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 financial results for its fiscal 2007 third quarter ended
December 31, 2006 (see attached tables). Timothy M. Klusas, TMA�s
President, stated, �As reflected in our third quarter results, TMA
is beginning to recognize the cost benefits of a number of the
initiatives we implemented over the past year. In the first half of
calendar 2006, we relocated our corporate headquarters and annuity
business to St. Louis in an effort to consolidate operations and
establish an infrastructure to better manage the growth and balance
of insurance products through the Company�s distributors. We also
hired key members of management to serve our member agencies and
increase new business opportunities on both the distributor and
carrier levels. After TMA incurred start-up costs in line with
these initiatives, we feel that the Company is better positioned to
capitalize on opportunities in the changing insurance marketplace.�
Mr. Klusas continued, �While we are pleased with these quarterly
results and the direction of the Company, we recognize there is
still much to be done. Let me address a few specific factors
relating to our business, our financial position and methods in
which we are enhancing the value of TMA for our shareholders: One
of the main catalysts for our Company�s future growth is through
the addition of new insurance carriers. By adding a new carrier to
TMA�s network, the Company can provide a broader range of insurance
products for our independent agent distributors to choose from and
then, in turn, offer to their customers. This chain is the core of
our business. In the past year, TMA has signed three new carriers,
ING, Met Life and Aviva / AmerUs Indianapolis Life, whose products
are now being sold through our Company. However, there is a certain
amount of integration time once a carrier joins our network,
usually about 6-9 months before TMA begins recognizing revenues
from the sales of their products. This is due to the synthesizing
of the carrier�s products into our distribution system, instructing
our sales force, introducing this product expansion to our
distributors, and subsequently having these distributors sell the
products to customers. The addition of each strategic carrier helps
to expand the capabilities of what our current members can offer to
consumers in a competitive marketplace, and makes the TMA network a
more attractive value proposition for new potential distributors.
In June 2006, we relocated our subsidiary, TMA Marketing, Inc.
(�TMAM�), from Philadelphia to our corporate headquarters to St.
Louis. TMAM�s primary focus is to provide our distributors an
annuity marketing, service and support program from our existing
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. We
appointed Laura Hahn, an industry veteran with over 27 years of
experience, as Managing Director of TMAM�s Annuity Sales and
Service Center, and have positioned the business to ensure that TMA
continues to expand its independent agencies� market presence.
Financial flexibility, while a sound business objective in its own
right, is also a distinct competitive advantage. TMA�s solid
financial position should produce lasting benefits and enhance the
positive impact of higher profitability going forward. The
Company�s balance sheet at December 31, 2006 reflected working
capital of $3.3 million, shareholders� equity of $3.7 million and
no long-term debt. We believe that the capital structure we now
have in place is sufficient to fund our growth plans for the
foreseeable future. We feel an appropriate way to have TMA�s
investors participate in our success, given the amount of free cash
flow we generate, is through the payment of dividends. TMA has a
long dividend history, having paid a total of approximately $3.4
million to our shareholders since 1999. Our intent is to provide
our shareholders with a meaningful current return while at the same
time retaining sufficient earnings to maintain our strong capital
base and take advantage of growth opportunities. On January 31,
2007, the Company paid a $0.17 per share cash dividend for
shareholders of record on December 1, 2006. This is the latest
dividend payment to shareholders and an increase of 13% over last
year�s cash dividend of $0.15 per share.� Mr. Klusas concluded,
�Our primary objective for our 2007 fiscal year is to continue the
progress we have made in streamlining our operations, leverage our
infrastructure, and concentrate on laying a foundation for top-line
growth. We feel that our long-term investments are beginning to
gain traction. We look forward to our near and long-term future
with confidence.� FISCAL 2007 THIRD QUARTER REVIEW Revenues
reported by the Company for the three-month period ended December
31, 2006, were $4.2 million versus $4.3 million in same period for
the prior year. The decrease was due to the consolidation of
certain insurance carriers whose products are distributed through
TMA. The Company reported a $566,609 increase in operating income
to $179,107 in its fiscal 2007 third quarter versus an operating
loss of ($387,502) in the same period for the prior year. This
increase is largely due to higher net operating revenues and
significantly lower operating expenses. These expenses decreased by
37% due to improved operating efficiencies related to the
consolidation of its corporate offices and TMAM into a new,
centralized headquarters in St. Louis. As a result of the above
factors, TMA reported a $315,082 improvement in net income to
$156,956, or $0.08 per share, for the fiscal 2007 third quarter,
versus a net loss of ($158,126), or ($0.08) per share, for the
prior year period. This increase is primarily due to higher
operating income as a result of the factors outlined above. FISCAL
2007 NINE MONTH REVIEW Total revenues for the first nine months of
fiscal 2007 were $11.8 million versus $12.4 million for the same
period in fiscal 2006. Fiscal 2007 nine month operating income was
$407,251 versus $109,225 for the first nine months of fiscal 2006.
TMA reported net income of $251,451, or $0.12 per share, for fiscal
2007 nine month period, versus net income of $283,865, or $0.14 per
share, in the prior year period, the difference largely due to
realized and unrealized gains and losses on investments. 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 9 Months Ended
12/31/2006� 12/31/2005� 12/31/2006� 12/31/2005� � Revenues $
4,237,426� $ 4,346,960� $ 11,802,741� $ 12,367,057� � Distributor
Related Expenses Distributor bonus & commissions paid $
2,731,741� 3,133,427� 7,273,794� 7,939,115� Distributor benefits
& processing � 668,295� � 699,807� � 2,014,812� � 1,968,589�
Total � 3,400,036� � 3,833,234� � 9,288,606� � 9,907,704� � Net
Operating Revenue 837,390� 513,726� 2,514,135� 2,459,353� �
Operating Expenses � 658,283� � 901,228� � 2,106,884� � 2,350,128�
� Operating Income (Loss) 179,107� (387,502) 407,251� 109,225� �
Other Income (Expense) Interest & dividend Income (net) 14,399�
38,926� 30,137� 65,138� Realized & unrealized gains [losses] on
investments (net) � � 72,778� 72,111� (5,529) 334,127� Interest
expense � (5,328) � (661) � (14,408) � (4,625) � Income (Loss)
Before Provision for Income Tax 260,956� (277,126) 417,451�
503,865� � Benefit (provision) for income taxes � (104,000) �
119,000� � (166,000) � (220,000) � Net Income (Loss) � 156,956� �
(158,126) $ 251,451� $ 283,865� � Shares Outstanding 2,036,247�
2,036,747� 2,036,247� 2,036,747� � Operating Income (Loss) per
Share $ 0.09� $ (0.19) $ 0.20� $ 0.05� Net Income (Loss) per Share
$ 0.08� $ (0.08) $ 0.12� $ 0.14� � � � Consolidated Selected
Balance Sheet Items � As of � Assets 12/31/2006� 3/31/2006� Current
Assets Cash $ 656,182� $ 89,440� Receivables 4,995,949� 4,878,709�
Investments 2,699,871� 2,963,394� Other � 188,264� � 525,035� Total
Current Assets 8,540,266� 8,456,578� � Other Non Current Assets �
378,102� � 462,480� � Total Assets $ 8,918,368� $ 8,919,058� �
Liabilities & Stockholders' Equity � Total Current Liabilities
$ 5,260,694� $ 5,196,537� � Total Liabilities 5,260,694� 5,196,537�
� Stockholders' Equity � 3,657,674� � 3,722,521� � Liabilities
& Stockholders' Equity $ 8,918,368� $ 8,919,058�
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