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 second quarter and six months ended September 30, 2009.

Timothy M. Klusas, TMA’s President, stated, “We continue to be very encouraged by the resilience and focus of our customers during challenging market conditions. We saw increasing interest in TMA’s outsourcing services such as TMA’s Business Processing Center, which provides application processing and back office support, and also TMA’s Annuity Center and Life marketing services, allowing our member agencies to cost-effectively expand their businesses while taking advantage of TMA’s economies of scale.”

Klusas continued, “I am also very pleased about TMA’s new relationship with Minnesota Life, which was announced to our distributors last month. Minnesota Life is a valuable addition to TMA’s portfolio of suppliers and brings new products for our network of distributors, complementing their offerings for agents to utilize with their individual customers.”

At a recent meeting subsequent to the end of second fiscal quarter, the Company’s Board of Directors voted to pay a $0.28 per share cash dividend on or about January 31, 2010, to shareholders of record at December 20, 2009. This dividend represents an increase of 21.7% over the dividend paid last year.

Fiscal 2010 Second Quarter Financial Review

• Total revenues for the three-month period ended September 30, 2009 were $4.8 million, compared to $5.4 million in the prior year period. Lower revenues for the period were primarily due to business conditions in the greater economy and its effects on consumer purchasing decisions in the insurance industry.
• Distributor bonus and commissions decreased to $3.1 million from $3.8 million in the same period last year, while benefits and processing expenses remained largely flat. The decreases were primarily due to lower revenues for the period.
• Net operating revenue (gross profit) grew 12% in the comparable fiscal 2009 period. The Company’s gross profit margins improved to 22% from 17% in the prior year period, largely due to distributors utilizing more of the Company’s services, efficiencies at TMA’s Business Processing Center, and a more favorable mix of products sold.
• Operating income rose 1.6% to $326,696, or 6.9% of revenues, from operating income of $321,551, or 6.0% of revenues, for the prior year period, due to distributors utilizing more of the Company’s services.
• Realized and unrealized gains on investments during the period totaled $291,663, compared to a realized and unrealized loss of $379,975 for the prior year period. The majority of TMA’s investment portfolio is currently invested in US Treasuries and money market accounts and the Company continues to regularly monitor the equity portion of its portfolio.
• Net income for the fiscal 2010 second quarter increased to $375,196, or $0.20 per share, from a net loss of $24,775, or $0.01 per share, in the fiscal 2009 second quarter, primarily as a result of improved operating income and realized and unrealized gains on investments.

Fiscal 2010 Six Month Financial Review

• Total revenues for the first six months of fiscal 2010 were $9.8 million, compared to $10.6 million for the same period in fiscal 2009.
• Distributor bonus and commissions for the first six months of fiscal 2010 decreased to $6.2 million from $7.2 million in same period of fiscal 2009, while benefits and processing expenses remained approximately flat at $1.3 million from the prior year period.
• Operating income increased 22% to $864,234 from $706,482 for the prior year period.
• Realized and unrealized gains on investments for the first six months of fiscal 2010 was $588,613, compared to realized and unrealized losses of $411,120 for the prior year period.
• The Company reported net income for the first six months of fiscal 2010 of $887,529, or $0.46 per share, as compared to net income of $199,619, or $0.10 per share, in the prior year period.

Balance Sheet Information

TMA’s balance sheet at September 30, 2009 reflected cash and cash equivalents of $3.7 million, working capital of $5.0 million, and shareholders’ equity of $5.7 million, compared to $3.7 million, $4.5 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   Year to Date   6 Months Ended 9/30/09 9/30/08 9/30/09   9/30/08   Revenues $ 4,753,763   $ 5,379,392   $ 9,785,055   $ 10,604,214     Distributor Related Expenses Bonus & commissions 3,056,236 3,795,305 6,231,110 7,181,018 Benefits & processing   652,926     652,008     1,272,451     1,343,056   Total   3,709,162     4,447,313     7,503,561     8,524,074     Net Operating Revenue 1,044,601 932,079 2,281,494 2,080,140   Operating Expenses   717,905     610,528     1,417,260     1,373,658     Operating Income 326,696 321,551 864,234 706,482   Other Income (Expense) Interest & dividend income [net] 24,814 23,878 54,295 44,513 Realized & unrealized [losses] on investments (net) 291,663 (379,975 ) 588,613 (411,120 )   Interest expense   (7,477 )   (1,229 )   (12,113 )   (4,256 )   Income [Loss] Before Provision for Income Tax 635,696 (35,775 ) 1,495,029 335,619   Provision for income taxes   (260,500 )   11,000     (607,500 )   (136,000 )   Net Income [Loss] $ 375,196   $ (24,775 ) $ 887,529   $ 199,619     Average Shares Outstanding 1,917,724 1,945,703 1,917,724 1,945,703   Operating Income per Share $ 0.17 $ 0.17 $ 0.45 $ 0.36 Net Income [Loss] per Share $ 0.20 $ (0.01 ) $ 0.46 $ 0.10     Consolidated Selected Balance Sheet Items As of   Assets 9/30/2009 3/31/2009 Current Assets Cash & Equivalents $ 3,693,837 $ 3,692,773 Receivables 5,100,497

5,890,665

Investments 2,177,515

1,599,412

Other   281,157    

562,721

  Total Current Assets 11,253,006

11,745,571

  Other Non Current Assets   614,830     235,626     Total Assets $ 11,867,836   $

11,981,197

    Liabilities & Stockholders' Equity   Total Current Liabilities $ 6,212,780   $ 7,213,667     Total Liabilities 6,212,780 7,213,667   Stockholders' Equity   5,655,056    

4,767,530

    Liabilities & Stockholders' Equity $ 11,867,836   $

11,981,197