Zix Corporation Delivers HIPAA Compliant Email Encryption to Sten-Tel(R)

Zix Corporation , the leader in email encryption services, today announced that Sten-Tel, a leading national medical, legal, law enforcement and insurance transcription company, has signed a three-year contract for the company's email encryption service.

The sweeping changes to the Health Information Portability Accountability Act (HIPAA) introduced via the Health Information Technology for Economic and Clinical Health (HITECH) Act earlier this year have generated enormous challenges for the healthcare industry and their business associate partners. The challenges arise from provisions that extend compliance responsibility for the HIPAA Privacy and Security Rules to the business associate category of companies that provide services to the healthcare industry. The new provisions that went into effect in September 2009 obligate these business associates, by law, to follow HIPAA.

The updated act, coupled with anticipated stronger enforcement, has amplified the risks for business associates substantially. These changes have particularly strong ramifications for the medical transcription industry since electronic Personal Health Information (ePHI) is at the core of their industry. Medical transcription vendors are business associates that offer dictation and translation services to medical professionals, clearly a market requiring secure management of electronic PHI.

Sten-Tel anticipated the changes to HIPAA and chose to implement ZixCorp's email encryption service for all sensitive email communication. "Sten-Tel's swift response to the new changes to HIPAA through HITECH demonstrates their understanding of the significance of this new environment," said Rick Spurr, Chief Executive Officer for ZixCorp. "Sten-Tel's actions signify a strong commitment to safeguarding patient privacy. We welcome Sten-Tel into the ZixCorp community and are pleased to see the business associate market recognize our healthcare leadership."

ZixCorp delivers HIPAA compliant email encryption services for seamless external communication with Sten-Tel members and business partners. As a ZixCorp customer, Sten-Tel users benefit from access to ZixDirectory(TM), the largest email encryption community in the world with over 18 million members. ZixDirectory plugs Sten-Tel into the community to send and receive secure email through a SaaS architecture that delivers seamless key management in the cloud.

"ZixCorp's email encryption service was up and running in a matter of hours; it's provided us with confidence in knowing we're compliant with the new changes to HIPAA," said

George Catuogno, President of Sten-Tel.

To Purchase ZipCorp Products Visit http://zixencryption.com

Zix Corporation Hits High End of Financial Guidance as Company

Zix Corporation (ZixCorp®) (Nasdaq: ZIXI), the leader in hosted services for email encryption and payor-sponsored e-prescribing, today announced financial results for the third quarter ended September 30, 2009. ZixCorp recorded third quarter revenues of $7.8 million and a GAAP net loss of $0.7 million for the quarter, or $0.01 loss per share, compared with revenues of $6.7 million, and a GAAP net loss of $1.5 million, or $0.02 loss per share, in the corresponding quarter in 2008. Reporting a positive result for the first time, adjusted net income (see "Use of Non-GAAP Financial Information" below and the attached "Reconciliation of GAAP to Non-GAAP Financial Measures") was $0.8 million, or $0.01 per share, compared with an adjusted net loss of $0.8 million, or $0.01 loss per share, in the corresponding period in 2008.

"I'm very pleased to report ZixCorp's first ever profits, on an adjusted basis, which is a measure that we use to evaluate the performance of the Company and make planning decisions," said Rick Spurr, Chairman and Chief Executive Officer for ZixCorp. "Record overall revenues, driven by continued strength in our Email Encryption business, reflect our successful subscription model that combines the healthy addition of new sales with a track record of high renewals in our customer base. The improvement in our renewal rate and several competitive win-backs are further indications of our strength in the marketplace with our superior Software as a Service (SaaS) solution and its management of shared public encryption keys in our ZixDirectory. This robust growth in our top-line performance on a primarily fixed cost infrastructure, combined with targeted cost-cutting actions we've undertaken recently in our e-Prescribing business, have enabled us to achieve this significant milestone of profitability. I believe ZixCorp has transitioned to a new phase in its development as a business and should thrive as it continues to deliver improved financial results. While we are making progress in our previously-announced assessment of strategic alternatives for our e-Prescribing business, we remain committed to executing our existing contracts and providing quality services to our customers, and I'm pleased to see continued strong usage of this life-saving and cost-reducing technology by our prescribers, as evidenced by the 16 percent increase in the script volume compared with the same period in 2008."

Corporate Highlights

-- Company-wide third quarter 2009 revenue of $7.8 million is up 17 percent
over the comparable period in 2008, meeting the high end of
previously-issued revenue guidance of $7.5 to $7.8 million
-- Cash and cash equivalents at September 30, 2009, were $12.4 million
compared with $12.5 million at the end of the second quarter of 2009 and
$13.2 million at December 31, 2008. Cash and cash equivalents remain
below the December 31, 2008, level, primarily because of certain
non-recurring cash items in the quarter and a slow-down in customer
payments

-- ZixCorp welcomed the Company's founder, successful entrepreneur David P.
Cook, back to its Board of Directors

Business Highlights

Email Encryption

-- Email Encryption revenue for third quarter 2009 was $6.7 million, up 20
percent when compared with the same quarter in 2008
-- New first-year orders were $1.3 million, a 12 percent increase over the
same period in 2008. Total orders for the quarter were $6.5 million, up
25 percent when compared the same period of 2008
-- ZixCorp reported a contract renewal of 91 percent for the quarter
-- Through its partnership with Dell Inc., ZixCorp began providing email
encryption services to customers of Dell's Email Management Services
(EMS) with ZixCorp's Email Encryption Service for EMS
-- ZixCorp extended one of its anchor customer relationships by renewing
its exclusive contract with Humana for the seventh year and expanding
the users to 36,000

-- ZixCorp increased its footprint within the financial services sector in
passing the 1,100 mark for financial institutions as customers, while
the overall number of members in the ZixDirectory surpassed 18 million

e-Prescribing

-- e-Prescribing revenue for third quarter 2009 was $1.2 million, up 2
percent when compared with the same quarter in 2008
-- The Company's PocketScript business met the e-Prescribing deployment
guidance of 200 to 250 for the third quarter with approximately 210
deployments
-- In the third quarter, which historically shows decreased volume with
many physicians taking vacations over the summer months, ZixCorp
processed over 2.3 million scripts, an increase of approximately 16
percent compared with the third quarter in 2008

-- ZixCorp continued its previously-announced review with Allen & Co. of
strategic alternatives for its e-Prescribing business

To Purchase ZipCorp Products Visit http://zixencryption.com

SEMCO ENERGY Selects ZixCorp for Email Encryption

- Zix Corporation (ZixCorp®), (Nasdaq: ZIXI), the leader in email encryption services, today announced the Company has signed a three-year email encryption service contract with SEMCO ENERGY. ZixCorp will encrypt email communications to all of SEMCO ENERGY's customers and business affiliates. SEMCO ENERGY's management team determined the most efficient and cost-effective way to protect the communications with their valued customers and business partners was to implement ZixCorp's policy-based email encryption.

"The ZixCorp service came highly recommended and is the only seamless email encryption service currently available," said Scott Graham, Project Lead for SEMCO ENERGY. "We were certain this was the answer for our email encryption needs. The ZixDirectory(TM) allows our business partners and customers to send secure emails to anyone, anywhere, in a manner that's simple and easy to use."

ZixCorp Diamond Partner, Discovery Business Systems, Inc., recommended ZixCorp email security services to SEMCO ENERGY. "We know firsthand of ZixCorp's success with email encryption and we felt that SEMCO ENERGY could benefit greatly from their services," said Mark Duchene, principal for Discovery Business Systems.

"Securing personal data is a key priority for any organization dealing with confidential information. ZixCorp's email encryption services provide an easy and cost-effective way to ensure customer privacy and regulatory compliance," said Rick Spurr, Chief Executive Officer for ZixCorp. "Our Software as a Service (SaaS) solution allows customers to rapidly achieve compliance with minimal impact to their IT operations."

To Purchase ZipCorp Products Visit http://zixencryption.com

Zix Corporation Selected by Hartford Hospital for Email Encryption Service

Zix Corporation , the leader in email encryption services, today announced that Hartford Hospital, a Connecticut-based hospital, has signed a three-year contract for the company's email encryption services.

ZixCorp will enforce Hartford Hospital's email encryption policies to ensure the secure handling of confidential information. The service includes a set of pre-configured policy filters that automatically detect and encrypt protected health information ("PHI"). The Hartford Hospital physician community places a great deal of value on the efficiency gains of electronic transmission of healthcare information. The only viable platform for sharing the information is email which is inherently insecure unless the traffic is encrypted. ZixCorp's email encryption service enables Hartford Hospital physicians to continue to share information via email in an efficient and secure manner.

"ZixCorp's services met all of our needs to provide a reliable, secure platform for sharing our emails among providers," said Jack Alberti, Director of Information Security for Hartford Hospital. "ZixCorp's healthcare customer base is significant. We believe our choice is the right one for our specific needs."

"ZixCorp's email encryption service gives Hartford Hospital peace of mind that the transmission of its patient information is secure so it can focus on its core business of patient care," said Rick Spurr, Chief Executive Officer for ZixCorp. "As the only hosted significant, shared 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."

To Purchase ZipCorp Products Visit http://zixencryption.com

Zix Corporation CEO Provides Corporate Update for Third Quarter 2009

Zix Corporation the leader in hosted services for email encryption and payor-sponsored e-prescribing, today offered a corporate update by its chief executive officer, Rick Spurr.

"The third quarter was another solid quarter for ZixCorp and we are on target to report within the range of our previously-issued guidance," said Spurr. "Preliminary estimates are that we should meet our revenue guidance of $7.5 to $7.8 million and our guidance for adjusted earnings per share (which excludes non-cash stock-based compensation, non-recurring items, and uses an effective tax rate of less than 1 percent) of $0.00 to $0.01 per share. If these preliminary estimates hold true in the final numbers for the quarter, each would represent a record result for ZixCorp."

"In our Email Encryption business, ZixCorp delivered $6.5 million in total orders in the third quarter which is traditionally our slowest quarter of the year in our Email business. This included $1.3 million in new first-year orders, a 13 percent increase over the 2008 third quarter," continued Spurr. "We saw continued success in both healthcare and financial services, demonstrating the strength of our Software as a Service (SaaS) solution. With a strong renewal rate of 91 percent and several competitive win-backs during the quarter, we remain well-positioned for future success in this business by capitalizing on our recognized leadership position in the industry."

About the Company's e-Prescribing business, Spurr said, "As we continue our review of strategic alternatives for our e-Prescribing service, we remain committed to operating on a business-as-usual basis with respect to executing our existing contracts and providing quality services to our customers. Our PocketScript business achieved our e-Prescribing deployment guidance for the third quarter with approximately 210 new deployments. Also, in the third quarter, which historically shows some drop-off with many physicians taking vacations over the summer months, we processed over 2.3 million scripts, an increase of approximately 16 percent compared with the third quarter in 2008."

To Purchase ZipCorp Products Visit http://zixencryption.com

Zix Corporation and Humana Renew and Expand Exclusive Agreement

One of nation's largest health plans extends use of ZixCorp email encryption service. Zix Corporation, the leader in email encryption services, today announced that Humana renewed its contract with ZixCorp. This latest agreement is a two-year extension of Humana's original agreement which has now spanned seven successful years. This latest contract also expands the number of ZixCorp licenses bringing the total to 36,000.

Humana is a Fortune 100 corporation with more than 28,000 associates serving the health benefits needs of 10.4 million members. A corporation of this size and sophistication demands reliability and scalability from its vendors. ZixCorp was founded on a model that envisioned massive scale delivered via a professionally certified data center. ZixCorp has attained the highest level of certification through its SysTrust(TM) accreditation. This vision, coupled with proven execution, has allowed ZixCorp to continue its successful role as Humana's exclusive email encryption service.

Humana utilizes ZixCorp email encryption services across the entire spectrum of their business communications. ZixCorp delivers HIPAA-compliant email encryption services for internal Humana communication as well as seamless external communication with members and business partners. As a ZixCorp customer, Humana users benefit from access to ZixDirectory, the largest email encryption directory in the world. ZixDirectory enables the entire Humana community to send and receive secure email through a SaaS architecture that delivers seamless key management "in the cloud."

"ZixCorp's email encryption services continue to be the first choice in the healthcare community because of our relentless focus on quality and reliability," said Rick Spurr, Chief Executive Officer for ZixCorp.

To Purchase ZipCorp Products Visit http://zixencryption.com

Zix Corporation Founder, David Cook, Joins Board of Directors

Zix Corporation, the leader in hosted services for email encryption and payor-sponsored e-prescribing, today announced the appointment of David Cook to the Company's Board of Directors. Mr. Cook's extensive business experience includes the inception, management and growth of four successful public companies, including the founding of Zix Corporation.

"David is a proven board executive that will bring over 30 years of technology vision and entrepreneurial success to the Zix Board," said Rick Spurr, Chairman and Chief Executive of ZixCorp. "We at Zix have been beneficiaries of his vision. Now, we can look forward to his contribution to the next phase of the Company's growth."

"ZixCorp has made remarkable progress over the last several years, both in terms of financial stability and market presence," said David Cook. "The ZixCorp email encryption service is capable of delivering results on a global scale and I am pleased to have the opportunity to play a more active role in the Company's continued success."

Cook founded four public companies where he served as Chairman, President and CEO of each. Perhaps most notably, Cook created Blockbuster Videos that revolutionized the delivery of video entertainment, growing to over 9,000 stores and employing approximately 90,000 full-time people worldwide. Tag Systems, Inc., later changed to Amtech Systems, developed RFID technology that became the standard for electronic toll collection worldwide. The same technology became a mandatory standard for American Railroads (AAR) and an international standard (ISO) for inter-modal logistics management. David P. Cook & Associates was a successful oil & gas software company providing engineering and economics information to over 1,000 oil companies. Cook then applied his talents as a visionary and his experience with large scale service delivery to the problem of securing email transactions for millions of global users. This original thinking formed the foundation of ZixCorp which has now solidified its position as the leader in the email encryption market segment.

To Purchase ZipCorp Products Visit http://zixencryption.com