Contact Information: Contact: NewMarket Technology, Inc. Investor Relations 214-722-3065 ir@newmarkettechnology.com http://www.newmarkettechnology.com
NewMarket Technology, Inc. Updates Website With Micros Report Research Coverage With Fair Value Target Price of $0.70 vs. Recent $0.239
CFO Philip J. Rauch Answers Shareholders' Questions on Analyst Report in Letter to Shareholders
| Source: NewMarket Technology, Inc.
DALLAS, TX--(Marketwire - December 4, 2007) - NewMarket Technology, Inc. (OTCBB : NMKT ) today
announced a corporate website update, adding the recently released research
coverage from Micros Report. Michael Willingham, Micros Report Director
of Research, authored the report, which includes a Fair Value Target price
for NMKT of $0.70 vs. NMKT's recent close at $0.239.
The market responded positively yesterday following the release of the
Micros Report. The price per share increased 17% to $0.239 on well above
average trading volume of over 2 million shares. Yesterday's share price
closed above the 20 day and 50 day moving average share price. The 200 day
moving average is $0.31 and the 52 week high price per share is $0.45.
The research report is now available on NewMarket's website under "Media
Center" at:
http://www.newmarkettechnology.com/NMKT_MicrosReport_20071130.pdf.
After the report was filed, the Company received a number of questions from
shareholders regarding the report. NewMarket's CFO, Philip J. Rauch, has
addressed the questions in a letter to shareholders. The letter is
included in its entirety below:
Dear Fellow Shareholders:
I believe the analyst report speaks for itself and I encourage shareholders
and interested investors to review the report and the Company's public
filings. The Company is fully reporting and all the company's public
filings can be found at www.sec.gov.
The purpose of my letter today is to briefly address some questions
received yesterday from shareholders regarding the Micros Report analyst
coverage.
Independent Analyst Coverage
NewMarket entered into a contract with Micros Report for Michael
Willingham, the Micros Report Director of Research, to research, review and
report on NewMarket Technology, NewMarket China, and the operations to be
consolidated into NewMarket Latin America. Separate reports will be
published on NewMarket China and the operations to be consolidated into
NewMarket Latin America in the future.
It is not unusual for a Company to pay for analyst coverage -- particularly
OTCBB listed companies. Uncompensated analyst coverage of OTCBB listed
companies is almost non-existent without the prospect of substantial
investment banking fees. Analyst coverage of big board listed companies is
ultimately paid for by institutional investors. The institutional
investment community pays to subscribe to analyst publications and attend
analyst conferences which, in turn, pays for the analyst coverage. Since
little institutional investment exists in the OTCBB market, little
compensation opportunity exists for analyst coverage outside of the
reviewed company paying to engage the analyst.
Micros Report's coverage of NewMarket is independent, even though NewMarket
compensated Micros Report. In order for Micros Report to maintain their
reputation to their followers, they must do independent, thorough and fair
research coverage of all the companies they cover. By comparison, we have
an independent accounting firm who is engaged by the Company to perform our
audit services and is similarly compensated by the Company.
Target Price Calculation
A number of methodologies exist for calculating a target share price or a
potential future share price. The purpose of undertaking an exercise to
calculate a target share price or potential future share price is to
provide a relative reference by which to consider a current share price.
For instance, is the current share price too low and a good buy, or at a
high suggesting a good time to sell?
The recent report published by Micros Report provided a broad spectrum of
methodologies to determine a target share price. The Micros Report
coverage considered target share price on a basis of corporate earnings,
sales, book value and discounted cash flow. The ultimate target price in
the Micros Report was an average of all the target share prices determined
by each of these target share price methodologies. I recommend that
shareholders and interested investors review each of the target share price
methodologies considered in the Micros Report coverage.
In my opinion, the share price methodology that best reflects NewMarket's
share price potential is the price to book (P/B) analysis. Public
companies infrequently have a share price that represents a market
capitalization less than the book value of the Company. I might be
concerned that the current share price reflects a discount to book value
and NewMarket could be considered to be a takeover candidate. However, a
takeover strategy would require an order of 100,000,000 shares to be
purchased in the open market to acquire a majority interest. The buying to
acquire such a large number of shares would likely result in a sharp share
price increase that in turn would eliminate the P/B discount that made a
takeover initially attractive.
The Micros Report coverage is encouraging. The coverage is another
indication that although NewMarket's reported fundamental financial
performance is simply not reflected in the current share price, the
underlying value nevertheless exists. NewMarket management remains
confident that the Company's underlying value will in time be reflected in
the share price as the company continues to build revenue and
profitability, along with further increasing the book value.
Please remember to review all the Company's filings when considering an
investment in NewMarket. Also, please continue to send us your questions
and comments to ir@newmarkettechnology.com or 214-722-3059. Your feedback
helps us to improve our communications to shareholders and interested
investors.
Best Regards,
Philip J. Rauch
Chief Financial Officer
NewMarket Technology, Inc.
To be added to NewMarket's corporate e-mail list for shareholders and
interested investors, please send an e-mail to ir@newmarkettechnology.com.
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 integration and maintenance
services to support the prevailing industry standard solutions such as
Microsoft, Oracle, 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. Some emerging technology solutions
NewMarket provides include VoIP, Broadband Wireless and Security.
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. In 2006, the company continued its rapid
growth, reporting $77.6 million in revenue with a net income of $5.8
million.
"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.