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 third quarter and the nine months ended December 31, 2009.

Timothy M. Klusas, TMA’s President, stated, “The progress we have made in streamlining our operations to better serve our customers and in leveraging our infrastructure to offer more products and services for their benefit has served us well in this environment. Despite a challenging economy, our seasoned customer base deserves much credit for maneuvering successfully through a difficult time and we feel very fortunate to be aligned with such professionals. We continue to be encouraged by our operating results.”

Operating Highlights

• The Company also announced that it has added Symetra Financial to its list of insurance carriers whose products are distributed by TMA. Symetra Financial provides a wide array of insurance products for TMA distributors to offer to their individual customers under a well-recognized brand name. This is the second major addition to the Company’s insurance carrier network thus far in fiscal 2010, as the Company announced an agreement with Minnesota Life earlier in its fiscal year.
• Mr. Klusas stated, “By adding a new carrier to TMA’s network, the Company provides a broader range of insurance products for our independent distributors to choose from and then, in turn, offer to their customers. Although Minnesota Life’s and Symetra’s products are now being distributed through our Company, as we have mentioned before there is an integration period when a new supplier joins our network, and it is usually about 6-9 months before TMA begins recognizing any material revenues from the distribution of their products.”

Financial Highlights

• Total revenues for the fiscal 2010 third quarter ended December 31, 2009 were $5.0 million, compared to $6.3 million in the prior year period. Total revenues for the fiscal 2010 nine month period ended December 31, 2009 were $14.8 million, compared to $16.9 million for the first nine months of fiscal 2009. The Company believes that a contributing factor in the difference between periods was adverse economic conditions and their effects on individuals purchasing insurance.
• Net operating revenue (gross profit) decreased slightly to $1.0 million in the fiscal 2010 third quarter from $1.1 million in the comparable fiscal 2009 period. The Company’s quarterly gross profit margins improved to 19.9% from 17.2% in the prior year period, largely due to a more profitable mix of products being sold through its member agencies. For the nine months ended December 31, 2009, net operating revenue improved to $3.3 million, or 22.2% of revenues, from $3.2 million, or 18.7% of revenues, in the comparable prior year period.
• Operating income for the fiscal 2010 third quarter was $254,958 compared to $402,471 in the prior year period. Operating income remained approximately flat at $1.1 million in the nine month periods ended December 31, 2009 and December 31, 2008.
• The Company reported net income for the fiscal 2010 third quarter of $161,694, or $0.08 per share, as compared to a net loss of $225,320, or $0.12 per share, for the fiscal 2009 third quarter. For the nine month period, TMA reported net income of $1,049,223, or $0.55 per share, as compared to a net loss of $25,701, or $0.01 per share, for the fiscal 2009 nine month period. The losses in fiscal 2009 were largely the result of the Company’s realized and unrealized losses on investments; for the nine months ended December 31, 2009, the Company has recorded gains on its investment portfolio.

Balance Sheet Information

TMA’s balance sheet at December 31, 2009 reflected cash and cash equivalents of $3.7 million, working capital of $4.7 million and no long-term debt. Shareholders’ equity at December 31, 2009 totaled $5.2 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.

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 12/31/2009 12/31/2008 12/31/2009   12/31/2008   Revenues $ 5,027,173   $ 6,293,505   $ 14,812,228   $ 16,897,719     Distributor Related Expenses Bonus & commissions 3,427,921 4,554,599 9,659,031 11,735,617 Benefits & processing   597,858     654,761     1,870,309     1,997,817   Total   4,025,779     5,209,360     11,529,340     13,733,434     Net Operating Revenue 1,001,394 1,084,145 3,282,888 3,164,285   Operating Expenses   746,436     681,674     2,163,696     2,055,332     Operating Income 254,958 402,471 1,119,192 1,108,953   Other Income (Expense) Interest & dividend income (net) 25,809 27,506 80,104 72,019 Realized & unrealized gains (losses) on investments (net) 2,122 (362,613 ) 590,735 (773,733 )   Interest expense   (10,695 )   (1,684 )   (22,808 )   (5,940 )   Income (Loss) Before Provision for Income Tax 272,194 65,680 1,767,223 401,299   Provision for income taxes   (110,500 )   (291,000 )   (718,000 )   (427,000 )   Net Income (Loss) $ 161,694   $ (225,320 ) $ 1,049,223   $ (25,701 )   Average Shares Outstanding 1,912,342 1,945,703 1,915,930 1,945,703   Operating Income per Share $ 0.13 $ 0.21 $ 0.58 $ 0.57 Net Income (Loss) per Share $ 0.08 $ (0.12 ) $ 0.55 $ (0.01 )   Consolidated Selected Balance Sheet Items     As of   Assets 12/31/2009 3/31/2009 Current Assets Cash & Equivalents $ 3,686,705 $ 3,692,773 Receivables 5,213,660 5,890,665 Investments 2,349,207 1,599,412 Other   946,074   562,721 Total Current Assets 12,195,646 11,745,571   Other Non Current Assets   452,057   235,626   Total Assets $ 12,647,703 $ 11,981,197   Liabilities & Stockholders' Equity   Total Current Liabilities $ 7,464,308 $ 7,213,667   Total Liabilities 7,464,308 7,213,667   Stockholders' Equity   5,183,395   4,767,530   Liabilities & Stockholders' Equity $ 12,647,703 $ 11,981,197