SOURCE: NewMarket Technology, Inc.

November 13, 2007 12:06 ET

NewMarket Technology, Inc. Updates Shareholders on 2007 YTD Sales Growth Over 2006, the Corporate Emerging Market Strategy and a 2008 Early Outlook

NewMarket Releases Chinese Subsidiary 2007 Third Quarter Financials Reporting $27.9 Million YTD Revenue; $29.5 Million in Revenue Reported in Fiscal Year 2006

DALLAS, TX--(Marketwire - November 13, 2007) - NewMarket Technology, Inc. (OTCBB: NMKT) today announced CEO Philip M. Verges has released a letter to shareholders to review year-to-date financial performance in addition to providing shareholders with an update on the Company's continued emerging market success and evolving market strategy in developing economies. The letter includes an early outlook of 2008 plans.

The letter has been released in conjunction with the published third quarter financial report for the independently listed NewMarket China, Inc. (OTCBB: NMCH) subsidiary. The subsidiary report has been filed in advance of NewMarket's comprehensive third quarter financial report to be published subsequently. The letter to shareholders is included in its entirety below.

NewMarket Technology recently announced a webcast scheduled for Monday, November 19 at 4:30 PM EST to review the Company's third quarter financial performance. The webcast review will be conducted by CEO Philip M. Verges and CFO Philip J. Rauch and will include third quarter performance for NewMarket's independently listed subsidiary NewMarket China and a review of NewMarket's subsidiary operations in Latin America. NewMarket's Latin American subsidiary operations are being consolidated into NewMarket Latin America, Inc. (PINKSHEETS: NLAI). Log on details for the webcast are available on on the home page under "Current Events" or can be accessed at

Dear Fellow Shareholders:

NewMarket continues to report dramatic award winning revenue growth with $77.6 million in 2006 and driving toward a $100 million revenue goal in 2007. The Company has been recognized in the Deloitte Technology Fast 500 for four consecutive years. NewMarket ranked as the fifth fastest growing company in North America in 2006 and 21st fastest growing company in 2007. NewMarket received honorable mention for placing highly in the rankings for two consecutive years in Deloitte's recent release on the 2007 results.

I believe NewMarket's pending third quarter financial performance results will be received by shareholders as a continued demonstration of aggressive revenue growth. I also believe that the third quarter results will demonstrate the Company's advancing maturity through net income performance and a stabilizing capital structure.

As previously communicated to shareholders, with award winning growth has come some growing pains. While management expects overall financial performance results in 2007 to demonstrate continued rapid growth, we had set our sights even higher. In addition to delaying projects that could have contributed more revenue in 2007, management also delayed planned dividends and the independent listing of more subsidiary operations. While revenue producing projects, dividend and independent listing events have been delayed, we have every intention of fully executing on all of these initiatives as we overcome the previously mentioned growing pains.

The purpose of this letter is to provide shareholders with a review of the year to date financial performance and how that performance fits into the Company's advancing maturity. Furthermore, this letter will also provide an update on NewMarket's exciting progress in the emerging markets arena and our evolving strategy to capitalize on this fast growth market segment. Finally, this letter will conclude with an early outlook of goals and prospects for 2008.

Corporate Maturity

NewMarket has grown over the last five years from a $1 million in annual sales "startup" into a nearly $100 million in annual revenue small to medium sized enterprise. I would characterize the company as still being in transition from its beginnings as a key-man managed startup into a professionally managed enterprise driving toward future recognition as a household brand name synonymous with "technology innovation."

We have added a number of senior managers and still have more positions to fill. The addition of Philip J. Rauch as our CFO last year has been instrumental in our transition into a professionally managed company. Mr. Rauch has been refining the organization's ongoing aggressive revenue growth objectives, including specific gross margin and net income discipline. In conjunction with Mr. Rauch coming on board last year, NewMarket posted its best ever net income in 2006. This year, NewMarket has continued to demonstrate a bottom line discipline, and I believe shareholders will find the third quarter financial results to be a further validation of our progress.

Significantly, Mr. Rauch has also improved NewMarket's long-term capital structure discipline. NewMarket acquired a number of assets prior to 2006 in transactions that ultimately resulted in a steep issued and outstanding increase on a quarterly basis after 2006. The Company shifted its acquisition strategy in order to stabilize the capital structure. I believe shareholders will consider the third quarter financial results a dramatic demonstration of the shift in acquisition strategy.

Emerging Market Success and Evolving Strategy

NewMarket's emerging market efforts in South America and China have been the greatest contributors to the Company's revenue growth. As the Company continues to execute on its business plan, management anticipates the net income contribution from emerging market operations in South America and China to begin keeping pace with the ongoing emerging market contribution to revenue.

With 50% of the world's population residing in Brazil, Russia, India and China, the "BRIC" acronym has become a common emerging market reference found in many Western Fortune 2000 business plans. However, the BRIC economies largely consist of small business operations. The shortage of business partner prospects with the operational magnitude to forge viable joint ventures with Fortune 2000 companies impedes the ability of Fortune 2000 operations to make a nimble entry into the leading global emerging markets -- not to mention the second and third tier emerging markets. On the other hand, NewMarket, as a small business itself, has been able to successfully forge small business partnerships in Brazil and China in addition to second and third tier developing economic regions and now has tenured management teams on the ground in the targeted emerging markets.

In addition to the issue of viable emerging market partnership potential is the issue of available investment support. The traditional investment banking community is less than eager to engage capital in emerging markets with the political and economic risk of most emerging markets -- especially the second and third tier emerging markets or "frontier" markets. However, NewMarket has found the micro-cap public markets an ideal platform for emerging market investment. The micro-cap public markets certainly have their own issues and risk and are experiencing their own maturation experience. But the liquidity of the micro-cap public markets and the smaller average size of the typical micro-cap investment has made for a favorable emerging market investment environment.

NewMarket is working to improve upon its current emerging market success by leveraging the public micro-cap investment environment and engaging small businesses to form small business partnerships with two specific initiatives. One, we are targeting state owned infrastructure oriented business operations with which to create joint ventures that can be independently listed on public micro-cap exchanges. I just returned from a conference of Telecom Operators for Small States (TOSS). This was a meeting of senior management from telecom companies providing services to countries with a population of less than two million residents, where the telecom companies are owned by the governments of small nations. Malta and the Isle of Man, for example, were in attendance. These telecom operators are facing similar issues resulting from the global telecommunications regulatory environment generating new laws and treaties at an accelerating rate and in general, intended for large telecom operators. The operators are struggling to react and diversify their services into content rich services that include features such as music downloads and wireless broadband internet access. NewMarket, in many instances is a larger organization or of commensurate size compared to many of these telecom operators in terms of annual revenue and balance sheet strength. As a result of our participation in this conference, we have a number of next stage business development opportunities to forge joint venture operations with TOSS members which could result in independent publicly listed companies delivering new telecom services to the resident populations of the TOSS member nations.

The second emerging market initiative we have launched is forging joint venture operations between early stage emerging market operations and Western Fortune 2000 companies. For example, we are in the early stages of developing an online travel services company in Sub-Saharan Africa. We are working to establish an equity partnership with a United States Fortune 2000 online travel services company. We are looking for the right U.S.-based online travel services company to provide intellectual property and management expertise, both of which will be protected by U.S. law as the joint venture company is headquartered in the U.S. and governed by U.S. law. We intend to mitigate the emerging market investment risk for the U.S. Fortune 2000 partner by independently listing the African joint venture operation on a U.S. micro-cap public exchange and raising the necessary early stage capital for the joint venture with the equity of the independently listed African joint venture. Additionally, the U.S. Fortune 2000 partner has the opportunity to participate in a social outreach initiative with minimized financial risk. The joint venture will generate jobs in the developing economic regions, where jobs are needed. If the joint venture succeeds, the Fortune 2000 operation will not only have participated in a social outreach initiative, but also opened a new high growth potential market.

The state-owned infrastructure company joint venture and Western Fortune 2000 joint venture initiatives are still early stage and financial results from these initiatives will take time. As an illustration, using our current operations as an example, our first meeting in China was in 2002 and we did not generate revenue from China until 2005. With 2007 annual sales approaching $40 million in China, we believe the 2002 initiative has proved worthwhile. We are equally optimistic, if not more so, of the potential that can be realized from our current state owned infrastructure and Western Fortune 2000 initiatives.

2008 Early Outlook

NewMarket Technology is an early stage technology company with a mission to continuously introduce new technologies to new markets. The two key strategies we follow in the execution of our mission are; 1) to launch our early stage technologies from one of our platform service companies providing current brand name technology solutions from the incumbent industry giants like Cisco Systems, Microsoft, Sun Microsystems and Oracle, and 2) to concentrate our early stage technology product offerings in the world's emerging markets where the global economy is growing the fastest and technology "leap frog" opportunities exist.

To date, NewMarket has made substantial strides since launching the execution of this mission in June of 2002. The Company has established a significant emerging market presence in two of the world's leading emerging markets -- Brazil and China. In Brazil, NewMarket's local operation is recognized as a leading provider of Oracle solutions and in the Northern regions of the South American continent, NewMarket's local operations are a recognized leading provider of Microsoft solutions. In China, NewMarket's operations are recognized in the greater Shanghai business region as a leading provider and integrator of some of the world's leading computer and networking equipment from brand name companies headquartered in Western countries.

While management prepared in late 2006 to transition NewMarket from a key man, small business into a professionally managed small to medium sized enterprise, we nevertheless encountered unanticipated growth challenges as the company continued to achieve rapid growth. The unanticipated challenges necessitated a reallocation of corporate resources to concentrate on corporate infrastructure initiatives rather than on corporate rapid growth initiatives. The result was a delay in the additional independent public listing of subsidiary operations and a corresponding delay in the planned distribution of dividends of stock in those subsidiaries to NewMarket shareholders. Additionally, the company also postponed a small number of organic growth initiatives that would have substantially increased overall 2007 sales. With the reallocation of corporate resources to corporate infrastructure initiatives, NewMarket will begin 2008 better prepared to support ongoing aggressive growth, including the independent public listing of subsidiary operations and the corresponding distribution of shareholder dividends. NewMarket has not altered its growth strategy, but is now better prepared to sustain continued growth.

Shareholders are assured that NewMarket will definitely list additional subsidiary operations in 2008 and issue shareholder dividends. The declaration of a dividend date of record before the end of 2007 is not out of the question. However, we are not currently prepared at this time to definitely commit to a date of record for a dividend.

After traditionally holding our annual Town Hall meetings in December every year, we have moved the meeting to January. We have scheduled the January date to be able to meaningfully present NewMarket's 2008 outlook with 2008 initiatives underway rather than conduct a December meeting with 2008 initiatives presented as no more than bullets on a PowerPoint presentation.

Town Hall and Emerging Market Seminar

In addition to the Company's annual Town Hall meeting, scheduled for Thursday, January 17, 2008 at 3:30 pm CST in Dallas, Texas, at the Fairmont Hotel, NewMarket will host a seminar focusing on emerging technologies and emerging and frontier economies. The seminar, which is scheduled for Friday, January 18, 2008 will be an opportunity for shareholders and interested investors to learn more about the use of emerging technologies and the opportunity for rapid growth within rapidly growing economies worldwide. Anticipated participants include business,non-profit, and government leaders with expertise in emerging markets, such as Brazil, China and Africa.

Those interested in attending the NewMarket Town Hall or Emerging Markets Seminar should contact Whitney Marks at or 214-722-3052 to RSVP and obtain more information.

Here at NewMarket, we are excited about the Company's outlook in 2008. We look forward to picking up the continued independent public listing of subsidiary operations and issuing our first shareholder dividends. We also look forward to expanding operations and sales. This year has been a foundation building year and 2008 will see the benefits of that foundation building. We sincerely appreciate shareholders' patience as we grow and build shareholder value.

Best Regards,

Philip Verges
CEO & Chairman
NewMarket Technology, Inc.

To be added to NewMarket's corporate e-mail list for shareholders and interested investors, please send an e-mail to

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, Oracle, 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. 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.


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.

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