The Marketing Alliance Announces Financial Results for Quarter Ended June 30, 2023
- Net income from continuing operations improved to $139,508 or $0.02 per share compared to a loss in the previous year quarter.
- The construction business had a strong start.
- Operating income decreased from $383,810 to $52,191 due to timing issues with insurance fees and revenue from the annual conference.
- Revenues decreased from $4,382,845 to $4,109,746 for the same reasons.
1Q 2024 Financial Key Items (all comparisons to the prior year period)
-
Operating income from continuing operations of
compared to$52,191 . The differences were largely due to the late timing of insurance fees (revenue) in the current year and the timing of revenue associated with the company’s annual conference, which was collected in the prior fiscal year due to an earlier conference date$383,810 -
Revenues were
compared to$4,109,746 , the decrease due primarily to late timing in the current year fee structure and revenue from the company’s annual conference billed prior to the beginning of this fiscal year$4,382,845 -
Net income from continuing operations was
or$139,508 per share compared to ($0.02 ) or ($257,992 ) per share as the current quarter benefited from an investment gain of$0.03 , compared with a loss of ($152,212 ) in the prior year quarter$670,618
Management Comments
Timothy M. Klusas, TMA’s Chief Executive Officer, commented, “Our fiscal first quarter 2024 results were actually quite similar to our results in the same quarter last year except for a few unfortunate timing issues. Our insurance fee revenue was approximately
Mr. Klusas added, “Our construction business had another exceptional start and actively positioned itself for larger jobs as we progress throughout the year.”
Fiscal First Quarter 2024 Financial Review
-
Revenues were
compared to$4,109,746 , due primarily to the factors above involved with timing of revenues on the company’s insurance fees and also the timing of reimbursements from an earlier annual conference, causing billings to be moved into the previous fiscal year.$4,382,845
-
Net operating revenue (gross profit) for the quarter was
, compared to net operating revenue of$1,042,371 in the prior-year fiscal period. Net operating revenue was affected by the decreases in revenue discussed above and relatively similar expense levels.$1,262,026
-
Operating expenses increased to
compared to$990,180 for the prior year. Approximately half of this increase was due to increased meeting expenses of a larger conference. This comparison was also affected by favorable one-time benefits in the previous year quarter such as reversals of accrued expenses and a one-time employee retention credit of$878,216 .$14,000
-
The Company reported operating income from continuing operations of
compared to$52,191 in the prior year period, with differences due to factors discussed above.$383,810
-
Operating EBITDA (excluding investment portfolio income) declined to
from$124,952 in the prior year period. A note reconciling operating EBITDA to operating income can be found at the end of this release.$446,480
-
Investment gain (loss), net (from non-operating investment portfolio) for the quarter was
, as compared with ($152,212 ) during the same period the previous year.$670,618
-
Net income from continuing operations was
or$139,508 per share compared to ($0.02 ) or ($257,992 ) per share.$0.03
Balance Sheet Information
-
TMA’s balance sheet on June 30, 2023, reflected cash and cash equivalents of
; working capital of$1.4 million ; and shareholders’ equity of 6.4 million; compared to cash and cash equivalents of$5.6 million , working capital of$2.5 million , and shareholders’ equity of$7 million as of June 30, 2022.$7.0 million
About The Marketing Alliance, Inc.
Headquartered in
Investor information can be accessed through the shareholder section of TMA’s website at: http://www.themarketingalliance.com/shareholder-information.
TMA’s common stock is quoted on the OTC Markets (http://www.otcmarkets.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. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our financial performance in future periods, our ability to obtain industry acceptance and competitive advantages of digital and no-contact business solutions, and our ability to generate earnings from our construction 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; the ultimate duration and impact of the ongoing COVID-19 pandemic and any other public health events, the ways that insurance carriers may react in their underwriting policies and procedures to the continuing risks they perceive from the COVID-19 pandemic; our reliance on a limited number of insurance carriers and any potential termination of those relationships or failure to develop new relationships;] privacy and cyber security regulations; future state and federal 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, changes in the public securities markets that affect the value of our investment portfolio; and weather and environmental conditions in the areas served by our construction . While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
|||||||
Three Months Ended |
|||||||
June 30, |
|||||||
2023 |
2022 |
||||||
Insurance commission and fee revenue |
$ |
3,899,144 |
|
$ |
4,002,084 |
|
|
Construction revenue |
180,802 |
|
205,661 |
|
|||
Other insurance revenue |
29,800 |
|
175,100 |
|
|||
Total revenues |
4,109,746 |
|
4,382,845 |
|
|||
Insurance distributor related expenses: |
|||||||
Distributor bonuses and commissions |
2,560,053 |
|
2,474,822 |
|
|||
Business processing and distributor costs |
293,875 |
|
456,511 |
|
|||
Depreciation |
2,892 |
|
2,958 |
|
|||
2,856,820 |
|
2,934,291 |
|
||||
Costs of construction: |
|||||||
Direct and indirect costs of construction |
153,543 |
|
141,324 |
|
|||
Depreciation |
57,012 |
|
45,204 |
|
|||
210,555 |
|
186,828 |
|
||||
Total costs of revenues |
3,067,375 |
|
3,120,819 |
|
|||
Net operating revenue |
1,042,371 |
|
1,262,026 |
|
|||
|
|
|
|
|
|
||
Total operating expenses |
990,180 |
|
878,216 |
|
|||
|
|
|
|
|
|
||
Operating income from continuing operations |
52,191 |
|
383,810 |
|
|||
Other income (expense): |
|||||||
Investment gain (loss), net |
152,212 |
|
(670,618 |
) |
|||
Interest expense |
(46,695 |
) |
(52,884 |
) |
|||
Paycheck protection program forgiveness |
0 |
|
24,500 |
|
|||
Income (loss) from continuing operations before provision |
157,708 |
|
(315,192 |
) |
|||
for income taxes |
|||||||
Income tax expense |
18,200 |
|
(57,200 |
) |
|||
Income (loss) from continuing operations |
139,508 |
|
(257,992 |
) |
|||
Discontinued operations: |
|||||||
Income from discontinued operations, |
|||||||
net of income taxes |
0 |
|
14,418 |
|
|||
Net income from discontinued operations |
0 |
|
14,418 |
|
|||
Net Income (Loss) |
$ |
139,508 |
|
$ |
(243,574 |
) |
|
Average Shares Outstanding |
8,081,266 |
|
8,081,266 |
|
|||
Operating Income from continuing operations per Share |
$ |
0.01 |
|
$ |
0.05 |
|
|
Net Income per Share |
$ |
0.02 |
|
$ |
(0.03 |
) |
CONSOLIDATED BALANCE SHEETS
|
|||||||
|
|
June 30, |
|
March 31, |
|||
|
2023 |
|
2023 |
||||
ASSETS |
|||||||
CURRENT ASSETS |
|||||||
Cash and cash equivalents |
$ |
1,377,085 |
$ |
2,461,956 |
|||
Equity securities |
4,198,708 |
3,904,217 |
|||||
Restricted cash |
554,525 |
536,212 |
|||||
Accounts receivable |
7,450,218 |
9,710,905 |
|||||
Inventory |
11,777 |
7,534 |
|||||
Current portion of notes receivable |
123,123 |
146,645 |
|||||
Prepaid expenses |
198,762 |
189,036 |
|||||
Assets related to discontinued operations |
1,030 |
6,822 |
|||||
Total current assets |
13,915,228 |
16,963,327 |
|||||
PROPERTY AND EQUIPMENT, net |
1,043,651 |
817,945 |
|||||
OTHER ASSETS |
|||||||
Notes receivable, net due to the allowance |
568,392 |
586,435 |
|||||
Restricted cash |
2,050,737 |
2,369,036 |
|||||
Operating lease right-of-use assets |
286,150 |
402,534 |
|||||
Total other assets |
2,905,279 |
3,358,005 |
|||||
$ |
17,864,158 |
$ |
21,139,277 |
||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
CURRENT LIABILITIES |
|||||||
Accounts payable and accrued expenses |
6,193,685 |
7,930,566 |
|||||
Dividends payable |
404,243 |
566,949 |
|||||
Line of credit payable |
675,000 |
400,000 |
|||||
Current portion of notes payable |
838,929 |
811,223 |
|||||
Current portion of finance lease liability |
41,579 |
67,276 |
|||||
Current portion of operating lease liability |
137,653 |
131,851 |
|||||
Liabilities related to discontinued operations |
677 |
87,194 |
|||||
Total current liabilities |
8,291,766 |
9,995,059 |
|||||
LONG-TERM LIABILITIES |
|||||||
Notes payable, net of current portion and debt issuance costs |
2,697,906 |
3,529,616 |
|||||
Finance lease liability, net of current portion |
129,629 |
165,191 |
|||||
Operating lease liability, net of current portion |
139,315 |
276,497 |
|||||
Deferred taxes |
216,000 |
200,000 |
|||||
Total long-term liabilities |
3,182,850 |
4,171,304 |
|||||
Total liabilities |
11,474,616 |
14,166,363 |
|||||
COMMITMENTS AND CONTINGENCIES |
|||||||
SHAREHOLDERS' EQUITY |
|||||||
Common stock, no par value; 50,000,000 shares authorized, |
|||||||
8,081,266 shares issued and outstanding June 30, 2022 |
|||||||
8,081,266 shares issued and outstanding June 30, 2023 |
1,025,341 |
1,025,341 |
|||||
Retained earnings |
5,364,201 |
5,947,573 |
|||||
Total shareholders' equity |
6,389,542 |
6,972,914 |
|||||
$ |
17,864,158 |
$ |
21,139,277 |
||||
Note – Operating EBITDA (excluding investment portfolio income)
Three Months Ended |
||||
June 30, |
||||
2023 |
2022 |
|||
Operating Income from Continuing Operations |
$ |
52,191 |
$ |
383,810 |
Add: |
||||
Depreciation/Amortization Expense |
$ |
72,761 |
$ |
62,670 |
EBITDA (Operating Income from Continuing Operations) |
$ |
124,952 |
$ |
446,480 |
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
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230929109411/en/
The Marketing Alliance, Inc.
Timothy M. Klusas, President
(314) 275-8713
tklusas@themarketingalliance.com
www.TheMarketingAlliance.com
-OR-
The Equity Group Inc.
Jeremy Hellman, Vice President
(212) 836-9626
jhellman@equityny.com
Source: The Marketing Alliance, Inc.