MAAL Marketing Alliance Inc (PK)

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 2010 first quarter ended June 30, 2009.

Timothy M. Klusas, TMA’s President, stated, “We were pleased with our results given the difficult economic climate during the period. We were fortunate to have many seasoned distributors in our network who adeptly managed through a challenging time. Despite an overall decrease in revenue, our distributors utilized more of our products and services during this time, which led to an increase in profitability. For example, we have seen a greater number of our distributors utilizing TMA’s Business Center for a majority of their business processes, including application processing and other routine administrative tasks. As a result, these agencies could allocate personnel and time towards attaining new customers and growing their businesses.”

Mr. Klusas continued, “Our bottom line was also positively affected by realized and unrealized gains on investments during the period. As we have noted in previous quarters, the majority of our investment portfolio is currently invested in US Treasuries and money market accounts and we continue to regularly monitor the equity portion of our portfolio. We believe the breadth of our network and a stable capital base is especially attractive in establishing new and cultivating existing relationships with independent agencies.”

During the quarter, the Board of Directors appointed William G. Steele, Jr., CPA, of Manchester, NH, to the Board of Directors to complete the term left vacant by the passing of Jim Stewart. Mr. Klusas added, “Bill brings considerable business planning and taxation experience to our Board. We feel very fortunate to have someone of his caliber and talent contributing his advice and counsel as a Board member.”

Fiscal 2010 First Quarter Financial Review

• Total revenues for the three-month period ended June 30, 2009 were $5.0 million, compared to $5.2 million in the prior year period. Lower revenues for the period coincided with challenging business conditions in the greater economy and its effects on consumer purchasing decisions.
• Distributor bonus and commissions decreased to $3.2 million from $3.4 million in the same period last year, and benefits and processing expenses also decreased to $619,000 from $691,000. These decreases were primarily due to lower revenues for the period.
• Net operating revenue (gross profit) grew 8% to $1.2 million from $1.1 million in the comparable fiscal 2009 period. The Company’s gross profit margins improved to 25% from 22% in the prior year period, largely due to distributors utilizing more of the Company’s services.
• Operating income rose 40% to $538,000, or 11% of revenues, from operating income of $385,000, or 7% of revenues, for the prior year period due to distributors utilizing more of the Company’s services as mentioned above.
• Realized and unrealized gains on investments during the period totaled $297,000, compared to a realized and unrealized loss of $31,000 for the prior year period.
• Net income for the fiscal 2010 first quarter increased 128% to $512,000, or $0.27 per share, from net income of $224,000, or $0.12 per share, in the fiscal 2009 first quarter, primarily as a result of improved operating income and realized and unrealized gains on investments.

Balance Sheet Information

TMA’s balance sheet at June 30, 2009 reflected cash and cash equivalents of $3.7 million, working capital of $4.9 million, and shareholders’ equity of $5.3 million, versus $3.7 million, $4.8 million, and $4.8 million, respectively, at March 31, 2009. The Company holds no long-term debt.

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.

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   6/30/09 6/30/08   Revenues $ 5,031,292   $ 5,224,822     Distributor Related Expenses Bonus & commissions 3,174,874 3,385,713 Benefits & processing   619,525     691,048   Total   3,794,399     4,076,761     Net Operating Revenue 1,236,893 1,148,061     Operating Expenses   699,355     763,130     Operating Income 537,538 384,931     Other Income (Expense) Interest & dividend income [net] 29,481 20,635 Realized & unrealized gains [losses] on investments (net) 296,950 (31,145 )   Interest expense   (4,636 )   (3,027 )   Income Before Provision for Income Tax 859,333 371,394   Provision for income taxes   (347,000 )   (147,000 )   Net Income $ 512,333   $ 224,394     Average Shares Outstanding 1,917,724 1,945,703   Operating Income per Share $ 0.28 $ 0.20 Net Income per Share $ 0.27 $ 0.12 Consolidated Selected Balance Sheet Items     As of   Assets 6/30/09 3/31/09 Current Assets Cash & Equivalents $ 3,677,927 $ 3,692,773 Receivables 5,465,755 5,890,665 Investments 2,046,602 1,599,412 Other   473,548   562,721 Total Current Assets 11,663,832 11,745,571   Other Non Current Assets   410,075   235,626   Total Assets $ 12,073,907 $ 11,981,197   Liabilities & Stockholders' Equity   Total Current Liabilities $ 6,794,047 $ 7,213,667   Total Liabilities 6,794,047 7,213,667   Stockholders' Equity   5,279,860   4,767,530   Liabilities & Stockholders' Equity $ 12,073,907 $ 11,981,197