Highlights for the three-month period ended June 30, 2005 --
Company changes fiscal year end to March 31st -- Net income
increases 233% to $222,000, or $0.11 per share -- Balance sheet
remains solid with $2.8 million of working capital and no long-term
debt. The Marketing Alliance, Inc. (Pink Sheets: MAAL) ("TMA"), a
consortium of independent life insurance brokerage general agencies
located throughout the United States, today announced its fiscal
2006 first quarter financial results for the three months ended
June 30, 2005. As previously announced, TMA's Board of Directors
approved a change in the Company's fiscal year to the twelve months
ending March 31st from a calendar year ending on December 31st. The
Company decided to make this change to better align its fiscal year
with the business cycle of its customers. The next quarterly period
the Company will report will be its fiscal 2006 second quarter
ending September 30, 2005. Timothy M. Klusas, TMA's President,
stated, "My goal since being appointed in March was to design and
implement the strategies necessary to establish TMA as a premier
life insurance products marketing organization. TMA has made
numerous strides to address potential areas of growth, and
continues to build a foundation for the future of the Company."
Revenues for the three-month period ended June 30, 2005 decreased
to $3.9 million from $4.1 million in the same period last year,
partially due to a slowdown in economic conditions of certain
member agencies. Operating revenue, or gross profit, for the
three-month period ended June 30, 2005 was $1.07 million, compared
to $1.14 million reported in the same period last year. This is due
primarily to lower revenues and increased bonuses earned by TMA
distributors. Operating expenses for the three-month period ended
June 30, 2005 rose 7% to $720,000 from the same period last year.
As stated in past announcements, operating expenses have begun to
return to more normalized levels following certain transitional
costs related to the opening of the Omaha Business Center in May
2004; start-up costs of the Company's annuity products subsidiary,
TMA Marketing, Inc; and certain one-time severance packages paid to
former employees. As a result, operating expenses decreased 29%
sequentially from the first quarter. Despite these increased
year-over-year costs, TMA reported operating income of $350,000 in
the three-month period ended June 30, 2005, as compared to
operating income of $469,000 in the comparable prior year period.
The Company reported net income of $222,000, or $0.11 per share, in
the three month period ended June 30, 2005, versus net income of
$67,000, or $0.03 per share, for the same period last year. The
primary reasons for this increase were realized and unrealized
gains on investments of $50,000 in the three-month period ended
June 30, 2005. In April 2005, the Company reassessed its investment
strategy, which previously consisted of a portfolio largely
containing equity investments in regional banks. TMA is now
beginning to benefit from a shift of a large majority of its
investment portfolio to third-party financial managers, with a
focus on steady, long-term growth consistent with TMA's working
capital needs. TMA's balance sheet at June 30, 2005 reflected
working capital of $2.8 million and no long-term debt. Mr. Klusas
concluded, "We continue to work towards our goal of providing our
members with the means to compete, which include leveraging pooled
production, centralized processing, shared services and
outsourcing. We are optimistic that we will continue to attract new
agencies to our network as well as help our existing agencies grow
with our core carriers." ABOUT THE MARKETING ALLIANCE, INC.
Headquartered in Pittsburgh, PA, TMA is one the largest
organizations providing support to independent insurance brokerage
agencies, with a goal of providing members value-added services on
a more efficient basis than they can achieve individually. TMA's
network is comprised of approximately 150 independent life
brokerage and general agencies in 43 states. Investor information
can be accessed through the shareholder section of TMA's website at
http://www.themarketingalliance.com/si_who.cfm. FORWARD LOOKING
STATEMENT Investors are cautioned that forward-looking statements
involve risks and uncertainties that may affect TMA's business and
prospects. Any forward-looking statements contained in this press
release represent our estimates only as of the date hereof, or as
of such earlier dates as are indicated, and should not be relied
upon as representing our estimates as of any subsequent date. These
statements involve a number of risks and uncertainties, including,
but not limited to, general changes in economic conditions. While
we may elect to update forward-looking statements at some point in
the future, we specifically disclaim any obligation to do so. -0-
*T Consolidated Statement of Operations Quarter Ended 6/30/2005
6/30/2004 Revenues $3,909,625 $4,053,530 ----------- -----------
Distributor Related Expenses Distributor bonus & commissions
paid 2,180,641 2,130,742 Distributor benefits & processing
659,087 779,361 ----------- ----------- Total 2,839,728 2,910,103
----------- ----------- Net Operating Revenue 1,069,897 1,143,427
Operating Expenses 719,603 674,793 ----------- -----------
Operating Income 350,294 468,634 Other Income (Expense) Interest
& dividend Income (net) 11,309 11,452 Realized & unrealized
gains (losses) on investments (net) 49,501 (266,700) Interest
expense (2,703) (6,463) Other (16,376) (49,247) -----------
----------- Income Before Provision for Income Tax 392,025 157,676
Provision for income taxes (170,000) (91,000) -----------
----------- Net Income $222,025 $66,676 =========== ===========
Shares Outstanding 2,036,747 2,036,747 Operating Income per Share
$0.17 $0.23 Net Income per Share $0.11 $0.03 Consolidated Selected
Balance Sheet Items As of Assets 6/30/2005 3/31/2005 Current Assets
Cash $113,461 $451,228 Receivables 4,765,430 4,776,861 Investments
2,398,933 1,929,600 Other 297,507 287,826 ----------- -----------
Total Current Assets 7,575,331 7,445,515 Other Non Current Assets
422,733 460,754 ----------- ----------- Total Assets $7,998,064
$7,906,269 =========== =========== Liabilities & Stockholders'
Equity Total Current Liabilities $4,811,247 $4,941,478 -----------
----------- Total Liabilities 4,811,247 4,941,478 Stockholders'
Equity 3,186,817 2,964,791 ----------- ----------- Liabilities
& Stockholders' Equity $7,998,064 $7,906,269 ===========
=========== *T
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