MAAL Marketing Alliance Inc (PK)

The Marketing Alliance, Inc. (Pink Sheets: MAAL) (“TMA”), a provider of services and distributor of products to independent insurance agencies throughout the United States, today announced financial results for its fiscal fourth quarter and for the fiscal year ended March 31, 2009.

Timothy M. Klusas, TMA’s President, stated, “We are pleased to report TMA’s results for the quarter and year ended March 31, 2009. I first want to compliment our distributors who have successfully operated their businesses in a tough and ever-changing economic environment. In the past year, TMA was fortunate to have many seasoned business owners and forward-thinking carriers (suppliers) in our distribution network who have continued to navigate through unprecedented market conditions. We believe that our efforts to establish new platforms and cultivate new and existing relationships with our carriers (suppliers) were rewarded.”

Mr. Klusas concluded, “Our focus in providing greater value for our distributors by offering many different products and services gave our distributors more ways to increase their revenue and reduce expenses. In a difficult economic environment, we feel this was a significant advantage for our members by providing them the tools to position themselves best to thrive in an otherwise adverse economy. As examples, our turn-key Annuity Center, our centralized Business Service Center, and our Competition Desk distinguished themselves as valuable additions for our distributors.”

Fiscal 2009 Fourth Quarter Financial Review

• Total revenues for the fiscal 2009 fourth quarter ended March 31, 2009 increased 35% to $5.8 million from $4.3 million for the prior year period. Some factors that led to the increase were TMA members taking further advantage of TMA’s incentive programs which rewarded them for growing their sales with TMA and utilizing the Company’s growing distribution of annuity products.
• Distributor bonus and commissions increased to $2.7 million in the fiscal 2009 fourth quarter from $1.5 million in the same period last year, due again to a greater utilization of distributor incentive programs. Benefits and processing expenses decreased to $634,000 from $707,000, largely due to efficiencies at the Company’s centralized Business Service Center.
• Net operating revenue (gross profit) increased 21% to $2.4 million in the fiscal 2009 fourth quarter from $881,000 in the comparable fiscal 2008 period. The Company’s gross profit margins declined to 42% from 47% in the prior year period, largely due to higher bonus payments as distributors benefitted from TMA’s incentive structures.
• Operating income rose 17% to $1.6 million in the fiscal 2009 fourth quarter, or 28% of revenues, from operating income of $1.4 million, or 32% of revenues, for the prior year period.
• Realized and unrealized losses on investments during the fiscal 2009 fourth quarter totaled $45,000, compared to realized and unrealized losses of $602,000 for the prior year period. Over the past year, the Company has moved over half of its investment portfolio into US Treasuries and money market accounts. Management continues to closely monitor the remaining portion of its equity positions, and reiterates these non-operating losses have not meaningfully affected TMA’s ability to execute any of its strategic initiatives.
• The Company reported a 152% increase in net income for the fiscal 2009 fourth quarter to $1.2 million, or $0.64 per share, as compared to net income of $489,000, or $0.25 per share, for the prior year period.

Fiscal 2009 Year Ended Financial Review

Total revenues for fiscal 2009 were $22.7 million, up 37% from $16.6 million for fiscal 2008.

• Distributor bonus and commissions for fiscal 2009 increased to $14.5 million from $9.3 million in fiscal 2008, while benefits and processing expenses increased to $2.6 million from $2.5 million in the prior year.
• Net operating revenues, or gross profit, for fiscal 2009 increased 18% to $5.6 million, or 25% of revenues, from $4.8 million, or 29% of revenues, for the prior year.
• Operating income increased 33% to $2.7 million from $2.1 million for the prior year.
• Realized and unrealized losses on investments for fiscal 2009 was $819,000, compared to realized and unrealized losses of $1.3 million for the prior year.
• The Company reported net income for fiscal 2009 of $1.2 million, or $0.63 per share, as compared to net income of $522,000, or $0.27 per share, in the prior year.

Balance Sheet Information

TMA’s balance sheet at March 31, 2009 reflected cash and cash equivalents of $3.7 million, working capital of $4.5 million and no long-term debt. Shareholders’ equity at March 31, 2009 totaled $4.8 million, versus $4.1 million at March 31, 2008.

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.

Investor information can be accessed through the shareholder section of TMA’s website at http://www.themarketingalliance.com/si_who.cfm. TMA stock is quoted in the “pink sheets” (www.pinksheets.com) under the symbol “MAAL”.

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 3 Months Ended 12 Months Ended 3/31/09   3/31/08 3/31/09   3/31/08   Revenues $ 5,796,771   $ 4,278,750   $ 22,694,490   $ 16,592,849     Distributor Related Expenses Bonus & commissions 2,718,345 1,548,931 14,453,962 9,306,398 Benefits & processing   634,446     706,686     2,632,263     2,523,122   Total   3,352,791     2,255,617     17,086,225     11,829,520     Net Operating Revenue 2,443,980 2,023,133 5,608,265 4,763,329     Operating Expenses   811,549     636,159     2,866,881     2,699,519     Operating Income 1,632,431 1,386,974 2,741,384 2,063,810     Other Income (Expense) Interest & dividend income [net] 21,750 31,341 93,769 103,800

Realized & unrealized [losses] on investments (net)

(45,434 ) (601,815 ) (819,167 ) (1,295,397 ) Other income 53,375 53,375 Interest expense   (1,259 )   (5,466 )   (7,199 )   (7,529 )   Income Before Provision for Income Tax 1,660,863 811,034 2,062,162 864,684   Provision for income taxes   (429,558 )   (322,244 )   (856,558 )   (342,244 )   Net Income   1,231,305   $ 488,790   $ 1,205,604   $ 522,440     Average Shares Outstanding 1,917,724 1,945,702 1,917,724 1,945,702   Operating Income per Share $ 0.85 $ 0.71 $ 1.43 $ 1.06 Net Income per Share $ 0.64 $ 0.25 $ 0.63 $ 0.27   Consolidated Selected Balance Sheet Items     As of   Assets 3/31/09 3/31/08 Current Assets Cash & Equivalents $

3,692,773

 

$

1,709,172

 

Receivables 5,890,665 4,529,119 Investments 1,599,412 2,256,120 Other   562,721     421,698   Total Current Assets 11,745,571 8,916,109   Other Non Current Assets   235,626     289,792     Total Assets $ 11,981,197   $ 9,205,901     Liabilities & Stockholders' Equity   Total Current Liabilities $ 7,213,667   $ 5,084,543     Total Liabilities 7,213,667 5,084,543   Stockholders' Equity   4,767,530     4,121,358     Liabilities & Stockholders' Equity $ 11,981,197   $ 9,205,901