MAAL Marketing Alliance Inc (PK)

The Marketing Alliance, Inc. (OTC: 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 third quarter and nine months ended December 31, 2010.

Timothy M. Klusas, TMA’s President, stated, “We are pleased with this quarter’s results. As distributors utilized more of the Company’s services, we saw growth in revenues, operating income, and net income, as well as expansion in our margins. I can’t write enough complimentary statements about our distributors to articulate our admiration and high regard for their professionalism, but I think our results speak to how our customers finished the calendar year during a difficult and uncertain time.”

Mr. Klusas continued, “Because this quarter included the end of a calendar year, longtime followers of our financial statements have reminded us in the past that they studied TMA by comparing rolling four-quarter periods, which addressed any annual reconciliations and / or seasonality factors that were common in our industry. For example, since many of our suppliers’ agreements with us were on an annual calendar basis, this may have helped them identify comparable periods by looking at four consecutive quarters rather than comparing consecutive 90-day periods and trying to understand any fluctuations.”

Fiscal 2011 Third Quarter Financial Review

• Total revenues for the three-month period ended December 31, 2010, were $6,179,069, an increase of 22.9% from $5,027,173 for the prior-year period.
• Net operating revenue (gross profit) for the quarter grew 74.1% to $1,743,102, which compares to net operating revenue of $1,001,394 in the prior-year fiscal period. The Company’s gross profit margins improved to 28% from 20% in the prior-year period, in part due to distributors utilizing more of the Company’s services which created economies of scale and reduced costs to subsidize unused capacity to provide services.
• Operating income increased to $916,608, or 14.8% of revenues, from operating income of $266,558, or 5.3% of revenues, for the prior-year period due in part to distributors utilizing more of the Company’s services as mentioned above and improved gross profit margins.
• Realized and unrealized gains on investments during the period totaled $357,147, compared to a realized and unrealized loss of $9,478 for the prior-year period. This reflects a period that was generally more favorable for equity investments.
• Net income for the fiscal 2011 third quarter increased to $902,681, or $0.47 per share, from net income of $161,693, or $0.08 per share, in the fiscal 2011 third quarter, primarily as a result of improved operating income, increases in realized and unrealized gains on investments, and a more favorable tax rate reflected in provision for income taxes due to utilization of deferred tax assets generated by capital losses on investments in prior periods.

Fiscal 2011 Nine Months Financial Review

• Total revenues for the nine months ended December 31, 2010, increased 7.8% to $15,960,184, from $14,812,228 in revenues for the prior-year nine-month period.
• Net operating revenue (gross profit) grew 34.8% to $4,425,604, from net operating revenue of $3,282,888 in the prior-year period. The Company’s gross profit margins improved to 28% from 22% in the prior-year period, due in part to distributors utilizing more of the Company’s services as mentioned above.
• Operating income increased to $2,012,249, from $1,130,792 for the prior-year nine-month period.
• Realized and unrealized gains on investments for the first nine months of fiscal 2011 was $416,944, compared to realized and unrealized gains of $579,135 for the prior-year period.
• Net income for the first nine months of fiscal 2011 was $1,580,348, or $0.83 per share, compared to $1,049,223, or $0.55 per share, in the prior-year period.

Balance Sheet Information

TMA’s balance sheet at December 31, 2010 reflected cash and cash equivalents of $3.5 million, working capital of $6.6 million, and shareholders’ equity of $7.6 million; compared to $3.8 million, $6.2 million, and $6.7 million, respectively, at March 31, 2010.

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 on the OTC Markets (http://www.otcmarkets.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   9 Months Ended 12/31/2010 12/31/2009 12/31/2010   12/31/2009   Revenues $ 6,179,069   $ 5,027,173   $ 15,960,184   $ 14,812,228     Distributor Related Expenses Bonus & commissions 4,102,355 3,427,921 9,918,806 9,659,031 Benefits & processing   333,612     597,858     1,615,774     1,870,309   Total   4,435,967     4,025,779     11,534,580     11,529,340     Net Operating Revenue 1,743,102 1,001,394 4,425,604 3,282,888     Operating Expenses   826,494     734,836     2,413,355     2,152,096     Operating Income 916,608 266,558 2,012,249 1,130,792   Other Income (Expense) Interest & dividend income [net] 36,357 25,808 93,763 80,104 Realized & unrealized gains on investments (net) 357,147 (9,478 ) 416,944 579,135   Interest expense   (3,741 )   (10,695 )   (13,679 )   (22,808 )   Income Before Provision for Income Tax 1,306,371 272,193 2,509,277 1,767,223   Provision for income taxes   (403,690 )   (110,500 )   (928,929 )   (718,000 )   Net Income $ 902,681   $ 161,693   $ 1,580,348   $ 1,049,223     Average Shares Outstanding 1,901,578 1,977,675 1,901,578 1,915,930   Operating Income per Share $ 0.48 $ 0.13 $ 1.06 $ 0.59 Net Income per Share $ 0.47 $ 0.08 $ 0.83 $ 0.55 Consolidated Selected Balance Sheet Items             As of   Assets 12/31/10 3/31/10 Current Assets Cash & Equivalents $ 3,457,157 $ 3,802,842 Receivables 5,683,203 5,548,948 Investments 3,111,244 2,414,856 Other   374,101   513,531 Total Current Assets 12,625,705 12,280,177   Other Non Current Assets   1,033,459   503,893   Total Assets $ 13,659,164 $ 12,784,070   Liabilities & Stockholders' Equity   Total Current Liabilities $ 6,058,318 $ 6,117,031   Total Liabilities 6,058,318 6,117,031   Stockholders' Equity   7,600,846   6,667,039   Liabilities & Stockholders' Equity $ 13,659,164 $ 12,784,070