November 15, 2005
New Mexico Software Reports Q3 '05 Financial Results
Company Reports Sharply Improved Revenue and Net Income
Albuquerque, NM, November 15, 2005 -- New Mexico Software, Inc. (OTC Bulletin Board: NMXS) reported today that revenue for the third quarter ended September 30, 2005 increased to $640,000, a 208% improvement over revenue of $208,000 in the third quarter a year ago. Net income was $49,000 or $0.00 earnings per fully diluted share versus a loss of $232,000 or $0.01 per fully diluted share in the comparable quarter a year ago.
For the nine-month period, revenue rose 29.3% to $1,274,000 from $985,000 reported in the first nine months of 2004. For the nine-month period, the company reported a net loss of $241,000 or $0.01 per fully diluted share compared with a net loss of $136,000 of $0.00 per fully diluted share in the comparable period in 2004.
New Mexico Software CEO Dick Govatski said, "This was the highest revenue quarter in our history, and it underlined the excellent progress we are making toward growth of our business, particularly in the area of software sales, custom programming and software maintenance. It also underscored our ability to grow the top line without substantially increasing operating expenses. The quarter's operating results were impacted by an allocation of approximately $125,000 to cover our final settlement with the IRS and some other miscellaneous items. Subsequent to the end of the quarter, we paid down $30,000 of our loan with Los Alamos National Bank, leaving us with a balance of $85,000. This represents an important improvement in our balance sheet.
"In the meantime, we are increasingly optimistic about our future. We have completed the development phase of our Roswell and XR-Express products. Sales of these products have begun to impact our revenue. We expect sales growth over the next two years, although it is likely to be inconsistent from quarter to quarter. We are currently focused on marketing the next version of our Digital Filing Cabinet (DFC3) through road shows and a major ad campaign we plan to launch during the fourth quarter. We have also opened a sales office in Chihuahua, Mexico, where we are seeking some major new business. We anticipate we will begin to see the impact of DFC3 during the fourth quarter and in the first quarter of next year. We also expect to see a revenue increase in software maintenance and custom programming," Govatski said.