The Marketing Alliance Announces Fiscal 2008 Fourth Quarter and Year-End Financial Results

  
    
  
  
    
      The Marketing Alliance, Inc. (Pink Sheets: MAAL) (“TMA”), 
      a consortium of independent life insurance brokerage general 
      agencies located throughout the United States, today announced financial 
      results for its fiscal fourth quarter and year ended March 31, 2008.
    
    
      Timothy M. Klusas, TMA’s President, stated, “We 
      are very pleased with our operating results for the fourth quarter and 
      fiscal year ended March 31, 2008. We posted double-digit percentage 
      increases in revenue and operating income for the fiscal 2008 fourth 
      quarter and year. Fiscal 2008 also marked the third consecutive year of 
      operating margin improvement, reflecting further realization of the 
      benefits of a streamlined infrastructure. We believe that our expanding 
      carrier network and balance sheet at March 31, 2008, have put us is in 
      position to have the opportunity to capitalize on future growth 
      initiatives.”
    
    
      Mr. Klusas continued, “With regards to our 
      annuity business (TMAM), our wide range of annuity products, service 
      options, and overall flexibility seem to appeal to agencies looking to 
      expand their annuity business without incurring significant start-up 
      costs or capital expenditures. Our new platform, launched in March 2007, 
      continues to engage agencies as it encourages them to increase focus on 
      developing their annuity businesses. During the past fiscal year, we 
      continued to work with existing carriers to further grow the business 
      and enhance these supplier relationships. We are now very excited to 
      announce the additions of Prudential Financial and Transamerica, both of 
      which were added to our network subsequent to the close of our reporting 
      period. We look forward to working with these carriers to fully 
      integrate them into our network, which we have found can take up to 24 
      months. We remain encouraged by the recent growth in our life and 
      annuity businesses, and will continue to strive to nurture new revenue 
      streams that also create value for our customers.”
    
    
      Mr. Klusas concluded, “Our investment 
      portfolio has grown substantially over the years, and our gains in past 
      years and periods have roughly offset our current losses. While these 
      recent losses impact our earnings, so far they have not meaningfully 
      impacted our ability to execute our strategic initiatives. We continue 
      to monitor our investment holdings and are adjusting for the changing 
      economic environment in an attempt to reduce the volatility of our 
      returns. Despite this effect on our earnings, we feel fortunate to have 
      a strong balance sheet in this economy and operating environment.”
    
    
      FISCAL 2008 FOURTH QUARTER REVIEW
    
    
      Total revenues for the three-month period ended March 31, 2008 increased 
      34% to $4.3 million from $3.2 million for the three-month period ended 
      March 31, 2007. The increase in revenues was due to favorable timing as 
      well as increased revenues from new additions to the Company’s 
      carrier network in the last three years.
    
    
      Distributor bonus and commissions increased to $1.6 million from 
      $690,000 in the same period last year, due primarily to increases in 
      revenue and customers thriving in new incentive programs.
    
    
      Benefits and processing expenses declined to $702,000, or 16.4% of 
      revenues, from $746,000, or 23.3% of revenues, in the fourth quarter of 
      fiscal 2007, due to TMA’s continued focus on 
      centralization and economies of scale.
    
    
      Net operating revenue (gross profit) grew 14% to $2.0 million from $1.8 
      million in the comparable fiscal 2007 period.
    
    
      Operating expenses as a percentage of revenues declined to 19.7% from 
      25.7% in the prior year’s fourth quarter, as 
      higher revenues and lower processing costs offset the rise in bonuses 
      and commissions.
    
    
      Operating income rose 23% to $1.2 million, or 27.1% of revenues, from 
      operating income of $941,000, or 29.4% of revenues for the prior fourth 
      quarter.
    
    
      Realized and unrealized loss on investments of $602,000 compared to a 
      realized and unrealized loss of $35,000 for the fourth quarter of fiscal 
      2007. The wider loss in the current year period was attributable to 
      current market conditions.
    
    
      Net income for the fiscal 2008 fourth quarter was $342,000, or $0.18 per 
      share, based on 1.95 million shares outstanding, as compared to net 
      income of $637,000, or $0.32 per share, based on 2.0 million shares 
      outstanding, for the fiscal 2007 fourth quarter. The decrease in shares 
      outstanding is due to the Company’s execution 
      of its share repurchase program.
    
    
      FISCAL 2008 ANNUAL REVIEW
    
    
      As a result of the factors listed above, total revenues for fiscal 2008 
      increased 10% to $16.6 million versus $15.0 million in fiscal 2007. 
      Distributor and bonus commissions rose to $9.3 million from $8.0 
      million. Benefits and processing expenses declined to $2.5 million, or 
      15.2% of revenues, from $2.8 million, or 18.8% of revenues last year. 
      Fiscal 2008 net operating revenue (gross profit) increased to $4.8 
      million, or 28.7% of revenues, from $4.2 million, or 28.2% of revenue. 
      Fiscal 2008 operating income increased 53% to $2.1 million, or 12.4% of 
      revenues, from $1.3 million, or 9.0% of revenues, in fiscal 2007. TMA 
      reported fiscal 2008 net income of $522,000, or $0.27 per share, as 
      compared to net income of $888,000, or $0.44 per share, in fiscal 2007.
    
    
      SELECTED OTHER FINANCIAL INFORMATION
    
    
      TMA’s balance sheet at March 31, 2008 
      reflected cash of $1.7 million, working capital of $3.8 million and no 
      long-term debt. Shareholders’ equity at March 
      31, 2008 totaled $4.1 million.
    
    
      On January 31, 2008, TMA paid a $0.21 per share cash dividend for 
      shareholders of record on December 1, 2007. This is the latest dividend 
      payment to shareholders and an increase of 24% over last year’s 
      cash dividend of $0.17 per share.
    
    
      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 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
        
      
      
        
        
        
        
        
          3/31/2008
        
        
        
        
        
        
        
        
          3/31/2007
        
        
        
        
        
        
        
        
          3/31/2008
        
        
        
        
        
        
        
        
          3/31/2007
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Revenues
        
        
          $
        
        
          4,278,750
        
        
           
        
        
        
        
          $
        
        
          3,199,947
        
        
           
        
        
        
        
          $
        
        
          16,592,849
        
        
           
        
        
        
        
          $
        
        
          15,002,688
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Distributor Related Expenses
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Distributor bonus & commissions paid
        
        
        
        
          1,573,497
        
        
        
        
        
        
        
        
          690,194
        
        
        
        
        
        
        
        
          9,306,398
        
        
        
        
        
        
        
        
          7,963,988
        
        
        
      
      
        
          Distributor benefits & processing
        
        
           
        
        
          702,144
        
        
           
        
        
        
        
           
        
        
          746,456
        
        
           
        
        
        
        
           
        
        
          2,523,122
        
        
           
        
        
        
        
           
        
        
          2,814,959
        
        
           
        
      
      
        
          Total
        
        
           
        
        
          2,275,641
        
        
           
        
        
        
        
           
        
        
          1,436,650
        
        
           
        
        
        
        
           
        
        
          11,829,520
        
        
           
        
        
        
        
           
        
        
          10,778,947
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net Operating Revenue
        
        
        
        
          2,003,109
        
        
        
        
        
        
        
        
          1,763,297
        
        
        
        
        
        
        
        
          4,763,329
        
        
        
        
        
        
        
        
          4,223,741
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating Expenses
        
        
           
        
        
          842,528
        
        
           
        
        
        
        
           
        
        
          822,384
        
        
           
        
        
        
        
           
        
        
          2,699,519
        
        
           
        
        
        
        
           
        
        
          2,875,577
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating Income
        
        
        
        
          1,160,581
        
        
        
        
        
        
        
        
          940,913
        
        
        
        
        
        
        
        
          2,063,810
        
        
        
        
        
        
        
        
          1,348,164
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other Income (Expense)
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Interest & dividend income [net]
        
        
        
        
          31,341
        
        
        
        
        
        
        
        
          25,595
        
        
        
        
        
        
        
        
          103,800
        
        
        
        
        
        
        
        
          55,733
        
        
        
      
      
        
          
            Realized & unrealized gains [losses]on 
            investments (net)
          
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
          (601,815
        
        
          )
        
        
        
        
        
        
          (35,150
        
        
          )
        
        
        
        
        
        
          (1,295,397
        
        
          )
        
        
        
        
        
        
          (40,679
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Interest expense
        
        
           
        
        
          (5,466
        
        
          )
        
        
        
        
           
        
        
          (1,354
        
        
          )
        
        
        
        
           
        
        
          (7,529
        
        
          )
        
        
        
        
           
        
        
          (15,762
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income (Loss) Before Provision for Income Tax
        
        
        
        
          584,641
        
        
        
        
        
        
        
        
          930,004
        
        
        
        
        
        
        
        
          864,684
        
        
        
        
        
        
        
        
          1,347,456
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Benefit (Provision) for income taxes
        
        
           
        
        
          (242,844
        
        
          )
        
        
        
        
           
        
        
          (293,424
        
        
          )
        
        
        
        
           
        
        
          (342,244
        
        
          )
        
        
        
        
           
        
        
          (459,424
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net Income (Loss)
        
        
           
        
        
          341,797
        
        
           
        
        
        
        
          $
        
        
          636,580
        
        
           
        
        
        
        
          $
        
        
          522,440
        
        
           
        
        
        
        
          $
        
        
          888,032
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Average Shares Outstanding
        
        
        
        
          1,945,702
        
        
        
        
        
        
        
        
          2,001,360
        
        
        
        
        
        
        
        
          1,945,702
        
        
        
        
        
        
        
        
          2,001,360
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating Income per Share
        
        
          $
        
        
          0.60
        
        
        
        
        
        
          $
        
        
          0.47
        
        
        
        
        
        
          $
        
        
          1.06
        
        
        
        
        
        
          $
        
        
          0.67
        
        
        
      
      
        
          Net Income (Loss) per Share
        
        
          $
        
        
          0.18
        
        
        
        
        
        
          $
        
        
          0.32
        
        
        
        
        
        
          $
        
        
          0.27
        
        
        
        
        
        
          $
        
        
          0.44
        
        
        
      
    
    
      
        
          
            CONSOLIDATED SELECTED BALANCE SHEET ITEMS
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          As of
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Assets
        
        
        
        
        
        
          3/31/2008
        
        
        
        
        
        
          3/31/2007
        
      
      
        
          Current Assets
        
        
        
        
        
        
        
        
        
      
      
        
          Cash
        
        
        
        
          $
        
        
          1,709,172
        
        
        
        
          $
        
        
          1,283,240
        
      
      
        
          Receivables
        
        
        
        
        
        
          4,529,119
        
        
        
        
        
        
          4,389,604
        
      
      
        
          Investments
        
        
        
        
        
        
          2,256,120
        
        
        
        
        
        
          2,715,997
        
      
      
        
          Other
        
        
        
        
           
        
        
          421,698
        
        
        
        
           
        
        
          140,488
        
      
      
        
          Total Current Assets
        
        
        
        
        
        
          8,916,109
        
        
        
        
        
        
          8,529,329
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other Non Current Assets
        
        
        
        
           
        
        
          289,792
        
        
        
        
           
        
        
          367,570
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Assets
        
        
        
        
          $
        
        
          9,205,901
        
        
        
        
          $
        
        
          8,896,899
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Liabilities & Stockholders' Equity
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Current Liabilities
        
        
        
        
          $
        
        
          5,084,543
        
        
        
        
          $
        
        
          4,707,408
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Liabilities
        
        
        
        
        
        
          5,084,543
        
        
        
        
        
        
          4,707,408
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Stockholders' Equity
        
        
        
        
           
        
        
          4,121,358
        
        
        
        
           
        
        
          4,189,491
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Liabilities & Stockholders' Equity
        
        
        
        
          $
        
        
          9,205,901
        
        
        
        
          $
        
        
          8,896,899