June 13, 2007
New Mexico Software Cites Improving Business Conditions
Company Expects Positive Cash Flow in Second Half of 2007
ALBUQUERQUE, NM, June 13-- New Mexico Software, Inc. (OTC Bulletin Board: NMXC), www.nmxc.net, a leading provider of web-based digital and paper management solutions, said today the company is experiencing improving business conditions, particularly an improving balance sheet and a tighter cost structure as recurring revenues continue to rise.
New Mexico Software CEO Dick Govatski said, “Our old liabilities are steadily decreasing, and at the same time, our revenue picture continues to brighten due to the sales growth of XR-EXpress, our web-based Teleradiology/PACS System.”
At the end of 2006, over half of the company’s total liabilities varied in age from six months to several years. Several of those old liabilities have been finalized during the first half of 2007. The past-due tax obligation and the note payable to Los Alamos National Bank originally totaled over $700,000. The company expects to pay the final $25,000 on these debts, as well as complete payments on the other remaining old liabilities during the third quarter of 2007. Consequently, by September 30, 2007, the company anticipates that its total liabilities will be reduced by approximately 50% since the beginning of the year, and the balance will consist of current operating liabilities.
Govatski said, “Our first quarter costs were the lowest they’ve been in two years. During the second quarter we have lowered costs even further. In addition, our bottom line has been reduced by adjustments in the fourth quarter of each of the last three years as a result of long-term consulting contracts, advertising agreements and extraordinary legal fees. Based on our current projections, we do not expect any major adjustments this year.”
Due to the combination of increased sales, reduced costs and liberating existing cash flow from dealing with old obligations, the company looks forward to generating positive cash flow during the second half of 2007.
“Our company’s strategic shift to a recurring revenue model from ‘one-off’ sales in 2005 is paying off,” Govatski said. “With our success in the medical division, our server division is now adopting the same pricing strategy. We have begun to market server products based on application minute pricing during the second quarter. Customers can now choose sales plans based on actual usage rather than be charged on the basis of bandwidth and storage. In fact, bandwidth and storage is completely free with our new model. The net result of this change is that current customers will continue to pay approximately the same rates. However, this model is better suited to the current market trends.
“During the second quarter, the company has released the Digital Filing Cabinet 3.2. The new version has multiple new technologies including a programmable workflow capability based on the Adobe Acrobat PDF forms feature. The server has universal appeal and we are seeing strong interest in the product for business processes,” Govatski said.
About New Mexico Software
New Mexico Software is a leading provider of information management solutions that significantly improve the interface between the paper world and the digital world, facilitating a true paperless environment. It is the only public company providing web-based integrated services for individuals and companies, large or small, which allows full access to data from anywhere in an easy-to-use, familiar browser environment at an affordable price. For more information, visit either www.nmxc.net or 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 Hawk Associates. For an online investor relations kit, visit www.hawkassociates.com or www.americanmicrocaps.com. For more investor-related questions, contact Frank Hawkins, Hawk Associates, at (305) 451-1888 or info@hawkassociates.com.