MAAL Marketing Alliance Inc (PK)

The Marketing Alliance, Inc. (OTC: 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 first quarter ended June 30, 2010.

Timothy M. Klusas, TMA’s President, stated, “We continue to focus on maintaining operations that we believe are highly adaptable to respond to rapidly changing market conditions. We feel that this is a business that requires a streamlined, cost-efficient infrastructure to operate most profitably, and we remained focused on improving the company’s profitability throughout this period. We continued to build new carrier relationships that can enable our distributors to remain flexible during the current economic climate by providing additional policy and product options to its customers that in turn meet their customers’ changing needs. We feel that this effort added value for our distributors and more stability for them to grow their business with these carriers.”

Mr. Klusas continued,” The flexibility of our network allowed our distributors to position their business to take advantage of profitable new opportunities to grow their top-line, while the leverage of our business model allowed the same distributors to pursue this growth in a profitable, capital-efficient way, such as through our Business Service Center or Annuity Centers. The interplay of these factors and other offerings in our service model resulted in a more favorable mix of business that increased operating profit versus the same quarter last year. Separately, our net income was affected by non-operating realized and unrealized losses on investments, which was not a surprise in a quarter where the S&P 500 decreased 11.8% versus a 15.2% gain last year.”

Fiscal 2011 First Quarter Financial Review

• Total revenues for the three-month period ended June 30, 2010 were $4,985,275, nearly matching the $5.0 million in revenues for the prior-year period.
• Net operating revenue (gross profit) grew 22% to $1.5 million from $1.2 million in the comparable prior year fiscal period. The Company’s gross profit margins improved to 30% from 25% in the prior-year period, largely due to distributors utilizing more of the Company’s services and a more favorable mix of business.
• Operating income rose 39% to $747,682, or 15% of revenues, from operating income of $537,538, or 11% of revenues, for the prior-year period due to distributors utilizing more of the Company’s services as mentioned above and improved gross margins.
• Realized and unrealized losses on investments during the period totaled $301,701, compared to a realized and unrealized gain of $296,950 for the prior-year period. The Company’s net earnings for the period were negatively impacted by the decrease in the value of its investments. The Company is supported by a strong balance sheet with no long-term debt, and the fluctuations in realized and unrealized gains or losses have not impacted TMA’s ability to operate effectively or capitalize on any growth opportunities.
• Net income for the fiscal 2011 first quarter decreased 49% to $262,873, or $0.14 per share, from net income of $512,333, or $0.27 per share, in the fiscal 2010 first quarter, primarily as a result of realized and unrealized losses on investments.

Balance Sheet Information

TMA’s balance sheet at June 30, 2010 reflected cash and cash equivalents of $3.9 million, working capital of $6.0 million, and shareholders’ equity of $6.9 million; compared to $3.8 million, $6.2 million, and $6.7 million, respectively, at March 31, 2010.

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   6/30/10 6/30/09   Revenues $ 4,985,275   $ 5,031,292     Distributor Related Expenses Bonus & commissions 2,850,903 3,174,874 Benefits & processing   630,346     619,525   Total   3,481,249     3,794,399     Net Operating Revenue 1,504,026 1,236,893     Operating Expenses   756,344     699,355    

Operating Income

747,682 537,538     Other Income (Expense) Interest & dividend income [net] 27,078 29,481 Realized & unrealized [losses] on investments (net) (301,701 ) 296,950   Interest expense   (3,947 )   (4,636 )   Income Before Provision for Income Tax 469,112 859,333   Provision for income taxes   (206,239 )   (347,000 )   Net Income $ 262,873   $ 512,333     Average Shares Outstanding 1,901,578 1,917,724   Operating Income per Share $ 0.39 $ 0.28 Net Income per Share $ 0.14 $ 0.27    

Consolidated Selected Balance Sheet Items

    As of   Assets 6/30/10 3/31/10 Current Assets Cash & Equivalents $ 3,853,643 $ 3,802,842 Receivables 5,299,265 5,548,948 Investments 2,240,578 2,414,856 Other   294,488   513,531 Total Current Assets 11,687,974 12,280,177   Other Non Current Assets   977,793   503,893   Total Assets $ 12,665,767 $ 12,784,070  

Liabilities & Stockholders' Equity

  Total Current Liabilities $ 5,735,859 $ 6,117,031   Total Liabilities 5,735,859 6,117,031   Stockholders' Equity   6,929,908   6,667,039   Liabilities & Stockholders' Equity $ 12,665,767 $ 12,784,070