SOURCE: NewMarket Technology, Inc.

February 26, 2008 13:38 ET

NewMarket Technology, Inc. Releases Update on 2008 Acquisition Strategy to Augment 20% Organic Growth Forecast

DALLAS, TX--(Marketwire - February 26, 2008) - NewMarket Technology, Inc. (OTCBB: NMKT) today released a letter from CEO Philip M. Verges. The letter is the second in a series of letters to be released over the next few weeks to provide detailed updates on the Company's plans for acquisitions after a two year hiatus, to continue with the independent listing of subsidiaries, to issue dividends and to move to a national exchange.

This second letter provides an overview of the Company's previous and current acquisition strategy. The letter outlines the content of future letters in this series that will provide more detail on specific initiatives underlying the Company's overall acquisition strategy.

The letter is included in its entirety below:

Dear Stakeholders and All Who Have Interest in the Small Business Market:

In addition to our core systems integration business, NewMarket is in the business of continuously introducing new technologies to new markets. In other words, NewMarket is always looking for garage and kitchen table technology entrepreneurs to bring into the NewMarket family of companies. Within the NewMarket family of companies, we work to provide technology entrepreneurs the infrastructure to commercialize their technology innovations.

Vulture Capital and Hiring IBM

In our search, we find the world has no shortage of entrepreneurial technology inventors. It is our contention that entrepreneurial technology inventors are hampered primarily by inconsistent access to early stage investment and a technology market gravitational pull toward established brand name incumbents. Perhaps you have heard one or two of the characterizations depicting the investment and marketing challenges facing technology entrepreneurs. For instance, the reference to venture capital as "vulture capital" or the old saying attributed to Management Information System (MIS) Managers and Chief Information Officers (CIO) that, "no one gets fired for hiring IBM."

A New Business Model to Empower the Technology Entrepreneur

NewMarket has founded a business model to overcome the "vulture capital" investment issues facing technology entrepreneurs and circumvent the "no one gets fired for hiring IBM" resistance of MIS Managers and CIOs. We are learning from our experience in the execution of this business model and in turn continuing to improve the model.

NewMarket Mergers and Acquisitions

This letter is part of a series of letters, started last week, intended to share with all NewMarket Stakeholders, and all who have interest in the small business market, what we have learned along the way in pursuit of the NewMarket vision to establish a recognized, respectable and repeatable early stage technology investment scenario. This particular letter focuses on mergers and acquisitions. It will address the Company's current merger and acquisition strategy, evolved from experience and updated to reflect the Company's growth and maturity. The intention of this letter is to update stakeholders on the Company's latest plans in addition to sharing lessons learned with other publicly listed small companies.

Innovative Technologies and Systems Integrators

NewMarket has two main categories of companies it looks to acquire. One category encompasses new, innovative technologies. The second category we define in general as systems integration companies. "New innovative technologies" is a very broad category. We streamline our efforts in this category by limiting our focus to a handful of industries at any one time. We plan to expand the number of industries we work in as the Company grows. "Systems integration companies" is also a broad category. IBM and EDS can be considered systems integrators. Each resells hardware and software products manufactured by other brand name technology companies such as Hewlett-Packard and Microsoft. NewMarket similarly resells many of the same brand name technology products. Similar to our innovative technology category, we have streamlined our systems integration category with a specific set of focused criteria.

Why Systems Integration

One purpose of building systems integration companies into the NewMarket business model is to specifically address the "no one gets fired for hiring IBM" issue. Without a recognized brand name, garage and kitchen table entrepreneurs, among other challenges, have difficulties getting potential clients to consider their innovations, let alone purchase them. NewMarket has implemented a practical solution to this problem by simply choosing to participate in the brand name technology arena as a systems integrator, reselling the products of recognized technology industry incumbents, such as Microsoft, Oracle and Cisco Systems. NewMarket sells its innovative technologies into its own systems integration channels established around technology industry incumbent brand names.

Historical Systems Integration Acquisition Criteria

NewMarket has enjoyed accelerated market penetration for both brand name and innovative technologies within the world's emerging economic regions. Accordingly, one of NewMarket's acquisition criterion has been "location," with a concentration in emerging economic regions. The Company has acquired and established systems integration operations in South East Asia, China, and South America in addition to North America. Candidly, another notable systems integrator acquisition criterion has been to look for distress situations. Distress does not necessarily mean a company that is struggling financially. NewMarket has acquired systems integration companies in situations where shareholders are in litigation with each other or experiencing financial distress with other assets and are in need of liquidity from a performing asset. The purpose of NewMarket's distress criteria has been to acquire assets as affordably as possible.

Updated Systems Integration Acquisition Criteria

NewMarket has not acquired a company in two years. The Company's last acquisition was UniOne in Brazil, during the first quarter of 2006. Over the last two years NewMarket has concentrated on solidifying systems integration market channels and building innovative technology sales into those channels. By solidifying existing channels and building innovative sales, the Company has demonstrated about twenty percent (20%) organic sales growth through 2007. During the acquisition hiatus, the Company also expanded its legal, accounting and executive management capabilities to prepare for a reinitiated merger and acquisition campaign. NewMarket is now about six months into building an acquisition pipeline. The Company is working to expand systems integration operations in South East Asia and North America through merger and acquisition. There are no systems integration acquisitions under consideration at this time in South America or China. Future letters in this series will address specific acquisitions under development. NewMarket Technology is not currently contemplating any stock acquisitions.

NewMarket China, Inc. and NewMarket Latin America, Inc.

NewMarket has two independently listed regional subsidiaries. One in China, NewMarket China, Inc. (OTCBB: NMCH) and one in South America, NewMarket Latin America, Inc. (PINKSHEETS: NLAI). The consolidation of NewMarket's South American operations into NewMarket Latin America is still underway. Future letters in this series will be dedicated to each of these independently listed regional subsidiaries. Both NewMarket China and NewMarket Latin America are today predominately systems integration operations. The immediate primary focus of each will be to expand innovative technology sales organically and through mergers and acquisitions. Each regional subsidiary has its own pipeline of innovative technology acquisition opportunities under development. Additionally, each company has also undertaken organic sales initiatives within their respective regions to market innovative technologies, currently within NewMarket's overall portfolio. For instance, announcements have been made recently regarding the sale of broadband wireless solutions in South America.

Communication, Security and Healthcare Innovations

Over the last five years NewMarket's innovative technology efforts have been concentrated on three industry sectors -- communications, security and healthcare. With the Company's founding roots in Voice over Internet Protocol (VoIP), most of the Company's innovative technology advances have been in the communications industry sector. In fact, after initial acquisitions in the security and healthcare sectors, NewMarket subsequently repositioned and reorganized its security and healthcare assets to better concentrate on its communication industry strengths. Today, with the Company's improved resources, NewMarket has begun to reenergize its healthcare and security industry sector concentrations. More information on specific progress in each sector will be forthcoming in future letters within this series.

Mobility Computing Solutions and NewMarket's Improving Business Model

NewMarket has recently made a number of announcements regarding its Mobility Computing Solutions initiative. Last week, NewMarket announced a letter of intent to acquire Worldwide Strategies, Inc. (OTCBB: WWSG). In addition to expanding NewMarket's innovative technologies portfolio, the Mobility Computing Solutions initiative will demonstrate NewMarket's maturing business model. NewMarket has recognized the benefits of the micro-cap public market in accessing early stage financing for innovative technologies. We have also identified the need to build incumbent brand name technology channels to complement new, innovative technology opportunities. Ultimately, the long-term sustainability of NewMarket's business model to continuously introduce new technologies to market is founded on the shareholder dividend potential of each new technology. After many lessons learned, NewMarket has the opportunity to integrate those lessons into the Mobility Computing Solutions initiative right from the start. I look forward to sharing with you in more detail the business model updates instituted in the Mobility Computing Solutions initiative and the acquisition of Worldwide Strategies, Inc.

20% Organic Growth and Over $100 Million in Revenue in Acquisition Pipeline

NewMarket has forecasted twenty percent organic growth in 2008 over 2007, with continued net income improvements as the Company's operations mature. We do not plan to include any potential benefit from possible mergers and acquisitions in the forecast until the acquisition is completed. After an acquisition is completed, only then will the forecast be updated. NewMarket is aggressively, but systematically pursuing acquisitions. We have over $100 million in potential revenue in the current acquisition pipeline. Management is optimistic about NewMarket's acquisition prospects, but the realization of any additional revenue or other benefit from acquisition must be considered speculative at this time.

Developing Company Communications - "Catch 22"

I want to further comment on communications about company developments in general, beyond the catchall "speculative" comment above. Even as NewMarket reaches $100 million in annualized sales, we are still a developing company. We are a high growth company with aggressive plans. Communications with shareholders can be a "Catch 22" situation. I believe it is important for any developing company to communicate its vision to shareholders and its plans and efforts to pursue that vision. The challenge faced by all developing companies is that those plans and efforts are undoubtedly going to change in reaction to unexpected encounters in pursuit of their vision. In fact, it is my belief that the best developing companies change in reaction to what they encounter, and those that stick to the plan end up out of business. However, it can be difficult for a stakeholder, not involved within the day to day management, to understand changes as a reaction to an unexpected encounter in pursuit of a vision and to otherwise interpret such changes as something less than genuine. We will do our best at NewMarket to err on the side of over communication in order to keep stakeholders up to date on latest lessons learned and possible changes that might result from those lessons. Our vision is over ten years old now and remains unchanged.

Thank You,
Philip M. Verges
CEO, NewMarket Technology, Inc.

Corporate Email Updates

To be added to NewMarket Technology's e-mail database to receive company updates, please send an e-mail to

About Worldwide Strategies, Inc. (

Worldwide Strategies is a development stage business that has built a proprietary affinity marketing process and system to provide clients with call center software platforms or outsourced client services to include multi-lingual capabilities. The Company's development to date has resulted in less than $1 million in liabilities. The affinity market business has signed several substantial contracts, but has not yet established substantial revenue. The Company has approximately 20 million shares outstanding on a fully diluted basis. The NewMarket transaction is intended to support a strategic business relationship and has been designed to have added no additional common stock to the issued and outstanding. The acquisition will be transacted with preferred stock including majority voting rights.

About NewMarket China, Inc. (

NewMarket China, Inc. is a technology leader in the rapidly developing Chinese market specializing today in software engineering, high quality software development and digital multimedia outsourcing services delivered to customers globally. At the same time, the firm is a systems integrator and value added reseller of major global hardware brands in the Chinese domestic market.

Headquartered in Dallas with operations in Shanghai and Beijing, NewMarket China bridges the gap between Western and Eastern business cultures to assist western clients in realizing the advantages of the high quality, low cost technology products and services available from China. NewMarket China also assists Western clients in localizing products and services to realize the tremendous growth potential available by expanding into the Chinese Market.

About NewMarket Latin America, Inc. (

NewMarket Latin America is a consolidated subsidiary of NewMarket Technology providing world class systems integration services through relationships with Hyperion, Oracle, SAP, SSA Global, Microsoft and many more. NewMarket Latin America has major customers in various sectors such as Oil and Gas, Consumer Products, Financial Services, and Pharmaceuticals Industries.

NewMarket Latin America deliver solutions to regional customers in addition to specializing in helping US clients expand their businesses and operations into one of the fastest growing economic regions in the world. NewMarket Latin America has offices and operations throughout Latin America.

NewMarket Latin America also identifies emerging technologies developed within the region and brings those latest technologies to market worldwide. These innovations help clients grow their businesses and gain a new competitive advantage.

About NewMarket Technology, Inc. (

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, 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. In 2006, the company continued its rapid growth, reporting $77.6 million in revenue with a net income of $5.8 million.


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.

Contact Information