Contact Information: Contact: NewMarket Technology, Inc. Investor Relations ir@newmarkettechnology.com 214-722-3065 http://www.newmarkettechnology.com
NewMarket Technology, Inc. Updates Ongoing Progress With Growth Initiatives and Sustained Forecasts in Face of Current Economic Environment
Beacon Equity Research Rates NMKT 'Speculative Buy,' With $0.54 Target Price
| Source: NewMarket Technology, Inc.
DALLAS, TX--(Marketwire - October 21, 2008) - NewMarket Technology, Inc. (PINKSHEETS : NMKT )
released a letter to shareholders today from the CEO Philip Verges to
provide an update on management's considerations in reaction to the
prevailing economic conditions. On Friday, October 17, 2008, Beacon Equity
Research released an analyst report recommending the Company's stock as a
'Speculative Buy' at $0.54. While the recommendation has been made based
on the Company's fundamental performance, the prevailing market environment
remains difficult. Management addresses the Company's unchanged growth
objectives and continued progress. The letter is included in its entirety
below. The Beacon Equity Research report is available at:
http://www.beaconequity.com/main/Covered-Companies/New-Market-Technology-Inc/%28showAs%29/short
(Due to its length, this URL may need to be copied/pasted into your
Internet browser's address field. Remove the extra space if one exists.)
Dear Fellow Shareholders -
"Only Thing We Have to Fear Is Fear Itself": FDR's First Inaugural Address
Franklin D. Roosevelt was elected president in 1932 at the depth of the
Great Depression. In his inaugural address, which was dedicated to
economic reform he famously said, "the only thing we have to fear is fear
itself." The theme of his address, in addition to outlining his plan for
economic reform, was to remind Americans that the nation's "common
difficulties" concerned "only material things."
Former Federal Reserve Chairman Alan Greenspan has long argued that
economic models don't adequately capture the way the economy behaves. Mr.
Greenspan frequently proclaims that human nature, which is prone to
euphoria and fear, is likely the principle economic driver, and that
unfortunately fear and euphoria measures can't be captured by economic
models. In short, if consumers are confident in the economy, they buy and
if they are fearful, they don't buy. They don't buy luxuries such as new
cars and new couches for the living room or vacations. And fearful of
where the market may go in the future, they don't invest in new stock
purchases.
Managing Fear and Euphoria
Instead of inspiring courage and dismissing fear as beneath American
dignity as President Roosevelt endeavored to do, today's federal government
is attempting to merely calm fears with stabilizing investments in the
financial industry. America's CEOs are largely following suit, attempting
to stabilize fears with confident communications to shareholders. The
magnitude of the bank failures and the record size of the bailout
investments makes the task of calming fears a rather difficult undertaking.
NewMarket Business as Usual with a Vigilant Attitude
Today at NewMarket, it is business as usual. The economic crisis has not
changed our objectives. Business as usual for NewMarket is ongoing
aggressive growth. Yes, our share price is much lower than we would all
like to see it. Yes, I believe the prevailing economic environment is
having an impact on our share price. The current crisis in our national
equity and debt markets has affected everyone from Main Street to Wall
Street. However, we feel this can also bring great opportunities for a
company like NewMarket. Our markets are full of good companies that have
seen their share prices disconnect from their fundamental performance.
Private company valuations have been similarly discounted through their
comparison to public firms. Many good companies around the world are
effectively on sale. NewMarket is in the business of seeking out and
acquiring good companies with new technologies. This could be one of the
best opportunities in our Company's history.
Beacon Equity Research $0.54 Speculative Buy Target Price
Not unlike many companies today, the fundamental operational performance of
NewMarket is not reflected in the share price. The current market share
price is well below the book value share price. Any explanation of the
current share price could only be speculative. Regardless of the
explanation, the current share price is an opportunity. Beacon Equity
Research has recommended a speculative buy target price of $0.54. In
today's market, that seems optimistic, but I believe the message investors
should hear is that NewMarket is undervalued at its current price. I
remain confident that NewMarket will in the future realize an alignment of
the market share price and the underlying fundamental value of the
operation.
Prudent Preparations
We are taking reasonable measures to prudently prepare for the possibility
of current economic conditions having a residual effect on NewMarket
operations. Our objectives will remain unchanged, but our plan of execution
may have to be adapted in the face of the economic crisis. While we are
taking prudent preparations against predictable operational impacts from
the current economic crisis, the possibility of unpredictable impacts are
our greatest risk. The only defense against the unpredictable is
intestinal fortitude and strength of character. When I was at West Point,
we use to play a game called "What Now Cadet?" Instructors would give us
historical accounts of overwhelming combat situations without telling us
how the situation ultimately turned out. Instead, the instructor would ask
how we would handle the scenario. After we did our best to formulate a
response, the instructor would finish the story. Each historical account
was an incredible success story in the face of overwhelming odds -- squad
sized units that defeated division sized enemies, prisoners of war that
escaped from armed captors. And the common theme of each story was "guts"
or intestinal fortitude and strength of character -- the courage to face
the seemingly impossible and the confidence to believe nothing is
impossible.
Founder-Managers
In light of the fact that 60% of all startups fail within three years,
every entrepreneur that launches a new business demonstrates a high degree
of intestinal fortitude and strength of character. To all of you reading
that have faced life or death situations, please do not think I am
comparing entrepreneurial courage to life or death courage. I am simply
illustrating a point. I am recommending that as each of you consider the
viability of your investment portfolio (not just NewMarket) within the
uncertainty of the prevailing economic environment, that the key factor to
consider is the intestinal fortitude and strength of character of the
management team associated with each investment. I would look to
founder-managers for the greatest strength. I would recommend management
teams such as the management team that I have the privilege of working with
here at NewMarket. After 11 years of operation, we remain founder-managed
today with a verifiable record of overcoming the unpredictable. We are
ready for the immediate future in a tumultuous economy.
FDR's Opening Statement in His Inaugural Address
Let me close by sharing more of President Roosevelt's opening statement in
his 1933 inaugural address:
"This great Nation will endure as it has endured, will revive and will
prosper. So, first of all, let me assert my firm belief that the only thing
we have to fear is fear itself -- nameless, unreasoning, unjustified terror
which paralyzes needed efforts to convert retreat into advance. In every
dark hour of our national life a leadership of frankness and vigor has met
with that understanding and support of the people themselves which is
essential to victory."
NewMarket is a growth company and NewMarket's leadership intends to
aggressively advance the Company's ongoing expansion. We are taking
prudent measures against the economic crisis, but we do not plan to fall
back from our growth objectives. We have a number of previously announced
initiatives to acquire new operations and move our listing to an upgraded
exchange among other growth initiatives. All plans are still on and we are
planning future announcements in conjunction with our ongoing progress and
next steps toward expanding the NewMarket vision and operation.
Thank you for your time and consideration and most of all for your ongoing
support.
Best Regards,
Philip Verges
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.