The Marketing Alliance Announces Fiscal 2009 Second Quarter and First Half Financial Results

  
    
  
  
    
      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 second quarter and first half ended 
      September 30, 2008.
    
    
      Timothy M. Klusas, TMA’s President, stated, “Our Company continued to 
      produce strong operating results in a difficult economic climate during 
      this quarter. TMA achieved over 39% growth in revenues, a 66% increase 
      in operating profit, and continued improvements in operating margins. We 
      have continued to realize the benefits of our operating initiatives 
      designed to streamline costs while delivering value-added insurance 
      products and services to our member base. Our ability to deliver these 
      services in a cost-effective manner generates substantial operating 
      leverage for TMA and provides our members with the tools they need to 
      help grow their businesses.”
    
    
      FISCAL 2009 SECOND QUARTER FINANCIAL 
      HIGHLIGHTS
    
    
      
        Total revenues for the three-month period ended September 30, 2008 
        increased 39% to $5.4 million from $3.9 million for the three-month 
        period ended September 30, 2007. The increase was due in part to 
        further sales penetration among a larger number of carriers in the 
        TMA’s network, including well-recognized providers such as ING and Met 
        Life.
      
      
        Distributor bonus and commissions increased to $3.8 million from $2.4 
        million in the same period last year, largely due to distributors 
        taking advantage of TMA’s new incentive programs. Benefits and 
        processing expenses decreased to $652,000 from $677,000 in the second 
        quarter of fiscal 2008, due in part to improvements in efficiencies at 
        the Company’s business processing center in Omaha, NE.
      
      
        Net operating revenue (gross profit) increased to $932,000 from 
        $808,000 in the comparable fiscal 2008 period. The Company’s gross 
        profit margins declined to 17.3% from 20.9% in the prior year period, 
        largely due to higher bonus payments as distributors are benefiting 
        from changes in the new incentive structures.
      
      
        Operating expenses for the three months ended September 30, 2008 were 
        down, to $611,000, or 11.3% of revenues, from $614,000, or 15.9% of 
        revenues, in the prior three-month period.
      
      
        Operating income rose 66% to $322,000, or 6.0% of revenues, from 
        operating income of $194,000, or 5.0% of revenues, for the prior year 
        period.
      
      
        Realized and unrealized losses on investments during the period 
        totaled $380,000, compared to a realized and unrealized gain of 
        $61,000 for the second quarter of fiscal 2008. The Company continues 
        to closely monitor its investment holdings, and reiterates that while 
        short-term unrealized gains and losses affect current earnings, it has 
        not meaningfully affected TMA’s ability to execute its strategic 
        initiatives.
      
      
        The Company reported a net loss for the fiscal 2009 second quarter of 
        $25,000, or $0.01 per share, as compared to net income of $167,000, or 
        $0.08 per share, for the fiscal 2008 second quarter. The net loss for 
        the fiscal 2009 period was to due to the above-referenced realized and 
        unrealized losses on investments.
      
    
    
      FISCAL 2009 FIRST HALF HIGHLIGHTS
    
    
      
        Total revenues for the first half of fiscal 2009 were $10.6 million, 
        up 36% from $7.8 million for the first half of fiscal 2008.
      
      
        Distributor bonus and commissions increased to $7.2 million from $4.7 
        million in the first half of fiscal 2008, while benefits and 
        processing expenses remained flat at $1.3 million for both half years.
      
      
        Net operating revenues for the six months ended September 30, 2008 
        increased 12% to $2.1 million from $1.9 million for the prior half 
        year.
      
      
        Operating expenses for the six months ended September 30, 2008 were 
        down 3%, to $1.37 million, or 13.0% or revenues, from $1.42 million, 
        or 18.1% of revenues, in the prior six-month period. Operating income 
        increased to $706,000 from $440,000 in the first half of fiscal 2008.
      
      
        Realized and unrealized loss on investments during the first half 
        totaled $411,000, compared to a realized and unrealized gain of 
        $123,000 for the first half of fiscal 2008.
      
      
        Net income was $200,000, or $0.10 per share, as compared to $357,000, 
        or $0.18 per share, in the first half of fiscal 2008.
      
    
    
      BOARD OF DIRECTORS ELECTS TIM KLUSAS 
      TO FINISH TERM OF LATE DIRECTOR K.V. DEY
    
    
      TMA also announced today the election of its President, Timothy M. 
      Klusas, as a member of the Company’s Board of Directors. Mr. Klusas 
      replaces K.V. Dey, who passed away earlier this year. Mr. Klusas will 
      serve the remainder of Mr. Dey’s term and the Company continues to have 
      a nine member Board of Directors.
    
    
      Mr. Klusas stated, “We are saddened by K.V.’s passing and we have 
      expressed our sympathies to his family. Everyone at TMA is appreciative 
      of his leadership and efforts on behalf of TMA’s shareholders and we 
      will miss him personally and professionally.”
    
    
      Also subsequent to the end of the quarter, three of TMA’s directors, 
      Gary Glassford, Jack Dewald and Art Jetter, were each re-elected by 
      shareholders as their terms expired to additional three-year terms.
    
    
      SELECTED OTHER FINANCIAL INFORMATION
    
    
      TMA’s balance sheet at September 30, 2008 reflected cash of $1.7 
      million, working capital of $4.1 million and no long-term debt. 
      Shareholders’ equity at September 30, 2008 totaled $4.3 million.
    
    
      TMA DECLARES 2008 CASH DIVIDEND
    
    
      The Company recently announced that its Board of Directors authorized a 
      $0.23 per share cash dividend for shareholders of record on December 1, 
      2008, to be paid on or about December 15, 2008. This is the latest 
      dividend payment to shareholders and an increase of 10% over last year’s 
      cash dividend of $0.21 per share.
    
    
      ABOUT THE MARKETING ALLIANCE, INC.
    
    
      Headquartered in St. Louis, MO, TMA is one of the largest organizations 
      offering 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. The Company provides its members 
      located across the country access to a wide array of life insurance and 
      annuity products from an extensive network of carriers.
    
    
      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
        
      
      
        
        
        
        
        
           
        
        
        
        
        
        
          6 Months Ended
        
      
      
        
        
        
        
        
          9/30/08
        
        
        
        
        
        
        
        
          9/30/07
        
        
        
        
        
        
        
        
          9/30/08
        
        
        
        
           
        
        
        
        
          9/30/07
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Revenues
        
        
          $
        
        
          5,379,392
        
        
           
        
        
        
        
          $
        
        
          3,869,093
        
        
           
        
        
        
        
          $
        
        
          10,604,214
        
        
           
        
        
        
        
          $
        
        
          7,823,956
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Distributor Related Expenses
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Distributor bonus & commissions paid
        
        
        
        
          3,795,305
        
        
        
        
        
        
        
        
          2,384,602
        
        
        
        
        
        
        
        
          7,181,018
        
        
        
        
        
        
        
        
          4,669,270
        
        
        
      
      
        
          Distributor benefits & processing
        
        
           
        
        
          652,008
        
        
           
        
        
        
        
           
        
        
          676,544
        
        
           
        
        
        
        
           
        
        
          1,343,056
        
        
           
        
        
        
        
           
        
        
          1,295,891
        
        
           
        
      
      
        
          Total
        
        
           
        
        
          4,447,313
        
        
           
        
        
        
        
           
        
        
          3,061,146
        
        
           
        
        
        
        
           
        
        
          8,524,074
        
        
           
        
        
        
        
           
        
        
          5,965,161
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net Operating Revenue
        
        
        
        
          932,079
        
        
        
        
        
        
        
        
          807,947
        
        
        
        
        
        
        
        
          2,080,140
        
        
        
        
        
        
        
        
          1,858,795
        
        
        
      
      
        
        
        
        
        
          17
        
        
          %
        
        
        
        
        
        
          21
        
        
          %
        
        
        
        
        
        
          20
        
        
          %
        
        
        
        
        
        
          24
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating Expenses
        
        
           
        
        
          610,528
        
        
           
        
        
        
        
           
        
        
          614,137
        
        
           
        
        
        
        
           
        
        
          1,373,658
        
        
           
        
        
        
        
           
        
        
          1,418,654
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating Income
        
        
        
        
          321,551
        
        
        
        
        
        
        
        
          193,810
        
        
        
        
        
        
        
        
          706,482
        
        
        
        
        
        
        
        
          440,141
        
        
        
      
      
        
        
        
        
        
          6
        
        
          %
        
        
        
        
        
        
          5
        
        
          %
        
        
        
        
        
        
          7
        
        
          %
        
        
        
        
        
        
          6
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other Income (Expense)
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Interest & dividend income [net]
        
        
        
        
          23,878
        
        
        
        
        
        
        
        
          32,239
        
        
        
        
        
        
        
        
          44,513
        
        
        
        
        
        
        
        
          46,942
        
        
        
      
      
        
          Realized & unrealized gains [losses]
        
        
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          on investments (net)
        
        
        
        
          (379,975
        
        
          )
        
        
        
        
        
        
          60,833
        
        
        
        
        
        
        
        
          (411,120
        
        
          )
        
        
        
        
        
        
          120,748
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Interest expense
        
        
           
        
        
          (1,229
        
        
          )
        
        
        
        
           
        
        
          (1,182
        
        
          )
        
        
        
        
           
        
        
          (4,256
        
        
          )
        
        
        
        
           
        
        
          (2,023
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income (Loss) Before Provision for Income Tax
        
        
        
        
          (35,775
        
        
          )
        
        
        
        
        
        
          285,700
        
        
        
        
        
        
        
        
          335,619
        
        
        
        
        
        
        
        
          605,808
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Benefit (Provision) for income taxes
        
        
           
        
        
          11,000
        
        
           
        
        
        
        
           
        
        
          (119,000
        
        
          )
        
        
        
        
           
        
        
          (136,000
        
        
          )
        
        
        
        
           
        
        
          (249,000
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net Income (Loss)
        
        
          $
        
        
          (24,775
        
        
          )
        
        
        
        
          $
        
        
          166,700
        
        
           
        
        
        
        
          $
        
        
          199,619
        
        
           
        
        
        
        
          $
        
        
          356,808
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Average Shares Outstanding
        
        
        
        
          1,945,703
        
        
        
        
        
        
        
        
          1,977,675
        
        
        
        
        
        
        
        
          1,945,703
        
        
        
        
        
        
        
        
          1,977,675
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating Income per Share
        
        
          $
        
        
          0.17
        
        
        
        
        
        
          $
        
        
          0.10
        
        
        
        
        
        
          $
        
        
          0.36
        
        
        
        
        
        
          $
        
        
          0.22
        
        
        
      
      
        
          Net Income (Loss) per Share
        
        
          $
        
        
          (0.01
        
        
          )
        
        
        
        
          $
        
        
          0.08
        
        
        
        
        
        
          $
        
        
          0.10
        
        
        
        
        
        
          $
        
        
          0.18
        
        
        
      
    
    
    
    
      
        
          Consolidated Balance Sheet Items
        
      
      
        
        
        
           
        
        
           
        
        
           
        
        
           
        
        
          As of
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
        
        
      
      
        
          Assets
        
        
        
        
        
        
        
        
        
        
        
        
          9/30/2008
        
        
        
        
        
        
          3/31/2008
        
      
      
        
          Current Assets
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Cash & Equivalents
        
        
        
        
        
        
        
        
        
        
          $
        
        
          1,692,365
        
        
        
        
          $
        
        
          1,709,172
        
      
      
        
          Receivables
        
        
        
        
        
        
        
        
        
        
        
        
          4,468,009
        
        
        
        
        
        
          4,497,987
        
      
      
        
          Investments
        
        
        
        
        
        
        
        
        
        
        
        
          2,510,005
        
        
        
        
        
        
          2,715,997
        
      
      
        
          Other
        
        
        
        
        
        
        
        
        
        
           
        
        
          440,545
        
        
        
        
           
        
        
          32,105
        
      
      
        
          Total Current Assets
        
        
        
        
        
        
        
        
        
        
        
        
          9,110,924
        
        
        
        
        
        
          8,916,109
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other Non Current Assets
        
        
        
        
        
        
        
        
        
        
           
        
        
          235,027
        
        
        
        
           
        
        
          289,792
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Assets
        
        
        
        
        
        
        
        
        
        
          $
        
        
          9,345,951
        
        
        
        
          $
        
        
          9,205,901
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Liabilities & Stockholders' Equity
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Current Liabilities
        
        
        
        
        
        
        
        
        
        
          $
        
        
          5,024,978
        
        
        
        
          $
        
        
          5,084,543
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Liabilities
        
        
        
        
        
        
        
        
        
        
        
        
          5,024,978
        
        
        
        
        
        
          5,084,543
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Stockholders' Equity
        
        
        
        
        
        
        
        
        
        
           
        
        
          4,320,973
        
        
        
        
           
        
        
          4,121,358
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Liabilities & Stockholders' Equity
        
        
        
        
        
        
        
        
        
        
          $
        
        
          9,345,951
        
        
        
        
          $
        
        
          9,205,901