New Mexico Software Q2 Revenue Up 345% to $902K; Six Month Revenue Up 318% to $1.8M

Second Quarter 2009 Financial Highlights:

-- Total revenue increased 345% to $902,000 from $202,000 in Q2 2008

-- Six month revenue rose 318% to $1,828,000 from $437,000 in the first half of 2008

-- Telerad Radiological Services (TRS) division revenue was $728,000, or 81% of total Q2 revenue. TRS operating profit was $1,000

-- Software division revenue was $185,000 or 20% of total Q2 revenue. Software division operating loss was ($19,000)

-- Cash and cash equivalents totaled $65,000, a decrease from $103,000 as of March 31, 2009

-- Gross profit increased 259% to $226,000 from $63,000 in Q2 2008

-- Net loss decreased to ($63,000) from ($172,000) a year ago

-- During the quarter the company spent roughly $48,000 on legal fees

New Mexico Software CEO Dick Govatski said, "Our Telerad radiological services revenue continued to drive our company's growth. Because of the current and potential opportunities in telemedicine and teleradiology in particular, we are continuing to focus the majority of our marketing efforts in these areas. We began our Telerad services business in May 2008 and in a little over a year, it has become our primary business segment. We currently have 20 licensed radiologists available to read and report on radiological studies from customers in 34 states.

"Our key indicator of operating progress is gross revenue. As we continue to grow our variable costs begin to constitute a greater percentage of our cost of sales, the gross profit percentage will vary more consistently with revenue making gross profit a more useful indicator of our progress. At the same time, we have maintained a strong focus on expenses and to help control costs we earlier eliminated six positions. Those savings of approximately $75,000 per quarter will be more strongly reflected in the third quarter. We faced a legal challenge in the quarter, which we hope will be resolved in our favor in the near future.

"We believe we can continue to take advantage of the growth in the telemedicine market in general and the teleradiology market in particular during the next few years. In the meantime, our primary goal is still focused on keeping the momentum going forward with the goal of becoming profitable by the end of the year," Govatski said.

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 Software also provides software and hardware that streamlines administrative processes for a more efficient working environment. Telerad Radiological Services (TRS) is a wholly owned subsidiary of New Mexico Software whose primary focus is to deliver interpretive radiological cases studies for medical facilities. 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/.

This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), including all statements that are not statements of historical fact regarding the intent, belief or current expectations of the company, its directors or its officers with respect to, among other things: (i) the company's financing plans; (ii) trends affecting the company's financial condition or results of operations; (iii) the company's growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words "may," "would," "will," "expect," "estimate," "anticipate," "believe," "intend" and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the company's ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors including the risk disclosed in the company's Forms 10-K and 10-Q filed with the SEC.

SOURCE: New Mexico Software, Inc.

New Mexico Software, Inc. 
Dick Govatski, 505-255-1999 
or 
Hawk Associates 
Frank Hawkins or Susan Zhou, 305-451-1888