Marketing Alliance (PK) (USOTC:MAAL)
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The Marketing Alliance, Inc. (Pink Sheets: MAAL):
BUSINESS HIGHLIGHTS
-- Net income increases 103% to $779,377, or $0.38 per share, in
Q4 FY'06 from $383,927 in Q4 FY'05
-- Third consecutive quarter of year-over-year operating margin
improvement
-- Solid balance sheet with $3.3 million of working capital and
no long-term debt at March 31, 2006
-- Company relocates TMA Marketing, Inc. subsidiary to corporate
headquarters in St. Louis
-- Appoints two seasoned industry veterans to key management
positions
The Marketing Alliance, Inc. (Pink Sheets: MAAL) ("TMA" or the
"Company"), a consortium of independent life insurance brokerage
general agencies located throughout the United States, today announced
its financial results for its fiscal 2006 fourth quarter and year
ended March 31, 2006.
Timothy M. Klusas, TMA's President, stated, "Our focus throughout
the past year has been to improve TMA's operating performance by
lowering expenses, gaining efficiencies within our operations and
establishing an infrastructure to manage the growth and balance of
insurance products through the Company's distributors. We are pleased
with our fourth quarter results, which includes year-over-year
improvements in the Company's operating margin for the third
consecutive quarter, despite slightly lower sales. Throughout this
period, TMA has remained committed to providing our members with a
cost-efficient level of service and support that enhances their
ability to grow more profitably and increase their scale while
maintaining their independence."
FISCAL FOURTH QUARTER 2006 REVIEW
Revenues reported by the Company for the three-month period ended
March 31, 2006 were $3.6 million versus the $3.9 million in same
period for the prior year. The decline was in part due to the
consolidation of certain insurance carriers, whose products are sold
through TMA. Improved gross profit and lower total operating expenses
resulted in a 28% increase in operating income to $993,076.
The Company reported a 103% increase in net income of $779,377, or
$0.38 per share, for the fiscal fourth quarter of 2006, versus net
income of $383,927, or $0.19 per share, for the fourth quarter of
fiscal 2005. This increase is primarily due to higher operating income
and an improvement of $562,198 in realized and unrealized gains on
investments during the period. In April 2005, the Company reassessed
its investment strategy, which previously consisted of a portfolio
largely containing equity investments in regional banks. TMA has now
shifted a large majority of its investment portfolio to third-party
financial managers, with a focus on steady, long-term growth
consistent with TMA's working capital needs.
FISCAL 2006 ANNUAL REVIEW
As a result of the factors listed above, total revenues for fiscal
2006 were $16.0 million, up from $16.7 million in fiscal 2005. Fiscal
2006 operating income increased 80% to $1.1 million, or 6.6% of
revenues, versus $587,474, or 3.5% of revenues, in fiscal 2005. TMA
reported a 369% increase in net income of $1.1 million, or $0.52 per
share, for fiscal 2006, versus net income of $226,463, or $0.11 per
share, in fiscal 2005.
COMPANY RELOCATES TMA MARKETING TO ST. LOUIS
TMA recently announced the relocation of its subsidiary, TMA
Marketing, Inc. ("TMAM"), to its corporate headquarters in St. Louis,
MO. TMAM represents TMA members in offering non-traditional insurance
products to both existing and new customers, with a focus on providing
distributors a turnkey annuity marketing and support program from a
variety of insurance carriers. TMAM allows the Company's independent
distributors who are not currently marketing annuity products to do
so, thereby establishing a new profit center for their agency, without
incurring significant start-up costs and capital investment.
Mr. Klusas commented, "We relocated our corporate headquarters to
St. Louis earlier this year in an effort to consolidate these
operations into one centralized location. We felt that moving TMAM to
St. Louis was instrumental in this effort and will help us create
further operating efficiencies, while also positioning TMAM to better
provide annuity services to our member agencies, which are spread
throughout the country."
COMPANY APPOINTS TWO INDUSTRY EXECUTIVES TO KEY POSITIONS
TMA also announced two recent executive appointments as part of
its continuing effort to better serve its member agencies and develop
its management depth and intellectual capital. Effective February 1,
Alan Protzel, CLU, ChFC, was named Director of Agency Development. Mr.
Protzel has 29 years of industry experience with insurance companies
such as MetLife and General American, and has spent the last 20 years
in independent life insurance distribution. Mr. Protzel is responsible
for all aspects of TMA's life insurance service business, including
the Life Service and Support Center.
The Company also appointed Laura Hahn as Managing Director of
TMAM's Annuity Sales and Service Center. Ms. Hahn brings over 27 years
of experience in the insurance and financial services industries to
TMA. Laura's past roles have included operations management for
General American Life Insurance Co., Regional Vice President for
GenAmerica Brokerage and most recently at MetLife as Director of
National Recruiting for Walnut Street Securities, Inc. Laura is
responsible for all aspects of the Company's Annuity business,
including the Annuity Sales and Service Center.
Mr. Klusas commented, "We are fortunate to have two seasoned
insurance executives such as Alan and Laura filling these important
leadership roles. Laura will ensure that TMA continues expand our
independent agencies' market presence through the offering of annuity
products, while Alan will help build upon our success in cultivating
strong relationships with our distributors and insurance carriers.
Both Alan and Laura will be based in our corporate headquarters in St.
Louis, and we have already seen an immediate impact from their
presence."
FINANCIAL CONDITION
TMA's balance sheet at March 31, 2006 reflected working capital of
$3.3 million and no long-term debt. Shareholders' equity at March 31,
2006 increased 26% to $3.7 million from $3.0 million at March 31,
2005.
Mr. Klusas concluded, "TMA continues to progress steadily towards
fulfilling its potential as the premier wholesale source of life
insurance products by companies, distributors, employees, vendors and
shareholders. Our primary objective in the coming year is to continue
the progress we have made in streamlining our operations, leverage our
infrastructure, and concentrate on laying a foundation conducive for
top-line growth. We expect to achieve this by adding the industry's
most well respected life and annuity carriers to our network, and
therein offering our distributors a broader product matrix. We felt
that our improvement on the bottom line was a strong step, and we look
forward to our near and long-term future with confidence."
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 traded in the "pink sheets" (www.pinksheets.com)
under the symbol "MAAL". These shares may be purchased or sold through
any broker, or through a market-maker in TMA stock, such as Robotti &
Company.
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.
-0-
*T
Consolidated Statement of Operations
Quarter Ended Year to Date
12 Months Ended
3/31/2006 3/31/2005 3/31/2006 03/31/2005
Revenues $3,625,713 $3,877,316 $15,992,770 $16,675,340
---------- ---------- ----------- -----------
Distributor Related
Expenses
Distributor bonus &
commissions paid 1,068,023 1,473,294 9,007,138 10,123,773
Business processing
& distributor
costs 690,005 698,858 2,658,594 2,925,210
----------- ----------- ------------ ------------
Total 1,758,028 2,172,152 11,665,732 13,048,983
---------- ---------- ----------- -----------
Net Operating
Revenue 1,867,685 1,705,164 4,327,038 3,626,357
Operating Expenses 874,609 930,446 3,270,677 3,038,883
---------- ---------- ----------- -----------
Operating Income 993,076 774,718 1,056,361 587,474
Other Income
(Expense)
Interest & dividend
Income (net) 23,429 9,097 88,567 66,084
Realized &
unrealized gains
(losses) on
investments (net) 338,520 (223,678) 672,647 (179,881)
Interest expense (6,690) (3,059) (11,315) (15,243)
Other (30,751) (20,373) 15,508 (125,569)
---------- ---------- ----------- -----------
Income Before Tax 1,317,584 536,705 1,821,768 332,865
Provision for
income taxes (538,207) (152,778) (758,526) (106,402)
---------- ---------- ----------- -----------
Net Income $ 779,377 $ 383,927 $ 1,063,242 $ 226,463
========== ========== =========== ===========
Shares Outstanding 2,036,747 2,036,747 2,036,747 2,036,747
Operating Income
per Share $ 0.49 $ 0.38 $ 0.52 $ 0.29
Net Income per
Share $ 0.38 $ 0.19 $ 0.52 $ 0.11
Consolidated Selected Balance Sheet Items
As of
Assets 3/31/2006 3/31/2005
Current Assets
Cash $ 89,440 $ 451,228
Receivables 4,878,709 4,776,861
Investments 2,963,394 1,929,600
Other 525,035 287,826
---------- ----------
Total Current Assets 8,456,578 7,445,515
Other Non Current Assets 462,480 460,754
---------- ----------
Total Assets $8,919,058 $7,906,269
========== ==========
Liabilities & Stockholders' Equity
Total Current Liabilities $5,196,537 $4,941,478
---------- ----------
Total Liabilities 5,196,537 4,941,478
Stockholders' Equity 3,722,521 2,964,791
---------- ----------
Liabilities & Stockholders' Equity $8,919,058 $7,906,269
========== ==========
*T