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The Marketing Alliance Announces Fiscal 2009 Second Quarter and First Half Financial Results

December 10, 2008 | About:

ST. LOUIS--(BUSINESS WIRE)--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

Press Release: The Marketing Alliance Announces Fiscal 2009 Second Quarter and First Half Financial Results

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Press Release:



ST. LOUIS--(BUSINESS WIRE)--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 second quarter and first half ended September 30, 2008. Timothy M. Klusas, TMA’s President, stated, “Our Company continued to produce strong operating results in a difficult economic climate during this quarter. TMA achieved over 39% growth in revenues, a 66% increase in operating profit, and continued improvements in operating margins. We have continued to realize the benefits of our operating initiatives designed to streamline costs while delivering value-added insurance products and services to our member base. Our ability to deliver these services in a cost-effective manner generates substantial operating leverage for TMA and provides our members with the tools they need to help grow their businesses.” FISCAL 2009 SECOND QUARTER FINANCIAL HIGHLIGHTS
  • Total revenues for the three-month period ended September 30, 2008 increased 39% to $5.4 million from $3.9 million for the three-month period ended September 30, 2007. The increase was due in part to further sales penetration among a larger number of carriers in the TMA’s network, including well-recognized providers such as ING and Met Life.
  • Distributor bonus and commissions increased to $3.8 million from $2.4 million in the same period last year, largely due to distributors taking advantage of TMA’s new incentive programs. Benefits and processing expenses decreased to $652,000 from $677,000 in the second quarter of fiscal 2008, due in part to improvements in efficiencies at the Company’s business processing center in Omaha, NE.
  • Net operating revenue (gross profit) increased to $932,000 from $808,000 in the comparable fiscal 2008 period. The Company’s gross profit margins declined to 17.3% from 20.9% in the prior year period, largely due to higher bonus payments as distributors are benefiting from changes in the new incentive structures.
  • Operating expenses for the three months ended September 30, 2008 were down, to $611,000, or 11.3% of revenues, from $614,000, or 15.9% of revenues, in the prior three-month period.
  • Operating income rose 66% to $322,000, or 6.0% of revenues, from operating income of $194,000, or 5.0% of revenues, for the prior year period.
  • Realized and unrealized losses on investments during the period totaled $380,000, compared to a realized and unrealized gain of $61,000 for the second quarter of fiscal 2008. The Company continues to closely monitor its investment holdings, and reiterates that while short-term unrealized gains and losses affect current earnings, it has not meaningfully affected TMA’s ability to execute its strategic initiatives.
  • The Company reported a net loss for the fiscal 2009 second quarter of $25,000, or $0.01 per share, as compared to net income of $167,000, or $0.08 per share, for the fiscal 2008 second quarter. The net loss for the fiscal 2009 period was to due to the above-referenced realized and unrealized losses on investments.
FISCAL 2009 FIRST HALF HIGHLIGHTS
  • Total revenues for the first half of fiscal 2009 were $10.6 million, up 36% from $7.8 million for the first half of fiscal 2008.
  • Distributor bonus and commissions increased to $7.2 million from $4.7 million in the first half of fiscal 2008, while benefits and processing expenses remained flat at $1.3 million for both half years.
  • Net operating revenues for the six months ended September 30, 2008 increased 12% to $2.1 million from $1.9 million for the prior half year.
  • Operating expenses for the six months ended September 30, 2008 were down 3%, to $1.37 million, or 13.0% or revenues, from $1.42 million, or 18.1% of revenues, in the prior six-month period. Operating income increased to $706,000 from $440,000 in the first half of fiscal 2008.
  • Realized and unrealized loss on investments during the first half totaled $411,000, compared to a realized and unrealized gain of $123,000 for the first half of fiscal 2008.
  • Net income was $200,000, or $0.10 per share, as compared to $357,000, or $0.18 per share, in the first half of fiscal 2008.
BOARD OF DIRECTORS ELECTS TIM KLUSAS TO FINISH TERM OF LATE DIRECTOR K.V. DEY TMA also announced today the election of its President, Timothy M. Klusas, as a member of the Company’s Board of Directors. Mr. Klusas replaces K.V. Dey, who passed away earlier this year. Mr. Klusas will serve the remainder of Mr. Dey’s term and the Company continues to have a nine member Board of Directors. Mr. Klusas stated, “We are saddened by K.V.’s passing and we have expressed our sympathies to his family. Everyone at TMA is appreciative of his leadership and efforts on behalf of TMA’s shareholders and we will miss him personally and professionally.” Also subsequent to the end of the quarter, three of TMA’s directors, Gary Glassford, Jack Dewald and Art Jetter, were each re-elected by shareholders as their terms expired to additional three-year terms. SELECTED OTHER FINANCIAL INFORMATION TMA’s balance sheet at September 30, 2008 reflected cash of $1.7 million, working capital of $4.1 million and no long-term debt. Shareholders’ equity at September 30, 2008 totaled $4.3 million. TMA DECLARES 2008 CASH DIVIDEND The Company recently announced that its Board of Directors authorized a $0.23 per share cash dividend for shareholders of record on December 1, 2008, to be paid on or about December 15, 2008. This is the latest dividend payment to shareholders and an increase of 10% over last year’s cash dividend of $0.21 per share. ABOUT THE MARKETING ALLIANCE, INC. Headquartered in St. Louis, MO, TMA is one of the largest organizations offering 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. The Company provides its members located across the country access to a wide array of life insurance and annuity products from an extensive network of carriers. 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
  6 Months Ended
9/30/08 9/30/07 9/30/08   9/30/07
 
Revenues $ 5,379,392   $ 3,869,093   $ 10,604,214   $ 7,823,956  
 
Distributor Related Expenses
Distributor bonus & commissions paid 3,795,305 2,384,602 7,181,018 4,669,270
Distributor benefits & processing   652,008     676,544     1,343,056     1,295,891  
Total   4,447,313     3,061,146     8,524,074     5,965,161  
 
Net Operating Revenue 932,079 807,947 2,080,140 1,858,795
17 % 21 % 20 % 24 %
 
Operating Expenses   610,528     614,137     1,373,658     1,418,654  
 
Operating Income 321,551 193,810 706,482 440,141
6 % 5 % 7 % 6 %
 
Other Income (Expense)
Interest & dividend income [net] 23,878 32,239 44,513 46,942
Realized & unrealized gains [losses] -
on investments (net) (379,975 ) 60,833 (411,120 ) 120,748
 
Interest expense   (1,229 )   (1,182 )   (4,256 )   (2,023 )
 
Income (Loss) Before Provision for Income Tax (35,775 ) 285,700 335,619 605,808
 
Benefit (Provision) for income taxes   11,000     (119,000 )   (136,000 )   (249,000 )
 
Net Income (Loss) $ (24,775 ) $ 166,700   $ 199,619   $ 356,808  
 
Average Shares Outstanding 1,945,703 1,977,675 1,945,703 1,977,675
 
Operating Income per Share $ 0.17 $ 0.10 $ 0.36 $ 0.22
Net Income (Loss) per Share $ (0.01 ) $ 0.08 $ 0.10 $ 0.18
Consolidated Balance Sheet Items
        As of
 
Assets 9/30/2008 3/31/2008
Current Assets
Cash & Equivalents $ 1,692,365 $ 1,709,172
Receivables 4,468,009 4,497,987
Investments 2,510,005 2,715,997
Other   440,545   32,105
Total Current Assets 9,110,924 8,916,109
 
Other Non Current Assets   235,027   289,792
 
Total Assets $ 9,345,951 $ 9,205,901
 
Liabilities & Stockholders' Equity
 
Total Current Liabilities $ 5,024,978 $ 5,084,543
 
Total Liabilities 5,024,978 5,084,543
 
Stockholders' Equity   4,320,973   4,121,358
 
Liabilities & Stockholders' Equity $ 9,345,951 $ 9,205,901



Source: BusinessWire

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