Contact Information: Contact: NewMarket Technology, Inc. Investor Relations ir@newmarkettechnology.com 214-722-3065 www.newmarkettechnology.com
NewMarket Technology, Inc. On Track to Achieve $120 Million 2008 Revenue Forecast With $25 Million in New Sales Contracts and $43.7 Million in Revenue for the First Six Months
CEO Releases Letter to Shareholders to Review Progress Toward $120 Million Revenue Forecast
| Source: NewMarket Technology, Inc.
DALLAS, TX--(Marketwire - August 21, 2008) - NewMarket Technology, Inc. (OTCBB : NMKT ) today
released a letter to shareholders from CEO Philip M. Verges reviewing the
Company's progress toward its $120 million revenue forecast for 2008. This
week, the Company reported $43.7 million in revenue for the first six
months of 2008 with a net income of $2 million. Separately, the Company
recently announced record year-to-date sales contracts anticipated to
contribute $25 million in revenue in 2008
(http://biz.yahoo.com/iw/080808/0423300.html). The anticipated revenue for
the majority of these sales contracts is scheduled to be recognized in the
second six months of 2008.
The shareholder letter details management's plan to augment sales from its
base of recurring customers that delivered $93.1 million in 2007 revenue
with revenue from new sales contracts to achieve the $120 million 2008
revenue forecast. Assuming no increase or decrease in sales from the
Company's base of recurring customers, the $25 million anticipated in
revenue from new sales contracts puts NewMarket within reach of its $120
million revenue forecast. Additionally, the CEO's letter gives more detail
on the Company's plan to reach the revenue forecast. The letter to
shareholders is included in its entirety below.
Dear Fellow Shareholders:
Our recently released second quarter financials have raised some questions.
The most notable of which is the assumed disconnect between our
year-to-date sales and our forecast of $120 million in annual sales for
2008. Looking back through our past communications, I can see how some
people may be scratching their heads.
NewMarket just had a very good quarter. The U.S. equity markets look
horrible across the board, and yet NewMarket continues to grow profitably.
Are we growing linearly? No, but we never have. Just like any other
company, we have our ups and downs. In addition, we historically have a
stronger second half of the year versus our first half of the year. In
2006, we achieved approximately 26% higher sales in the second half of the
year versus the first half of the year. In 2007 we had about 32% higher
sales in the second half of the year. It's the nature of our business.
Now, I will say that all companies, large and small, have their challenges.
Sometimes things just don't work out the way you planned. You have to work
with the information you have at hand, and make your best guess about the
future. We have done just that. We know what our business has been in the
past, we know what we have on our plates right now, and we are making an
educated guess that our forecast of $120 million by the end of the year is
doable. It is an aggressive goal but we believe it is doable. So what are
we basing our forecast on? Well, I'll do my best to reiterate what we have
communicated to date in a slightly different and hopefully more concise
manner.
Last year, the Company reported $93.1 million in revenue. Like most
companies, we win some and we lose some. While we maintain the majority of
our customers, we do lose some. However, on a net basis, we have
historically built upon our base of customers and sales, year after year.
Since reorganizing in 2002, we have done nothing but grow our sales. Again,
that growth hasn't been in a perfectly straight line, but the trend is
unmistakably up. I expect our base of business to continue to grow. In
addition, we have recently signed some new contracts that I consider to be
a bonus of sorts. On August 8, we released in press our higher than
anticipated sales for the year. These sales are certainly welcomed, but are
not part of our traditional business growth. We expect these new sales to
bring in approximately $25 million in new revenue by the end of the year.
If you do some simple math, $93 million plus $25 million is about $118
million in sales, which is very close to our 2008 forecast of $120 million.
While the majority of the revenue from these $25 million in contracts has
not yet been realized, we expect this revenue to hit our books over the
remainder of the year. We have already started to deliver on a small
portion of these contracts.
Since we don't expect our traditional core business to be completely
static, we expect last year's $93 million base in sales to change. In past
years, it has changed to the upside, so we feel that our $120 million
dollar sales forecast is very achievable.
NewMarket is still a young company, and our actual performance may be
different than what we forecast, but we are working hard to achieve the
goals we have set for the Company. I thank all of you for having faith in
our vision and our efforts. I also hope you now have a better idea of how
we have formulated our forecast and why we believe it can be achieved.
On Thursday, August 21st at 4:15 EDT, I will discuss the Company's $120
million revenue forecast in more detail in a Webcast. A link to the
Webcast is available at the Company's corporate Website Investor Relations
page at www.newmarkettechnology.com/investor-relations.htm under "Current
Events and Communications" or by going to.
http://www.vcall.com/IC/CEPage.asp?ID=133305. I will also discuss the
Company's ongoing bottom line improvements.
While this letter has focused primarily on top line sales, we have also
managed to work in some notable financial performance improvements. Most
recently, the Company reported $2 million in net income through the first
six months of 2008, a 71% increase over the net income for the same period
last year. I hope you might have time to listen. Thank you for your
ongoing interest in NewMarket Technology, Inc.
Best Regards,
Philip Vergers
Founder and CEO
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.