MAAL Marketing Alliance Inc (PK)

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 its fiscal third quarter ended December 31, 2007. Timothy M. Klusas, TMA�s President, stated, �We think that our Company is focusing on the right things. I thought it might be an appropriate time to outline some of the recent progress we have made, and the direction that we are headed. In an effort to describe our business in general, we are a distribution company and the products we distribute are insurance and annuity products, from insurance carriers to independent insurance agencies. We believe this is a business that requires a streamlined, cost-efficient infrastructure to operate most profitably. When we consolidated our sales and marketing offices into one centralized facility in 2006, the goal was to begin to centralize our operations and create a platform on which to handle incremental business growth without significant increases in fixed costs. This was a difficult and lengthy process that involved a substantial restructuring, but one that we feel we have made good progress upon. We remained focused on improving margins and operating profitably throughout this period, and plan to continue to take advantage of increased efficiencies.� Mr. Klusas continued, �With an infrastructure in place, we have turned our attention to growth initiatives - building on a wide array of different life and annuity products to offer our agencies from a deeper network of carriers. Our operating results during the fiscal third quarter are attributable to a number of these initiatives, and we were pleased to achieve a 6% increase in revenues for the period. This increase is attributed to growth in our wholly-owned annuity business, TMA Marketing, Inc. (�TMAM�), as well as benefits from additions to our carrier network. I would like to specifically address the benefits and impact of these initiatives: Our wholly-owned �turnkey� annuity business, TMAM, which was previously only targeted at distributors new to the annuity business, now functions on multiple levels as a result of a new incentive plan launched in March 2007. Previously, TMAM engaged agencies looking to enter the annuity business and build their product offerings and back office processing from the ground up. While we achieved success offering this to our distributors, we found that many of our members who already had existing annuity businesses in place wanted to take advantage of an expanded offering of services and products to suit their customers� needs. With our flexibility, we are now attracting these agencies, providing them with value added services from sales support to business placement, and have nurtured a new revenue stream for our Company. We are hopeful that as we expand our annuity business, we will be able to continue to offer a wider variety of offerings for our distributors, while at the same time contributing to our top-line with minimal incremental operating cost. We are also now recognizing more revenue from the additions of new carriers and a wider product offering to our network, most specifically ING, MetLife, and Aviva. We expect to see revenues continue to trend higher during the next 12-24 months, as these carriers are more fully integrated into our sales network, and consider new additions to our network as a catalyst for future growth.� Mr. Klusas concluded, �Although our operations are in a strong position, our net earnings for the period were negatively impacted by a loss on investments. These holdings are managed in part by third parties and consist largely of equities. We continue to monitor our holdings and will adjust as necessary for the changing economic climate. We are confident in our investment management providers based on their track records. We are supported by a strong balance sheet, and feel that the strides made by the Company in the past three years have placed TMA in a better position to achieve growth through a wider variety of channels. We look forward to keeping all of our shareholders apprised of our progress in the coming months.� FISCAL 2008 THIRD QUARTER REVIEW Total revenues for the three-month period ended December 31, 2007 increased 6% to $4.5 million from $4.2 million for the three-month period ended December 31, 2006. The increase in revenues was due to increased volume at TMA�s wholly-owned subsidiary, TMA Marketing as well as higher revenues from the addition of ING, MetLife and Aviva to its carrier network. As a result of higher revenues, TMA�s net operating revenue (gross profit) grew from the comparable fiscal 2007 period. Operating income for the fiscal third quarter increased to $311,088, or 6.9% of revenues, from $179,107, or 4.2% of revenues in the prior third quarter. Operating expenses for the period decreased to $590,337, or 13.1% of revenues, from $655,410, or 15.5% of revenues, in the third quarter of fiscal 2007. The decrease in operating expenses is due to the aforementioned centralization in the Company�s business and increasing economies of scale. For the fiscal 2008 third quarter, TMA reported a net loss of ($274,163), or ($0.14) per share, based on 1,977,675 shares outstanding, versus a net income of $156,957, or $0.08 per share, based on 2,036,747 shares outstanding, for the fiscal 2007 third quarter. The net loss for the period is primarily due to a realized and unrealized loss on investments of ($814,330), compared to a gain of $72,778 for the prior year period. The decrease in shares outstanding is due to the Company�s execution of its share repurchase program. FISCAL 2007 NINE MONTH REVIEW Total revenues for the first nine months of fiscal 2008 were $12.3 million, an increase of 4% versus $11.8 million for the same period in fiscal 2007. Fiscal 2007 nine month operating income increased 122% to $903,229 from $407,251 for the first nine months of fiscal 2007. TMA reported net income of $180,643, or $0.09 per share, for the nine-month period ended December 31, 2007, versus net income of $251,452 or $0.12 per share, in the prior year period. FINANCIAL CONDITION TMA�s balance sheet at December 31, 2007 reflected working capital of $3.6 million and no long-term debt. Shareholders� equity at December 31, 2007 totaled $3.9 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. 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 12/31/2007 12/31/2006 12/31/2007 12/31/2006 � Revenues $ 4,490,143 � $ 4,237,426 � $ 12,314,099 � $ 11,802,741 � � Distributor Related Expenses Distributor bonus & commissions paid $ 3,063,631 2,731,741 7,732,901 7,273,794 Distributor benefits & processing � 525,087 � � 671,168 � � 1,820,978 � � 2,068,503 � Total � 3,588,718 � � 3,402,909 � � 9,553,879 � � 9,342,297 � � Net Operating Revenue 901,425 834,517 2,760,220 2,460,444 � � Operating Expenses � 590,337 � � 655,410 � � 1,856,991 � � 2,053,193 � � Operating Income 311,088 179,107 903,229 407,251 � � Other Income (Expense) Interest & dividend income [net] 25,517 14,400 72,459 30,138 Realized & unrealized gains [losses] on investments (net) (814,330 ) 72,778 (693,582 ) (5,529 ) � Interest expense � (38 ) � (5,328 ) � (2,063 ) � (14,408 ) � Income (Loss) Before Provision for Income Tax (477,763 ) 260,957 280,043 417,452 � Benefit (Provision) for income taxes � 203,600 � � (104,000 ) � (99,400 ) � (166,000 ) � Net Income (Loss) $ (274,163 ) $ 156,957 � $ 180,643 � $ 251,452 � � Average Shares Outstanding 1,977,675 2,036,747 2,006,961 2,036,747 � Operating Income per Share $ 0.16 $ 0.09 $ 0.45 $ 0.20 Net Income (Loss) per Share $ (0.14 ) $ 0.08 $ 0.09 $ 0.12 CONSOLIDATED SELECTED BALANCE SHEET ITEMS � � As of � Assets 12/31/2007 3/31/2007 Current Assets Cash $ 843,020 $ 1,283,240 Receivables 4,444,534 4,497,987 Investments 3,523,123 2,715,997 Other � 193,107 � 32,105 Total Current Assets 9,003,784 8,529,329 � Other Non Current Assets � 289,214 � 367,571 � Total Assets $ 9,292,998 $ 8,896,900 � Liabilities & Stockholders' Equity � Total Current Liabilities $ 5,385,549 $ 4,707,409 � Total Liabilities 5,385,549 4,707,409 � Stockholders' Equity � 3,907,449 � 4,189,491 � Liabilities & Stockholders' Equity $ 9,292,998 $ 8,896,900