The Marketing Alliance Announces Financial Results for Quarter Ended March 31, 2024
FY 2024 Financial Key Items (all comparisons to the prior year period)
-
Revenues were
$19,585,772 compared to$17,940,089 , the 9% increase was primarily due to growth in the insurance distribution business that was partially offset by a decrease in construction revenue -
Operating income from continuing operations of
$1,099,267 compared to$1,542,958 in the prior year period. Operating income in the prior year period was increased by$325,114 due to a restatement of commission expense -
Net income from continuing operations was
$1,043,214 or$0.13 per share compared to$815,338 or$0.10 per share in the prior year period
Management Comments
Fiscal 2024 Financial Review
-
Total revenues for the twelve-month period ended
March 31, 2024 , were$19,585,772 , compared to$17,940,089 in the prior year. The increase was primarily due to growth in the insurance distribution business that was supplemented by new carrier and agency relationships. Construction revenue of$1,284,021 decreased compared to the prior year revenue of$2,016,248 , due to a large job in the previous year where we were project manager with a large portion outsourced to subcontractors. -
Net operating revenue (gross profit) for the fiscal year was
$4,655,172 , compared to net operating revenue of$5,372,772 in the prior-year fiscal period, where the restatement of commission expense increased net operating revenue by$325,114 in the prior fiscal year. -
Operating expenses decreased to
$3,555,905 , compared to$3,829,814 for the prior year. The reduction was due to various cost reduction efforts throughout the company. -
The Company reported operating income from continuing operations of
$1,099,267 , compared to operating income of$1,542,958 in the prior-year period, due to a combination of the factors noted above, notably operating income in the prior year period was increased by$325,114 due to a restatement of commission expense. -
Operating EBITDA (excluding investment portfolio income) declined to
$1,388,524 from$1,794,401 in the prior year. 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 fiscal year was
$493,334 , as compared with ($304,488 ) during the previous fiscal year. -
Other income (expense) was (
$67,390 ) at the end of the fiscal year due to a valuation allowance on a note receivable. The Company reported other income in its current year interim financial statements that was subsequently reclassified as reduced commission expense in the previous fiscal year (see operating income note above). -
Net income from continuing operations was
$1,043,214 or$0.13 per share compared to$815,338 or$0.10 per share.
Balance Sheet Information
-
TMA’s balance sheet on
March 31, 2024 , reflected cash and cash equivalents of$2.9 million ; working capital of$7.6 million ; and shareholders’ equity of 6.7 million; compared to cash and cash equivalents of$2.0 million , working capital of$7.3 million , and shareholders’ equity of$6.9 million as ofMarch 31, 2023 .
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 the timing of our receipt and recognition of fee revenues, our plan to reduce expenses and cost overruns associated with various business initiatives, 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 ways that insurance carriers may react in their underwriting policies and procedures to the continuing risks they perceive from public health matters; the ability of our construction business to be engaged for projects and for those projects to commence on the anticipated timetable; 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.
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||
|
|
||||||||||
(Unaudited) |
|||||||||||
2024 |
2023 |
2024 |
2023 |
||||||||
Insurance commission and fee revenue |
$ |
5,518,767 |
$ |
3,607,443 |
$ |
17,756,951 |
$ |
15,224,236 |
|||
Construction revenue |
22,425 |
(4,515) |
1,284,021 |
2,016,248 |
|||||||
Other insurance revenue |
305,000 |
357,745 |
544,800 |
699,605 |
|||||||
Total revenues |
5,846,192 |
3,960,673 |
19,585,772 |
17,940,089 |
|||||||
Insurance distributor related expenses: |
|||||||||||
Distributor bonuses and commissions |
4,396,109 |
2,813,078 |
12,137,471 |
9,370,001 |
|||||||
Business processing and distributor costs |
581,184 |
475,390 |
1,780,758 |
1,863,575 |
|||||||
Depreciation |
0 |
2,049 |
9,382 |
11,834 |
|||||||
4,977,293 |
3,290,517 |
13,927,611 |
11,245,410 |
||||||||
Costs of construction: |
|||||||||||
Direct and indirect costs of construction |
(86,558) |
(197,067) |
757,064 |
1,129,623 |
|||||||
Depreciation |
65,949 |
49,238 |
245,925 |
192,284 |
|||||||
(20,609) |
(147,829) |
1,002,989 |
1,321,907 |
||||||||
Total costs of revenues |
4,956,684 |
3,142,688 |
14,930,600 |
12,567,317 |
|||||||
Net operating revenue |
889,508 |
817,985 |
4,655,172 |
5,372,772 |
|||||||
Operating Expenses |
1,048,936 |
1,286,149 |
3,555,905 |
3,829,814 |
|||||||
Operating income (losses) from continuing operations |
(159,428) |
(468,164) |
1,099,267 |
1,542,958 |
|||||||
Other income (expense): |
|||||||||||
Investment gain, net |
156,114 |
132,464 |
493,334 |
(304,488) |
|||||||
Interest expense |
(46,925) |
(49,453) |
(196,620) |
(199,817) |
|||||||
Other income |
(268,242) |
- |
(67,390) |
- |
|||||||
Income (losses) from continuing operations before provision for income taxes |
(318,481) |
(385,153) |
1,328,591 |
1,038,653 |
|||||||
Income tax expense |
(119,483) |
(122,851) |
285,377 |
222,315 |
|||||||
Income(losses) from continuing operations |
(198,998) |
(262,302) |
1,043,214 |
815,338 |
|||||||
Discontinued operations: |
|||||||||||
Income (loss) from discontinued operations, net of income taxes |
- |
(23,321) |
- |
78,289 |
|||||||
Net gain (loss) from discontinued operations |
- |
(23,321) |
- |
78,289 |
|||||||
Net Income (Loss) |
$ |
(198,998) |
$ |
(285,623) |
$ |
1,043,214 |
$ |
893,627 |
|||
Average Shares Outstanding |
8,081,266 |
8,081,266 |
8,081,266 |
8,081,266 |
|||||||
Operating Income from continuing operations per Share |
$ |
(0.02) |
$ |
(0.06) |
$ |
0.14 |
$ |
0.19 |
|||
Net Income per Share |
$ |
(0.02) |
$ |
(0.04) |
$ |
0.13 |
$ |
0.11 |
|||
CONSOLIDATED BALANCE SHEETS |
|||||
|
|
||||
|
|
2024 |
|
|
2023 |
|
|
|
|
|
(restated) |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
Cash and cash equivalents |
$ |
2,949,323 |
|
$ |
1,994,763 |
Equity securities |
|
2,837,506 |
|
|
4,109,381 |
Restricted cash |
|
573,841 |
|
|
554,525 |
Accounts receivable |
|
7,492,812 |
|
|
7,766,243 |
Current portion of notes receivable |
|
548,552 |
|
|
125,297 |
Prepaid expenses |
|
506,456 |
|
|
366,025 |
Total current assets |
|
14,908,490 |
|
|
14,928,011 |
PROPERTY AND EQUIPMENT, net |
|
829,680 |
|
|
642,180 |
OTHER ASSETS |
|
|
|
|
|
Notes receivable, net due to the allowance |
|
63,614 |
|
|
571,557 |
Restricted cash |
|
1,523,812 |
|
|
2,050,737 |
Operating lease right-of-use assets |
|
179,218 |
|
|
321,340 |
Total other assets |
|
1,766,644 |
|
|
2,943,634 |
|
$ |
17,504,814 |
|
$ |
18,502,048 |
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
Accounts payable and accrued expenses |
|
6,198,078 |
|
|
6,582,465 |
Current portion of notes payable |
|
938,068 |
|
|
831,787 |
Current portion of finance lease liability |
|
36,174 |
|
|
41,044 |
Current portion of operating lease liability |
|
95,305 |
|
|
154,280 |
Liabilities related to discontinued operations |
|
677 |
|
|
677 |
Total current liabilities |
|
7,252,021 |
|
|
7,610,253 |
|
|
|
|
|
|
LONG-TERM LIABILITIES |
|
|
|
|
|
Line of credit payable |
|
675,000 |
|
|
600,000 |
Notes payable, net of current portion and debt issuance costs |
|
2,359,132 |
|
|
2,908,521 |
Finance lease liability, net of current portion |
|
103,200 |
|
|
142,602 |
Operating lease liability, net of current portion |
|
78,982 |
|
|
155,987 |
Deferred taxes |
|
313,000 |
|
|
190,000 |
Total long-term liabilities |
|
3,529,314 |
|
|
3,997,110 |
Total liabilities |
|
10,781,335 |
|
|
11,607,363 |
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 |
|
5,698,138 |
|
|
5,869,344 |
Total shareholders' equity |
|
6,723,479 |
|
|
6,894,685 |
|
|
|
|
|
|
|
$ |
17,504,814 |
|
$ |
18,502,048 |
Note – Operating EBITDA (excluding investment portfolio income) |
|||
Twelve Months Ended |
|||
EBITDA Calculation |
|
|
|
2024 |
2023 |
||
Operating Income continuing operations |
|
|
|
Add: |
|||
Depreciation/Amortization |
289,257 |
251,443 |
|
EBITDA (Operating Income from Continuing Operations) |
|
|
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/20240701846209/en/
(314) 275-8713
tklusas@themarketingalliance.com
www.TheMarketingAlliance.com
-OR-
(212) 836-9626
jhellman@equityny.com
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