Dear Investor

Over the last year, investors have often suffered through the daily roller coaster of the stock market, a roller coaster whose wheels rest soundly in the tech sector. Investors have been watching their positions dwindle as common sense returned to the market and words like “revenues” and “earnings” once again had meaning.

Today, the market seems abuzz with the pursuit of a catchy phrase, “upside potential.” We assume that means future profitability and growth. In contrast to the carefree tech run of the recent past, upside potential must now be combined with a sturdy business plan tested over more than a quarter. You just can’t add “dot com” to a word and hand it to the public.

So, while investors still welcome the sex appeal of a story that could be the next eBay, logical investor’s are also finding enthusiasm for companies with balance sheets that confirm their business plans. We believe we’ve found a company with just that sort of promise.

The Neptune Society (OTC: BB: NTUN) is a company entrenched in an industry that many of us never realized was quite so profitable, though ultimately, all of us will eventually need. 

What does this company do? Well, more than likely you’ve seen the ads on television. The Neptune Society provides cremation services in the death care industry; an industry that locks in profits on “Pre-Need” revenues, an industry on the cusp of the aging Baby Boomer generation.

The Neptune Society is a company with a record of predictable, positive income results based on a $40 million trust, 55,000 active contracts, and nearly 1,500 appointments scheduled for goods and services every month.

According to Neptune chief operating officer (COO) David Schroeder, The Neptune Society has come a very long way. “As a whole, we are very encouraged by our sales. Our revenues are up, our operating efficiency has improved, and we set a record in May for Pre-Need sales and cash collected. Another important factor in our success is in our market share. Across the industry, some companies have experienced up to a 12 percent drop in market share while our market share has increased two to five percent. Our unique management and marketing structure has been extremely effective in delivering results.”

Lou Fischler, a top analyst at Banyan Capital Markets, has written an in-depth research report his firm has issued to initiate coverage on The Neptune Society. He took time to talk to us this week. “The company has a good story to tell. Management took a fragmented group of partnerships and unified them into one efficient, consolidated, public company. Taking over the operations and financially engineering them into one operating company is impressive. They can now start to focus on accelerating their marketing, producing growth, and implementing their business model.

“The company’s true operating adjusted cash-flow for the first quarter was approximately $500,000. Now with its operating structure firmly in place, it is positioned to concentrate more of its resources to drive Pre-Need sales and generate more and more cash flow. Because of Neptune’s revenue recognition policy and significant non-cash expenses, its reported financial results tend to understate its real operating performance. As a result, cash flow is more relevant in determining value than net earnings for this company. The management at the Neptune Society has jumped some very high hurdles and landed on its feet. The company is a major player in its industry and its year-over-year numbers are outstanding.” 

Sound Interesting? Take a look at these bullet points:

The Neptune Society offers new investors and current shareholders a fundamentally sound business model and four unique elements that are significant to growth.

EXISTING ASSETS
When the trust was established in 1988 its beginning marker was $0. In 1994 it had risen to $16 million and now, in 2001, the total pre-funded cremation arrangements exceed $40 million. With Neptune's continued expansion, estimates for the fund are $74 million by 2004.

SALES
The trust supports a growing bottom line. Cremation costs 50-80% less than traditional burials and Pre-Need contracts at the Neptune Society have grown at an annual compound rate of 32.7% from 1998 to 2000 with a historical cancellation rate for Pre-Need services at less than one percent. 

REVENUES
In addition to the company’s main channels of revenues, the Neptune Society also benefits from sales that include registration services like a travel rider that ranges from $50-300, and is immediately recognized as revenue and an 8% interest charge in California and Oregon on Pre-Need installment programs

SOLID MANAGEMENT
During the past two years, a talented group of four senior executives has been recruited to operate Neptune.  Collectively, these executives possess substantial functional expertise and over 100 years of combined experience in the cremation industry.

Marco Markin became the first member of Neptune’ current management team when he became a member of Neptune’s Board of Directors in June 1999 and its President and Chief Executive Officer (CEO) in September 1999. 

David L. Schroeder was recruited to be Neptune’s Chief Operating Officer (COO) on June 1, 2000, and became a Director and its Secretary in November 2000. 

Rodney M. Bagley became a Director, the Chief Financial Officer and the Treasurer of Neptune in November 2000. 

Gary I. Harris became Neptune’s National Sales Manager and a Director in March 2000.

Contact The Neptune Society

Management:
Marco Markin,
President & CEO

Corporate Headquarters
3500 W. Olive
Suite # 1430
Burbank, CA 91505
Telephone: 888-637-8863
E-mail: info@neptunesociety.com
Visit The Neptune Society on the Web:Click here

We welcome investors to keep an eye on the Neptune Society. Watch for a research report to be issued by Banyan Capital Markets.  We invite you to investigate the Neptune Society, trading symbol NTUN, by using the following links. 

Links to more information:

Recent SEC Filings click here
Click here for Financial Chart 
For Trading Technicals click here
For current stock quote click here

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