MAAL Marketing Alliance Inc (PK)

The Marketing Alliance, Inc. (Pink Sheets: MAAL) (�TMA� or the �Company�), a consortium of independent life insurance brokerage general agencies located throughout the United States, today announced financial results for its fiscal 2007 third quarter ended December 31, 2006 (see attached tables). Timothy M. Klusas, TMA�s President, stated, �As reflected in our third quarter results, TMA is beginning to recognize the cost benefits of a number of the initiatives we implemented over the past year. In the first half of calendar 2006, we relocated our corporate headquarters and annuity business to St. Louis in an effort to consolidate operations and establish an infrastructure to better manage the growth and balance of insurance products through the Company�s distributors. We also hired key members of management to serve our member agencies and increase new business opportunities on both the distributor and carrier levels. After TMA incurred start-up costs in line with these initiatives, we feel that the Company is better positioned to capitalize on opportunities in the changing insurance marketplace.� Mr. Klusas continued, �While we are pleased with these quarterly results and the direction of the Company, we recognize there is still much to be done. Let me address a few specific factors relating to our business, our financial position and methods in which we are enhancing the value of TMA for our shareholders: One of the main catalysts for our Company�s future growth is through the addition of new insurance carriers. By adding a new carrier to TMA�s network, the Company can provide a broader range of insurance products for our independent agent distributors to choose from and then, in turn, offer to their customers. This chain is the core of our business. In the past year, TMA has signed three new carriers, ING, Met Life and Aviva / AmerUs Indianapolis Life, whose products are now being sold through our Company. However, there is a certain amount of integration time once a carrier joins our network, usually about 6-9 months before TMA begins recognizing revenues from the sales of their products. This is due to the synthesizing of the carrier�s products into our distribution system, instructing our sales force, introducing this product expansion to our distributors, and subsequently having these distributors sell the products to customers. The addition of each strategic carrier helps to expand the capabilities of what our current members can offer to consumers in a competitive marketplace, and makes the TMA network a more attractive value proposition for new potential distributors. In June 2006, we relocated our subsidiary, TMA Marketing, Inc. (�TMAM�), from Philadelphia to our corporate headquarters to St. Louis. TMAM�s primary focus is to provide our distributors an annuity marketing, service and support program from our existing carriers. TMAM allows the Company�s independent distributors who are not currently marketing annuity products to do so, thereby establishing a new profit center for their agency, without incurring significant start-up costs and capital investment. We appointed Laura Hahn, an industry veteran with over 27 years of experience, as Managing Director of TMAM�s Annuity Sales and Service Center, and have positioned the business to ensure that TMA continues to expand its independent agencies� market presence. Financial flexibility, while a sound business objective in its own right, is also a distinct competitive advantage. TMA�s solid financial position should produce lasting benefits and enhance the positive impact of higher profitability going forward. The Company�s balance sheet at December 31, 2006 reflected working capital of $3.3 million, shareholders� equity of $3.7 million and no long-term debt. We believe that the capital structure we now have in place is sufficient to fund our growth plans for the foreseeable future. We feel an appropriate way to have TMA�s investors participate in our success, given the amount of free cash flow we generate, is through the payment of dividends. TMA has a long dividend history, having paid a total of approximately $3.4 million to our shareholders since 1999. Our intent is to provide our shareholders with a meaningful current return while at the same time retaining sufficient earnings to maintain our strong capital base and take advantage of growth opportunities. On January 31, 2007, the Company paid a $0.17 per share cash dividend for shareholders of record on December 1, 2006. This is the latest dividend payment to shareholders and an increase of 13% over last year�s cash dividend of $0.15 per share.� Mr. Klusas concluded, �Our primary objective for our 2007 fiscal year is to continue the progress we have made in streamlining our operations, leverage our infrastructure, and concentrate on laying a foundation for top-line growth. We feel that our long-term investments are beginning to gain traction. We look forward to our near and long-term future with confidence.� FISCAL 2007 THIRD QUARTER REVIEW Revenues reported by the Company for the three-month period ended December 31, 2006, were $4.2 million versus $4.3 million in same period for the prior year. The decrease was due to the consolidation of certain insurance carriers whose products are distributed through TMA. The Company reported a $566,609 increase in operating income to $179,107 in its fiscal 2007 third quarter versus an operating loss of ($387,502) in the same period for the prior year. This increase is largely due to higher net operating revenues and significantly lower operating expenses. These expenses decreased by 37% due to improved operating efficiencies related to the consolidation of its corporate offices and TMAM into a new, centralized headquarters in St. Louis. As a result of the above factors, TMA reported a $315,082 improvement in net income to $156,956, or $0.08 per share, for the fiscal 2007 third quarter, versus a net loss of ($158,126), or ($0.08) per share, for the prior year period. This increase is primarily due to higher operating income as a result of the factors outlined above. FISCAL 2007 NINE MONTH REVIEW Total revenues for the first nine months of fiscal 2007 were $11.8 million versus $12.4 million for the same period in fiscal 2006. Fiscal 2007 nine month operating income was $407,251 versus $109,225 for the first nine months of fiscal 2006. TMA reported net income of $251,451, or $0.12 per share, for fiscal 2007 nine month period, versus net income of $283,865, or $0.14 per share, in the prior year period, the difference largely due to realized and unrealized gains and losses on investments. 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. TMA�s network is comprised of independent life brokerage and general agencies in 43 states. Investor information can be accessed through the shareholder section of TMA�s website at http://www.themarketingalliance.com/si_who.cfm. TMA stock is traded in the �pink sheets� (www.pinksheets.com) under the symbol �MAAL�. These shares may be purchased or sold through any broker, or through a market-maker in TMA stock, such as Robotti & Company. 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 12/31/2006� 12/31/2005� 12/31/2006� 12/31/2005� � Revenues $ 4,237,426� $ 4,346,960� $ 11,802,741� $ 12,367,057� � Distributor Related Expenses Distributor bonus & commissions paid $ 2,731,741� 3,133,427� 7,273,794� 7,939,115� Distributor benefits & processing � 668,295� � 699,807� � 2,014,812� � 1,968,589� Total � 3,400,036� � 3,833,234� � 9,288,606� � 9,907,704� � Net Operating Revenue 837,390� 513,726� 2,514,135� 2,459,353� � Operating Expenses � 658,283� � 901,228� � 2,106,884� � 2,350,128� � Operating Income (Loss) 179,107� (387,502) 407,251� 109,225� � Other Income (Expense) Interest & dividend Income (net) 14,399� 38,926� 30,137� 65,138� Realized & unrealized gains [losses] on investments (net) � � 72,778� 72,111� (5,529) 334,127� Interest expense � (5,328) � (661) � (14,408) � (4,625) � Income (Loss) Before Provision for Income Tax 260,956� (277,126) 417,451� 503,865� � Benefit (provision) for income taxes � (104,000) � 119,000� � (166,000) � (220,000) � Net Income (Loss) � 156,956� � (158,126) $ 251,451� $ 283,865� � Shares Outstanding 2,036,247� 2,036,747� 2,036,247� 2,036,747� � Operating Income (Loss) per Share $ 0.09� $ (0.19) $ 0.20� $ 0.05� Net Income (Loss) per Share $ 0.08� $ (0.08) $ 0.12� $ 0.14� � � � Consolidated Selected Balance Sheet Items � As of � Assets 12/31/2006� 3/31/2006� Current Assets Cash $ 656,182� $ 89,440� Receivables 4,995,949� 4,878,709� Investments 2,699,871� 2,963,394� Other � 188,264� � 525,035� Total Current Assets 8,540,266� 8,456,578� � Other Non Current Assets � 378,102� � 462,480� � Total Assets $ 8,918,368� $ 8,919,058� � Liabilities & Stockholders' Equity � Total Current Liabilities $ 5,260,694� $ 5,196,537� � Total Liabilities 5,260,694� 5,196,537� � Stockholders' Equity � 3,657,674� � 3,722,521� � Liabilities & Stockholders' Equity $ 8,918,368� $ 8,919,058�