FY 2009 Third Quarter Financial Highlights * Revenue up 40% to $6.3 million * Operating income increased 70% to $402,471, or $0.21 per share * Operating margin improved to 6.4% from 5.3% * Non-operating realized and unrealized losses on investments resulted in net loss of $225,320
ST. LOUIS, May 4, 2009 (GLOBE NEWSWIRE) -- 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 third quarter and nine months ended December 31, 2008.
Timothy M. Klusas, TMA's President, stated, "We achieved over 40% growth in revenues and improved our operating margins, primarily driven by the benefits of certain initiatives undertaken over the last 2 years. We have targeted cost-effective ways for our independent members to grow their businesses. The expansion of our network and product offering from well-known carriers ING, Met Life and Transamerica, which are now fully integrated into our sales network, has provided a greater spectrum of insurance products for our members. Our annuity business is also gaining traction among our existing distributors, providing them a new potential revenue stream with minimal cost. Finally, we believe that the bonus and benefit package that we designed in March 2007 to incentivize members has allowed these distributors to increase their profitability and cost-effectively grow their businesses. For a company such as TMA, our value proposition is centered on providing independent brokerage agencies with the means to compete. We are gratified by our results over the past few years, and will continue to focus on potential growth opportunities for both TMA and our members."
Mr. Klusas continued, "While we are very pleased with the continued and sustained growth of our core operations, we recognize the effect that our investment portfolio has had on the Company's bottom line. We have moved the majority of our investment portfolio into U.S. Treasuries and money market accounts, and continue to regularly monitor the remaining portion of our equity portfolio, which our Investment Committee has targeted at less than 33% of our investable assets at December 31, 2008. Finally, I would like to compliment our members and employees for their focus on their businesses and their dedication to keeping their customers informed during a tumultuous time in our business."
Subsequent to the end of the quarter, TMA Director and founding member Jim Stewart of Charlotte, NC, passed away in late March. "Jim played an integral role in the founding of our Company in 1996 and has generously shared his vision and counsel with us as a member of the Board of Directors since that time. His friendship and leadership will be missed by all at TMA, and our thoughts continue to be with his family," said Mr. Klusas.
Fiscal 2009 Third Quarter Financial Highlights
* Total revenues for the fiscal 2009 third quarter ended December 31, 2008 increased 40% to $6.3 million from $4.5 million for the three-month period ended December 31, 2007. The increase was due to the full integration of a larger number of insurance carriers through TMA's sales network, further utilization of the Company's incentive program by TMA's members, and growth in annuity product distribution. * Distributor bonus and commissions increased to $4.6 million in the fiscal 2009 third quarter from $3.1 million in the same period last year, and benefits and processing expenses increased to $655,000 from $521,000. These increases were largely due to distributors taking advantage of TMA's incentive programs. * Net operating revenue (gross profit) increased to $1.1 million in the fiscal 2009 third quarter from $881,000 in the comparable fiscal 2008 period. The Company's gross profit margins declined to 17.3% from 19.6% in the prior year period, largely due to higher bonus payments as distributors are benefiting from changes in the new incentive structures. The gross profit margins remained essentially flat sequentially from the 17.3% reported in the second quarter of fiscal 2009. * Operating expenses for the fiscal 2009 third quarter ended December 31, 2008 decreased to $628,000, or 9.9% of revenues, from $645,000, or 14.4% of revenues, in the prior three-month period. These decreases are largely due to continued improvement in operating efficiencies at the Company's centralized processing center in Omaha and leveraging TMA's infrastructure to accommodate a higher revenue base. * Operating income rose 70% to $402,000 in the fiscal 2009 third quarter, or 6.4% of revenues, from operating income of $237,000, or 5.3% of revenues, for the prior year period. * Realized and unrealized losses on investments during the period totaled $363,000, compared to realized and unrealized losses of $814,000 for the fiscal 2008 third quarter. The Company continues to closely monitor its investment holdings, and reiterates these non-operating losses have not meaningfully affected TMA's ability to execute any of its strategic initiatives. * The Company reported a net loss for the fiscal 2009 third quarter of $225,000, or $0.12 per share, as compared to a net loss of $323,000, or $0.16 per share, for the fiscal 2008 third quarter.
Fiscal 2009 Nine Month Highlights
* Total revenues for the fiscal 2009 nine month period ended December 31, 2008 were $16.9 million, up 37% from $12.3 million for the first nine months of fiscal 2008. * Distributor bonus and commissions for the fiscal 2009 nine month period increased to $11.7 million from $7.8 million in the first nine months of fiscal 2008, while benefits and processing expenses increased to $2.0 million from $1.8 million in the prior year period. * Net operating revenues for the fiscal 2009 nine month period increased 15.5% to $3.2 million, or 18.8% of revenues, from $2.7 million, or 22.3% of revenues, for the prior year period. * Operating expenses remained essentially flat at $2.1 million for both the fiscal 2009 and fiscal 2008 nine month periods. Operating income increased to $1.1 million from $677,000 in the nine month period ended December 31, 2007. * Realized and unrealized losses on investments for the fiscal 2009 nine month period was $774,000, compared to realized and unrealized losses of $694,000 for the prior year period. * The Company reported a net loss for the fiscal 2009 nine month period of $26,000, or $0.01 per share, as compared to net income of $34,000, or $0.02 per share, in the prior year period.
Balance Sheet Information
TMA's balance sheet at December 31, 2008 reflected cash and cash equivalents of $2.2 million, working capital of $3.4 million and no long-term debt. Shareholders' equity at December 31, 2008 totaled $3.6 million.
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.
The Marketing Alliance Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5978
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
9 Months Ended
12/31/2008 12/31/2007 12/31/2008 12/31/2007
Revenues $6,293,505 $4,490,143 $16,897,719 $12,314,099
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Distributor Related
Expenses
Distributor bonus
& commissions $4,554,599 3,088,197 11,735,617 7,757,467
Distributor
benefits &
processing 654,761 520,545 1,997,817 1,816,436
---------- ---------- ----------- -----------
Total 5,209,360 3,608,742 13,733,434 9,573,903
---------- ---------- ----------- -----------
Net Operating
Revenue 1,084,145 881,401 3,164,285 2,740,196
Operating Expenses 628,299 644,706 2,055,332 2,063,360
---------- ---------- ----------- -----------
Operating Income 402,471 236,695 1,108,953 676,836
Other Income
(Expense)
Interest & dividend
income (net) 27,506 25,517 72,019 72,459
Realized &
unrealized
(losses) on
investments (net) (362,613) (814,330) (773,733) (693,582)
Interest expense (1,684) (40) (5,940) (2,063)
---------- ---------- ----------- -----------
Income (Loss) Before
Provision for Income
Tax 65,680 (552,158) 401,299 53,650
Benefit (Provision)
for income taxes (291,000) 229,000 (427,000) (20,000)
---------- ---------- ----------- -----------
Net Income
(Loss) $ (225,320) $ (323,158) $ (25,701) $ 33,650
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Average Shares
Outstanding 1,945,702 1,977,675 1,945,702 1,977,675
Operating Income
per Share $ 0.21 $ 0.12 $ 0.57 $ 0.34
Net Income (Loss)
per Share $ (0.12) $ (0.16) $ (0.01) $ 0.02
Consolidated Balance Sheet Items
As of
Assets 12/31/2008 3/31/2008
Current Assets
Cash & Equivalents $ 2,219,049 $ 1,709,172
Receivables 5,040,682 4,529,119
US Treasuries 800,000
Investments 1,106,011 2,256,120
Other 743,744 421,698
----------- -----------
Total Current Assets 9,909,486 8,916,109
Other Non Current Assets 205,076 289,792
----------- -----------
Total Assets $10,114,562 $ 9,205,901
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Liabilities & Stockholders' Equity
Total Current Liabilities $ 6,466,421 $ 5,084,543
----------- -----------
Total Liabilities 6,466,421 5,084,543
Stockholders' Equity 3,648,141 4,121,358
----------- -----------
Liabilities & Stockholders' Equity $10,114,562 $ 9,205,901
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