Zix Corporation Addresses New HIPAA Regulations

New HIPAA era has arrived; ZixCorp executive offers advice for healthcare businesses to ensure compliance. Zix Corporation (ZixCorp(R)) (Nasdaq: ZIXI), the leader in hosted services for email encryption, today announced that ZixCorp Vice President and HIPAA subject matter expert, Geoff Bibby, is available to discuss the recent amendments to the healthcare privacy and security obligations under the Health Insurance Portability and Accountability Act (HIPAA). On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act (ARRA). The healthcare portion is known as the Health Information Technology for Economic and Clinical Health Act (HITECH Act) and it contains drastic changes to the Health Insurance Portability and Accountability Act (HIPAA). This new legislation has significant ramifications, most notably in the following areas - enforcement, breach notification, implication for business associates and use of encryption.

* Bibby is available to speak on any HIPAA-related topics, including: Why email encryption should be a high priority compliance area for healthcare enterprises
* Needed improvements to security practices, including use of policy-based encryption
* How new HIPAA legislation drastically alters the healthcare privacy and security environment and the associated challenges
* Enforcement changes including fines exceeding $1 million
* How companies can become compliant with the new HIPAA standards
* Impact of these changes on business associates

HIPAA requires use of methods for rendering Personal Health Information (PHI) data in paper or electronic form unusable, unreadable, or indecipherable to unauthorized individuals while in motion. However, recent history has provided examples of healthcare organizations distributing PHI via unsecure e-mail. As enforcement continues to be more extensive and penalties more punitive, today's security breaches, even those without any discernible risk of harm, will be broadly publicized, often dictated by regulations, and can be financially catastrophic for non-compliant businesses, including a new tiered penalty structure ranging from $25,000 to $1.5 million. Healthcare organizations and their business associates need to begin to address the new requirements in order to be compliant with the February deadline.

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Zix Corporation Announces Review of Strategic Alternatives for e-Prescribing Business

Zix Corporation, the leader in email encryption services and payor sponsored e-Prescribing services, announced today that it has retained Allen & Company LLC to assist ZixCorp's Board of Directors in investigating strategic alternatives for maximizing the value of the Company's e-Prescribing business. This strategic review may result in a partnership, joint venture, the sale of some or all of its e-Prescribing assets or a similar transaction.

No decision has been made to enter into any transaction at this time and there can be no assurance that the Company will enter into such a transaction in the future. It is ZixCorp's policy not to comment on any specific discussions or any potential corporate transactions unless and until it enters into a definitive agreement with respect to such a transaction.

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Zix Corporation to Hold Annual Shareholder's Meeting June 4

DALLAS, June 3 /PRNewswire-FirstCall/ -- Zix Corporation (ZixCorp(R)), (Nasdaq: ZIXI), the leader in hosted services for email encryption and payor-sponsored e-prescribing, today reminded shareholders that the company's 2009 Annual Shareholder Meeting will be held tomorrow, June 4, 2009, in Turtle Creek I Room on the first floor of the Cityplace Conference Center located at 2711 N. Haskell Avenue, Dallas, TX. Registration for the meeting will begin at 9:30 a.m. Central Time, with the meeting itself scheduled to begin at 10:00 a.m. Central Time.

In addition to conducting the company's normal business at the meeting, ZixCorp's chairman and chief executive officer, Rick Spurr, will provide a corporate update on the company. A live Webcast of the shareholder's meeting will be available on the Investors portion of ZixCorp's Web site at http://investor.zixcorp.com. There will be no telephonic broadcast of the meeting. A replay of the meeting will be available via Webcast on the Web site.
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Zix Corporation Reports Highest Revenue Quarter as Company Announces First Quarter 2009 Financial Results

Email Encryption business continues to drive performance for Company

DALLAS, April 28 /PRNewswire-FirstCall/ -- Zix Corporation (ZixCorp(R)), (Nasdaq: ZIXI), the leader in hosted services for email encryption and payor-sponsored e-prescribing, today announced financial results for the first quarter ended March 31, 2009. ZixCorp recorded first quarter revenues of $7.3 million and a GAAP net loss of $1.5 million for the quarter, or $0.02 per share, compared with revenues of $7.2 million, and a GAAP net loss of $1.7 million, or $0.03 per share, in the corresponding quarter in 2008. Adjusted net loss was $0.7 million, or $0.01 per share, compared with an adjusted net loss of $1.0 million, or $0.02 per share, in the corresponding quarter in 2008.

"I am pleased that, in this current economic environment, ZixCorp was able to record its highest revenue quarter ever, driven by the 18 percent year-on-year revenue growth in our Email Encryption business," said Rick Spurr, chairman of the board and chief executive officer. "We believe compliance will continue to drive demand for our Email Encryption services, whether because of our ability to conform to European standards through our newly-opened UK data center or the expansion of entities covered by HIPAA under the recently-enacted federal stimulus package. In fact, our recently-announced new partnership with Webroot provides further evidence of the growing demand for email encryption services. Our market leadership, superior SaaS architecture, and the largest shared directory of email addresses in the industry, with our management of encryption keys 'in the cloud,' indicate our Email Encryption business remains well-positioned for continued growth. In our PocketScript business, we continue to pursue larger payor contracts while we deploy new deals that were secured in the last two quarters. Despite recording revenue in this business of about half of last year's amount, as described later in this release, I am encouraged by the growth in usage by our physicians, where we saw year-over-year growth in scripts written on essentially the same-sized active prescriber base. This trend, combined with the incorporation of e-prescribing as an essential element of healthcare IT in the recently-enacted federal stimulus package, reinforces our belief that e-prescribing is a fundamental technology on which a connected healthcare system can be built."

* Corporate Highlights Company-wide first quarter 2009 revenue of $7.3 million is up 1 percent over the comparable quarter in 2008, meeting the upper half of previously-issued revenue guidance of $7.1 to $7.4 million
* Cash and cash equivalents at March 31, 2009 were $12.2 million, reflecting a timing difference in payments of $1.1 million from two long-time customers expected in Q1 but not received until the middle of April. Accordingly, the Company considers the temporary decline in cash a normal part of the payment and receipt cycle
* Adjusted earnings (see "Use of Non-GAAP Financial Information" below and the attached Reconciliation of GAAP to Non-GAAP Financial Measures) were ($0.01), meeting previously issued guidance of ($0.01) to ($0.02)

Business Highlights

* Email Encryption Email Encryption revenue for first quarter 2009 was $6.2 million, up 18 percent when compared with the same quarter in 2008
* New first-year orders of $1.1 million, compared with $1.4 million in the same quarter in 2008. Total orders for the quarter were $7.4 million, compared with $8.7 in the first quarter of 2008
* ZixCorp maintained a strong renewal rate for eligible contracts at 95 percent
* The ZixDirectory(TM), the community of users which forms the backbone of ZixCorp's Email Encryption Service, achieved a new milestone, topping 16 million members at a growth rate of approximately 100,000 new addresses added each week
* ZixCorp recently announced the establishment of a European data center in the United Kingdom to enable its European customers to comply with European Union privacy and security rules

* e-Prescribing e-Prescribing revenue for first quarter 2009 was $1.0 million compared with $1.9 million for the first quarter in 2008. This drop in revenue was due primarily to the decline in fee revenue after a contractual cap was reached in one payor program, the decrease in deployment revenues as the rate of new physician deployments has declined in 2008 and early 2009 when compared with 2007, as well as the first quarter 2008 impact of a one-time revenue item resulting from the achievement of certain performance-related metrics in a single contract
* The Company's PocketScript business achieved the top end of the e-prescribing deployment guidance of 250 to 350 for the first quarter with 350 deployments
* ZixCorp released PocketScript(R) 6.9, a new version of its e-prescribing application. This release provides more robust information to physicians at the point of care to enhance the decision support and leverages the latest standards to keep PocketScript current with its certifications
* The Company signed an expansion contract with Blue Cross Blue Shield of Massachusetts covering up to 400 new prescribers
* ZixCorp's PocketScript e-Prescribing service processed over 2.5 million e-scripts in the first quarter, an increase of 12 percent over the first quarter of 2008

Financial Highlights

Note: All gross profit and expenditure explanations below are based on adjusted non-GAAP amounts, the primary adjustment of which is non-cash stock-based compensation under SFAS 123R - see "Use of Non-GAAP Financial Information" below and the "Reconciliation of GAAP to Non-GAAP Financial Measures" presented with attached financial statements.


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Zix Corporation Selected by Houston Healthcare for Email Encryption Service

DALLAS, April 7, 2009 /PRNewswire-FirstCall via COMTEX/ -- Georgia-based health system to deploy ZixCorp's email encryption services

Zix Corporation (ZixCorp(R)), (Nasdaq: ZIXI), the leader in email encryption services, today announced that Houston Healthcare, a Georgia-based health system, has signed a three-year contract for the company's email encryption services.

ZixCorp will enforce Houston Healthcare's email encryption policies to ensure the secure handling of confidential information. The service includes a pre-configured lexicon that automatically detects and encrypts protected health information ("PHI"). ZixCorp will also provide branding and encrypted messaging functionality to the organization's website.

"ZixCorp's services are the proven choice for the healthcare industry," said Rob Rhodes, chief information officer for Houston Healthcare. "After reviewing ZixCorp's customer base and excellent recommendations from references and consultants, we're confident our choice was the right one."

"ZixCorp's email encryption services continue to be the first choice in the healthcare community because of the ZixDirectory and our ability to deliver key management in the cloud," said Rick Spurr, chief executive officer for ZixCorp. "As the only significant hosted service for email encryption, we can uniquely provide immediate access to a large community of users in a highly scalable and easy-to-deploy manner."

ZixCorp offers the simplicity of Software as a Service ("SaaS") with the convenience of customizable encryption policies. ZixCorp operates the largest email encryption directory in the world enabling seamless and secure communication among communities of interest. ZixCorp's directory connects over 15 million members and includes 20 state banking regulators, over 800 financial institutions, over 1000 hospitals and over 30 Blue Cross Blue Shield organizations.

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Statement by ZixCorp Supporting New Federal CIO's Vision for Software as a Service Architecture

Leader in e-mail encryption service applauds new vision for federal IT architecture

DALLAS, March 10 /PRNewswire-FirstCall/ -- Zix Corporation (ZixCorp(R)), (Nasdaq: ZIXI), the leader in hosted services for e-mail encryption, issued a statement supporting the shift to Software as a Service (SaaS) expressed by Vivek Kundra, the newly appointed federal CIO. In an interview with The Wall Street Journal published March 5, 2009, Mr. Kundra made his preference very clear stating, "I'm all about the cloud computing notion. I look at my lifestyle, and I want access to information wherever I am." He added, "I am killing projects that don't investigate Software as a Service first."

The federal CIO is placing greater emphasis on leveraging cloud computing and the efficiencies that accompany a SaaS architecture. ZixCorp strongly believes that a shared infrastructure is the ideal means for enabling scalable, reliable and trusted communications. As a pioneer in the e-mail encryption industry, ZixCorp has been the leader in bringing e-mail encryption services to organizations across the country. Security is the most important element in the development of a scalable shared infrastructure. ZixCorp is certified under the AICPA SysTrust(TM) process which performs annual audits to prove our availability, integrity and security as well as our ability to protect the confidentiality of our customers' data.

ZixCorp was founded on a model that envisioned massive scale delivered via a SysTrust(TM) certified data center. This vision, coupled with proven execution, has allowed ZixCorp to secure the FFIEC banking regulators as customers, including the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA) and the Office of Thrift Supervision (OTS). "ZixCorp understands that delivering services via a SaaS architecture requires highly reliable, scalable and proven processes and operations," said ZixCorp's chief executive officer, Rick Spurr. "We're thrilled that Mr. Kundra is utilizing his authority as the federal CIO to take advantage of the efficiencies of SaaS architectures and we're proud of our strong track record in the federal market. Our federal customers deserve credit for having the foresight to invest in our SaaS model before it became so overwhelmingly popular."

As a pioneer in the e-mail encryption industry, ZixCorp has been the leader in bringing e-mail encryption services to organizations across the United States. ZixCorp offers the simplicity of SaaS with the confidence of customizable encryption policies. ZixCorp operates the largest e-mail encryption directory in the world enabling seamless and secure communication among communities of interest. ZixCorp's directory connects over 15 million members and includes 20 state banking regulators, over 800 financial institutions, over 1,000 hospitals and over 30 Blue Cross Blue Shield organizations.

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Zix Corporation and Blue Cross Blue Shield of Massachusetts Expand the Industry's Largest e-Prescribing Program

e-Prescribing industry's longest running program adds additional users with Zix Corporation

DALLAS, March 2 /PRNewswire-FirstCall/ -- Zix Corporation (ZixCorp(R)) (Nasdaq: ZIXI) and Blue Cross Blue Shield of Massachusetts (BCBSMA) today announced a contract to add another 400 e-Prescribing physicians in 2009. Zix Corporation and Blue Cross Blue Shield of Massachusetts are extending their successful e-Prescribing program which is now entering its sixth year. Under the contract terms, Zix Corporation will immediately begin recruiting and deploying PocketScript(R) e-Prescribing services to 200 physicians in Massachusetts. A further 200 prescribers will be recruited and deployed following the full release of the latest version of PocketScript(R) which is scheduled for early in the second quarter.

This latest expansion is yet another step to ensure widespread adoption of e-prescribing in Massachusetts. BCBSMA previously announced that e-prescribing is a requirement for any physicians seeking to qualify for BCBSMA incentive programs. BCBSMA is supporting e-prescribing in an effort to continuously improve the quality, affordability, and efficiency of care for its members. The new requirement applies to both primary care physicians and specialists.

During 2008, Massachusetts e-prescribers transmitted more than 4.0 million electronic prescriptions. The program averaged 331,500 electronic prescriptions transmitted each month and increased overall prescription volume to 17.8 million total electronic prescriptions sent to date by the program's prescribers. In 2008, 82,600 e-prescriptions were changed or cancelled due to a drug-to-drug or drug allergy warning. This safety improvement is representative of 2% of the overall electronic scripts.

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