DALLAS, TX--(Marketwire - April 15, 2009) - NewMarket Technology, Inc. (
PINKSHEETS:
NMKT)
today announced that the Company will take additional time to finalize the
Company's fiscal year 2008 annual report to be filed on Form 10-K.
Management continues to indicate that the report will reflect record
revenue results, exceeding the Company's $93.1 million in profitable
revenue reported in 2007. Philip J. Rauch, CFO, has released a letter to
shareholders to address the exceptional economic conditions the Company is
taking extra time to reflect on within the 2008 audited financial
statements.
The entire letter is included within this press release. Additionally, the
Company will conduct a Webcast on Tuesday, April 21st, to outline its plan
to sustain growth and profit through the prevailing economic downturn.
Dear Fellow Shareholders:
The market conditions causing a market wide decline in share prices have
had a substantial impact on NewMarket's fiscal year 2008 financial
statements. This impact is not unique to NewMarket. Every company has to
carefully scrutinize the current value of its assets based on the
prevailing economic conditions. This revaluation of assets is the matter I
have decided to take time to address before filing our 2008 annual report.
How Market Conditions Impact the Financial Statement
If a homeowner were to attempt to sell their house today, that homeowner
would likely find it challenging to receive a sale price as high as one
that might have been obtained in recent years. Selling a house in the
current market would likely result in a substantially lower price for the
homeowner. Similarly, NewMarket has acquired a number of assets over the
previous six years and it would be similarly challenging for the company to
realize a sale price equal to our purchase price if we were to attempt to
sell those assets in the prevailing market. Regardless of our intention to
sell any assets, we nevertheless have to account for the loss in value of
those assets due to the current market conditions. The accounting for that
reduction in value is the primary reason we have decided to take additional
time in finalizing our 2008 financial statements.
What Takes So Much Time
At the end of 2007, NewMarket reported $22.3 million in goodwill and $9.9
million in investments on our balance sheet. The goodwill, accumulated
since 2002, is a result of multiple acquisitions. We have acquired several
companies since 2002 in the execution of our business plan. We have also
made several investments in the execution of our business plan. As a
matter of course, all companies are required to revalue the carrying value
of their goodwill and investments relative to the current market and
business conditions. Due to our numerous acquisitions and investments,
this is a large undertaking and we are dedicating the necessary time to
appropriately account for the revaluation. This has resulted in an
increased time requirement.
2008 Financial Report Overall
NewMarket reported record revenue and continued operating margin
improvements through the first three quarters of 2008. We did experience a
slowdown of projects in progress in the fourth quarter. We did not enjoy
the usual substantial increase in fourth quarter revenue that we have
reported in years prior. The Company continues to sign new sales contracts
and we remain optimistic that we can manage continued revenue growth in
2009. The $93.1 million in annual revenue reported in 2007 was a record
for NewMarket, and we do anticipate reporting record revenue in 2008. We
remain optimistic that with some hard work we can report record revenue for
2009.
The revaluation effort discussed here will result in goodwill and
investment value reductions on the balance sheet for 2008 compared to
2007. These asset reductions will be reported as a non-cash charge to net
income reported on our 2008 income statement and will likely result in the
Company reporting an overall loss for 2008. It is important for
shareholders to recognize that the Company will still report positive
operating income for the year ended December 31, 2008. The overall loss is
due to revaluation of certain assets and the associated non-cash charge
against earnings to be reflected on our income statement for 2008.
We have scheduled a Webcast for Tuesday, April 21st to discuss our plan to
sustain growth in 2009 in the face of the current market conditions. At
that time, we will reiterate and expound upon the impact on the 2008
audited financial statement of prevailing market conditions. We will
attempt to address any shareholder questions we receive between now and the
Webcast.
Best Regards,
Philip J. Rauch
Chief Financial Officer
NewMarket Technology, Inc.
Corporate E-mail Updates
To be added to NewMarket Technology's e-mail database to receive company
updates or to obtain more information on the Company, please send an e-mail
to
ir@newmarkettechnology.com or call 214-722-3065.
About NewMarket Technology, Inc. (
www.newmarkettechnology.com)
NewMarket helps clients maintain the delicate balance between maintaining
legacy systems and gaining a competitive edge from the latest technology
innovations. NewMarket provides certified systems integration and
maintenance services to support the prevailing industry standard solutions
from companies such as Microsoft, Oracle, Infor, Cisco Systems, SAP, Siebel
and Sun Microsystems. Concurrently, NewMarket continuously seeks to acquire
emerging technology assets to incorporate into an overall product portfolio
carefully packaged to complement the prevailing industry standard
solutions.
NewMarket delivers its portfolio of products and services through its
network of Solution Integration subsidiaries in North America and the
leading emerging markets around the world to include Latin America, China
and Singapore.
NewMarket ranked Number One in Texas, Number Three in the United States and
Number Five in North America on Deloitte's 2006 Technology Fast 500, a
ranking of the 500 fastest growing technology, media, telecommunications
and life sciences companies in North America. Rankings are based on
percentage revenue growth over five years, from 2001-2005. The Company grew
from less than $1 million in revenue in 2001 to over $50 million in
profitable revenue in 2005.
The company has continued its rapid growth, reporting $77.6 million in
revenue with a net income of $5.8 million in 2006 and most recently $93.1
million in revenue with a net income of $7.3 million in 2007.
"SAFE HARBOR STATEMENT" UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
This press release contains forward-looking statements that involve risks
and uncertainties. The statements in this release are forward-looking
statements that are made pursuant to safe harbor provision of the Private
Securities Litigation Reform Act of 1995. Actual results, events and
performance could vary materially from those contemplated by these
forward-looking statements. These statements involve known and unknown
risks and uncertainties, which may cause NewMarket's actual results in
future periods to differ materially from results expressed or implied by
forward-looking statements. These risks and uncertainties include, among
other things, product demand and market competition. You should
independently investigate and fully understand all risks before making
investment decisions.
Contact Information: Contact:
NewMarket Technology, Inc.
Investor Relations
214-722-3065
ir@newmarkettechnology.com