UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 3, 2009
ZIX CORPORATION
(Exact name of registrant as specified in its charter)
| |
|
|
|
|
| Texas
|
|
0-17995
|
|
75-2216818 |
| (State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer Identification No.) |
2711 North Haskell Avenue
Suite 2200, LB 36
Dallas, Texas 75204-2960
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (214) 370-2000
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
|
|
|
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
|
|
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
|
|
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
|
|
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
|
|
| Item 2.05 |
|
Costs Associated with Exit or Disposal Activities. |
On December 8, 2009, Zix Corporation (the “Company”) filed a Current Report on Form 8-K (the
“December 8, 2009 Form 8-K”) disclosing the decision by the Company’s Board of Directors to exit
the e-Prescribing business by winding down its operations while servicing existing contractual
obligations to current customers. At the time of filing of the December 8, 2009 Form 8-K, the
Company was unable to estimate the amount or range of amounts to be incurred for each major type of
cost and future cash expenditures associated therewith, as required by Item 2.05 of Form 8-K. In
the December 8, 2009 Form 8-K, the Company stated its intention to file an amended Form 8-K/A once
exit costs and future cash expenditures were able to be estimated.
The Company is filing this Form 8-K/A to amend the December 8, 2009 Form 8-K to provide
estimated exit costs and future cash expenditures associated with the exit of the e-Prescribing
business and to provide further details related to the wind-down period. In connection with the
wind-down of the e-Prescribing business, the Company currently estimates that it will incur total
costs, once the relevant accounting criteria have been met, of $500,000 to $700,000 (pre-tax) of
which (i) $300,000 to $400,000 relates to personnel-related costs, (ii) $100,000 to $200,000
relates to vendor contract termination charges, and (iii) approximately $100,000 relates to
impaired inventory on hand. Of the total wind-down costs, the Company expects to accrue
approximately $200,000 in its fiscal year ending December 31, 2009 and the remainder in fiscal year
2010. The Company estimates the personnel-related charges of $300,000 to $400,000 and the vendor
contract termination charges of $100,000 to $200,000 will result in cash expenditures in 2010.
The Company has targeted December 31, 2010 as the official termination date for this business,
due in large measure to the expiration of ongoing contractual commitments by that date. ZixCorp
has reduced its e-Prescribing staff to 10, and, based on projections for renewals to be just below
historical rates in the first quarter of 2010 and then decline significantly as the end of 2010
approaches, the Company believes its e-Prescribing revenues should at least cover the costs
incurred by this business during the wind-down process. On a cash basis, however, total outlays
through the end of 2010 are expected to be between $1.0 million and $1.3 million with respect to
the wind-down of the e-Prescribing business. In addition, the Company expects that approximately
$0.8 million of annual expenses projected to be allocated to the e-Prescribing business in 2010,
including approximately $0.4 million of corporate costs such as insurance and facility costs and
approximately $0.4 million of personnel-related costs for employees who provide services for both
lines of business, will remain with the Company after the exit from the e-Prescribing business has
been completed.
This Form 8-K/A contains “forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995, which are subject to inherent
risks and uncertainties and are not a guarantee of future results or performance. Actual results
may differ materially from those projected in these forward-looking statements. These risks and
uncertainties include, but are not limited to, the following: the estimated financial information
provided for 2009 may be subject to adjustment and may prove to be incorrect following the
Company’s completion of its quarter- and year-end accounting procedures, as well
as procedures to be undertaken by the Company’s independent accounting firm, the Company may not be
able to achieve the results set forth in the projected financial information provided for 2010, the
Company’s ability to achieve broad market acceptance for the Company’s products and services,
including the Company’s ability to continue realizing acceptance of its Email Encryption business
in its core markets of healthcare and financial services and to achieve market acceptance of its
Email Encryption business in other markets, the Company’s ability to maintain existing and generate
other revenue opportunities, the Company’s ability to establish and maintain strategic and OEM
relationships to gain customers and grow revenues in its Email Encryption business, the expected
increase in competition in the Company’s Email Encryption business, the Company’s ability to
successfully and timely introduce new Email Encryption products and services and implement
technological changes, and various risks and uncertainties associated with the wind-down process
for the Company’s e-Prescribing business, including the fact that the Company may not be able to
achieve the projected financial results described above. Further details pertaining to certain of
the foregoing risks and uncertainties may be found in the Company’s public filings with the SEC.
The Company does not intend, and undertakes no obligation, to update or revise any forward-looking
statement, except as required by federal securities regulations.