RESULTS OF OPERATIONS
Revenues:
For the Three Months Ended March 31, 2013
2013 $1,221,000 2012 $923,000 Increase $298,000 Percent (Dec) 32.3%
Net Medical Xpress Solutions’ gross profit was $76,000 during the first quarter of 2013, compared to $37,000 during the same
period in 2012. The majority of the direct costs in this division are staffing expenses, which have decreased during 2013 due to less
emphasis on this business line and greater emphasis on developing and expanding our specialists program. We expect the
percentage of gross profit this division contributes to total gross profit to stabilize at about fifty percent during 2013.
Net Medical Xpress Services’ gross profit was $217,000 during the first quarter of 2013, compared to $167,000 during the same
period in 2012. Approximately eighty-one percent of the direct costs in this division are doctor fees, which are directly related to
revenues. Therefore, we expect this percentage to remain relatively stable during 2013.
Net Medical Xpress Specialists’ gross profit was $12,000 during the first quarter of 2013, compared to $2,000 during the same
period in 2012. We began this program during the first quarter of 2012. Approximately thirty percent of the direct cost in this
division consists of relatively fixed costs at this time. The percentage of fixed costs should decrease as revenues increase over the
next few years. Approximately twenty-five percent of direct cost is hardware costs related to the sales of equipment necessary for
new customers, which produces a very small gross profit. As the revenues generated by established customers increases, these
hardware costs should become less of a factor. In general, we believe the gross profit percentage of this division will increase
during 2013 as the revenues grow, while the fixed costs remain stable.
LIQUIDITY AND CAPITAL RESOURCES
“Liquidity” refers to our ability to generate adequate amounts of cash to meet our needs for cash. We believe we will have
adequate liquidity during the balance of 2013. As of March 31, 2013, cash and cash equivalents totaled $192,000, representing a
$83,000 increase from December 31, 2012.
