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XMPie Reports Record Growth: Exclusive interview with CEO

Press release from the issuing company

NEW YORK—January 16, 2006 – ( SEE AN EXCLUSIIVE INTERVIEW BELOW) -- XMPie, a software provider for dynamic publishing, announced today that the company’s revenues in 2005 grew by more than 270% compared to 2004. New product introductions, a larger sales force and strong expansion into international markets drove the growth.   XMPie closed out 2005 at 37% above its global target.  In Q4’05, North American sales nearly tripled compared to Q4’04, and international sales in Q4’05 from new markets in Europe and Asia equaled total North American sales from the same period only a year earlier. In the last quarter alone, XMPie added hundreds of new customers, all of whom benefited from the modular pricing of systems and new technology advances. Its total employees grew 40% to 50 employees by the end of 2005, mostly joining the global sales and R&D departments.   XMPie was in high gear in 2005, releasing several new products alongside key upgrades to its flagship product PersonalEffect. “At the heart of XMPie is an extremely talented and dedicated R&D team,” stated Eyal S. Goldwerger, CEO of XMPie. “They work closely with our sales force and strategic partners to understand what our customers need and rapidly develop and deploy new software solutions to meet these needs.”  ============== INTERVIEW WITH CEO Eyal Goldwerger By Cary Sherburne Today’s announcement by XMPie of more than 270% year-over-year revenue growth in 2005 prompted WhatTheyThink to contact the company’s CEO, Eyal Goldwerger, to get his perspective on the reasons for this growth and the state of the variable data opportunity. As a private company, XMPie declined to discuss specific revenue numbers. WTT: Eyal, what do you think this signals for the variable data printing market in general, a market that has been on the verge of exploding for the last ten years, according to many industry pundits? ESG: We are seeing major changes in the market in general. Two years ago, it was in the early adopter stage. A year ago, we saw more people at the head of the growth curve in terms of purchasing decisions and more aggressive business decisions being made. Now, certainly in North America—the most advanced variable data market—and even in Europe, everyone that has the potential of being a player in this type of application is in the market to buy. They may have had a lower end solution they need to upgrade or they may have made a first-time decision to pursue the opportunity. WTT: Why do you think that is? ESG: Before, it was more of a market education effort. We had to talk to people about what variable data is and why it is important to them and their customers. This is no longer part of the conversation. Today it is assumed that the buyer already knows that. To use a car analogy, they know they need to figure out what they want to drive, a BMW, a Fiat or a Buick. They are looking to determine what is the right vehicle and the right capital investment. This shows a maturity on the part of the customer and an understanding of what they can deliver to the top line by deploying variable data services. They can get more profitable print volumes, and tighter relationships and more lock in with customers. This is our impression of the people that talk with us. There is more and more awareness in the market. Another metric that shows that the interest is building up, even without our interactivity, is the number of people hitting our web site every day—that is increasing exponentially. WTT: Do you think XMPie’s growth is typical of the industry as a whole? ESG: No. We are growing faster than the market according to the data I read, so we are gaining market share at a rapid clip in terms of increasing dominance in this market. We are assuming category leadership at this point. WTT: Why is that? ESG: I think it is a combination of various things that differentiate us and allow us to sell effectively—the ingredients in our own smorgasbord of value propositions. One thing XMPie has been doing very differently in the last year is reflected in our rapid growth from a product standpoint. As a print service provider, if I have to figure out what solution to acquire, I need to understand that customers may come to me with different projects in the future and I don’t know what they are going to be. As a buyer, I need to understand how versatile and flexible the software suite of solutions is in terms of the experience base that is embedded in its development and the versatility of its performance. It is almost as if you are buying an insurance policy; you need to make sure you are well covered. You need to make an investment on a platform with the most breadth and depth so it can serve you beyond today. We brought a phenomenal array of new products, modules and capabilities to market in 2005, and you will see an equivalent amount in 2006. This builds a track record and a menu of options that the customer can count on for the future to give them peace of mind. WTT: What else do you see as a differentiator? ESG: Open standards are important, of course. Compliance with standards gives the customer a clean, easy migration path into the future. And philosophically, everything we do is based on the native tools and environments of the creative professionals that use our software. They can work with our tools as plug-ins within InDesign or directly into relational databases. Open standards apply to printing as well; compatibility across the board has long-run ramifications. When businesses are small, everything looks easier and individual decisions don’t have a lot of impact. But when you start building your business and developing your market, it becomes more important that investments are long term. WTT: Does XMPie have a formal users’ group? ESG: Not at this point. We do have a very vibrant and collaborative user community that pushes the boundaries of creativity and effectiveness in using the software. There is a lot of value captured where users can share expertise and best practices, and they push us for R&D that we can recycle and deliver back to our customers. But we are in the process of setting up a users group this year because we have reached critical mass and we need to build that infrastructure now. WTT: I am just curious, as you have seen your sales efforts heat up, have you seen a shift in the ratio between inbound and outbound sales calls? ESG: We are not seeing a lot of shift. Since late 2004, we have been working almost 100% on inbounds. The bulk of the business we get comes through channel partners or people calling us or visiting our web site. Not having enough pipeline has not been a problem for us for a year or two. It is palpable—every quarter you can feel the momentum pushing us forward. WTT: We hear rumors from time to time that XMPie is an acquisition target. Can you comment on that? ESG: The company is not undergoing any formal process for acquisition by anyone. WTT: Eyal, thanks for your time and your insight.

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