow from operations was $10.7 million, an increase of 142% or $6.3
million compared to the prior year period.
Recent Operational Highlights
- Successfully completed the business operations integration of
CloudAlly, an industry leader in cloud-based data backup and
recovery, which Zix acquired in November 2020.
- Zix added 46,141 cloud mailboxes in Q1 2021, bringing the total
number of productivity mailboxes to over 1.2 million.
- Direct customers and MSP partners started over 2,600 trials of
Advanced Threat Protection, ZixEncrypt, ZixArchive and Secure File
Share in Q1 2021.
Management Commentary
“Our consistent results for the first quarter reflect our
continued commitment to driving profitable growth as well as our
partners’ and customers’ increasing adoption of Zix’s Secure Cloud
platform,” said David Wagner, Zix’s Chief Executive Officer. “We
delivered 14% growth in revenue and ARR in Q1, along with an 18%
increase in adjusted EBITDA dollars and solid cash flow from
operations. These strong results underscore the growing role Zix is
playing in empowering businesses of all sizes with the technology
to drive cloud adoption, facilitate digital transformation, and
protect communications. CloudAlly has continued to perform
exceedingly well post acquisition with ARR recently hitting record
levels; cloud data back-up is playing an increasingly critical role
within a secure modern workplace, and we have a leading solution to
address that growing need. Overall, Zix remains well positioned to
take advantage of many secular market trends and to realize highly
efficient new customer acquisition and greater adoption of our
Secure Cloud platform.”
Zix’s Chief Financial Officer Dave Rockvam commented: “The first
quarter of 2021 marked another period of consistent profitable
growth, increased year-over-year adjusted EBITDA dollars, and
strong cash flow generation. Our Secure Cloud platform and
high-velocity sales model is enabling our partners to empower our
end customers to add more services. The macro acceleration of the
business cloud journey and increased focus on email security give
us confidence we can continue to capture meaningful growth
opportunities well into the future. Moreover, our current base of
more than 5,000 partners and 90,000 end customers provide a
built-in growth opportunity to attach Zix’s organic, higher-margin
products. As we execute this strategy, we believe our 100%
subscription business, favorable profitability profile and strong
cash flow generation positions well us to meet our manageable debt
obligations and achieve our adjusted EBITDA guidance of $56.0
million.”
First Quarter 2021 Corporate Financial Summary and Other
Operational Metrics
$ in Millions, except per share
data
Q1 2021
Q1 2020
Change (1)
Revenue
$60.0
$52.4
14.5%
GAAP Net Income (Loss)
($2.5)
($0.9)
(188.4%)
GAAP Net Income (Loss) Attributable to
Common Stockholders
($4.8)
($3.1)
(55.2%)
GAAP Net Income (Loss) Per Share
Attributable to Common Stockholders – Diluted
($0.09)
($0.06)
(52.5%)
Non-GAAP Adjusted Net Income Attributable
to Common Stockholders (3)
$5.6
$4.5
25.3%
Non-GAAP Adjusted Net Income Per Share
Attributable to Common Stockholders – Diluted (3)
$0.10
$0.08
23.0%
Non-GAAP Adjusted Net Income Before Deemed
Dividends(3)
$8.1
$7.3
11.1%
Non-GAAP Adjusted Net Income Per Share
Before Deemed Dividends - Diluted(3)
$0.15
$0.14
9.0%
Non-GAAP Adjusted Net Income Before Deemed
Dividends and Excluding Deferred Tax (Benefit) Expense(3)
$7.9
$6.7
18.3%
Non-GAAP Adjusted Net Income Per Share
Before Deemed Dividends and Excluding Deferred Tax (Benefit)
Expense(3)
$0.15
$0.12
16.0%
EBITDA (2)(3)
$8.9
$8.7
1.7%
EBITDA Margin
14.8%
16.6%
1.9 pts
Adjusted EBITDA (3)
$13.1
$11.1
18.4%
Adjusted EBITDA Margin (3)
21.9%
21.2%
0.7 pts
Total Billings
$62.3
$55.8
11.7%
(1)
Changes are based on actual numbers versus
numbers shown in the columns, which may reflect rounding
(2)
Earnings before interest, taxes,
depreciation, and amortization
(3)
A reconciliation of GAAP to non-GAAP
results is included in this press release and available on the Zix
investor relations website at http://investor.zixcorp.com
Financial Outlook
Zix provides guidance based on current market conditions and
expectations. The company emphasizes that its guidance is subject
to various important cautionary factors referenced in the section
entitled "Forward-Looking Statements" below, including risks and
uncertainties associated with the COVID-19 pandemic.
For the second quarter of 2021, the company forecasts revenue to
range between $61.2 million and $61.6 million. Zix’s revenue
forecast for the second quarter of 2021 implies a 15% growth rate
compared to the same year ago quarter. The company forecasts fully
diluted GAAP earnings (loss) per share (attributable to common
stockholders) to be in the range of ($0.09) and ($0.08), and fully
diluted non-GAAP adjusted earnings per share (attributable to
common stockholders) before deemed dividends and excluding deferred
tax (benefit) expense to be $0.14 for the second quarter of 2021.
The company forecasts adjusted EBITDA to be approximately 22% of
forecast revenue for Q2 2021. The per share guidance figures are
based on an approximate basic share count of 57.0 million for Q2
2021.
Based on management’s current visibility, the company increased
its revenue guidance for fiscal 2021 to range between $248.0
million and $250.5 million, representing an increase of between 14%
and 15% compared to fiscal year 2020. The company also expects
fully diluted GAAP earnings (loss) per share (attributable to
common stockholders) to range between ($0.36) and ($0.33) and fully
diluted non-GAAP adjusted earnings per share (attributable to
common stockholders) before deemed dividends and excluding deferred
tax (benefit) expense to range between $0.58 to $0.60 for fiscal
year 2021. The company forecasts adjusted EBITDA to be $56.0
million (or approximately 22% of forecast revenue) for 2021,
representing a year-over-year increase of approximately 10%
compared to fiscal year 2020. The per share figures are based on an
approximate basic average share count of 55.5 million for 2021.
Fiscal 2021 guidance adds back approximately $3.0 million of
expenses related to travel, compensation, and marketing, which were
reduced in 2020 due to COVID-19.
Conference Call Information
Management will discuss these financial results and outlook on a
conference call today (May 5, 2021) at 5:00 p.m. ET (2:00 p.m.
PT).
A live webcast of the conference call will be available in the
investor relations section of Zix’s website here. Alternatively,
participants can access the conference call by dialing
1-855-853-6940 (U.S. toll-free) or 1-720-634-2906 (international)
at least 15 minutes before the call and entering access code
9296071. If you have any difficulty connecting with the conference
call, please contact Gateway Investor Relations at
1-949-574-3860.
An audio replay can be accessed for seven days by dialing
1-855-859-2056 (U.S. toll-free) or 1-404-537-3406 (international)
and entering the access code 9296071. An archive of the webcast
will also be available on the Zix investor relations Web site.
About Zix Corporation
Zix Corporation (Zix) is a leader in email security. Trusted by
the nation’s most influential institutions in healthcare, finance,
and government, Zix delivers a superior experience and easy-to-use
solutions for email encryption and data loss prevention, advanced
threat protection, unified information archiving and bring your own
device (BYOD) mobile security. Focusing on the protection of
business communication, Zix enables its customers to better secure
data and meet compliance needs. Zix is publicly traded on the
Nasdaq Global Market under the symbol ZIXI. For more information,
visit www.zixcorp.com.
Forward-Looking Statements
As more fully described in Zix's Annual Report on Form 10-K for
the year ended December 31,, 2020, which was filed with the SEC on
March 5,, 2021, the company has been actively monitoring the
COVID-19 situation and its impact on both the company and the world
in which we operate. The impact of COVID-19 and unprecedented
measures to prevent its spread are affecting our business in
various ways such as causing volatility in demand for our products,
changes in customer behavior, including their spending and payment
patterns, disruptions in the operations of our third-party
suppliers and business partners, and limitations on our employees’
and partners ability to work and travel. We expect the ultimate
significance of the impact of the foregoing on our financial and
operational results will be dictated by the length of time that
these circumstances continue, which will depend on the currently
unknowable extent and duration of the COVID-19 pandemic and
governmental and public actions taken in response. These factors
also make it more challenging for management to estimate the future
performance of our business, particularly over the near term.
Statements in this release that are not purely historical facts
or that necessarily depend upon future events, including statements
about forecasts of sales, revenue, annual recurring revenue,
EBITDA, EBITDA margin, earnings or earnings per share, potential
benefits of acquisitions and strategic relationships, or other
statements about anticipations, beliefs, expectations, hopes,
intentions or strategies for the future, may be forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. Readers are cautioned not to
place undue reliance on forward-looking statements. All
forward-looking statements are based upon information available to
Zix on the date this release was issued. Zix undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. Any forward-looking statements involve risks and
uncertainties that could cause actual events or results to differ
materially from the events or results described in the
forward-looking statements, including but not limited to, risks or
uncertainties related to the completion and integration of
acquisitions, the effects of our debt and equity financing
transactions, year-end adjustments to previously reported
preliminary unaudited financial information, market acceptance of
both existing and new Zix solutions, changing market dynamics
resulting from technological change, innovation and continuing
customer migration to the cloud, changes in the competitive
ecosystem, how privacy and data security laws may affect demand for
Zix data protection solutions, and business disruptions,
uncertainty and market instability stemming from the COVID-19
pandemic and governmental actions related thereto. Zix may not
succeed in addressing these and other risks. Further information
regarding factors that could affect Zix’s business and its
financial and other results can be found in the risk factors
section of Zix’s most recent annual report on Form 10-K and
quarterly report on Form 10-Q, each as filed with the Securities
and Exchange Commission, as those risk factors may be supplemented
in subsequent filings.
We monitor ARR as an operating metric, which we define as the
aggregate annualized contract value attributable to recurring
revenue contracts as of the end of the applicable reporting period.
We calculate ARR by determining the annual or monthly revenue of
subscription agreements that are active as of the end of the
applicable period and multiplying by 1 or 12. We monitor this
metric to aid in determining to what extent individual customer
relationships, considered in the aggregate, are growing or
declining in financial magnitude. ARR is an operating metric
derived as of the date of determination, and should be viewed
independently of revenue, unearned revenue and any other GAAP
financial measure over any period.
ZIX CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
March 31,
2021
December 31,
(unaudited)
2020
ASSETS
Current assets:
Cash and cash equivalents
$
23,747,000
$
21,362,000
Receivables, net
16,878,000
16,831,000
Prepaid and other current assets
5,024,000
5,430,000
Total current assets
45,649,000
43,623,000
Property and equipment, net
6,651,000
7,345,000
Operating lease assets
12,941,000
14,259,000
Other assets and deferred costs
12,449,000
12,767,000
Intangible Assets, Net
139,897,000
144,163,000
Goodwill
194,988,000
195,013,000
Deferred tax assets
32,882,000
32,554,000
Total assets
$
445,457,000
$
449,724,000
LIABILITIES, PREFERRED STOCK AND
STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
30,112,000
$
30,382,000
Deferred revenue
40,484,000
40,447,000
Other current liabilities
7,920,000
7,963,000
Total current liabilities
78,516,000
78,792,000
Long-term liabilities:
Deferred revenue
963,000
1,079,000
Operating and finance lease
liabilities
8,784,000
10,208,000
Debt
209,306,000
209,658,000
Total long-term liabilities
219,053,000
220,945,000
Total liabilities
297,569,000
299,737,000
Total preferred stock
117,875,000
115,552,000
Total stockholders’ equity
30,013,000
34,435,000
Total liabilities, preferred stock and
stockholders’ equity
$
445,457,000
$
449,724,000
ZIX CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
`
Three Months Ended March
31,
2021
2020
Revenue
$
60,015,000
$
52,434,000
Cost of revenue
33,138,000
26,079,000
Gross profit
26,877,000
26,355,000
Operating expenses:
Research and development
6,060,000
5,386,000
Selling, general and administrative
21,297,000
20,029,000
Total operating expenses
27,357,000
25,415,000
Operating income
(480,000
)
940,000
Operating margin
-1
%
2
%
Other income (expense)
Investment and other income (expense)
43,000
(15,000
)
Interest expense
(2,126,000
)
(2,648,000
)
Total other income (expense)
(2,083,000
)
(2,663,000
)
Income before income taxes
(2,563,000
)
(1,723,000
)
Income tax benefit (expense)
103,000
870,000
Net (loss) income
$
(2,460,000
)
$
(853,000
)
Deemed and accrued dividends on preferred
stock
(2,323,000
)
(2,229,000
)
Net (loss) income attributable to common
shareholders
$
(4,783,000
)
$
(3,082,000
)
Basic (loss) income per share attributable
to common shareholders:
$
(0.09
)
$
(0.06
)
Diluted (loss) income per share
attributable to common shareholders:
$
(0.09
)
$
(0.06
)
Shares used in per share calculation -
basic
54,536,103
53,496,042
Shares used in per share calculation -
diluted
54,536,103
53,496,042
Other Comprehensive income, net of
tax:
Foreign currency translation
adjustments
(1,262,000
)
(905,000
)
Comprehensive (loss) income
$
(3,722,000
)
$
(1,758,000
)
ZIX CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March
31,
2021
2020
Operating activities:
Net (loss) income
$
(2,460,000
)
$
(853,000
)
Non-cash items in net income
13,863,000
9,998,000
Changes in operating assets and
liabilities
(729,000
)
(4,738,000
)
Net cash provided by operating
activities
10,674,000
4,407,000
Investing activities:
Purchases of property and equipment and
capitalized software
(4,979,000
)
(5,007,000
)
Acquisition of business, net of cash
acquired
(339,000
)
-
Net cash used in investing activities
(5,318,000
)
(5,007,000
)
Financing activities:
Proceeds from exercise of stock
options
253,000
117,000
Proceeds from long term debt
-
6,000,000
Repayment of long term debt
(551,000
)
(460,000
)
Repayment of finance lease obligations
(201,000
)
(406,000
)
Purchase of treasury stock
(2,105,000
)
(1,785,000
)
Net cash provided used in financing
activities
(2,604,000
)
3,466,000
Effect of exchange rate changes on
cash
(367,000
)
80,000
(Decrease) Increase in cash and cash
equivalents
2,385,000
2,946,000
Cash and cash equivalents, beginning of
period
21,362,000
13,349,000
Cash and cash equivalents, end of
period
$
23,747,000
$
16,295,000
ZIX CORPORATION
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(Unaudited)
Three Months Ended
March 31,
2021
2020
Revenue:
GAAP revenue
$
60,015,000
$
52,434,000
Cost of revenue
GAAP cost of revenue
$
33,138,000
$
26,079,000
Stock-based compensation charges (1)
(A)
(268,000
)
(172,000
)
Strategic consulting and litigation costs
(2)
(B)
(1,000
)
(58,000
)
Intangible Amortization (3)
(C)
(2,923,000
)
(2,607,000
)
Corporate separation payment (4)
(D)
-
-
Non-GAAP adjusted cost of revenue
$
29,946,000
$
23,242,000
Gross profit:
GAAP gross profit
$
26,877,000
$
26,355,000
Stock-based compensation charges (1)
(A)
268,000
172,000
Strategic consulting and litigation costs
(2)
(B)
1,000
58,000
Intangible Amortization (3)
(C)
2,923,000
2,607,000
Corporate separation payment (4)
(D)
-
-
Non-GAAP adjusted gross profit
$
30,069,000
$
29,192,000
Research and development expense
GAAP research and development expense
$
6,060,000
$
5,386,000
Stock-based compensation charges (1)
(A)
(612,000
)
(337,000
)
Strategic consulting and litigation costs
(2)
(B)
(16,000
)
(106,000
)
Intangible Amortization (3)
(C)
(76,000
)
(76,000
)
Corporate separation payment (4)
(D)
-
-
Non-GAAP adjusted research and development
expense
$
5,356,000
$
4,867,000
Selling and marketing expense
GAAP selling and marketing expense
$
14,922,000
$
14,341,000
Stock-based compensation charges (1)
(A)
(1,083,000
)
(544,000
)
Strategic consulting and litigation costs
(2)
(B)
(1,000
)
(39,000
)
Intangible Amortization (3)
(C)
(3,327,000
)
(3,119,000
)
Corporate separation payment (4)
(D)
(43,000
)
-
Non-GAAP adjusted selling and marketing
expense
$
10,468,000
$
10,639,000
General and administrative expense
GAAP general and administrative
expense
$
6,375,000
$
5,688,000
Stock-based compensation charges (1)
(A)
(1,841,000
)
(938,000
)
Strategic consulting and litigation costs
(2)
(B)
(403,000
)
(177,000
)
Corporate separation payment (4)
(D)
-
-
Non-GAAP adjusted general and
administrative expense
$
4,131,000
$
4,573,000
Operating income:
GAAP operating income
$
(480,000
)
$
940,000
Stock-based compensation charges (1)
(A)
3,804,000
1,991,000
Strategic consulting and litigation costs
(2)
(B)
421,000
380,000
Intangible Amortization (3)
(C)
6,326,000
5,802,000
Corporate separation payment (4)
(D)
43,000
-
Non-GAAP adjusted operating income
$
10,114,000
$
9,113,000
Adjusted Operating Margin
16.9
%
17.4
%
Net income:
GAAP net (loss) income
$
(2,460,000
)
$
(853,000
)
Stock-based compensation charges (1)
(A)
3,804,000
1,991,000
Strategic consulting and litigation costs
(2)
(B)
421,000
380,000
Intangible Amortization (3)
(C)
6,326,000
5,802,000
Corporate separation payment (4)
(D)
43,000
-
Non-GAAP adjusted net income
$
8,134,000
$
7,320,000
Deferred tax (benefit) expense
(223,000
)
(633,000
)
Non-GAAP adjusted net income excluding
deferred tax (benefit) expense
$
7,911,000
$
6,687,000
Deemed and accrued dividends on preferred
stock
(2,323,000
)
(2,229,000
)
Adjusted Net income attributable to common
stockholders
$
5,588,000
$
4,458,000
Diluted net income per common share:
GAAP net income per share before deemed
dividends
$
(0.05
)
$
(0.02
)
Adjustments per share
(A-D)
$
0.20
$
0.16
Non-GAAP adjusted net income per share
before deemed dividends
$
0.15
$
0.14
Deferred tax (benefit) expense impact to
Non-GAAP adjusted net income before deemed dividends per share
(E)
$
(0.00
)
$
(0.01
)
Non-GAAP adjusted net income before deemed
dividends per share excluding deferred tax (benefit) expense
$
0.15
$
0.12
Deemed dividends per share impact to
Non-GAAP adjusted net income
$
(0.04
)
$
(0.04
)
Adjusted Net income per share attributable
to common stockholders
$
0.10
$
0.08
Shares used to compute Non-GAAP adjusted
net income per share - diluted
54,536,103
53,496,042
Reconciliation of Net income to EBITDA
and Adjusted EBITDA:
(F)
Net income
$
(2,460,000
)
$
(853,000
)
Income tax provision
(103,000
)
(870,000
)
Interest expense
2,126,000
2,648,000
Depreciation
1,147,000
1,312,000
Amortization
8,153,000
6,481,000
EBITDA
8,863,000
8,718,000
Adjustments:
Stock-based compensation charges (1)
(A)
3,804,000
1,991,000
Strategic consulting and litigation costs
(2)
(B)
421,000
380,000
Corporate separation payment (4)
(D)
43,000
-
Adjusted EBITDA
$
13,131,000
$
11,089,000
Adjusted EBITDA margin
21.9
%
21.1
%
(1) Stock-based compensation charges
are included as follows:
Cost of revenues
$
268,000
$
172,000
Research and development
612,000
337,000
Selling and marketing
1,083,000
544,000
General and administrative
1,841,000
938,000
$
3,804,000
$
1,991,000
(2) Strategic consulting,
acquisition, integration and litigation costs are included as
follows:
Cost of revenues
1,000
58,000
Research and development
16,000
106,000
Selling and marketing
1,000
39,000
General and administrative
403,000
177,000
$
421,000
$
380,000
(3) Intangible Amortization is
included as follows:
Cost of revenues
2,923,000
2,607,000
Research and development
76,000
76,000
Selling and marketing
3,327,000
3,119,000
$
6,326,000
$
5,802,000
(4) Corporate separation payment is
included as follows:
Cost of revenues
-
-
Research and development
-
-
Selling and marketing
43,000
-
General and administrative
-
-
$
43,000
$
-
(5) Net Income tax components:
Current tax (benefit)/expense
120,000
(237,000
)
Deferred tax (benefit)/expense
(223,000
)
(633,000
)
$
(103,000
)
$
(870,000
)
This presentation includes Non-GAAP
measures. Our Non-GAAP measures, including "Non-GAAP adjusted net
income and net income per share excluding deferred tax expense" are
not meant to be considered in isolation or as a substitute for
comparable GAAP measures and should be read only in conjunction
with our consolidated financial statements prepared in accordance
with GAAP. For a detailed explanation of the adjustments made to
comparable GAAP measures, the reasons why management uses these
measures, the usefulness of these measures and the material
limitations of these measures, see Notes to Reconciliation of GAAP
to Non-GAAP Financial Measures on the next page.
ZIX CORPORATION
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES OUTLOOK
LOW
HIGH
LOW
HIGH
Three Months Ended
Three Months Ended
Twelve Months Ended
Twelve Months Ended
30-Jun
30-Jun
31-Dec
31-Dec
2021
2021
2021
2021
Revenue: GAAP revenue
$
61,200,000
$
61,600,000
$
248,000,000
$
250,500,000
Diluted net income per common share: GAAP net income
$
(0.04
)
$
(0.05
)
$
(0.16
)
$
(0.19
)
Stock-based compensation charges
$
0.07
$
0.07
$
0.27
$
0.30
Strategic consulting, acquisition and litigation costs
$
0.00
$
0.01
$
0.01
$
0.02
Intangible Amortization
$
0.11
$
0.11
$
0.45
$
0.48
Corporate separation payment
$
-
$
-
$
0.00
$
0.00
Non-GAAP adjusted net income per share
$
0.14
$
0.14
$
0.58
$
0.61
Deferred tax (benefit) expense
$
0.00
$
(0.00
)
$
-
$
(0.01
)
Non-GAAP adjusted net income before deemed dividends per share
excluding deferred tax (benefit) expense
$
0.14
$
0.14
$
0.58
$
0.60
Deemed dividends per share impact to Non-GAAP adjusted net income
$
(0.04
)
$
(0.04
)
$
(0.18
)
$
(0.18
)
Adjusted Net income per share attributable to common stockholders
$
0.10
$
0.10
$
0.41
$
0.42
GAAP fully diluted earnings (loss) per share attributable to common
stockholders
$
(0.08
)
$
(0.09
)
$
(0.33
)
$
(0.36
)
Shares used to compute Non-GAAP adjusted net income per share -
diluted
57,000,000
57,000,000
55,500,000
55,500,000
This presentation includes Non-GAAP measures. Our Non-GAAP
measures, including "Non-GAAP adjusted net income per share
excluding deferred tax expense" are not meant to be considered in
isolation or as a substitute for comparable GAAP measures and
should be read only in conjunction with our consolidated financial
statements prepared in accordance with GAAP. For a detailed
explanation of the adjustments made to comparable GAAP measures,
the reasons why management uses these measures, the usefulness of
these measures and the material limitations of these measures, see
Notes to Reconciliation of GAAP to Non-GAAP Financial Measures on
the next page.
ZIX CORPORATION NOTES TO RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
USE OF
NON-GAAP FINANCIAL INFORMATION
The
Company occasionally utilizes financial measures and terms not
calculated in accordance with generally accepted accounting
principles in the United States (“GAAP”) in order to provide
investors with an alternative method for assessing our operating
results in a manner that enables investors to more thoroughly
evaluate our current performance as compared to past performance.
We also believe these Non-GAAP measures provide investors with a
more informed baseline for modeling the Company’s future financial
performance. Management uses these Non-GAAP financial measures to
make operational and investment decisions, to evaluate the
Company's performance, to forecast and to determine compensation.
Further, management utilizes these performance measures for
purposes of comparison with its business plan and individual
operating budgets and allocation of resources. We believe that our
investors should have access to, and that we are obligated to
provide, the same set of tools that we use in analyzing our
results. These Non-GAAP measures should be considered in addition
to results prepared in accordance with GAAP, but should not be
considered a substitute for or superior to GAAP results. We have
provided definitions below for certain Non-GAAP financial measures,
together with an explanation of why management uses these measures
and why management believes that these Non-GAAP financial measures
are useful to investors. In addition, in our earnings release we
have provided tables to reconcile the Non-GAAP financial measures
utilized to GAAP financial measures.
ADJUSTED
NON-GAAP MEASURES
Our
Non-GAAP measures adjust GAAP Cost of revenue, Gross profit,
Research and development expense, Selling and marketing expense,
General and administrative expense, Operating income, Net income,
Net Income excluding deferred tax (benefit) expense, Net income per
share - diluted, Net income per share - diluted excluding deferred
tax (benefit) expense, and EBITDA for non-cash stock-based
compensation expense, and strategic consulting and litigation costs
to derive Non-GAAP adjusted Cost of revenue, adjusted Gross profit,
adjusted Research and development expense, adjusted Selling and
marketing expense, adjusted General and administrative expense,
adjusted Operating income, adjusted Net income, adjusted Net income
per share - diluted and adjusted EBITDA. We provide a
reconciliation of these adjusted Non-GAAP measures to GAAP Gross
profit, Operating income, Net income, Net income per share -
diluted and EBITDA.
Our
forward-looking adjusted Non-GAAP earnings per share information
consistently excludes non-cash stock-based compensation expense.
Additionally, the adjusted Non-GAAP earnings per share will
consistently exclude litigation expenses and non-recurring items
that impact our ongoing business. See items (A) through (E) below
for further information on the current quarter's reconciling
items.
Items
(A) through (F) on the "Reconciliation of GAAP to Non-GAAP
Financial Measures" table are listed to the right of certain
categories under "Gross profit," "Operating income," "Net income,"
"Net income excluding deferred tax (benefit) expense," "Net income
per share - diluted," "Net income per share excluding deferred tax
(benefit) expense- diluted," and "EBITDA" and correspond to the
categories explained in further detail below under (A) through
(F).
(A)
Non-cash stock-based compensation charges relating to stock option
grants, restricted stock, and restricted stock units awarded to and
accounted for in accordance with Share-Based Payment accounting
guidance. See (1) on previous page for breakdown of stock-based
compensation. Because of varying valuation methodologies,
subjective assumptions and varying award types, the Company
believes that the exclusion of stock-based compensation charges
provides for more accurate comparisons to our peer companies and
for a more accurate comparison of our financial results to previous
periods. Additionally, the Company believes it is useful to
investors to understand the specific impact of non-cash stock-based
compensation charges on our operating results.
(B)
Strategic consulting, acquisition integration and litigation costs.
See item (2) on previous page. The Company’s management excludes
certain board-directed consulting costs and litigation expenses
when evaluating its ongoing performance and/or predicting its
earnings trends and therefore excludes these charges on our
adjusted operating results.
(C)
Intangible amortization costs. See item (3) on previous page. The
Company’s management excludes amortization expenses associated with
the acquisition of intangible assets when evaluating its ongoing
performance and/or predicting its earnings trends and therefore
excludes these charges on our adjusted operating
results.
(D) Corporate separation payment relating to
employment termination benefits agreement. See item (4) on previous
page. The Company’s management excludes these costs when evaluating
its ongoing performance and/or predicting its earnings trends and
therefore excludes these charges on our adjusted operating
results.
(E)
Deferred tax expense represents the non-cash tax expense included
in the GAAP tax provision, including the current period utilization
of deferred tax assets created in previous periods. The remaining
provision for income taxes represents expected cash taxes to be
paid.
(F)
EBITDA represents earnings before interest, taxes, depreciation and
amortization. Adjusted EBITDA adds back stock-based compensation
charges and litigation expenses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210505005878/en/
Zix Company Contact Geoff Bibby 1-214-370-2241
gbibby@zixcorp.com
Zix Investor Contact Matt Glover and Tom Colton Gateway
Investor Relations 1-949-574-3860 ZIXI@gatewayir.com
Zix (NASDAQ:ZIXI)
Historical Stock Chart
From Apr 2024 to May 2024
Zix (NASDAQ:ZIXI)
Historical Stock Chart
From May 2023 to May 2024