The Marketing Alliance Announces Fiscal Year 2007 Year-End and Fourth Quarter Financial Results

  
    
  
  
    
      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 financial results 
      for its fiscal 2007 fourth quarter and year ended March 31, 2007 (see 
      attached tables).
    
    
      Timothy M. Klusas, TMA’s President, stated, “Higher 
      gross profit margins and operating margins during the fiscal 2007 fourth 
      quarter, despite lower revenues, demonstrates our success in meeting our 
      previously stated goal of improving TMA’s 
      operating performance by lowering expenses, gaining efficiencies, and 
      establishing an infrastructure to manage the growth and balance of 
      insurance products through the Company’s 
      distributors. We have also commenced initiatives to grow the business:
    
    
      
        In March, 2007, TMA implemented a new incentive plan designed to 
        encourage our members to drive additional business through TMA. 
        Importantly, this new plan allows our members to deliver insurance 
        products and utilize TMA’s benefits and 
        services that are tailored to needs of their customers. We are hopeful 
        that, over time, members who have previously used TMA for specific 
        purposes will recognize the wider breadth of services and products we 
        are now offering. While early, we are encouraged by the performance of 
        this new program.
      
      
        In the past 15 months, TMA has begun offering insurance products from 
        three new carriers: ING, Met Life Investors and Aviva / AmerUs 
        Indianapolis Life. As we have noted in the past, TMA begins 
        recognizing the first measurable revenues from these new products 
        approximately 6-9 months following the addition of the carrier to our 
        network. TMA’s goal is to continue exposing 
        these products to existing members, while also looking to add new 
        carriers to further expand our product offerings while also making 
        sure that TMA’s current carriers’ 
        business continues to expand and be profitable.”
      
    
    
      FISCAL FOURTH QUARTER 2007 REVIEW
    
    
      Revenues for the three-month period ended March 31, 2007 were $3.2 
      million as compared to $3.6 million in the 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. As a result of 
      lower revenues, TMA’s net operating revenue 
      (gross profit) declined to $1.7 million from $1.9 million. However, TMA’s 
      gross profit margin improved to 53.4% of revenues in the fiscal fourth 
      quarter of 2007 from 51.5% of revenues in the prior year period.
    
    
      TMA reported operating income of $940,933 during the three month period 
      ended March 31, 2007. The impact of lower revenues for the 2007 period 
      was offset by a $136,348 decline in operating expenses, which produced 
      an operating margin 29.4%. Operating income for the three months ended 
      March 31, 2006 was $962,644, or 26.6% of revenues.
    
    
      TMA reported net income of $636,581, or $0.31 per share for the fiscal 
      fourth quarter of 2007, versus net income of $779,377, or $0.38 per 
      share, for the fiscal fourth quarter of 2006. This decrease is primarily 
      due to a $35,150 realized and unrealized loss on investments in the 
      fiscal fourth quarter of 2007, as compared to a $338,520 gain on 
      investments during the prior year period. The Company’s 
      portfolio is comprised largely of investments in the banking industry 
      and is managed by third-party financial managers. Over the past five 
      years, TMA’s investment portfolio has yielded 
      a 17% annual return, including a return of 26% in fiscal 2006. However, 
      the sub-prime mortgage market and interest rate concerns led to a lower 
      than expected return in the fourth quarter and year-ended March 31, 
      2007. The Company continually assesses its investment strategy, adhering 
      to a philosophy of steady, long-term growth consistent with TMA’s 
      capital needs.
    
    
      FISCAL 2007 ANNUAL REVIEW
    
    
      As a result of the factors listed above, total revenues for fiscal 2007 
      were $15.0 million versus $16.0 
      million in fiscal 2006. Fiscal 2007 net operating revenue (gross profit) 
      decreased to $4.2 million from $4.3 million, but gross profit margins 
      increased to 28.2% from 27.1%. Fiscal 2007 operating income increased 
      25.8% to $1.3 million, or 9.0% of revenues, versus $1.1 million, or 6.7% 
      of revenues, in fiscal 2006. This marks the second consecutive year of 
      operating margin improvement. TMA reported net income of $888,032, or 
      $0.44 per share, for fiscal 2007, versus net income of $1.1 million, or 
      $0.52 per share, in fiscal 2006. The decline is largely due to the loss 
      on realized and unrealized investments noted above. On January 31, 2007, 
      the Company paid a $0.17 per share cash dividend for shareholders of 
      record on December 1, 2006. This is the latest dividend payment to 
      shareholders and an increase of 13% over last year’s 
      cash dividend of $0.15 per share.
    
    
      FINANCIAL CONDITION
    
    
      TMA’s balance sheet at March 31, 2007 
      reflected working capital of $3.8 million and no long-term debt. 
      Shareholders’ equity at March 31, 2007 
      increased 12.5% to $4.2 million from $3.7 million at March 31, 2006.
    
    
      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.
    
    
      
        
          Consolidated Statement of Operations
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          Quarter Ended
        
        
        
        
          Fiscal Year Ended
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
          3/31/2007
        
        
        
        
          3/31/2006
        
        
        
        
          3/31/2007
        
        
        
        
          3/31/2006
        
      
      
        
        
        
        
        
          
             
          
        
        
        
        
          
             
          
        
        
        
        
        
        
        
        
          
             
          
        
      
      
        
          Revenues
        
        
        
        
          $
        
        
          3,199,947
        
        
        
        
          $
        
        
          3,625,713
        
        
        
        
          
            $
          
        
        
          
            15,002,688
          
        
        
        
        
          $
        
        
          15,992,770
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Distributor Related Expenses
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Distributor bonus & commissions paid
        
        
        
        
        
        
          690,194
        
        
        
        
        
        
          1,068,023
        
        
        
        
        
        
          7,963,988
        
        
        
        
        
        
          9,007,138
        
      
      
        
          Distributor benefits & processing
        
        
        
        
           
        
        
          800,127
        
        
        
        
           
        
        
          690,005
        
        
        
        
           
        
        
          2,814,939
        
        
        
        
           
        
        
          2,658,594
        
      
      
        
          
            Total
          
        
        
        
        
           
        
        
          1,490,321
        
        
        
        
           
        
        
          1,758,028
        
        
        
        
           
        
        
          10,778,927
        
        
        
        
           
        
        
          11,665,732
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net Operating Revenue
        
        
        
        
        
        
          1,709,626
        
        
        
        
        
        
          1,867,685
        
        
        
        
        
        
          4,223,761
        
        
        
        
        
        
          4,327,038
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating Expenses
        
        
        
        
           
        
        
          768,693
        
        
        
        
           
        
        
          905,041
        
        
        
        
           
        
        
          2,875,577
        
        
        
        
           
        
        
          3,255,169
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating Income
        
        
        
        
        
        
          940,933
        
        
        
        
        
        
          962,644
        
        
        
        
        
        
          1,348,184
        
        
        
        
        
        
          1,071,869
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other Income (Expense)
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Interest & dividend income [net]
        
        
        
        
        
        
          25,576
        
        
        
        
        
        
          23,429
        
        
        
        
        
        
          55,713
        
        
        
        
        
        
          88,567
        
      
      
        
          
            Realized & unrealized gains [losses] 
            on investments (net)
          
        
        
        
        
        
        
          (35,150)
        
        
        
        
        
        
          338,520
        
        
        
        
        
        
          (40,679)
        
        
        
        
        
        
          672,647
        
      
      
        
          Interest expense
        
        
        
        
           
        
        
          (1,354)
        
        
        
        
           
        
        
          (6,690)
        
        
        
        
           
        
        
          (15,762)
        
        
        
        
           
        
        
          (11,315)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Income Before Tax
        
        
        
        
        
        
          930,005
        
        
        
        
        
        
          1,317,903
        
        
        
        
        
        
          1,347,456
        
        
        
        
        
        
          1,821,768
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Provision for income taxes
        
        
        
        
           
        
        
          (293,424)
        
        
        
        
           
        
        
          (538,526)
        
        
        
        
           
        
        
          (459,424)
        
        
        
        
           
        
        
          (758,526)
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net Income
        
        
        
        
          $
        
        
          636,581
        
        
        
        
          $
        
        
          779,377
        
        
        
        
          $
        
        
          888,032
        
        
        
        
          $
        
        
          1,063,242
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Shares Outstanding
        
        
        
        
        
        
          2,036,247
        
        
        
        
        
        
          2,036,747
        
        
        
        
        
        
          2,036,247
        
        
        
        
        
        
          2,036,747
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating Income per Share
        
        
        
        
          $
        
        
          0.46
        
        
        
        
          $
        
        
          0.47
        
        
        
        
          $
        
        
          0.66
        
        
        
        
          $
        
        
          0.53
        
      
      
        
          Net Income per Share
        
        
        
        
          $
        
        
          0.31
        
        
        
        
          $
        
        
          0.38
        
        
        
        
          $
        
        
          0.44
        
        
        
        
          $
        
        
          0.52
        
      
    
    
      
        
          Consolidated Selected Balance Sheet Items
        
      
      
        
        
        
        
        
          As of
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Assets
        
        
        
        
          3/31/2007
        
        
        
        
          3/31/2006
        
      
      
        
          Current Assets
        
        
        
        
        
        
        
        
        
      
      
        
          Cash
        
        
        
        
          $
        
        
          1,283,240
        
        
        
        
          $
        
        
          89,440
        
      
      
        
          Receivables
        
        
        
        
        
        
          2,715,997
        
        
        
        
        
        
          4,878,709
        
      
      
        
          Investments
        
        
        
        
        
        
          4,389,604
        
        
        
        
        
        
          2,963,394
        
      
      
        
          Other
        
        
        
        
           
        
        
          140,488
        
        
        
        
           
        
        
          525,035
        
      
      
        
          Total Current Assets
        
        
        
        
        
        
          8,529,329
        
        
        
        
        
        
          8,456,578
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other Non Current Assets
        
        
        
        
           
        
        
          367,571
        
        
        
        
           
        
        
          462,480
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Assets
        
        
        
        
          $
        
        
          8,896,900
        
        
        
        
          $
        
        
          8,919,058
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Liabilities & Stockholders' Equity
        
        
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Current Liabilities
        
        
        
        
          $
        
        
          4,707,409
        
        
        
        
          $
        
        
          5,196,537
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Total Liabilities
        
        
        
        
        
        
          4,707,409
        
        
        
        
        
        
          5,196,537
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Stockholders' Equity
        
        
        
        
           
        
        
          4,189,491
        
        
        
        
           
        
        
          3,722,521
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Liabilities & Stockholders' Equity
        
        
        
        
          $
        
        
          8,896,900
        
        
        
        
          $
        
        
          8,919,058