Business Services Industry

New Mexico Software Reports 123% Q3 '08 Revenue Growth

Business Wire, Nov 17, 2008

Company Says Surging Revenues Leading To Profitability and Positive Cash Flow

ALBUQUERQUE, N.M. -- New Mexico Software, Inc. (OTCBB:NMXC), a leading services provider of next-generation business and medical services, announced today that revenue for the third quarter of 2008 increased 123% to $520,000 from $233,000 in the third quarter of 2007. Net loss for the third quarter was reduced by 74%, to $46,000 from $177,000 in the third quarter of 2007.

Third Quarter Financial Highlights

* A substantial increase of 123% in revenue to $520,000 from the comparable quarter of 2007, primarily due to the new revenue stream from teleradiology services

* An increase of 157% sequentially in revenue from $202,000 for the second quarter of 2008

* An increase of 234% in cost of services, as a result of costs related to the new teleradiology services

* A decrease of 40% in general and administrative expenses due to decreased marketing expenses and compensation expenses

* A 15% increase in gross profit to $136,000 for the third quarter of 2008 as compared to $118,000 a year ago

* A 38% decrease in total operating costs and expenses to $180,000

* A 74% year-over-year decrease in net loss to $46,000, and sequentially a 73% decrease from $172,000 in the second quarter of 2008

For the first nine months of 2008, revenue was $957,000, an increase of 29% over $740,000 for the comparable period last year. The net loss for the nine months ended September 30, 2008 was $291,000, compared with a net loss of $422,000 for the nine-month period ended September 30, 2007.

New Mexico Software CEO Dick Govatski said, "It's been a fast moving period at the company as characterized by the 123% growth in revenue during the quarter. In May, we set up a special 17-person division to promote and manage our teleradiology services. Since then we have contracted with 25 radiologists nationwide to read images for clients. Our teleradiology services began generating revenue in June and our XR-EXpress obtained the important FDA clearance in October. Our case load has been doubling every month, going from hundreds of cases in June to multiple thousands of cases per month now. More than 107 medical divisions at about 6,900 facilities nationwide are currently using our teleradiology services -- more than double the number from last year."

Govatski concluded, "We expect to sustain these positive demand trends in both New Mexico Software (NMS) and Telerad Services (TRS) divisions through the remainder of the year and further into 2009. Our goal is to begin generating a net profit and positive cash flow by the end of 2008."

About New Mexico Software, Inc.

New Mexico Software, Inc. develops and provides medical IT services and solutions that enable improved and faster communication within the preventative, comprehensive and critical healthcare segments. New Mexico also provides software and hardware that streamlines administrative processes for a more efficient working environment. For more information, visit http://www.nmxc.net or http://www.nmxs.com, or contact Dick Govatski, president and CEO, at 505-255-1999 or ceo@nmxs.com.

An investment profile on New Mexico Software may be found at http://www.hawkassociates.com/profile/nmxc.cfm. For an online investor relations kit, visit http://www.hawkassociates.com or http://www.americanmicrocaps.com. For more investor-related questions, contact Frank Hawkins or Susan Zhou, Hawk Associates, at 305-451-1888 or New.Mexico.Software@hawkassociates.com. To subscribe to future releases via e-mail alert, visit http://www.hawkassociates.com/about/alert/.> The foregoing press release contains forward-looking statements including statements regarding the company's expectation of its future business. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the company's control. Actual results could differ materially from these forward-looking statements.