DALLAS, TX--(Marketwire - October 3, 2008) - NewMarket Technology, Inc. (
OTCBB:
NMKTE) today
released a letter to shareholders from CEO Philip Verges to update
shareholders on YTD progress to achieve the Company's profitable $120
million 2008 revenue forecast. In the letter, Mr. Verges addresses share
price performance in 2008, with a recent close of $0.09 compared to the
Company's book value of $0.29 per share and the recently published fair
value target price recommendation of $0.78 per share. Mr. Verges' update
includes information on an anticipated ticker symbol change and
management's developing buyback plan.
Dear Fellow Shareholders:
All of us here at NewMarket are enthusiastic about what we believe to be an
inevitable recovery from the current financial industry crisis to be lead
by a refocusing of investment activity on the growing small business
sector. The global small business sector is stronger than ever before and
will arguably be the foundation of the 21st century economy. In the fast
paced market of the Internet Age, small businesses are able to adapt more
quickly in response to constantly changing market demands and economic
conditions. Small businesses are inherently accustomed to tighter access
to capital and they are the ones creating jobs while big businesses
continue to down size. When investors return to the market, they will be
looking for companies such as NewMarket that are fundamentally strong and
showing growth in the face of economic struggle.
But today, most investors remain concerned and hesitant to make any
investment decision pending the outcome of the developing bailout plan.
The financial industry crisis is impacting many people at work and at home.
While all of us here at NewMarket are enthusiastic about the future, we
recognize the importance of communicating our ongoing progress to achieve
forecasted goals and objectives in the face of the current financial
industry crisis.
Third Quarter Financial Report Anticipated to Reflect Continued Growth
The third quarter has just closed and the corresponding public financial
report is due out next month. We do not anticipate any negative impact in
the third quarter report resulting from the current economic conditions.
We expect the third quarter financial results to reflect ongoing growth and
progress toward the Company's 2008 profitable $120 million revenue
forecast. Remember, while the fear in global stock markets is pervasive,
stock markets are not the economy. They are only one segment of the overall
economy. Even in the face of declining stock market indices, many
businesses continue to grow. The Dow Jones Industrial Average peaked in
September of 2007. We are actually one year into this market downturn, and
many companies like NewMarket have continued to show quarter on quarter
growth throughout this period of market decline. We expect to do the same
this quarter.
Limited Credit Industry Impact on NewMarket Operations
Some 70%-80% of NewMarket's operations are outside the United States. As
of yet, we have seen no impact to the Company's credit lines outside the
United States. Inside the United States, the Company is not currently
using any credit lines. The Company recently retired a domestic $3 million
credit facility as part of a comprehensive effort to restructure and reduce
the Company's overall debt. Internally, NewMarket has not seen anything out
of the ordinary. Of course, we cannot fully know what the condition of our
current customers' and vendors' credit situations may be, so we are being
vigilant for any signs of deterioration. So far, things are looking stable.
Founders and Management Buyback Plan
In conjunction with the effort to restructure and reduce the Company's
overall debt, NewMarket founders and management are currently seeking
investment sponsorship to back a buyback of a controlling interest in
conjunction with a move to an upgraded exchange. For more details on this
topic please listen to the recent Webcast linked below.
"NewMarket Technology Year-to-Date Corporate Update" listed under "Current
Events and Communications" at:
www.newmarkettechnology.com/investor-relations.htm
Anticipated Ticker Symbol Change to 'NMKT'
On August 28th, the Company filed a SEC Form 8-K disclosing the details
regarding the ticker symbol change to 'NMKTE.' The previous ticker symbol
was 'NMKT' (
OTCBB:
NMKT). We anticipate that the Company's ticker symbol
will change back to NMKT in the near future. However, the execution of the
symbol change is outside of the Company's control and we are not certain as
to the exact timing. The Company is current in all its required public
filings.
Mobility Solutions - Everex and World Wide Strategies Acquisitions
NewMarket has previously announced details regarding the launch of a
mobility solutions initiative that includes the acquisition of World Wide
Strategies, Inc. and Everex. The anticipated closing time was schedule in
the September 2008 timeframe. Though we have exceeded the anticipated
closing timeframe, the transactions are otherwise still on track. All
parties are working together to construct the best possible structure for
all shareholders. The optimal structure is taking more time than
anticipated. The current financial industry crisis has not been an issue
to this point, but a potential impact from the financial industry crisis is
being taken into consideration and all three parties are formulating
contingency plans to move forward regardless of any potential fallout from
the financial industry crisis.
Book Value $0.29 PPS and Fair Value Target Price of $0.78 PPS
NewMarket currently has a book value of approximately $62 million and a
market capitalization value of only $20 million. The book value price per
share is $0.29 compared to a recent market share price as low as $0.08. I
point this out because fundamentally this situation is upside down.
Profitable growing companies traditionally trade at a premium to book
value. We are trading at a significant discount to book value. In fact we
are trading at less than one third of our book value, and this is a big
reason why management is exploring a buyback plan. We see it as not just a
controlling interest issue, but as a value play on our own Company.
Micros Report recently released a detailed analyst report update
recommending NewMarket as a speculative buy with a fair value target price
of $0.78 (a copy of the report is available by contacting the Company at
ir@newmarkettechnology.com). While many may recoil at the suggestion that a
company trading at $0.08 could possibly be worth $0.78, consider the
following. As I mentioned previously, profitable growing companies nearly
always trade at a premium to book value. Assuming we only traded at one
times our book value, we would be at $0.29 a share. Now when you consider
our growth and continually improving fundamental financials, traditional
financial analysis would certainly place a value above book value. How far
above book value is open to debate and interpretation, but Micros Report
has made a case for $0.78.
The NewMarket management and founders remain enthusiastic about the future
of the Company and committed to realizing that future. We appreciate the
concerns associated with investing in an early stage company and the
complication of those concerns within the current financial industry
crisis. We thank you for your ongoing support. Please continue to contact
the Company to answer any questions or clarify any concerns. We welcome
and encourage your feedback.
Best Regards,
Philip Verges
Founder and CEO
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 (
OTCBB:
NMKTE), previously under NMKT (
OTCBB:
NMKT), helps
clients maintain the delicate balance between maintaining legacy systems
and gaining a competitive edge from the latest technology innovations.
NewMarket provides certified integration and maintenance services to
support the prevailing industry standard solutions such as Microsoft, 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. In 2006, the company continued its rapid
growth, reporting $77.6 million in revenue with a net income of $5.8
million.
Contact Information: Contact:
NewMarket Technology, Inc.
Investor Relations
214-722-3065
ir@newmarkettechnology.com
www.newmarkettechnology.com