INX 8K William Blair Small-Cap Stock Conference | SEC 7 Oct 08

William Blair Small-Cap Stock Conference

INX Inc.

Nasdaq: INXI

www.INXI.com

October 7, 2008

Jim Long - Chairman & CEO

GAAP Reconciliation and
Forward-Looking Statements

All financial results shown are for continuing operations unless otherwise noted

GAAP Reconciliation

Safe Harbor Statement

Agenda

1. Brief overview of INX and the industry in which INX participates

2. Financial performance, stock price performance & valuation

3. Update on recent trends in our business, our strategy for
improving shareholder value during the current economic
slowdown & our outlook

Overview - - INX Inc.

NASDAQ GM: INXI

One class of shares

Shares Outstanding: ~8.8MM

Float: ~6.8MM

Diluted shares: ~9.5MM

90-day avg. volume: ~32,000

Headquarters: Houston, Texas
(corporate administration) and
Dallas, Texas (operations)

Overview - - INX Inc.

Revenue in millions

Profitable, with 2007 3-year compound
annual growth rate of revenue of 44%

2007, 1H-2008 and most recently reported
quarter reflect record revenue, record
operating income, record non-GAAP EPS

On a per diluted share basis revenue and
operating income increased 21% and 78%
respectively for 2007, and increased 18%
and 157% respectively for 1H-2008

Managed Services

Professional Services

Products

The INX Solutions Set

Selling network, IP telephony,
network security, wireless,
security, network storage and
virtualization products

Network assessment and
design consulting and
implementation services,
billed hourly or by project

15%-19% target gross margin,
a level we have been
achieving

30%-35% target gross margin,
trending towards this range

12%-15% of total revenue

Monitoring and management
of the customer’s network
and network-related devices

40%-50% target gross
margin, trending towards this
range

1%-3% of total revenue and
growing

80%-85% of total revenue

33% growth for 2007

29% growth for 2007

70% growth for 2007

No working capital required

Modest working capital
required

Modest working capital and
substantial investment capital
required

Increasing IP Network Importance & Complexity
Benefits Focused Solutions Providers Like INX

Voice / Video

Wireless Access

Storage

Collaboration

Security

Demand For Focused Solutions Provider Services

Routing & Switching

Enterprise organizations are realizing
that the IP network is rapidly becoming
the platform for all forms of
communications, while at the same time
the network is becoming more complex.
INX is benefiting from this trend.

Virtualization

Relevant Industry/Market Growth Prospects

Expected worldwide 4-5 year market segment growth forecasts; market sizes, except for
Virtualization, are based on IDC forecasts; Virtualization market size is based on VMware
revenue; worldwide market size is in billions of U.S. dollars; IDC data from late 2007

Notes:

INX Industry/Market Segments
And INX Views On Organic Growth

INX estimates of long term industry growth rates are INX estimates based on IDC and other
industry analyst research reports, and certain relevant manufacturer segment growth rates; INX
’07 growth is based on customer billings

Note:

Industry Participant Size & Growth

Note:

Actual and future expected revenue year-over-year growth; data from Yahoo Finance

Growth Strategies

Geographic expansion

Grow both the number and the size of clients

Make selective, strategic, accretive acquisitions

Expand into select, complementary categories of technology such as recent
additions of network security, network storage and virtualization as focused
practice areas

Geographic Expansion -

3X Growth Since Mid-2005

Houston

San Antonio

Dallas

El Paso

Albuquerque

Los Angeles

Eugene

Portland

Seattle

Washington

(Federal)

Boston

Boise

Sacramento

Increasing Number and Size of Customers

We serve U.S. “enterprise”
organizations - - corporate, state and
local government, federal government,
and education - with 200 to 50,000
employees

As we have become more of a
“national” scope organization, we have
been able to win larger customers and
transactions

As we continue to grow our national
presence we believe our ability to win
larger-sized customers will continue to
be enhanced

No material direct exposure to
problematic industry sectors such as
homebuilding, mortgage companies,
investment banking, etc.

Competition: National Presence +
Focus & Expertise Are Competitive Advantages

High focus

& expertise

Low focus

& expertise

Low geographic

presence

High geographic

presence

INX’s increasingly

national presence,

combined with a high

level of focus and

expertise, is a

competitive advantage

with large, national-

presence customers

Small, focused,

regional solutions

providers

Large IT solutions

providers and

telecom carriers

Small, generalist

VARs & IT solutions

providers

Past Acquisitions Have Been Financially
Successful And Accretive To Earnings

Note: “Operating Profit Contribution” for a business unit is the direct operating income from such
business unit without any allocation of “corporate” costs to the business unit; “annualized” 1H-2008
operating profit contribution is actual 1H-2008 operating profit contribution times two

Industry-Leading Organic Revenue Growth -
From Both “Mature” Markets & Acquisitions

Measuring INX organic revenue growth vs. growth from acquisitions has been made
complex due to multiple acquisitions

INX has been producing above-industry-average organic growth from its mature offices
in Texas (including Federal), as well as from the acquisitions it has made, as well as its
“overlay” managed services business

While organic growth for 1H-2008 did decrease to only 10% y/y growth compared to 25%
y/y growth in 2007, organic growth still exceeded what we believe U.S. industry growth to
have been

Gross Margin
Product vs. Services Revenue Sources

Product gross margin has trended upward slightly over a multi-year period, a function of
our increasingly high value-add solutions and increasing business from repeat customers

Services gross margin declined in 2005 and 2006 due to rapid national expansion and
start-up of new practice areas, both of which increased engineering and other categories
of costs of service in advance of service revenue production; improving recently as
benefits are realized; two recent quarters near mid-point of target of 30%-35%

Gross and Operating Profit Margin

Gross profit margin on total revenue has trended slightly upward over the past several
years due to improving mix of service revenue and improving gross margin on both
product revenue and service revenue; in 1H-2008 this trend continued

Operating profit margin turned positive in 2004, then declined in 2005 and 2006 as we
executed on rapid geographic expansion and introduced new practice areas, but has
improved since 2006 as benefits of expansion have begun to be realized

* 2005 results exclude one-time non-cash charge of $5.7 million

Staffing Trends
- Key To Both Growth and Improving Margins

Dec 31,

2004

+156%

+278%

Dec 31,

2007

Incr.

Jun 30,

2008

Incr.

+13%

+30%

1H-2008

For 2007, direct employee costs were 68% of total operating expenses, so leveraging
employee costs is key to improving operating profit margin

Sales staff and engineering staff are direct revenue producing staffing, and we have been
able to leverage non-direct-revenue-producing staff - key to improving profit margin

Direct revenue-producing staffing increased 30% in 1H-2008 compared to 13% increase for
non-direct revenue producing staff - key to continued organic revenue growth

Long-Term Trend

Q3-2008

Incr.

Sep 30,

2008

+ 5%

+ 1%

vs.

Financial Performance

Stock Price Performance

2-Year INX Daily Stock Graph As of 10/3/2008

Recent Divergence Between
Non-GAAP (Comparable) EPS and Share Price

* Non-GAAP EPS reflects trailing 12 months as of end of each quarter shown; share price is the
average daily close price during each quarterly period; red bullet is recent ~ $7.00 share price

There has been a divergence between operating results improvement and stock price
appreciation

While comparable non-GAAP earnings per share has continued to improve during 1H-2008,
the price at which shares of INX common stock changed hands has not reflected the improving
per-share fundamentals

INX Enterprise Value / Operating Income

Enterprise Value / Operating Income is a way of viewing historical INX per-share valuations in a
more stable and consistent manner than EPS multiples

Historically, the quarterly average daily closing price of shares of INX common stock has resulted in
Enterprise Value / Trailing 12-month Operating Income multiples of between ~12x and ~60x

At recent $7.00 share price, this multiple is at a historic low of ~7.8x based on trailing 12-month
gross profit and diluted shares used to compute 2Q08 per share data

* Enterprise Value is based on the number of diluted shares used to compute diluted earnings
per share for the quarter times the average daily closing price of shares during each quarter.

INX Enterprise Value / Revenue

Enterprise Value / Revenue is an overly simplistic way of viewing historical INX per-share
valuations, but one that is sometimes evaluated by investors in periods of earnings aberrations

Historically, the quarterly average daily closing price of shares of INX common stock has resulted in
Enterprise Value / Trailing 12-month Operating Income multiples of ~0.28x to ~0.47x

At recent $7.00 share price, this multiple is at a historic low of ~0.2x based on trailing 12-month
gross profit and diluted shares used to compute 2Q08 per share data

* Enterprise Value is based on the number of diluted shares used to compute diluted earnings
per share for the quarter times the average daily closing price of shares during each quarter.

INX Enterprise Value / Gross Profit

Enterprise Value / Gross Profit is a way of viewing historical INX per-share valuations in a more
stable manner than net income multiples, and a method that has more meaning that revenue
multiples

Historically, the quarterly average daily closing price of shares of INX common stock has resulted in
Enterprise Value / Trailing 12-month Gross Profit multiples of between ~1.6x and ~2.5x

At recent $7.00 share price, this multiple is at a historic low of ~1.0x based on trailing 12-month
gross profit and diluted shares used to compute 2Q08 per share data

* Enterprise Value is based on the number of diluted shares used to compute diluted earnings
per share for the quarter times the average daily closing price of shares during each quarter.

Growth In 3 Key Areas Of Operating Results

INX has materially increased all key aspects of operating performance, including:

Revenue: +49% over past 18 months, +22 over past 12 months

Gross profit: +54% over past 18 months, +31% over past 12 months

Operating income: +225% over past 18 months, +98 over past 12 months

This improvement is a result of organic revenue growth, accretive acquisitions and improving
employee productivity.

TTM Revenue

TTM Gross Profit

TTM Operating Income

+ 49%

+ 54%

+225%

Improving Per Diluted Share Operating Results

On a per diluted share basis, INX has materially improved all key aspects of operating
performance, including:

Revenue per share +25% over past 18 months, +13% over past 12 months

Gross profit per share +29% over past 18 months, +21% over past 12 months

Operating income per share +172% over past 18 months, +83 over past 12 months

TTM Revenue / Share

TTM Gross Profit / Share

TTM Oper. Income / Shr.

+ 25%

+ 29%

+172%

Improving Balance Sheet

INX’s balance sheet has shown substantial improvement; currently stronger balance sheet
than at any recent time

Stockholders equity and net cash per diluted share have both improved substantially over
the past 18 months

Maximum leverage, measured in terms of the debt/equity ratio, has been around a maximum
of 20%, and is at 0% as of 6/30/2008

Stockholder’s Equity / Share

Net Cash / Share

Debt / Equity Ratio

+ 95%

Improving Return On Capital Used In Operations
(Operating Income / Capital Used In Operations)

Improving operating income relative to the amount of capital used to generate such operating
income is key to improving long-term shareholder value

Careful use of capital for acquisitions and other investments used to generate improving
operating income has resulted in substantial improvement on the return on the capital
deployed to generate such operating income

The ratio of operating income to capital used in operations, (defined as trailing 12-month
operating income divided by average equity capital plus debt minus cash) has improved to
23.7% at 6/30/2008 compared to 13.5% one year earlier, and compared to 9% 18 months
earlier

TTM Operating Income

TTM Average Capital Used

Ratio

+ 225%

+ 22%

Update On Recent Trends In Business

Outlook

Recent Events Indicate
A Probable Continuation Of Weak Customer Demand

INX indicated in early November of 2007 that tight
credit markets and worries over a possible recession
had been causing demand by customers to slow,
starting in approximately September of 2007

More recently, on August 12th, we had indicated that
demand had been improving somewhat since
approximately April

The events of the last several weeks in the credit and
stock markets indicate a high likelihood of a
continuation of, and probable further expansion of,
the economic weakness and weak customer demand
that began over one year ago

It is difficult to predict the impact of the credit and
financial markets crisis because events and
circumstances are changing rapidly

Cover of the October 4th issue
of the Economist Magazine

Update On Our Guidance For Q3

On August 12th we provided an outlook for Q3 total revenue and service revenue:

   Total revenue: we expected total revenue to be between $64 million and $69
            million, an increase of approximately 23% to 33% compared to prior year period
          total revenue of $52.0 million

   Service revenue: we expected that service revenue would make up approximately
          $10 million to $12 million of total revenue, representing an increase of 48% to 77%
         compared to prior year period service revenue

At this time we expect both total revenue and service revenue to be close to the upper
end of our previous guidance

On the expense side:

Q3 results will include costs related to integrating the recent AccessFlow acquisition
and propagating our new virtualization practice throughout the organization

We incurred minor costs related to hurricane Ike at our Houston facility

   We continued to hire sales staff to take advantage of the weakness at some of our
          competitors and to counteract the impact of softer customer demand (we increased
          sales staffing levels by 11% during Q3)

Recent Trends In Customer Demand

Product sales order bookings provide the best near-term indication of customer demand

Recent product sales order bookings year-over-year growth:

Q3 bookings increased by ~ 47% in total, and increased ~ 34% organically

September bookings increased by ~ 17% in total, and increased ~ 14% organically

For the “last two weeks” of September (last 11 business days of September)
bookings increased by ~ 33% in total, and increased ~ 30% organically

While demand by customers has been healthy right up through the last two weeks of
September, our sales staff are indicating that some customers are delaying moving
forward with some large projects, and it is logical that the uncertainty of the last several
weeks will cause some enterprise organizations to delay cap-ex expenditure projects

We can counteract slowing customer demand by increasing the number of sales staff
searching for new customers and working opportunities and we are doing so

How This Economic Slowdown Impacts INX’s Industry

INX and its competitors provide solutions that are considered capital expenditures

INX and virtually all of INX’s competitors have been negatively impacted by the
economic weakness of the past several quarters

INX’s industry is well positioned on a relative basis because unified communications
and data center virtualization are areas of cap-ex that result in cost savings

This particular economic slowdown has been, and continues to be, characterized by
tight credit availability

Some of INX’s competitors are highly leveraged, and depend upon continued credit
availability to generate revenue; they depend upon increased credit availability to
grow, and they will suffer due to tighter credit availability

There will be a realigning of industry-wide spending among industry solutions
providers based upon balance sheet strength

Our Strategy For Improving Shareholder Value
Through The Expected Economic Slowdown

Because INX has no funded debt, a material cash reserve, and substantial credit
availability under existing lines of credit, we have an opportunity to gain market share
during this downturn, a strategy we have been pursuing

This particular economic slowdown is driven by tight credit, financial sector,
homebuilder sector and other specific sector weakness; corporations outside certain
impacted sectors have generally healthy balance sheets and earnings

Because our customers are enterprise organizations, not consumers, and because we
have little exposure to the most negatively impacted sectors, we plan to continue to
capitalize on the relative strength of our customer base and our expertise selling to and
servicing relatively strong sectors of the economy

Tight credit and economic uncertainty are factors driving lower multiples for equities,
and we hope to use this opportunity to make additional acquisitions at attractive
valuations

Increase revenue per sales staff member through recently added new practice areas
(network storage less than 2 years ago; virtualization 3 months ago)

How Executing Our Strategy Will Impact
Near-Term Results Of Operations

INX’s sales staff are primarily compensated through sales commissions; therefore,
weak customer demand resulting in lower revenue per sales staff member can be
counteracted by adding additional sales staff, theoretically with little impact on
operating results

However, INX’s sales involve a somewhat lengthy sales cycle, and INX pays a “draw
against commissions” to new sales staff, which are reflected as expense until
commissions are “earned”, at which time such “draws” are recouped, resulting in
lower effective commission rates when the sales staff member becomes productive

Because we have been hiring, and intend to continue to hire, additional sales staff
during this period of relative competitor weakness, selling expense relative to
revenue will be elevated; this negatively impacts operating profit margin % relative to
what could have been achieved with better customer demand

We will continue to focus on improving operating profit margin over the long-term, but
we believe it is more important to gain market share against our competitors during
this period of economic weakness, a period during which INX’s financial strength is a
material competitive advantage

Summary

Substantial long-term industry growth driven by cost savings and productivity
improvements made possible through the technology we provide in the area of unified
communications and virtualization of the data center

Excellent track record of industry-leading organic growth and executing on acquisitions

Q3 revenue is expected to be at the upper end of our previous guidance;
bookings/invoicing ratio above 1 for Q3; order bookings healthy right up through
September; we are expanding our sales force to counteract slower customer demand

The recent credit crisis is expected to slow overall customer demand, the magnitude
and duration of which cannot be predicted, but we have a strategy to improve
shareholder value through this down cycle, and emerge from the downturn stronger
and better positioned

Revenue growth & improving gross margin has been resulting in improving operating
profit margin % over the past couple of years, although we are currently focused on
gaining market share during the present cycle of economic weakness, an environment
in which our financial strength is becoming an increasingly important competitive
advantage

INX Inactive 8-KWilliam Blair Small-Cap Stock Conference