MAAL Marketing Alliance Inc (PK)

The Marketing Alliance, Inc. (Pink Sheets: MAAL): BUSINESS HIGHLIGHTS -- Net income increases 103% to $779,377, or $0.38 per share, in Q4 FY'06 from $383,927 in Q4 FY'05 -- Third consecutive quarter of year-over-year operating margin improvement -- Solid balance sheet with $3.3 million of working capital and no long-term debt at March 31, 2006 -- Company relocates TMA Marketing, Inc. subsidiary to corporate headquarters in St. Louis -- Appoints two seasoned industry veterans to key management positions The Marketing Alliance, Inc. (Pink Sheets: MAAL) ("TMA" or the "Company"), a consortium of independent life insurance brokerage general agencies located throughout the United States, today announced its financial results for its fiscal 2006 fourth quarter and year ended March 31, 2006. Timothy M. Klusas, TMA's President, stated, "Our focus throughout the past year has been to improve TMA's operating performance by lowering expenses, gaining efficiencies within our operations and establishing an infrastructure to manage the growth and balance of insurance products through the Company's distributors. We are pleased with our fourth quarter results, which includes year-over-year improvements in the Company's operating margin for the third consecutive quarter, despite slightly lower sales. Throughout this period, TMA has remained committed to providing our members with a cost-efficient level of service and support that enhances their ability to grow more profitably and increase their scale while maintaining their independence." FISCAL FOURTH QUARTER 2006 REVIEW Revenues reported by the Company for the three-month period ended March 31, 2006 were $3.6 million versus the $3.9 million in same period for the prior year. The decline was in part due to the consolidation of certain insurance carriers, whose products are sold through TMA. Improved gross profit and lower total operating expenses resulted in a 28% increase in operating income to $993,076. The Company reported a 103% increase in net income of $779,377, or $0.38 per share, for the fiscal fourth quarter of 2006, versus net income of $383,927, or $0.19 per share, for the fourth quarter of fiscal 2005. This increase is primarily due to higher operating income and an improvement of $562,198 in realized and unrealized gains on investments during the period. In April 2005, the Company reassessed its investment strategy, which previously consisted of a portfolio largely containing equity investments in regional banks. TMA has now shifted 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. FISCAL 2006 ANNUAL REVIEW As a result of the factors listed above, total revenues for fiscal 2006 were $16.0 million, up from $16.7 million in fiscal 2005. Fiscal 2006 operating income increased 80% to $1.1 million, or 6.6% of revenues, versus $587,474, or 3.5% of revenues, in fiscal 2005. TMA reported a 369% increase in net income of $1.1 million, or $0.52 per share, for fiscal 2006, versus net income of $226,463, or $0.11 per share, in fiscal 2005. COMPANY RELOCATES TMA MARKETING TO ST. LOUIS TMA recently announced the relocation of its subsidiary, TMA Marketing, Inc. ("TMAM"), to its corporate headquarters in St. Louis, MO. TMAM represents TMA members in offering non-traditional insurance products to both existing and new customers, with a focus on providing distributors a turnkey annuity marketing and support program from a variety of insurance carriers. TMAM allows the Company's independent distributors who are not currently marketing annuity products to do so, thereby establishing a new profit center for their agency, without incurring significant start-up costs and capital investment. Mr. Klusas commented, "We relocated our corporate headquarters to St. Louis earlier this year in an effort to consolidate these operations into one centralized location. We felt that moving TMAM to St. Louis was instrumental in this effort and will help us create further operating efficiencies, while also positioning TMAM to better provide annuity services to our member agencies, which are spread throughout the country." COMPANY APPOINTS TWO INDUSTRY EXECUTIVES TO KEY POSITIONS TMA also announced two recent executive appointments as part of its continuing effort to better serve its member agencies and develop its management depth and intellectual capital. Effective February 1, Alan Protzel, CLU, ChFC, was named Director of Agency Development. Mr. Protzel has 29 years of industry experience with insurance companies such as MetLife and General American, and has spent the last 20 years in independent life insurance distribution. Mr. Protzel is responsible for all aspects of TMA's life insurance service business, including the Life Service and Support Center. The Company also appointed Laura Hahn as Managing Director of TMAM's Annuity Sales and Service Center. Ms. Hahn brings over 27 years of experience in the insurance and financial services industries to TMA. Laura's past roles have included operations management for General American Life Insurance Co., Regional Vice President for GenAmerica Brokerage and most recently at MetLife as Director of National Recruiting for Walnut Street Securities, Inc. Laura is responsible for all aspects of the Company's Annuity business, including the Annuity Sales and Service Center. Mr. Klusas commented, "We are fortunate to have two seasoned insurance executives such as Alan and Laura filling these important leadership roles. Laura will ensure that TMA continues expand our independent agencies' market presence through the offering of annuity products, while Alan will help build upon our success in cultivating strong relationships with our distributors and insurance carriers. Both Alan and Laura will be based in our corporate headquarters in St. Louis, and we have already seen an immediate impact from their presence." FINANCIAL CONDITION TMA's balance sheet at March 31, 2006 reflected working capital of $3.3 million and no long-term debt. Shareholders' equity at March 31, 2006 increased 26% to $3.7 million from $3.0 million at March 31, 2005. Mr. Klusas concluded, "TMA continues to progress steadily towards fulfilling its potential as the premier wholesale source of life insurance products by companies, distributors, employees, vendors and shareholders. Our primary objective in the coming year is to continue the progress we have made in streamlining our operations, leverage our infrastructure, and concentrate on laying a foundation conducive for top-line growth. We expect to achieve this by adding the industry's most well respected life and annuity carriers to our network, and therein offering our distributors a broader product matrix. We felt that our improvement on the bottom line was a strong step, and we look forward to our near and long-term future with confidence." ABOUT THE MARKETING ALLIANCE, INC. Headquartered in St. Louis, MO, TMA is one of 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 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. TMA stock is traded in the "pink sheets" (www.pinksheets.com) under the symbol "MAAL". These shares may be purchased or sold through any broker, or through a market-maker in TMA stock, such as Robotti & Company. 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 Year to Date 12 Months Ended 3/31/2006 3/31/2005 3/31/2006 03/31/2005 Revenues $3,625,713 $3,877,316 $15,992,770 $16,675,340 ---------- ---------- ----------- ----------- Distributor Related Expenses Distributor bonus & commissions paid 1,068,023 1,473,294 9,007,138 10,123,773 Business processing & distributor costs 690,005 698,858 2,658,594 2,925,210 ----------- ----------- ------------ ------------ Total 1,758,028 2,172,152 11,665,732 13,048,983 ---------- ---------- ----------- ----------- Net Operating Revenue 1,867,685 1,705,164 4,327,038 3,626,357 Operating Expenses 874,609 930,446 3,270,677 3,038,883 ---------- ---------- ----------- ----------- Operating Income 993,076 774,718 1,056,361 587,474 Other Income (Expense) Interest & dividend Income (net) 23,429 9,097 88,567 66,084 Realized & unrealized gains (losses) on investments (net) 338,520 (223,678) 672,647 (179,881) Interest expense (6,690) (3,059) (11,315) (15,243) Other (30,751) (20,373) 15,508 (125,569) ---------- ---------- ----------- ----------- Income Before Tax 1,317,584 536,705 1,821,768 332,865 Provision for income taxes (538,207) (152,778) (758,526) (106,402) ---------- ---------- ----------- ----------- Net Income $ 779,377 $ 383,927 $ 1,063,242 $ 226,463 ========== ========== =========== =========== Shares Outstanding 2,036,747 2,036,747 2,036,747 2,036,747 Operating Income per Share $ 0.49 $ 0.38 $ 0.52 $ 0.29 Net Income per Share $ 0.38 $ 0.19 $ 0.52 $ 0.11 Consolidated Selected Balance Sheet Items As of Assets 3/31/2006 3/31/2005 Current Assets Cash $ 89,440 $ 451,228 Receivables 4,878,709 4,776,861 Investments 2,963,394 1,929,600 Other 525,035 287,826 ---------- ---------- Total Current Assets 8,456,578 7,445,515 Other Non Current Assets 462,480 460,754 ---------- ---------- Total Assets $8,919,058 $7,906,269 ========== ========== Liabilities & Stockholders' Equity Total Current Liabilities $5,196,537 $4,941,478 ---------- ---------- Total Liabilities 5,196,537 4,941,478 Stockholders' Equity 3,722,521 2,964,791 ---------- ---------- Liabilities & Stockholders' Equity $8,919,058 $7,906,269 ========== ========== *T