The Marketing Alliance Announces Financial Results for Quarter Ended September 30, 2022
The Marketing Alliance, Inc. (OTC: MAAL) reported its fiscal 2023 second-quarter results ending September 30, 2022. Revenue decreased to $4.84 million, down from $5.75 million year-over-year, due to changes in insurance carrier mix. Operating income increased to $452,731 from $393,147, driven by a strong construction segment which saw revenues rise to $724,084. Net income fell to $199,015 or $0.02 per share, reduced from $459,245 or $0.06 per share in the prior year. The company also declared a $0.05 dividend amid economic challenges.
- Operating income from continuing operations increased to $452,731 from $393,147.
- Construction revenue grew significantly to $724,084 from $215,845.
- Total revenues decreased to $4,839,242 from $5,747,090.
- Net income dropped to $199,015 or $0.02 per share from $459,245 or $0.06 per share.
- Investment loss of $(33,756) recorded compared to a gain of $105,986 in the prior year.
FY 2023 Second Quarter Financial Key Items (all comparisons to the prior year period)
-
Operating income from continuing operations of
compared to$452,731 in the prior year period, reflecting an increased contribution in the quarter from construction business activity$393,147 -
Revenues were
compared to$4,839,242 , largely due to the continued change in carrier and product mix in the insurance distribution business$5,747,090 -
Operating EBITDA (excluding investment income) increased by
15% to from$521,261 in the prior year quarter$453,237 -
Net income was
or$199,015 per share compared to$0.02 or$459,245 per share$0.06
Management Comments
Fiscal 2023 Second Quarter Financial Review
-
Total revenues for the three-month period ended
September 30, 2022 , were , compared to$4,839,242 in the prior year quarter. The decrease was due to a shift of the business and carrier mix in the insurance distribution business. Construction revenue increased to$5,747,090 compared to$724,084 in the second quarter of 2022, due to increased activity levels compared with the prior year period.$215,845
-
Net operating revenue (gross profit) for the quarter was
, compared to net operating revenue of$1,256,385 in the prior-year fiscal period, reflecting the combination of reduced insurance net operating revenue, offset by an improvement in construction revenue and gross operating margin.$1,345,570
-
Operating expenses decreased to
compared to$803,654 for the same period of the prior year as the company continued to focus on cost reduction efforts.$952,423
-
The Company reported operating income from continuing operations of
, compared to operating income of$452,731 in the prior-year period, due to a combination of the factors noted above.$393,147
-
Operating EBITDA (excluding investment portfolio income) increased by
15% to from$521,261 in the prior year quarter. A note reconciling operating EBITDA to operating income can be found at the end of this release.$453,237
-
Investment loss, net (from non-operating investment portfolio) for the quarter was
, as compared to an investment gain, net (from non-operating investment portfolio) of$(33,756) for the same quarter of the previous fiscal year.$105,986
-
Net income (loss) from continuing operations was
or$130,557 per share compared to$0.02 or$459,245 per share.$0.06
Balance Sheet Information
-
TMA’s balance sheet on
September 30, 2022 , reflected cash and cash equivalents of ; working capital of$1.7 million ; and shareholders’ equity of$6.7 million ; compared to cash and cash equivalents of$6.7 million , working capital of$1.2 million , and shareholders’ equity of$7.4 million as of$7.4 million September 30, 2021 .
About
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 performance in future periods, 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 relative permanence of no-contact business solutions, and our ability to generate earnings in businesses not correlated with our core insurance 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, the effect of the COVID-19 pandemic on our business, financial condition and results of operations, as well as the pandemic’s effect of heightening other risks within our business and ways that insurance carriers may react to them in their underwriting policies; privacy and cyber security regulations; expectations of the economic environment, material adverse changes in economic conditions in the markets we serve and in the general economy; 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, 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 STATEMENTS OF OPERATIONS Unaudited |
||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||
|
|
|||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||
Insurance commission and fee revenue |
$ |
4,110,728 |
$ |
5,495,645 |
$ |
8,112,812 |
$ |
11,415,941 |
||||
Construction revenue |
724,084 |
215,845 |
929,745 |
705,992 |
||||||||
Other insurance revenue |
4,430 |
35,600 |
179,530 |
115,600 |
||||||||
Total revenues |
4,839,242 |
5,747,090 |
9,222,087 |
12,237,533 |
||||||||
Insurance distributor related expenses: |
||||||||||||
Distributor bonuses and commissions |
2,782,060 |
3,745,913 |
5,100,854 |
8,019,181 |
||||||||
Business processing and distributor costs |
468,534 |
487,950 |
925,045 |
1,001,499 |
||||||||
Depreciation |
3,851 |
3,673 |
6,809 |
7,573 |
||||||||
3,254,445 |
4,237,536 |
6,032,708 |
9,028,253 |
|||||||||
Costs of construction: |
||||||||||||
Direct and indirect costs of construction |
278,252 |
120,184 |
575,604 |
390,984 |
||||||||
Depreciation |
50,160 |
43,800 |
95,364 |
87,600 |
||||||||
328,412 |
163,984 |
670,968 |
478,584 |
|||||||||
Total costs of revenues |
3,582,857 |
4,401,520 |
6,703,676 |
9,506,837 |
||||||||
Net operating revenue |
1,256,385 |
1,345,570 |
2,518,411 |
2,730,696 |
||||||||
Total general and administrative expenses |
803,654 |
952,423 |
1,681,870 |
1,956,084 |
||||||||
Operating income from continuing operations |
452,731 |
393,147 |
836,541 |
774,612 |
||||||||
Other income (expense): |
||||||||||||
Investment gain, net |
(33,756) |
105,986 |
(704,374) |
327,132 |
||||||||
Interest expense |
(48,218) |
(54,573) |
(101,102) |
(108,711) |
||||||||
Paycheck protection program forgiveness |
- |
245,000 |
- |
373,525 |
||||||||
Gain on sale of equipment |
- |
- |
- |
- |
||||||||
Income from continuing operations before provision for income taxes |
370,757 |
689,560 |
31,065 |
1,366,558 |
||||||||
Income tax expense |
240,200 |
230,315 |
183,000 |
360,415 |
||||||||
Income (loss) from continuing operations |
130,557 |
459,245 |
(151,935) |
1,006,143 |
||||||||
Discontinued operations: |
||||||||||||
Income from discontinued operations, net of income taxes |
68,458 |
- |
82,876 |
110,332 |
||||||||
Net income from discontinued operations |
68,458 |
- |
82,876 |
110,332 |
||||||||
Net Income (Loss) |
$ |
199,015 |
$ |
459,245 |
$ |
(69,059) |
$ |
1,116,475 |
||||
Average Shares Outstanding |
8,081,266 |
8,081,266 |
8,081,266 |
8,081,266 |
||||||||
Operating Income from continuing operations per Share |
$ |
0.06 |
$ |
0.05 |
$ |
0.10 |
$ |
0.10 |
||||
Net Income per Share |
$ |
0.02 |
$ |
0.06 |
$ |
(0.01) |
$ |
0.14 |
CONSOLIDATED BALANCE SHEETS Unaudited |
||||||
|
|
|||||
|
2022 |
|
2021 |
|||
ASSETS |
||||||
CURRENT ASSETS |
||||||
Cash and cash equivalents |
$ |
1,733,435 |
$ |
1,202,620 |
||
Equity securities |
3,885,669 |
5,774,482 |
||||
Restricted cash |
536,212 |
483,883 |
||||
Accounts receivable |
9,452,907 |
10,623,548 |
||||
Inventory |
5,732 |
1,140 |
||||
Current portion of notes receivable |
133,504 |
162,283 |
||||
Prepaid expenses |
122,814 |
82,342 |
||||
Assets related to discontinued operations |
1,030 |
22,126 |
||||
Total current assets |
15,871,303 |
18,352,424 |
||||
PROPERTY AND EQUIPMENT, net |
762,804 |
963,778 |
||||
OTHER ASSETS |
||||||
Notes receivable, net due to the allowance |
580,187 |
674,628 |
||||
Restricted cash |
2,235,747 |
2,961,264 |
||||
Operating lease right-of-use assets |
368,589 |
309,777 |
||||
Other assets related to discontinued operations |
- |
- |
||||
Total other assets |
3,184,523 |
3,945,669 |
||||
$ |
19,818,630 |
$ |
23,261,871 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||
CURRENT LIABILITIES |
||||||
Accounts payable and accrued expenses |
7,174,813 |
9,081,179 |
||||
Dividends payable |
404,963 |
- |
||||
Line of credit payable |
550,000 |
300,000 |
||||
Current portion of notes payable |
818,188 |
725,825 |
||||
Current portion of finance lease liability |
67,276 |
71,441 |
||||
Current portion of operating lease liability |
131,851 |
118,045 |
||||
Liabilities related to discontinued operations |
677 |
636,681 |
||||
Total current liabilities |
9,147,768 |
10,933,171 |
||||
LONG-TERM LIABILITIES |
||||||
Notes payable, net of current portion and debt issuance costs |
3,332,579 |
4,222,133 |
||||
Finance lease liability, net of current portion |
153,099 |
214,499 |
||||
Operating lease liability, net of current portion |
243,558 |
200,147 |
||||
Deferred taxes |
200,000 |
275,400 |
||||
Other liabilities related to discontinued operations |
- |
- |
||||
Total long-term liabilities |
3,929,236 |
4,912,179 |
||||
Total liabilities |
13,077,004 |
15,845,350 |
||||
COMMITMENTS AND CONTINGENCIES |
||||||
SHAREHOLDERS' EQUITY |
||||||
Common stock, no par value; 50,000,000 shares authorized, |
||||||
8,081,266 shares issued and outstanding |
||||||
8,081,266 shares issued and outstanding |
1,025,341 |
1,025,341 |
||||
Retained earnings |
5,716,285 |
6,391,180 |
||||
Total shareholders' equity |
6,741,626 |
7,416,521 |
||||
$ |
19,818,630 |
$ |
23,261,871 |
Note – Operating EBITDA (excluding investment portfolio income) |
||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||
|
|
|||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||
Operating Income/(Loss) from Continuing Operations |
$ |
452,731 |
$ |
393,147 |
$ |
836,541 |
$ |
774,612 |
||||
Add: |
||||||||||||
Depreciation/Amortization Expense |
68,530 |
60,090 |
131,200 |
117,874 |
||||||||
EBITDA (Excluding Investment Portfolio Income) |
$ |
521,261 |
$ |
453,237 |
$ |
967,741 |
$ |
892,486 |
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/20221213005767/en/
(314) 275-8713
tklusas@themarketingalliance.com
www.TheMarketingAlliance.com
-OR-
(212) 836-9626
jhellman@equityny.com
Source:
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