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 the year ended March 31, 2010.

Timothy M. Klusas, TMA’s President, stated, “The volatile business conditions for financial companies last year presented many challenges for our Company and our customers. In response, we prioritized flexibility to alleviate rapidly changing market conditions. This led TMA to add and implement new supplier (carrier) relationships. While we made progress in building these new carrier relationships, we concentrated on keeping our distributors informed of changes in our existing carriers. We feel that this effort adds value for our distributors and more stability for them to grow their business with these carriers.”

Mr. Klusas continued, “Besides keeping our customers informed, we are focused on helping them grow profitably. As economic conditions improved over the last fiscal year, we initiated many efforts to help them expand their business, one of which is through new carrier relationships.”

Company Appoints New Director

Subsequent to the end of the quarter and fiscal year, TMA also announced the appointment of David S. Lenaburg, FSA, MAAA, to the Company’s Board of Directors. Mr. Lenaburg retired earlier this year as President and Chief Executive Officer of the Legal & General America companies: Banner Life Insurance Company and its subsidiary, William Penn Life Insurance Company of New York.

Mr. Klusas stated, "We are very pleased to welcome David to our Board of Directors and expect his expertise and experience will be invaluable additions. We have admired his leadership and ability to execute at a very-high level while at the Legal & General America companies, and now we can rely on his advice to help guide our Company’s direction. We are very excited to welcome him to our Board of Directors.”

Financial Highlights

• Total revenues for the fiscal 2010 fourth quarter ended March 31, 2010 were $4.8 million, compared to $5.8 million in the prior year period. Total revenues for the fiscal year ended March 31, 2010 were $19.6 million, compared to $22.7 million for the prior year. The Company believes that a contributing factor in the difference in revenue was adverse economic conditions and their effects on individuals purchasing insurance.
• Net operating revenue (gross profit) decreased to $2.3 million in the fiscal 2010 fourth quarter from $2.4 million in the comparable fiscal 2009 period. The Company’s quarterly gross profit margins improved to 47.5% from 42.2% in the prior year period, largely due to a different mix of higher margin products being sold through its member agencies. For the fiscal year ended March 31, 2010, net operating revenue remained flat at $5.6 million, while gross profit margins improved to 28.3% from 24.7% in the comparable prior year.
• Operating income for the fiscal 2010 fourth quarter was $1.7 million compared to $1.6 million in the prior year period. Operating income for the year ended March 31, 2010 was $2.8 million, compared to $2.7 million in the prior year.
• Realized and unrealized gains on investments during the fiscal 2010 fourth quarter totaled $157,030, compared to realized and unrealized losses of $45,434 for the prior year period. For the fiscal year ended March 31, 2010, realized and unrealized gains on investments totaled $747,765, compared to realized and unrealized losses of $821,657 in the prior fiscal year.
• The Company reported net income for the fiscal 2010 fourth quarter of $1.5 million, or $0.78 per share, compared to net income of $1.2 million, or $0.64 per share, for the fiscal 2009 fourth quarter. For the year ended March 31, 2010, TMA reported net income of $2.5 million, or $1.33 per share, compared to $1.2 million, or $0.62 per share, for the prior year.

Balance Sheet Information

TMA’s balance sheet at March 31, 2010 reflected cash and cash equivalents of $3.8 million, working capital of $6.2 million, and shareholders’ equity of $6.7 million; compared to $3.7 million, $4.5 million, and $4.8 million, respectively, at March 31, 2009.

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 3/31/10   3/31/09 3/31/10   3/31/09   Revenues $ 4,828,716   $ 5,796,771   $ 19,640,944   $ 22,694,490     Distributor Related Expenses Bonus & commissions 1,785,126 2,718,345 11,444,157 14,453,962 Benefits & processing   749,175     634,446     2,619,484     2,632,263  

Total

  2,534,301     3,352,791     14,063,641     17,086,225     Net Operating Revenue 2,294,415 2,443,980 5,577,303 5,608,265   Operating Expenses   603,710     811,549     2,767,406     2,866,881    

Operating Income

1,690,705 1,632,431 2,809,897 2,741,384   Other Income (Expense) Interest & dividend income (net) 21,312 21,750 101,416 96,259 Realized & unrealized gains (losses) on investments (net) 157,030 (45,434 ) 747,765 (821,657 ) Other Income [expense] (31,053 ) 53,375 (31,053 ) 53,375 Interest expense   (5,278 )   (1,259 )   (28,086 )   (7,199 )   Income (Loss) Before Provision for Income Tax 1,832,716 1,660,863 3,599,939 2,062,162   Provision for income taxes   (349,075 )   (429,558 )   (1,067,075 )   (856,558 )   Net Income   1,483,641   $ 1,231,305   $ 2,532,864   $ 1,205,604     Average Shares Outstanding 1,908,754 1,931,713 1,909,651

 

1,931,713   Operating Income per Share $ 0.89 $ 0.85 $ 1.47

 

$ 1.42 Net Income per Share $ 0.78 $ 0.64 $ 1.33

 

$ 0.62     Consolidated Selected Balance Sheet Items       As of   Assets 3/31/10 3/31/09 Current Assets Cash & Equivalents $ 3,802,842 $ 3,692,773 Receivables 5,548,948 5,964,149 Investments 2,414,856 1,599,412 Other   513,531   562,721 Total Current Assets 12,280,177 11,819,055   Other Non Current Assets   503,893   235,626   Total Assets $ 12,784,070 $ 12,054,681   Liabilities & Stockholders' Equity   Total Current Liabilities $ 6,117,031 $ 7,287,151   Total Liabilities 6,117,031 7,287,151   Stockholders' Equity   6,667,039   4,767,530   Liabilities & Stockholders' Equity $ 12,784,070 $ 12,054,681