ST. LOUIS, June 30, 2025 (GLOBE NEWSWIRE) -- The Marketing Alliance, Inc. (OTC: MAAL) ("TMA" or the "Company"), announced its financial results today for its fiscal 2025 year ended March 31, 2025.
FY 2025 Financial Key Items (all comparisons to the prior year period)
- Revenues from operations were $21,373,673 compared to $19,585,772. The 9% increase was primarily due to 12% revenue growth in the insurance distribution business that was offset by a decline in construction revenue
- Operating income from continuing operations of $730,005 compared to $1,099,267 in the prior year
- Net income was $465,599 or $0.06 per share compared to $1,043,214 or $0.13 per share in the prior year
- The Company completed its share repurchase program announced October 2024, to repurchase up to 800,000 shares of issued and outstanding common stock
Management Comments
Timothy M. Klusas, TMA's Chief Executive Officer, commented, "We were pleased with our performance in the final quarter to finish this fiscal year, as some of the projects we initiated and key roles we created on our leadership team started to gain traction. We realized double-digit revenue gains in the insurance business and now turn to finding ways to streamline operations and improve operating efficiency.
Further, as our business continues to evolve, in the previous quarter we elected to acknowledge the changing nature of our reimbursement and marketing revenues by recognizing them over their respective projected project lives (often the calendar year) instead of when agreed and billed. Historically the company has treated non-refundable reimbursement and marketing fee revenue from carriers as earned when the agreed upon amount has been invoiced. We will now acknowledge any timing differences of these payments as deferred revenue on the balance sheet. Starting with the quarter that just ended, the company treated reimbursement and marketing revenue as a time-duration item and allocated revenue throughout its respective period.
The construction business was difficult this year as we saw expected work get cancelled or postponed, which affected revenues adversely throughout the year. This year we did not have a multi-year job of the same size as previous years. Unfortunately, we were not able to reduce costs proportionately, which translated to adverse performance on the bottom line. We continued to maintain a very disciplined approach to only undertaking jobs that were economically profitable with respect to our capabilities."
Fiscal Year 2025 Financial Review
- Revenues were $21,373,673 compared to $19,585,772, due to 12% growth in the insurance distribution business that was offset by a decrease in the construction business.
- Net operating revenue (gross profit) for the year was $4,259,504, compared to net operating revenue of $4,655,172 in the prior year. While Net operating revenue was less in both insurance distribution and construction, the decrease was substantially in the construction business versus the prior year.
- Although operating expenses were relatively flat at $3,529,499 compared to $3,555,905 for the prior year, the Company hosted two annual conferences during the fiscal year (April 2024 and March 2025) which increased travel and meeting expenses by approximately $150,000. This increase was offset by a decrease in compensation expense.
- The Company reported operating income from continuing operations of $730,005 compared to $1,099,267 in the prior year period, with differences due to factors discussed above.
- Operating EBITDA (excluding investment portfolio income) of $1,008,211 was less than the prior year EBITDA of $1,388,524. 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 year was ($138,010) as compared with $493,334 the previous year. Unrealized (losses) gains on investments, net were ($267,988) in the current fiscal year and $401,886 in the previous fiscal year.
- Net income was $465,599, or $0.06 per share, compared to $1,043,214 or $0.13 per share.
- Subsequent to the end of the fiscal year, on April 2, the Company announced that its Board of Directors had authorized a share repurchase program to repurchase up to 800,000 shares of the Company's issued and outstanding common stock, effective immediately and concluding March 31, 2026. As of June 26, the Company had repurchased 103,360 shares under this program.
Balance Sheet Information
- TMA's balance sheet on March 31, 2025, reflected cash and cash equivalents of $2.0 million; working capital of $5.1 million; and shareholders' equity of $5.4 million; compared to cash and cash equivalents of $2.9 million, working capital of $7.7 million, and shareholders' equity of $6.7 million as of March 31, 2024.
- Subsequent to the end of the fiscal year, the Company repaid a $1,912,882 note (payable) in full at its maturity in June. The proceeds to satisfy the note were previously in restricted cash and cash and cash equivalents.
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.themarketingallianceinc.com.
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 of growth based upon our investments in our business, our recently announced stock repurchase program, our plans to reduce expenses, and our ability to undertake more suitable jobs and 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 ability of our construction business to be engaged for projects and for those projects to commence on the anticipated timetable and with the anticipated profitability; the ways that insurance carriers may react in their underwriting policies and procedures to the continuing risks they perceive from public health matters; 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 matters and our ability to protect confidential information; 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 business. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.
| Contact: | ||
| The Marketing Alliance, Inc. | -OR- | The Equity Group Inc. |
| Timothy M. Klusas, President | Jeremy Hellman, Vice President | |
| (314) 275-8713 | (212) 836-9626 | |
| tklusas@themarketingalliance.com www.TheMarketingAlliance.com | jhellman@equityny.com | |
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
| Twelve Months Ended March 31, | |||||||
| 2025 | 2024 | ||||||
| Insurance commission and fee revenue and related | $ | 20,409,278 | $ | 18,301,751 | |||
| Construction revenue | 964,395 | 1,284,021 | |||||
| Total revenues | 21,373,673 | 19,585,772 | |||||
| Insurance distributor related expenses: | |||||||
| Distributor bonuses and commissions | 14,110,303 | 12,137,471 | |||||
| Business processing and distributor costs | 1,996,731 | 1,780,758 | |||||
| Depreciation | 5,521 | 9,382 | |||||
| 16,112,555 | 13,927,611 | ||||||
| Costs of construction: | |||||||
| Direct and indirect costs of construction | 744,738 | 757,064 | |||||
| Depreciation | 256,876 | 245,925 | |||||
| 1,001,614 | 1,002,989 | ||||||
| Total costs of revenues | 17,114,169 | 14,930,600 | |||||
| Net operating revenue | 4,259,504 | 4,655,172 | |||||
| Total General and administrative expenses | 3,529,499 | 3,555,905 | |||||
| Operating income | 730,005 | 1,099,267 | |||||
| Other income (expense): | |||||||
| Other | 4,938 | (67,390 | ) | ||||
| Investment (losses) gains, net | (138,010 | ) | 493,334 | ||||
| Interest | (119,572 | ) | (196,620 | ) | |||
| Income before provision for income taxes | 477,361 | 1,328,591 | |||||
| Income tax expense | 11,762 | 285,377 | |||||
| Net income | $ | 465,599 | $ | 1,043,214 | |||
| Average Shares Outstanding | 7,397,594 | 8,081,266 | |||||
| Net Income per Share | $ | 0.06 | $ | 0.13 | |||
| CONSOLIDATED BALANCE SHEETS | ||||||
| March 31, | ||||||
| 2025 | 2024 | |||||
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash and cash equivalents | $ | 2,043,274 | $ | 2,949,323 | ||
| Equity securities | 2,630,444 | 2,837,506 | ||||
| Restricted cash | 1,623,608 | 573,841 | ||||
| Accounts receivable, net | 8,480,785 | 7,492,812 | ||||
| Current portion of notes receivable | - | 548,552 | ||||
| Prepaid expenses and other current assets | 277,880 | 506,456 | ||||
| Total current assets | 15,055,991 | 14,908,490 | ||||
| PROPERTY AND EQUIPMENT, net | 650,875 | 829,680 | ||||
| OTHER ASSETS | ||||||
| Notes receivable, net of allowance and current portion | - | 63,614 | ||||
| Restricted cash | - | 1,523,812 | ||||
| Operating lease right-of-use assets | 136,485 | 179,218 | ||||
| Total other assets | 136,485 | 1,766,644 | ||||
| 15,843,351 | 17,504,814 | |||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| CURRENT LIABILITIES | ||||||
| Accounts payable and accrued expenses | $ | 6,877,555 | $ | 6,151,797 | ||
| Deferred revenue | 726,606 | 30,000 | ||||
| Current portion of notes payable | 2,173,614 | 938,068 | ||||
| Current portion of finance lease liability | 103,350 | 36,174 | ||||
| Current portion of operating lease liability | 93,865 | 95,305 | ||||
| Liabilities related to discontinued operations | 677 | 677 | ||||
| Total current liabilities | 9,975,667 | 7,252,021 | ||||
| LONG-TERM LIABILITIES | ||||||
| Lines of credit payable | - | 675,000 | ||||
| Notes payable, net of current portion and debt issuance costs | 235,218 | 2,359,132 | ||||
| Finance lease liability, net of current portion | - | 103,200 | ||||
| Operating lease liability, net of current portion | 46,064 | 78,982 | ||||
| Deferred taxes | 149,200 | 313,000 | ||||
| Total long-term liabilities | 430,482 | 3,529,314 | ||||
| Total liabilities | 10,406,149 | 10,781,335 | ||||
| COMMITMENTS AND CONTINGENCIES | ||||||
| SHAREHOLDERS' EQUITY | ||||||
| Common stock, no par value; 50,000,000 shares authorized, | ||||||
| 7,397,594 shares issued and outstanding March 31, 2025 | ||||||
| 8,081,266 shares issued and outstanding March 31, 2024 | 1,114,406 | 1,025,341 | ||||
| Treasury stock at cost | (1 | ) | - | |||
| Retained earnings | 4,322,797 | 5,698,138 | ||||
| Total shareholders' equity | 5,437,202 | 6,723,479 | ||||
| $ | 15,843,351 | $ | 17,504,814 | |||
| Note - Operating EBITDA (excluding investment portfolio income) | |||||
| Twelve Months Ended March 31, | |||||
| 2025 | 2024 | ||||
| Operating Income from Continuing Operations | $ | 730,005 | $ | 1,099,267 | |
| Add: | |||||
| Depreciation/Amortization Expense | $ | 278,206 | $ | 289,257 | |
| EBITDA (Excluding Investment Portfolio Income) | $ | 1,008,211 | $ | 1,388,524 | |
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.
