LOL. Cute Scov.
As for the rest of ya...Now, now, children...behave.
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bellwetherreport.com: The Bellwether Report continues to watch over the ever exciting NewMarket Technology Inc
Friday , June 09, 2006 03:24 ET
Jun 09, 2006 (M2 PRESSWIRE via COMTEX) -- NewMarket Technology Inc (OTCBB:NMKT), is a company that our research team will be tracking over the ensuing weeks. They recently came out with a significant corporate development, causing a market stir. The BWR Research Team will continue to bring its subscribers cutting edge research tools, and second to none customer service.
NewMarket Technology Inc, Systems Innovation Company, this morning released a letter to shareholders from CEO Philip Verges and CFO Philip J. Rauch.
Only four more weeks remain in the second fiscal quarter of 2006. NewMarket is still on track to meet or exceed the recently revised forecast of $65 million 2006 profitable revenue. Continued fundamental financial performance improvement remains our primary focus. They believe NewMarket's share price is considerably undervalued when compared to national exchange listed technology service companies of similar revenue and profitability.They believe quarter after quarter fundamental financial results are the key to shareholders recognizing a healthy investment return as the market begins to value NewMarket consistent with the market value of comparable national exchange listed technology service companies.
As they approach the end of the second fiscal quarter, it has become apparent that a number of shareholder questions seem to be recurring regarding the first quarter financial report. Although NewMarket's financial performance in both revenue and income growth continues to convey a message of sustainability and rapid growth, many of the key financial indicators are somewhat subtle.
Compared to the same period last year the Company's total gross profit increased 8% from $4.7m in the first quarter of 2005 to $5.1m in the first quarter of 2006. However, gross profit as a percentage of revenue decreased 37% from 46% of revenue in the first quarter of 2005 to 29% of revenue in the first quarter of 2006.
This decrease in the percentage of revenue has been the subject of a number of questions.
The core value of NewMarket's business model lies within its continuous acquisition, development and marketing of emerging technologies. NewMarket's approach to marketing emerging technologies is to package emerging technologies with brand name mainstream technologies. To achieve this end, NewMarket maintains marketing partnerships with brand name companies such as Cisco Systems, Microsoft and Sun Microsystems. Within these brand name marketing partnerships, NewMarket sells, integrates and maintains the products of the brand name companies. In order to increase emerging technology sales, NewMarket initially must increase brand name mainstream technology sales. The gross profit margin of the brand name mainstream technology sales is generally lower than the gross profit margin associated with the sale of emerging technology products and services.
The reduced gross profit as a percentage of revenue is a reflection of NewMarket's success in expanding the sale of its mainstream brand name products and services. In conjunction with the reduced gross profit margin, revenue substantially increased 70% from $10.2m to $17.3m. The increased revenue and reduced gross profit as a percentage of revenue demonstrates the successful expansion of mainstream brand name products that will subsequently enable NewMarket to expand the sale of its higher gross profit margin emerging technology products and services. The overall first quarter financial performance is indicative of NewMarket's successfully maturing business model.
NewMarket's first quarter financial results are positive and demonstrative of a maturing business model. Understandably, a cursory review of a reduced gross profit margin as a percentage of revenue might create suspicion of a business performance problem. However, a broader review of overall increased revenue, increased net profits, reduced operational expenses and improving cash flows should mitigate and overcome any concern relating to business performance. The comprehensive first quarter financial picture is altogether strong and more importantly, is a clear indication of NewMarket's maturing business model.
Following the release of letter to shareholders of NewMarket, investors did not react the way they were expected trading down another 6%.
With tons of potential its going to take a considerable announcement to turn this company around, as it currently trades at $0.361, a huge value compared to its 52-week high of $0.69. I really feel that this company is a great opportunity, especially at these very undervalued prices. The BWR Research Team will continue to follow the market sentiment on this company and numerous others.
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