SOURCE: Rockwood National Corp

March 24, 2011 08:30 ET

Rockwood Letter to Shareholders

BOCA RATON, FL--(Marketwire - March 24, 2011) - Rockwood National Corp. (PINKSHEETS: RNTL) ("Rockwood")


To our existing shareholders and investor base, I personally welcome you to the new Rockwood. After a long state of dormancy, dynamic changes at Rockwood have begun to take place. In October 2010, Rockwood merged with AmRes Services Group, Inc. (AmRes), a national multi-disciplinary real estate services group, and immediately embarked on implementing strategic growth initiatives within each core group. To that end, the company completed its first acquisition in December 2010 (Marketwire 12-22-2010), acquiring Tennessee-based Elite Home Loans, a HUD Full Eagle mortgage lender. Continuing on plan, Rockwood recently announced it has entered into a definitive Letter of Intent to acquire Gulfstream Processing Services, Inc. (Marketwire 2-8-2011), a national attorney-driven loss mitigation services organization and is currently in active negotiations with several additional opportunities to further drive our growth objectives. Significant effort is being channeled in this area, as we are committed to closing on 3 new target opportunities within the next 90 days.

Driving our business model, the multi-trillion dollar residential mortgage industry, regardless of its cyclicality, is the largest consumer finance market in the US. AmRes concentrates on the growing opportunities in the distressed US residential real estate marketplace, and created a one-stop platform with nationwide capabilities for both consumers and mortgage servicers alike. As a provider to the overall real estate industry, AmRes unites complete default loss mitigation, real estate brokerage services (Retail, Short Sale & REO), full mortgage origination and lending, and title service capabilities to maximize production and revenue opportunities. As a direct result of the domestic housing meltdown, a unique opportunity now exists for AmRes to maximize the experience of its management team to significantly capture market share, while simultaneously implementing its merger and roll up strategy to increase capacity and net profitability. Combined with the rapidly escalating volume of defaulting loans, the ensuing runoff of the higher quality performing loans driven by negative home equity, and the predicted continued default & foreclosure volume increases due to ARM resets and challenging economic recovery, the door is open for AmRes to continue expanding to facilitate long term growth.

With the existing foreclosure crisis and future shadow inventory estimated in excess of $7 trillion, this market condition, projected by analysts to require more than 4 years to resolve, presents a once-in-a-lifetime chance to further build our real estate services platform. Utilizing an employee/partner network of professional real estate agents and mortgage originators, AmRes is well positioned to continually capture market share. Inherent to our growth strategy, it is these same preferred partners that ultimately will become the next acquisition targets as AmRes continues to grow its nationwide distribution network.

Presently, there is NO competitor offering a full service, one-stop solution providing loss mitigation processing, real estate sales, mortgage origination, and title services on a national level that mirrors the AmRes model. Proprietary to the industry, our combined platform model promotes synergy and cost efficiencies for each of our subsidiaries. In addition to benefiting from economies of scale, it is the internal ability to capture revenue throughout the cradle-to-grave lifecycle that drives enhanced profitability. Consumers exiting the loss mitigation division become the next short sale listing candidates for our real estate brokerage base, driving sales commissions. Upon sale of the property, the new home buyer becomes an ideal candidate for our mortgage lending division with virtually no associated marketing expense. At closing, both the mortgage and title service components generate added revenue at reduced expense levels. On a consolidated basis, our business model demonstrates margins in excess of 30%, more than double the industry standard.

Again I welcome you to the improved Rockwood, and remain committed to providing regular newsletters as we implement our core business model and drive shareholder value to unprecedented new heights.

With Warmest Regards,

Gary A. Fioretti
Chairman and Chief Executive Officer

Contact Information

  • Contact:
    Gary A. Fioretti
    Chairman and Chief Executive Officer