The Marketing Alliance Announces Financial Results for Its Fiscal 2018 First Quarter Ended June 30, 2017

FY 2018 First Quarter Financial Highlights (all comparisons to the prior year period)

  • Revenues increased 16.7% to $7,429,199;
  • Net operating revenue increased to $2,210,649, compared to operating revenue of $2,134,463 in the prior year period;
  • Operating EBITDA (excluding investment portfolio income) was $184,410, as compared to $133,881; and
  • Net income increased to $66,898, or $0.01 per share, compared to a net income of $18,998, or $0.00 per share;
  • Subsequent to the end of the quarter, TMA's Board of Directors approved an 8:7 stock split. The record date for the split was August 25, 2017, and as a result the Company's common stock outstanding increased to 8,032,266 shares outstanding from 7,028,233 shares outstanding.

ST. LOUIS--()--The Marketing Alliance, Inc. (OTC:MAAL) (“TMA”), today announced its fiscal 2018 first quarter ended June 30, 2017 financial results.

Timothy M. Klusas, TMA’s Chief Executive Officer, commented, “We were pleased with the increases in net income, revenue and EBITDA reported over the prior year and remain focused on execution in the fiscal year ahead to convert revenue growth into bottom line results.”

“We were able to grow our revenue by reinvesting in the insurance business over the last few months by bringing new carriers to our distributors with new products for them to offer to their producers. As we have described in the past, the time required to make new carriers productive within our business model has an adverse effect on profit margins as we are build up their sales and our resulting commissions from less optimal levels of production to more beneficial levels. Over time, our goal is to be significant enough to the carrier to work closely with them on marketing, distribution, and business development. Our time since March 2016, when one of our historically significant carrier relationships (Genworth) ceased issuing new policies, has been focused on creating these new opportunities. TMA remained committed to offering our distributors a wide variety of products from a diverse network of carriers and continued to support a multi-carrier digital platform for life insurance applications, which we felt would become more accepted in the industry and provide a competitive advantage for our distributors as we add carriers and work to improve the process. With respect to annuity sales and as previously noted, the Department of Labor’s Fiduciary ruling continued to adversely affect our annuity business due to uncertainty about its final form.”

“For our construction business, we were able to grow revenue by over 40% versus the comparable quarter last year, despite continued weakness in the agriculture market, by our focus on an application new to our company that provides drainage for roadway projects. This new effort was due to the company remaining flexible in finding new ways to utilize our equipment during the down business cycle in agricultural markets (caused by low crop prices) and seasonal down time when we were previously not able to work in farm fields due to the presence of crops or frozen soil. I am encouraged by our resourcefulness, as we expanded our customer base and found new ways to utilize our equipment during downturns. As some of these jobs were not scheduled to begin until future start dates, we realized some expense in the current quarter to secure bonding and other costs associated with creating bidding estimates and plans.”

“In regard to our family entertainment business, we experienced a decrease in revenue for the first fiscal quarter as we continued to assess price changes at our facilities. We strived to find the ideal balance of offering a superior family entertainment experience at a value to our customers while capturing more revenues for our business. Our goal in the coming quarters remains, as we continue to evaluate costs, to focus on the growth and profitability of these centers with emphasis on growth through improving customer value and experience.”

Fiscal 2018 First Quarter Financial Review

  • Total revenues for the three-month period ended June 30, 2017, were $7,429,199, as compared to $6,368,138 in the prior year quarter. The increase in total revenue was attributable to rises in revenue for the Company’s insurance distribution and construction businesses, which were offset by a decrease in family entertainment revenue over the prior year quarter.
  • Net operating revenue (gross profit) increased for the quarter to $2,210,649 compared to net operating revenue of $2,134,463 in the prior-year fiscal period. The increase in net operating revenues for the quarter was due to increasing revenues and a decrease in depreciation expense resulting from the full depreciation of equipment in the construction business.
  • Operating expenses decreased for the fiscal 2018 first quarter to $2,218,409 as compared to $2,291,842 for the prior year due to decreases in compensation, depreciation and amortization expense, and office expense, but were offset by increases in travel and meetings expense.
  • Operating loss for the fiscal 2018 first quarter was ($7,760), compared to an operating loss of ($157,379) reported in the prior-year period. The decrease in the operating loss for the quarter when compared to the prior year was due to a decrease in general and administrative expenses and increase in net operating revenue reported for the fiscal 2018 first quarter discussed above.
  • Operating EBITDA (excluding investment portfolio income) for the quarter was $184,410, as compared to $133,881, in the prior-year period. A note reconciling operating EBITDA to operating income can be found at the end of this release. Operating EBITDA was impacted by greater operating income and decreases in depreciation and amortization expenses as compared to the prior year.
  • Investment gain, net (from investment portfolio) for the first quarter ended June 30, 2017 was $185,746, as compared to $275,320, in the prior year quarter.
  • Net income for the fiscal 2018 first quarter was $66,898, or $0.01 per share, as compared to net income of $18,998, or $0.00 per share for the prior year period. The change in net income was primarily due to greater operating income this quarter versus last year.

Balance Sheet Information

  • TMA’s balance sheet at June 30, 2017 reflected cash and cash equivalents of approximately $4.9 million, working capital of $10.5 million, and shareholders’ equity of $10.9 million; compared to $4.5 million, $10.4 million, and $10.8 million, respectively, at March 31, 2017.

About The Marketing Alliance, Inc.

Headquartered in St. Louis, MO, TMA operates three businesses. TMA provides 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 also owns an earth moving and excavating business and nine children’s play and party facilities. Investor information can be accessed through the shareholder section of TMA’s website at:

TMA’s common stock is quoted on the OTC Markets ( 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. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during fiscal 2018 and future periods and the production of favorable returns to shareholders, our ability to obtain industry acceptance and competitive advantages of a multi-carrier digital platform for life insurance applications, our expectations with respect to the distribution of new life insurance products, the effects of ongoing uncertainty regarding the Department of Labor’s Fiduciary Rule in our annuity business, our ability to diversify our earth moving and excavating business and our ability to increase revenue and reduce costs from our family entertainment business. Any forward-looking statements contained in this press release represent our estimates, expectations or intentions only as of the date hereof, or as of such earlier dates as are indicated, and should not be relied upon as representing our views as of any subsequent date. These statements involve a number of risks and uncertainties, including, but not limited to, expectations of the economic environment; material adverse changes in economic conditions in the markets we serve and in the general economy; future regulatory actions and conditions in the states in which we conduct our business; our ability to work with carriers on marketing, distribution and product development; pricing and other payment decisions and policies of the carriers in our insurance distribution business, weather and environmental conditions in the areas served by our earth moving and excavation business, the integration of our operations with those of businesses or assets we have acquired or may acquire in the future and the failure to realize the expected benefits of such acquisition and integration. 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
Three-months ended
June 30,
2017   2016
Commission and fee revenue $ 6,057,173 $ 4,912,709
Construction revenue 195,390 136,001
Family entertainment revenue 1,130,095 1,277,428
Other Revenue   46,541   42,000
Revenues 7,429,199 6,368,138
Distributor Related Expenses
Bonus & commissions 4,318,587 3,316,060
Processing & distribution 442,270 456,207
Depreciation   1,994   2,626
Total 4,762,851 3,774,893
Cost of Construction
Direct and Indirect costs of construction 140,913 78,294
Depreciation   9,998   84,297
Total 150,911 162,591
Family entertainment cost of sales   304,788   296,191
Net Operating Revenue   2,210,649   2,134,463
Operating Expenses   2,218,409   2,291,842
Operating Income (Loss) (7,760) (157,379)
Other Income (Expense)
Investment gain, (loss) net 185,746 275,320
Interest expense (67,763) (52,772)
Swap settlement expense (6,108) (14,772)
Interest rate swap, fair value adjustment (5,123) (21,512)
Loss on disposal of property and equipment   (6,924)   -
Income Before Provision for Income Tax 92,068 28,885
Provision for income taxes   25,170   9,887
Net Income (Loss) $ 66,898 $ 18,998
Average Shares Outstanding 8,032,266 8,032,266
Operating Income (Loss) per Share $ - $ (0.02)
Net Income (Loss) per Share $ 0.01 $ -
Note: * - Operating EPS and Net EPS stated after giving effect to 8:7 stock split for shareholders of record as of August 21, 2017 and paid September 15, 2017 for all periods. Shares outstanding increased to 8,032,266 from 7,028,233 with this stock split and have been retroactively adjusted to account for the split.
Consolidated Selected Balance Sheet Items
As of
Assets 6/30/17   3/31/17
Cash & Equivalents $ 4,920,785 $ 4,538,393
Investments 7,984,579 7,719,319
Receivables 7,771,408 7,664,743
Other   1,084,282   1,230,189
Total Current Assets 21,761,054 21,152,644
Property and Equipment, Net 2,505,844 2,629,719
Intangible Assets, net 1,273,334 1,316,807
Other   764,535   807,273

Total Non Current Assets

  4,543,713   4,753,799
Total Assets $ 26,304,767 $ 25,906,443
Liabilities & Stockholders' Equity
Total Current Liabilities $ 11,269,175 $ 10,784,318
Long Term Liabilities  




Total Liabilities   15,446,510   15,115,084
Stockholders' Equity   10,858,257   10,791,359
Liabilities & Stockholders' Equity $ 26,304,767 $ 25,906,443

Note – Operating EBITDA (excluding investment portfolio income)


Q1FY2018 Operating EBITDA (excluding investment portfolio income) was determined by adding Q1FY 2018 Operating Loss of ($7,760) and Depreciation and Amortization Expense of $192,170 for a total of $184,410. Q1FY2017 Operating EBITDA (excluding investment portfolio income) was determined by adding Q1FY 2017 Operating Loss of ($157,379) and Depreciation and Amortization Expense of $291,260 for a total of $133,881. The Company elects not to include investment portfolio income because the Company believes it is non-operating in nature.

The Company uses Operating EBITDA as a measure of operating performance. However, Operating EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or GAAP, and when analyzing its operating performance, investors should use Operating EBITDA in addition to, and not as an alternative for, income as determined in accordance with GAAP. Because not all companies use identical calculations, its presentation of Operating EBITDA may not be comparable to similarly titled measures of other companies and is therefore limited as a comparative measure. Furthermore, as an analytical tool, Operating EBITDA has additional limitations, including that (a) it is not intended to be a measure of free cash flow, as it does not consider certain cash requirements such as tax payments; (b) it does not reflect changes in, or cash requirements for, its working capital needs; and (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Operating EBITDA does not reflect any cash requirements for such replacements, or future requirements for capital expenditures or contractual commitments. To compensate for these limitations, the Company evaluates its profitability by considering the economic effect of the excluded expense items independently as well as in connection with its analysis of cash flows from operations and through the use of other financial measures.

The Company believes Operating EBITDA is useful to an investor in evaluating its operating performance because it is widely used to measure a company’s operating performance without regard to certain non-cash or unrealized expenses (such as depreciation and amortization) and expenses that are not reflective of its core operating results over time. The Company believes Operating EBITDA presents a meaningful measure of corporate performance exclusive of its capital structure, the method by which assets were acquired and non-cash charges, and provides additional useful information to measure performance on a consistent basis, particularly with respect to changes in performance from period to period.


The Marketing Alliance, Inc.
Timothy M. Klusas, 314-275-8713
The Equity Group Inc.
Adam Prior, 212-836-9606
Senior Vice President
Terry Downs, 212-836-9615


The Marketing Alliance, Inc.
Timothy M. Klusas, 314-275-8713
The Equity Group Inc.
Adam Prior, 212-836-9606
Senior Vice President
Terry Downs, 212-836-9615