MAAL Marketing Alliance Inc (PK)

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 2007 second quarter ended September 30, 2006 (see attached tables). Timothy M. Klusas, TMA�s President, stated, �In the second quarter and first half of fiscal 2007 we continued to incur charges related to the ramp up of our consolidated corporate offices in St. Louis. Our management team felt it was vital to the growth of TMA�s business to establish a working infrastructure with the ability to better service our independent insurance members while still gaining long-term cost efficiencies in the rapidly changing insurance marketplace. We�re very pleased that TMA has continued to operate profitably through this period of capital reinvestment, and feel that the long-term cost benefits will begin to materialize going forward.� FISCAL 2007 SECOND QUARTER REVIEW Revenues reported by the Company for the three-month period ended September 30, 2006 were $3.7 million versus $4.1 million in same period for the prior year. The decrease was due to the consolidation of certain insurance carriers whose products are sold through TMA. Lower net operating revenue (gross profit) resulted in a slight operating loss for the fiscal second quarter of 2007 of $598 (actual), versus operating income of $162,809 in the same period for the prior year. This decline is partially due to lower net revenues and start-up costs related to the consolidation of its corporate offices and TMA Marketing into a new, centralized headquarters in St. Louis. Including start-up costs, total fiscal year-to-date one-time costs are approximately $110,000. The Company reported net income of $11,895, or $0.01 per share, for the fiscal 2007 second quarter, versus net income of $219,966, or $0.11 per share, for the second quarter of fiscal 2006. This decrease is primarily due to a lower realized and unrealized gain in investments of $18,096 during the period, versus gains on investments of $212,515 in the same period for the prior year, a difference of approximately $194,419. FISCAL 2007 FIRST HALF REVIEW As a result of the factors noted above, total revenues for the first half of fiscal 2007 were $7.6 million versus $8.0 million for the same period in fiscal 2006. Fiscal 2007 first half operating income was $228,144 versus $496,727 in the first half of fiscal 2006. TMA reported net income of $94,495, or $0.05 per share, for fiscal 2007 six month period, versus net income of $441,991, or $0.22 per share, in the first half of fiscal 2006. MET LIFE JOINS TMA�S GROWING NUMBER OF INSURANCE CARRIERS The Company also announced that it has added Met Life to its growing number of insurance carriers, whose products will now be sold through TMA. Met Life will provide a wide array of insurance products for TMA distributors to offer to their individual customers under a globally-recognized brand name. This is the second major addition to the Company�s battery of carriers thus far in fiscal 2007, as the Company announced an agreement with ING in August. Mr. Klusas concluded, �Our goal in the coming months is to continue working towards building a foundation for the future, while still providing our independent insurance agency members with the means to compete. The addition of carriers such as Met Life and ING will make our services more attractive to new, independent distributors, giving them a broader range of products to offer their customers. In addition, by joining the TMA network, these members have access to a number of benefits and expansion opportunities to help grow in a competitive marketplace. We feel that our unique business model helps to enhance the businesses of our distributors through additional revenue streams and more effective cost reductions, which in turn, fuels TMA�s growth.� TMA Declares 2006 Cash Dividend The Company recently announced that its Board of Directors authorized a $0.17 per share cash dividend for shareholders of record on December 1, 2006, to be paid on or about January 31, 2007. This is the latest dividend payment to shareholders and an increase of 13% over last year�s cash dividend of $0.15 per share. TMA Re-Authorizes Share Re-Purchase Program TMA�s Board of Directors has extended�until December 31, 2007 the program allowing�the Company to repurchase at its discretion up to 100,000 shares of TMA common stock. Currently, there�are approximately 2.0 million shares of TMA common stock outstanding. FINANCIAL CONDITION TMA�s balance sheet at September 30, 2006 reflected working capital of $3.4 million and no long-term debt. Shareholders� equity at September 30, 2006 increased 2.5% to $3.8 million from $3.7 million at March 31, 2006. 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. Consolidated Statement of Operations � Quarter Ended Year to Date 6 Months Ended 9/30/2006� 9/30/2005� 9/30/2006� 9/30/2005� � Revenues $ 3,694,329� $ 4,110,472� $ 7,565,315� $ 8,020,097� � Distributor Related Expenses Distributor bonus & commissions paid 2,344,915� 2,625,047� 4,542,053� 4,805,688� Distributor benefits & processing � 691,278� � 609,695� � 1,346,517� � 1,268,782� Total � 3,036,193� � 3,234,742� � 5,888,570� � 6,074,470� � Net Operating Revenue 658,136� 875,730� 1,676,745� 1,945,627� � Operating Expenses � 658,734� � 712,921� � 1,448,601� � 1,448,900� � Operating Income (598) 162,809� 228,144� 496,727� � Other Income (Expense) Interest & dividend Income (net) 8,846� 14,903� 15,738� 26,212� Realized & unrealized gains [losses] -� on investments (net) 18,096� 212,515� (78,307) 262,016� Interest expense (3,449) (1,261) (9,080) (3,964) Other � � � � -� Income Before Provision for Income Tax 22,895� 388,966� 156,495� 780,991� � Provision for income taxes � (11,000) � (169,000) � (62,000) � (339,000) � Net Income $ 11,895� $ 219,966� $ 94,495� $ 441,991� � Shares Outstanding 2,036,247� 2,036,747� 2,036,247� 2,036,747� � Operating Income per Share $ (0.00) $ 0.08� $ 0.11� $ 0.24� Net Income per Share $ 0.01� $ 0.11� $ 0.05� $ 0.22� � Consolidated Selected Balance Sheet Items � As of � Assets 9/30/2006� 3/31/2006� Current Assets Cash $ 771,345� $ 89,440� Receivables 4,405,698� 4,878,709� Investments 2,404,376� 2,963,394� Other � 220,895� � 525,035� Total Current Assets 7,802,314� 8,456,578� � Other Non Current Assets � 401,769� � 462,480� � Total Assets $ 8,204,083� $ 8,919,058� � Liabilities & Stockholders' Equity � Total Current Liabilities $ 4,389,435� $ 5,196,537� � Total Liabilities 4,389,435� 5,196,537� � Stockholders' Equity � 3,814,648� � 3,722,521� � Liabilities & Stockholders' Equity $ 8,204,083� $ 8,919,058� 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 2007 second quarter ended September 30, 2006 (see attached tables). Timothy M. Klusas, TMA's President, stated, "In the second quarter and first half of fiscal 2007 we continued to incur charges related to the ramp up of our consolidated corporate offices in St. Louis. Our management team felt it was vital to the growth of TMA's business to establish a working infrastructure with the ability to better service our independent insurance members while still gaining long-term cost efficiencies in the rapidly changing insurance marketplace. We're very pleased that TMA has continued to operate profitably through this period of capital reinvestment, and feel that the long-term cost benefits will begin to materialize going forward." FISCAL 2007 SECOND QUARTER REVIEW Revenues reported by the Company for the three-month period ended September 30, 2006 were $3.7 million versus $4.1 million in same period for the prior year. The decrease was due to the consolidation of certain insurance carriers whose products are sold through TMA. Lower net operating revenue (gross profit) resulted in a slight operating loss for the fiscal second quarter of 2007 of $598 (actual), versus operating income of $162,809 in the same period for the prior year. This decline is partially due to lower net revenues and start-up costs related to the consolidation of its corporate offices and TMA Marketing into a new, centralized headquarters in St. Louis. Including start-up costs, total fiscal year-to-date one-time costs are approximately $110,000. The Company reported net income of $11,895, or $0.01 per share, for the fiscal 2007 second quarter, versus net income of $219,966, or $0.11 per share, for the second quarter of fiscal 2006. This decrease is primarily due to a lower realized and unrealized gain in investments of $18,096 during the period, versus gains on investments of $212,515 in the same period for the prior year, a difference of approximately $194,419. FISCAL 2007 FIRST HALF REVIEW As a result of the factors noted above, total revenues for the first half of fiscal 2007 were $7.6 million versus $8.0 million for the same period in fiscal 2006. Fiscal 2007 first half operating income was $228,144 versus $496,727 in the first half of fiscal 2006. TMA reported net income of $94,495, or $0.05 per share, for fiscal 2007 six month period, versus net income of $441,991, or $0.22 per share, in the first half of fiscal 2006. MET LIFE JOINS TMA'S GROWING NUMBER OF INSURANCE CARRIERS The Company also announced that it has added Met Life to its growing number of insurance carriers, whose products will now be sold through TMA. Met Life will provide a wide array of insurance products for TMA distributors to offer to their individual customers under a globally-recognized brand name. This is the second major addition to the Company's battery of carriers thus far in fiscal 2007, as the Company announced an agreement with ING in August. Mr. Klusas concluded, "Our goal in the coming months is to continue working towards building a foundation for the future, while still providing our independent insurance agency members with the means to compete. The addition of carriers such as Met Life and ING will make our services more attractive to new, independent distributors, giving them a broader range of products to offer their customers. In addition, by joining the TMA network, these members have access to a number of benefits and expansion opportunities to help grow in a competitive marketplace. We feel that our unique business model helps to enhance the businesses of our distributors through additional revenue streams and more effective cost reductions, which in turn, fuels TMA's growth." TMA Declares 2006 Cash Dividend The Company recently announced that its Board of Directors authorized a $0.17 per share cash dividend for shareholders of record on December 1, 2006, to be paid on or about January 31, 2007. This is the latest dividend payment to shareholders and an increase of 13% over last year's cash dividend of $0.15 per share. TMA Re-Authorizes Share Re-Purchase Program TMA's Board of Directors has extended until December 31, 2007 the program allowing the Company to repurchase at its discretion up to 100,000 shares of TMA common stock. Currently, there are approximately 2.0 million shares of TMA common stock outstanding. FINANCIAL CONDITION TMA's balance sheet at September 30, 2006 reflected working capital of $3.4 million and no long-term debt. Shareholders' equity at September 30, 2006 increased 2.5% to $3.8 million from $3.7 million at March 31, 2006. 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 6 Months Ended 9/30/2006 9/30/2005 9/30/2006 9/30/2005 Revenues $3,694,329 $4,110,472 $7,565,315 $8,020,097 ----------- ----------- ----------- ----------- Distributor Related Expenses Distributor bonus & commissions paid 2,344,915 2,625,047 4,542,053 4,805,688 Distributor benefits & processing 691,278 609,695 1,346,517 1,268,782 ----------- ----------- ----------- ----------- Total 3,036,193 3,234,742 5,888,570 6,074,470 ----------- ----------- ----------- ----------- Net Operating Revenue 658,136 875,730 1,676,745 1,945,627 Operating Expenses 658,734 712,921 1,448,601 1,448,900 ----------- ----------- ----------- ----------- Operating Income (598) 162,809 228,144 496,727 Other Income (Expense) Interest & dividend Income (net) 8,846 14,903 15,738 26,212 Realized & unrealized gains (losses) - on investments (net) 18,096 212,515 (78,307) 262,016 Interest expense (3,449) (1,261) (9,080) (3,964) Other ----------- ----------- ----------- ----------- - Income Before Provision for Income Tax 22,895 388,966 156,495 780,991 Provision for income taxes (11,000) (169,000) (62,000) (339,000) ----------- ----------- ----------- ----------- Net Income $ 11,895 $ 219,966 $ 94,495 $ 441,991 =========== =========== =========== =========== Shares Outstanding 2,036,247 2,036,747 2,036,247 2,036,747 Operating Income per Share $ (0.00) $ 0.08 $ 0.11 $ 0.24 Net Income per Share $ 0.01 $ 0.11 $ 0.05 $ 0.22 Consolidated Selected Balance Sheet Items As of Assets 9/30/2006 3/31/2006 Current Assets Cash $ 771,345 $ 89,440 Receivables 4,405,698 4,878,709 Investments 2,404,376 2,963,394 Other 220,895 525,035 ----------- ----------- Total Current Assets 7,802,314 8,456,578 Other Non Current Assets 401,769 462,480 ----------- ----------- Total Assets $8,204,083 $8,919,058 =========== =========== Liabilities & Stockholders' Equity Total Current Liabilities $4,389,435 $5,196,537 ----------- ----------- Total Liabilities 4,389,435 5,196,537 Stockholders' Equity 3,814,648 3,722,521 ----------- ----------- Liabilities & Stockholders' Equity $8,204,083 $8,919,058 =========== =========== *T