NMKT UPDATE ON REVENUE GROWTH & DIVDENDS
Dear Fellow Shareholders –
Recently, NewMarket trading volume and share price is down. For a relatively small company listed on an exchange with some notoriety for less than stellar transparency, such trading activity can be cause for concern. Understandably , we received a number of calls and emails inquiring if some operational or strategic issue yet unknown to shareholders might be to blame for of the share price dip. I will elaborate in the following paragraphs, but the simple answer is no. NewMarket has not experienced any operational or strategic issues that would account for the current trading activity.
The stock market exhibits some seasonality on trading activity. That seasonality is arguably more pronounced on the over-the-counter exchanges. Summer time is usually a period of lower average trading volume and often share prices, especially on the OTCBB exchange.
NewMarket's operational performance continues to be robust. NewMarket has reported increased revenue every quarter compared to the same quarter for the previous year since the Company's new business plan launched in the summer of 2002. NewMarket expects to continue this trend for the second quarter of 2007.
Growing from $1 million in annual sales in 2002 to $77.6 million in annual sales in 2006 has resulted in an array of growing pains. As a public company, those growing pains have been very public. Most recently, we listed two subsidiary operations (according to plan) which tested our public reporting capacity. The unfortunate result was delayed and restated financial statements. This particular growing pain certainly impacted shareholder confidence as reflected in the communications we received from shareholders and as reflected in the share price.
As from previous growing pains, we are learning and improving. Among other enhancements, we are increasing staffing in our finance and reporting department. We are also behind on our announced intention to issue dividends in our publicly listed subsidiaries. Please keep in mind that our internal resources responsible for the issue of dividends are the same resources responsible for our public reporting. In reaction to our issues with reporting on our first subsidiary public listings, all of our related activity has been impacted. However, we are adjusting to these demands and are making the changes necessary to get back on track with our dividend strategy.
NewMarket is continuing to expand aggressively throughout the Company's regional operations. NewMarket 's financial reports and project backlog will demonstrate the Company's continuing aggressive expansion. Issuing dividends in publicly listed subsidiaries remains central to NewMarket 's business plan. We have not deviated from our plan to issue dividends to shareholders. We are working diligently to be able to announced a stock dividend as soon as possible. NewMarket fully intends to list on an upgraded exchange, but will continue to participate on the OTCBB with our subsidiary listings. In addition to our previously announced plans for continued revenue growth, dividends and an upgraded exchange, NewMarket continues to expand its business model into new geographic regions. NewMarket has recently completed initial projects in Eastern Europe and we will be presenting our business model in Nairobi, Kenya later in the month of August.
It is my belief that NewMarket's fundamental value is not recognized by either its 52 week low or high share price. With a market capitalization of under $60 million, our 2006 revenue of $77.6 million gives NewMarket a price to sales ratio of 0.76. So, I understandably believe that a meaningful opportunity exists on the OTCBB for near and long-term returns for NewMarket. I believe an even greater return can be achieved in conjunction with NewMarket 's future listing on an upgraded exchange.
I appreciate the current shareholder concerns resulting from the recent trading activity. I am, in turn, ever the more grateful for your patience and commitment. I can not adequately express my commitment to NewMarket within this letter. However, I want you to know that for me, NewMarket is more than a good business opportunity.
Our business model has generated millions of dollars of investment in developing economies around the world and promises to generate millions more. NewMarket has created jobs in global regions in need of new jobs. NewMarket has injected cash into global regions in need of investment. NewMarket has done so and has concurrently built a sound company with a promising future. Central to the developing economic benefit and sound business that NewMarket has created is our micro-cap specific business model. We are essentially becoming a conglomerate of micro-cap listed companies. The vision of NewMarket is to exponentially expand this business model and to even see this business model replicated by other companies.
Most of you know I graduated from the United States Military Academy at West Point . Some of you understand the seriousness of the oath to public service taken by West Point graduates. At the very real risk of sounding corny or less than sincere, it is NewMarket's potential to establish an exemplary business model that stimulates sustained economic growth in developing economic regions that drives my personal commitment to NewMarket. At the same time, NewMarket is firmly committed to creating a profitable, rapid growth, global company which will in turn, benefit the Company's shareholders through an increase in shareholder value from both a rising enterprise value and periodic stock dividends.
I am asking for your continued patience and commitment. I am offering the promise of a sound business building a strong foundation in both the emerging market and emerging technology market place. If you share my interest in generating public benefit, particularly in places around the world that could use a lift, while economically benefitting from a healthy projected investment return, then I am asking for your support in that cause in addition to my promise of building a sound business with a strong foundation.
Thank you,
Philip Verges
