DALLAS, TX--(Marketwire - November 18, 2008) - NewMarket Technology, Inc. (
PINKSHEETS:
NMKT)
recently filed SEC Form 10-Q reporting the Company's financial performance
through the third quarter of 2008.
NewMarket reported $76 million in revenue for the first nine months of 2008
with net income of $3.7 million. Net income increased 36% and revenue
increased 20% in the first nine months of 2008 compared to the same period
last year.
NewMarket has experienced award winning growth over the previous five
years. The Company attributes its growth to the early recognition of a
major landscape shift in the global economy. Management is optimistic that
the current financial industry crisis will bring overdue attention to this
major landscape shift and that NewMarket and its shareholders will be
rewarded for its early participation. The CEO has written a letter to
highlight this change in the economic landscape and to discuss the
opportunities for NewMarket and other companies, as well as investors.
Dear Fellow Shareholders and Small Equity Investors -
At NewMarket, we see a silver lining within the current global economic
concerns. No, we don't think we can blindly ignore and avoid a downturn in
the economy. However, we do see the issues within the financial industry
as an opportunity to bring attention to a long overlooked business sector
-- a business sector that happens to account for the majority of economic
activity around the world with historically little attention from Wall
Street. As Wall Street struggles to recover, we are optimistic that this
previously overlooked business sector will finally get the attention it
deserves as institutions search for strength in the market.
The 20 Year Rise of Global Small Business Solutions and Demand for
Technology Solutions
NewMarket was founded over ten years ago on the recognition of an
opportunity created by the shifting landscape of the global economy. That
shift is the continuing segmentation of mass markets and the ongoing
fragmentation of production. The commercialization of the Internet more
than 20 years ago has driven this market segmentation and production
fragmentation. With a virtually infinite number of choices, consumers can
customize almost any product or service to their specific individual
requirements. Market pie charts have more slices than ever before and small
businesses are accounting for more and more of those small slices.
Production fragmentation is increasing as big businesses continually seek
to save money by hiring small businesses to replace an increasing number of
business functions formerly provided at a higher cost by in-house
departments. Segmentation and fragmentation is a global phenomenon, with
small businesses from all over the world meeting the proliferating
segmentation of market demands and the ever increasing big business
requirement to reduce operational expenses. NewMarket's award winning
growth over the previous ten years has resulted from servicing this global
phenomenon.
Nothing Small About Small Business
The statistical significance of the growing small business sector can be
seen in publicly available data assimilated by the Small Business
Administration Office of Advocacy (
http://www.sba.gov/advo/) and the United
States Census Bureau (
http://www.census.gov/epcd/www/smallbus.html). The
data available from these two organizations shows that half of the United
States GDP and employment comes from small business even before the
inclusion of self-employment. Another way to convey the magnitude of the
economic impact of small businesses is to consider that of 5.6 million
registered businesses in the United States, only 31,000 realize more than
$50 million in annual revenue. Less than 2,000 U.S. firms have more than
$1 billion in annual revenue. Those firms with $50 million or less in
annual revenue account for half of the employment in the United States.
Neglected, Underappreciated and Difficult to Invest
While the largest business segment contributing to employment and the gross
domestic product consists of businesses with less than $50 million in
annual revenue, little opportunity exists for the general public to invest
in these businesses. Likewise, these small businesses have little access
to equity financing or debt with equity as collateral. Small businesses
seeking access to equity investing are usually relegated to angel
investing, venture capital or public capital available through listing on
an over the counter quotation system. There are few accepted, let alone
regulated standards for angel investing or venture capital. SEC standards
do exist for small publicly traded firms just as they exist for large
publicly traded firms, but the regulations are problematic to small firms
and the retail investors in small firms. Regulations, particularly since
the advent of the Sarbanes-Oxley Act, place an extraordinary regulatory
compliance expense on small businesses in terms of the expense as a
percentage of revenue when compared to a large publicly traded firm.
Former Chief Counsel for the SBA Office of Advocacy Thomas M. Sullivan said
in his written testimony submitted to the Senate Small Business and
Entrepreneurship Committee that:
"There is a compelling record demonstrating that the costs of complying
with [Sarbanes-Oxley] Section 404 are large and disproportionately high for
small public companies... Advocacy believes that the excessive cost of
Section 404 internal controls reporting may restrict a new generation of
small innovative companies from seeking capital in the U.S. capital
markets."
According to a recent United States Government Accounting Office (GAO)
study, the cost of compliance and the time needed for small public
companies to comply with Sarbanes-Oxley regulations has been
disproportionately higher than for large public companies. Firms with
assets of $1 billion or more spend just thirteen cents per $100 in revenue
for audit fees, while small businesses are forced to spend more than a
dollar per $100 in revenue to comply with the same rules.
Social Evolution and Advance
The current financial industry crisis is much more than an economic issue.
The crisis is impacting the daily lives of millions around the world.
Individual livelihood is at risk or even damaged. Jobs and homes have been
lost. The financial industry crisis is a social calamity of yet unknown
scale.
The Stock Market Crash of 1929 and subsequent Great Depression were
comparative social calamities, but hopefully more severe than the ultimate
turnout of the current financial industry crisis of 2008. Slavery and the
Civil War were also social calamities of a different nature. Social
prejudice of sex and race differences is yet another example of social
calamity. In each case, a reactionary social movement has ensued to
overcome the social calamity. The prevailing government at the time of
each social calamity and the general population has interacted in various
cooperative and combative relationships to mitigate or overcome the
calamity. For example, slavery was fought by Abolition. The post Civil
War period is known for the Emancipation Proclamation and the Restoration
Period. The 1929 financial crisis was met with the New Deal. Prejudice in
the United States has been fought notably by the Civil Rights Movement and
Women's Suffrage.
Though damaging already with unknown damage likely yet to come, from a
historical perspective, the financial industry crisis of 2008 is the type
of social calamity that in the end brings overwhelming social improvement.
To learn more about the interrelationship between social calamity and
social progress, you can research the science of "social vulnerability."
Simply type the words "social vulnerability" into a Web search field.
Social vulnerability research has become a deeply interdisciplinary
science, rooted in the modern realization that humans are the causal agents
of disasters. The desire to understand geographic, historic, and
socio-economic characteristics of social vulnerability motivates much of
the research being conducted around the world today.
The New Wall Street
The Civil Rights Movement was the outcome of extreme racial injustice. The
United Nations evolved in the aftermath of two World Wars and mass
genocide. The Labor Union Movement was a reaction to egregious worker
abuse that diminished human dignity. The Constitution of the United States
and Declaration of Independence were a citizen revolt to tyranny. The
Human Race consistently rises to the occasion in the face of social
calamity.
The current financial industry crisis is unlikely to be the social calamity
that stumps the Human Race. As taxpayers and voters, and frequently as
shareholders and property owners, all of us share a vested interest in an
improved investment environment surrounding the small business economy. A
new Wall Street of the 21st Century will emerge from the current financial
industry crisis with a new appreciation for investment in the small
businesses filling the gaps in the continuing market segmentation and the
ongoing production fragmentation.
We see a silver lining in the current financial industry crisis and that
silver lining is a thriving small business sector growing in reaction to
the Internet driven market segmentation and production fragmentation of the
Fortune 500 economy. As Wall Street adapts its current practices to adjust
to the shifting economic landscape, we believe companies such as NewMarket
will benefit from a new era of investment interest. It will not happen
overnight and the economy will likely present several challenges in the
interim, but we do believe the best is yet to come.
Best Regards,
Philip Verges
Founder and CEO
NewMarket Technology, Inc.
Third Quarter Financial Webcast
NewMarket management will conduct a Webcast, Friday, November 21 at 12:00
pm EST to review third quarter 2008 financials.
A link to the Webcast will be available at the Company's corporate Website
Investor Relations page at
www.newmarkettechnology.com/investor-relations.htm under "Current Events
and Communications." An archive of the Webcast will be available afterwards
for review.
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
ir@newmarkettechnology.com
214-722-3065
www.newmarkettechnology.com