The Marketing Alliance Announces Financial Results for Quarter Ended June 30, 2023

ST. LOUIS–(BUSINESS WIRE)–The Marketing Alliance, Inc. (OTC: MAAL) (“TMA” or the “Company”), today announced financial results for its fiscal 2024 first quarter ended June 30, 2023.

1Q 2024 Financial Key Items (all comparisons to the prior year period)

• Operating income from continuing operations of $52,191 compared to $383,810. 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
• Revenues were $4,109,746 compared to $4,382,845, 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
• Net income from continuing operations was $139,508 or $0.02 per share compared to ($257,992) or ($0.03) per share as the current quarter benefited from an investment gain of $152,212, compared with a loss of ($670,618) in the prior year quarter

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 $100,000 less than the previous year quarter because we issued our fee structure later than in the previous year. While this affected fee revenue this quarter, we calculated that the difference relative to the previous year quarter would be reduced throughout the balance of the fiscal year. Second, the timing of our annual insurance conference, earlier this year than the previous year, had the effects of the company collecting reimbursements and sponsorships for the conference in the previous fiscal year while leaving the expenses paid in the current fiscal year. The combined negative financial effect on the quarter versus the prior year quarter was approximately $204,000. While we wouldn’t ordinarily be concerned with the timing of our conferences relative to financial quarters, the timing around the fiscal year end had a pronounced effect this time.”

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 $4,109,746 compared to $4,382,845, 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.
• Net operating revenue (gross profit) for the quarter was $1,042,371, compared to net operating revenue of $1,262,026 in the prior-year fiscal period. Net operating revenue was affected by the decreases in revenue discussed above and relatively similar expense levels.
• Operating expenses increased to $990,180 compared to $878,216 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 $14,000.
• The Company reported operating income from continuing operations of $52,191 compared to $383,810 in the prior year period, with differences due to factors discussed above.
• Operating EBITDA (excluding investment portfolio income) declined to $124,952 from $446,480 in the prior year period. A note reconciling operating EBITDA to operating income can be found at the end of this release.
• Investment gain (loss), net (from non-operating investment portfolio) for the quarter was $152,212, as compared with ($670,618) during the same period the previous year.
• Net income from continuing operations was $139,508 or $0.02 per share compared to ($257,992) or ($0.03) per share.

Balance Sheet Information

• TMA’s balance sheet on June 30, 2023, reflected cash and cash equivalents of $1.4 million; working capital of $5.6 million; and shareholders’ equity of 6.4 million; compared to cash and cash equivalents of $2.5 million, working capital of $7 million, and shareholders’ equity of $7.0 million as of June 30, 2022.

About The Marketing Alliance, Inc.

Headquartered in St. Louis, MO, TMA provides support to independent insurance brokerage agencies, with a goal of integrating insurance and “insuretech” engagement platforms to provide members value-added services on a more efficient basis than they can achieve individually.

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.

Note – Operating EBITDA (excluding investment portfolio income)

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.

Contacts

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