The Marketing Alliance Announces Financial Results for Its Fiscal 2013 First Quarter Ended June 30, 2012
FY 2013 Q1 Financial Highlights
Revenues increased 18% to $6,832,850
Operating income of $593,308, or $0.24 per share, versus $631,048, or $0.25 per share, in the prior year period
Operating EBITDA (excluding investments) increased 9% to $711,828 from $652,453
Net income of $253,414, or $0.10 per share, versus $383,026, or $0.15 per share, in the prior year period
Highlights Subsequent to the Quarter
Board of Directors declared a 6:5 stock split (20%) distributed as one additional share for every five shares owned. The new shares were distributed on October 15, 2012, to shareholders of record as of close of business on September 15, 2012. As a result of the stock split, the outstanding shares of the Company's common stock increased to approximately 2,510,083 shares outstanding
Company acquired assets of two children's party and entertainment facilities in September
ST. LOUIS--(BUSINESS WIRE)-- The Marketing Alliance, Inc. (OTC: MAAL) ("TMA"), today announced financial results for its fiscal 2013 first quarter ended June 30, 2012.
Timothy M. Klusas, TMA's President, stated, "We are pleased with our results for the quarter given the difficult operating environment marked by historically-low interest rates. While low interest rates helped our organization secure debt at appealingly low cost, low interest rates can also be problematic for the performance of the insurance products that our organization distributes. Some of these effects include less consumer demand for interest rate-sensitive annuities in a low-interest rate environment and guarantees in life insurance products that become more expensive to the consumer (some carriers discontinued products during the quarter). In our insurance distribution business, we continue to develop and seek new initiatives for our distributors to grow their businesses despite these challenges. During the quarter, we also benefitted in our excavation business from the seasonally busy spring season of tiling and terracing before crops were planted. Subsequent to the end of the quarter, we completed the acquisition of two children's party and entertainment facilities based in St. Louis."
Insurance Distribution Business: "During the quarter, we focused our efforts on new initiatives to help our distributors grow their businesses. Our annuity business was affected by low interest rates, which we feel caused consumers to delay purchasing decisions or seek other alternatives. This environment also contributed to some of our carriers reducing their product portfolio to offer less selection in longer-term products or exit a market altogether. We continue to seek new products and alternatives for our distributors, who look to us to help them manage volatility in times like these."
Earth moving and excavating: "We were pleased with the growth and progress at our earth moving and excavating business during the quarter. We believe that agricultural tiling and terracing remains a compelling value proposition for farmers and promotes green initiatives such conservation of farmland and watersheds while reducing erosion. As we have mentioned in previous reports, the first fiscal quarter is usually an active time for this business once the ground thaws until crops are planted."
New Acquisition: "Subsequent to the end of the quarter we acquired the assets, under the franchise name of 'Monkey Joe's', of two children's party and entertainment facilities and related franchise rights in the St. Louis area. Both facilities are indoor play centers designed for children ages 2 - 12 with inflatable slides, obstacle courses, jumps, and party rooms for group events. We are pleased to be able to put capital to work and provide a new and diverse revenue stream."
Fiscal 2013 First Quarter Financial Review*
Total revenues for the three-month period ended June 30, 2012, were $6,832,850 up 18% from $5,807,497, for the prior-year period. The increase was primarily due to an additional $1,013,788 received in construction revenue not present in the prior year period, and relatively stable commission revenue from the life insurance distribution business versus the prior year period.
Net operating revenue (gross profit) for the quarter grew 20% to $1,839,291, compared to net operating revenue of $1,534,135 in the prior-year fiscal period. The increase was due to the addition of the gross profit from the excavating business, but was offset by less gross profit in the insurance distribution business versus the prior year period.
Operating EBITDA (excluding investment revenue) for the quarter was $711,828 versus $652,453 in the prior-year period. A note reconciling Operating EBITDA to Operating Income can be found at the end of this release.
Operating income decreased to $593,308 from operating income of $631,048 for the prior-year period due to an increase in General and Administrative expenses of $342,896 (from $903,087 to $1,245,983) over the same period of the prior year. The differences between Operating EBITDA and Operating Income comparisons were Depreciation and Amortization Expense of $118,520 compared to $21,405 in the prior year period.
Realized and unrealized losses on investments during the fiscal 2013 first quarter totaled $168,474 compared to a realized and unrealized loss of $51,812 for the prior-year period due to general market conditions.
Net income for the fiscal 2013 first quarter decreased to $253,414, or $0.10 per share, from net income of $383,026, or $0.15 per share, in the fiscal 2012 first quarter. This decrease was due to less Operating Income and the increase in realized and unrealized losses on investments versus the prior year for various reasons mentioned above.
* Copies of The Marketing Alliance's quarterly reviewed financial statements and annually audited financial statements are available upon request (see contact information below)
Balance Sheet Highlights
TMA's balance sheet at June 30, 2012 reflected cash and cash equivalents of $5.3 million, working capital of $11.0 million, and shareholders' equity of $11.6 million; compared to $4.8 million, $10.9 million, and $11.3 million, respectively, at March 31, 2012.
About The Marketing Alliance, Inc.
Headquartered in St. Louis, MO, TMA operates three business segments. 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 two children's play and party facilities. 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. These forward-looking statements are sometimes identified by the use of terms and phrases such as "believe," "should," "expect," "project," "estimate," "will," "can," "may," or similar expressions elsewhere in this document. Our results of operations and financial condition may differ materially from those in the forward-looking statements. Such statements are based on management's current views and assumptions, and involve risks and uncertainties that could affect expected results. 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
3 Months Ended
Distributor Related Expenses
Bonus & commissions
Benefits & processing
Costs of construction:
Direct and indirect cost of construction
Total Cost of Revenue
Net Operating Revenue
Other Income (Expense)
Investment income, net
Income Before Provision for Income Tax
Provision for income taxes
Average Shares Outstanding
Operating Income per Share
Net Income per Share
Note: * - Operating EPS and Net EPS stated after giving effect to the 20% stock split for shareholders of record as of September 15, 2012 and paid October 15, 2012 for all periods. Shares outstanding increased to 2,510,083 from 2,091,736 with this stock split and have been retroactively adjusted to account for this split. Operating EPS and Net EPS have also been stated and after giving effect to the 10% stock split for shareholders of record as of June 15, 2011 and paid July 15, 2011 for all periods. Shares outstanding were increased to 2,091,736 from 1,901,578 with this stock split and at the time of the split were retroactively adjusted to account for this split.
Consolidated Selected Balance Sheet Items
Cash & Equivalents
Total Current Assets
Property and Equipment, Net
Other Non Current Assets
Liabilities & Stockholders' Equity
Total Current Liabilities
Long Term Liabilities
Liabilities & Stockholders' Equity
Note - Operating EBITDA (excluding investments)
Q1FY 2013 Operating EBITDA (excluding investments) was determined by adding Q1FY 2013 Operating Income of $593,308 and Depreciation and Amortization Expense of $118,520 for a sum of $711,828.
Q1FY 2012 Operating EBITDA (excluding investments) was determined by adding Q1FY 2012 Operating Income of $631,048 and Depreciation and Amortization Expense of $21,405 for a sum of $652,453.
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, President
The Equity Group Inc.
Adam Prior, Vice President
Terry Downs, Account Executive
KEYWORDS: United States North America Missouri
The article The Marketing Alliance Announces Financial Results for Its Fiscal 2013 First Quarter Ended June 30, 2012 originally appeared on Fool.com.
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