Marketing Alliance (PK) (USOTC:MAAL)
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Highlights for the three-month period ended March 31,
2005
-- Company changes fiscal year end to March 31st
-- Net income of $384,000, or $0.19 per share
-- Revenues increase 5% to $3.9 million
-- Balance sheet remains solid with $2.5 million of working
capital and no long-term debt.
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 the three months ended March 31, 2005.
As previously announced, TMA's Board of Directors approved a
change in the Company's fiscal year to the period ending March 31st
from a calendar year ending on December 31st. The Company decided to
make this change as a means of better aligning its fiscal year with
the business cycle of its member agencies. The next quarterly period
the Company will report will be its fiscal first quarter ended June
30, 2005.
Revenues for the three-month period ended March 31, 2005 increased
to $3.9 million from $3.7 million in the same period last year,
largely due to internal growth among TMA's member agencies. Net
operating revenue, or gross profit, for the three months ended March
31, 2005 was $1.7 million, or 44% of revenues, down slightly from the
$1.8 million, or 48% of revenues, reported in the same period last
year, due primarily to increased bonuses earned by TMA distributors.
Operating expenses for the three-month period ended March 31, 2005
rose 25% to $930,000 from the same prior year period. This increase
was largely due to severance packages given to the Company's former
CEO and other personnel, and start-up costs relating to the Company's
TMA Marketing, Inc. subsidiary, which provides annuity products to TMA
member agencies. Despite these non-recurring charges, TMA reported
operating income of $775,000 in the three-month period ended March 31,
2005, as compared to operating income of $1.0 million in the
comparable prior year period.
The Company reported net income of $384,000, or $0.19 per share,
in the three month period ended March 31, 2005, versus net income of
$721,000, or $0.35 per share, for the same period last year. The
primary reason for this decline is a realized and unrealized loss 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.
Ronald D. Verzone, Chairman of TMA, stated, "Our focus over the
past year has been to aggressively address potential areas of growth
for the Company, while still adhering to our core philosophy of
providing our independent member agencies with the means to compete
within their marketplace. One of TMA's initiatives was the opening of
the Omaha Business Center in May 2004. The Business Center offers
TMA's distributors increased efficiency levels for each transaction,
as all aspects of the application processing cycle are handled
internally. This allows our independent agents to allocate more time
and resources to growing their business. With the growth of the
business center, we are optimistic that we can continue to attract new
agencies to our expanding network."
Mr. Verzone concluded, "We enter our next fiscal year with a great
opportunity to leverage our investments in the Business Center and TMA
Marketing Inc., which allows our distributors that do not presently
market annuity products to enter a new profit center without any
start-up costs. We are pleased to have successfully completed both of
these initiatives without incurring any long-term debt, and feel that
by continuing to enhance the available products and capabilities of
our distributors, we are fueling TMA's growth."
ABOUT THE MARKETING ALLIANCE, INC.
Headquartered in Pittsburgh, PA, TMA is one 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 approximately 150 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.
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-
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Consolidated Statement of Operations
Quarter Ended
3/31/2005 3/31/2004
Revenues $3,877,316 $3,689,554
------------ -----------
Distributor Related Expenses
Distributor bonus & commissions paid 1,473,294 1,129,338
Distributor benefits & processing 698,858 772,380
------------ -----------
Total 2,172,152 1,901,718
------------ -----------
Net Operating Revenue 1,705,164 1,787,836
Operating Expenses 930,446 742,444
------------ -----------
Operating Income 774,718 1,045,392
Other Income (Expense)
Interest & dividend Income (net) 9,087 5,811
Realized & unrealized gains (losses)
on investments (net) (223,678) 205,827
Interest expense (3,059) (6,925)
Other (20,373) (18,454)
------------ -----------
Income Before Provision for Income Tax 536,695 1,231,651
Provision for income taxes (152,778) (510,558)
------------ -----------
Net Income $ 383,917 $ 721,093
============ ===========
Shares Outstanding 2,036,747 2,036,747
Operating Income per Share $ 0.38 $ 0.51
Net Income per Share $ 0.19 $ 0.35
Consolidated Selected Balance Sheet Items
As of
Assets 3/31/2005 12/31/2004
Current Assets
Cash $ 451,228 $ 354,640
Receivables 4,776,861 2,538,925
Investments 1,929,600 4,861,673
Other 287,826 273,542
------------ -----------
Total Current Assets 7,445,515 8,028,780
Other Non Current Assets 460,754 490,563
------------ -----------
Total Assets $7,906,269 $8,519,343
============ ===========
Liabilities & Stockholders' Equity
Total Current Liabilities $4,941,478 $5,938,469
------------ -----------
Total Liabilities 4,941,478 5,938,469
Stockholders' Equity 2,964,791 2,580,874
------------ -----------
Liabilities & Stockholders' Equity $7,906,269 $8,519,343
============ ===========
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