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NMKT news - NewMarket Technology, Inc. Releases Forecast of Profitable $75 Million in 2005 Booked Revenue In Shareholder Letter

October 07, 2004 11:20:00 (ET)


DALLAS, Oct 7, 2004 (BUSINESS WIRE) -- NewMarket Technology, Inc. (NMKT, Trade) today released a letter to shareholders from the CEO, Philip Verges. In the letter, Mr. Verges announces the third annual NewMarket Technology Town Hall Meeting intended as a venue to review with shareholders the Company's plans for 2005. Mr. Verges highlights in the shareholder letter current year performance through the third quarter of 2004 and performance expectations for the fourth quarter. Mr. Verges also uses the letter to shareholders as a means to communicate with shareholders-at-large regarding frequently asked questions.

The letter to shareholders is included in its entirety within this press release.

Dear Fellow Shareholders:

The third quarter of 2004 has just concluded and NewMarket remains ahead of plan to achieve forecasted financial performance objectives for the year. Plans to reach $75 million in profitable revenue in 2005 are well underway. We have just scheduled our third Annual Town Hall Meeting in Dallas for Dec. 9 to review our detailed 2005 plans with shareholders. In reaction to the encouraging attendance at last year's meeting, as well as the enthusiastic response from those that attended, we have expanded the Town Hall agenda to include a presentation from the managers of each of our high-tech subsidiaries and affiliates, as well as a tour of our facilities in Dallas. In addition to reviewing detailed enterprise growth plans for 2005, management will also update shareholders on our progress toward advancing NewMarket Technology onto a national stock exchange.

Year-to-Date Performance Through 3rd Quarter 2004

New Market recently announced increasing its 2004 booked revenue forecast from $20 million to $24 million as a result of better than expected organic growth. In the first six months of 2004, the Company exceeded $10 million in revenue with a small second quarter loss of $75,000. The Company forecasts a profitable annualized revenue run rate of over $50 million by year-end. Shareholders can anticipate a third quarter SEC Form 10Q filing that will report financial performance consistent with the recently increased booked revenue forecast for the year.

In 2002, NewMarket, launched a business plan to continuously introduce emerging communication technologies to the marketplace by utilizing a new financing model for early technologies specific to the micro-cap market. Since then, the NewMarket Technology business model has established sales traction and is now building notable momentum in new contracts, partnerships and acquisitions. We have a growing base of profitable systems integration business selling and implementing brand name solutions from Sun Microsystems (SUNW, Trade), Cisco Systems (CSCO, Trade) and Microsoft (MSFT, Trade) to name only a few. With these brand name products, we package our own proprietary emerging technologies. Each of NewMarket's proprietary technologies resides within an independent subsidiary or affiliate company. Each sale we make of a proprietary technology enhances the equity value of the respective subsidiary or affiliate company. By packaging emerging technologies with brand name technologies, NewMarket has implemented a practical marketing strategy for new technologies with a lower associated expense. Along with the enhanced equity value that results from each emerging technology sale comes an even more lucrative future equity income opportunity in the form of capital appreciation for the NewMarket shareholders. In fact, NewMarket is actively in the process of staging our first of a number planned subsidiary spin-offs.

In the last 18 months, NewMarket has acquired four high-tech subsidiaries and established a 20% or better equity stake in four high-tech affiliate companies, in addition to expanding our sales and delivery capability through the acquisition of three systems integration companies. NewMarket ended 2003 with a headcount of about 70 -- and has grown to more than 300 employees in four countries. Separate from the revenue growth associated with our mergers and acquisitions, 40% of NewMarket's revenue growth from 1st quarter to 2nd quarter in 2004 was generated by increased organic sales.

In addition to the exceptional revenue growth in 2004, the Company has also made substantial progress in our preparations for a national exchange listing. We believe the Over The Counter Bulletin Board Exchange (OTCBB) is an excellent venue for early stage Companies seeking capital formation and we intend to continue taking advantage of the many benefits the OTCBB exchange has to offer early stage Companies in regard to our portfolio of high-tech subsidiaries and affiliates. However, as NewMarket matures to the next stage, we will seek to take advantage of the enhanced capital formation opportunities and larger potential investor base that comes with the stability associated with the increased regulation and heightened standards of a national exchange.

Frequently Asked Questions

Recently we have received a number of questions regarding the Company's issued and outstanding share balance as well as the authorized number of shares. I will take some time below to articulate the history of the issued and outstanding as well as the authorized. In short, the issued and outstanding is currently at approximately 70 million shares and the authorized number of shares is 300 million.

NewMarket began the year at approximately 55 million shares issued and outstanding. Throughout the course of 2003, the Company has made several acquisitions as summarized above. All the above listed acquisitions have been appropriately disclosed. The Company has also orchestrated a small number of strategic financing transactions in conjunction with the above listed acquisitions. Furthermore, the Company has engaged the services of executive talent on both an employee and consulting basis to help the company execute on plans in association with the above-mentioned acquisitions. All of the acquisitions have been made with restricted securities, as have all of the financial arrangements and the executive compensation commitments.

I imagine some portion of the questions regarding the issued and outstanding may be related to a certain degree of skepticism surrounding the integrity of management teams in general that work in OTCBB listed Companies. A certain degree of skepticism is healthy and I would encourage shareholders to inquire in regard to any doubts they may have with the management of any Company where they are a shareholder or prospective shareholder.

With this in mind, I will try to address any possible concerns with the management team as it might relate to the increase in the issued and outstanding in 2004. I have not received any additional shares in 2004 nor do I anticipate receiving any shares. I have not sold any shares in 2004 nor do I anticipate selling any shares. No officers or directors of NewMarket have sold any shares in 2004 nor do I anticipate any officers or directors selling any shares in 2004.

When considering the issued and outstanding, I believe it is worthwhile to look at NewMarket in the framework of the overall OTCBB. The top 100 most actively traded issues on the OTCBB of course changes every day, however you find many of the same Companies on the list on a consistent daily basis. NewMarket regularly makes this list. The average issued and outstanding number of shares of companies usually in the top 100 approaches 1 Billion shares -- not the authorized, but the already issued and outstanding. The average share price of the usual companies on the top 100 list is $0.07 with an average 52 week high of $0.31. We are pleased that NewMarket regularly achieves recognition as one of the top 100 most actively traded , but when it comes to the top 100's issued and outstanding balances, we do not have any intention of competing in this category.

In addition to questions regarding the issued and outstanding, there also seems to be some confusion regarding the number of Authorized shares. As previously mentioned, the number of Authorized shares is 300 million. This has been the number of Authorized shares since 2002. The number of Authorized shares was increased from 100 million by a shareholder vote and board vote in conjunction with the purchase of VergeTech. The VergeTech acquisition was the landmark event initiating the current business plan articulated in this letter. Given the share price at the time of the VergeTech acquisition, the Authorized had to be increased to accommodate the potential fully diluted obligations of the Company.

For some reason, there appears to be a concern that the issued and outstanding was recently increased from 100 million shares to 300 million shares. This is not the case. I do have someone at our Company reviewing recent filings to see if we inadvertently put the old 100 million number in a recent document that might account for the confusion. If we discover such an inaccuracy, we will accordingly file an amendment.

In light of our revenue growth expectations, the increase in shares outstanding are well in line. As a reminder, NewMarket booked revenue of $2.3 Million in 2003, and we expect to finish 2004 with realized revenue of $24 Million and to achieve revenue of $75 Million in 2005. Once again, in light of possible skepticism regarding management intentions, there is no plan in place nor is there any current consideration of a plan that would call for the Company to make use of even half of the current Authorized.

All of us working here at NewMarket are excited about our progress in 2004 and even more enthusiastic about our plans for 2005. We hope many of you will find the time to visit us in Dallas on Dec. 9 for the Annual Town Hall and tour our Dallas facilities. I also travel frequently for the purpose of being available in person to speak with shareholders. Our offices are always open for shareholders to visit although we would recommend an appointment. We encourage shareholders to take advantage of any opportunity to learn more about NewMarket first hand from our management team and staff.


Thank you,
Philip Verges
CEO
NewMarket Technology Inc.
About NewMarket Technology, Inc. (www.newmarkettechnology.com)

In 2002, NewMarket launched a business plan to continuously introduce emerging communication technologies to market. The plan included a financing model for early technologies and an approach to creating economies of scale through a specialized service and support organization intended specifically for the emerging technology industry. The Company posted six consecutive profitable quarters through 2003 and established an annualized $15 million in revenue. In 2004, the Company diversified its communications technology offering into the healthcare and homeland security industries with the respective acquisitions of Medical Office Software Inc. and Digital Computer Integration Corp. The Company has expanded sales into Asia and Latin America through the acquisitions of Infotel Technologies in Singapore and RKM IT Solutions of Caracas, Venezuela. After the second quarter of 2004, NewMarket has booked over $10 million in revenue and has achieved a revenue run rate of over $40 million. This press release contains statements (such as projections regarding future performance) that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to those detailed from time to time in the Company's filings with the Securities and Exchange Commission.

SOURCE: NewMarket Technology, Inc.


NewMarket Technology, Inc., Dallas
Investor Relations, 404-261-1196
Email: [e-mail]

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