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The Marketing Alliance Releases 3rd Quarter Fiscal 2014 Financial Results [Manufacturing Close - Up](Manufacturing Close - Up Via Acquire Media NewsEdge) The Marketing Alliance, Inc. ("TMA") announced financial results for its fiscal 2014 third quarter and nine months ended Dec. 31, 2013. In a release on April 11, Timothy M. Klusas, TMA's Chief Executive Officer, said: "Despite an unfavorable comparison to the prior year we were pleased with our results given the business conditions of the quarter and fiscal year-to-date. Our insurance distribution business declined in revenue versus the prior year quarter as we continued to adjust to changes in product offerings from our insurance carrier partners. Historically, during the third quarter TMA benefits from calendar year-end reconciliations of our annual distribution agreements with carriers. However, we experienced lower than anticipated production levels, which affected our revenue and margins. We focused on operating profitability while exploring new opportunities for growth during the quarter, and will continue to provide value for our distributors in support of helping their businesses grow during this time. "Our land improvement business was also adversely affected by the weather compared to the prior year, as the early onset of winter drastically reduced our working season this year and its associated potential revenues. During the quarter, due to TMA's capital position, the Company's Board of Directors authorized a 13.7 percent increase in its annual cash dividend to shareholders of record as of December 20, 2013. We believe this demonstrated TMA's ongoing commitment to its shareholders." Klusas provided additional details on each of the Company's operations for the third quarter of the fiscal 2014 year: -Insurance Distribution Business: "In our insurance distribution business, we continued to assist our customers in utilizing our broad selection of life insurance products and carriers in response to industry changes. As we have mentioned in previous quarters, our results have been affected by life insurance carriers changing their product lines in reaction to current interest rate and regulatory conditions (a notable example was changes in reserving methodologies). In turn, this has lead to our distributors revising their product mix to adjust to market conditions. When these revisions by our distributors occur faster than we can create new opportunities with carriers, it becomes very difficult for us to achieve our planned levels to drive our revenue and profit margins. Some of the revisions were caused by the discontinuance of products while others were caused by in-force rate increases that reduced demand for those products. While this dislocation may lead to short- term fluctuations, especially as we witnessed in this quarter, we feel it creates long-term benefits as our distributors are able to offer a wider array of products and thus be less susceptible to these product and carrier changes. For this, I commend our distributors for their flexibility and professionalism in adapting their practices to highlight different carriers' products. Recently, we have been pleased with the increasingly favorable trends from new carriers and look to develop new carrier suppliers. -Earth Moving (Land Improvement - Construction): "Our land improvement business historically had two periods, during the first and third fiscal (second and third calendar) quarters, where it could actively enter a farmer's field and provide excavating (tiling) and terracing services to increase the farm's crop yield. The year began with a wet spring that caused a late start to the growing season, pushing back planting, which carried through the growing season and delayed the harvest well into the third quarter of the fiscal 2014 year. The delayed harvest further set the business back when an early winter arrived and brought an end to the working season, which was essentially shortened from both directions. An early winter froze the ground and resulted in interruptions of the services we were able to provide. We are determined to continue our efforts to develop alternative uses of our equipment during the down periods. In addition, we continue to strive to improve operational efficiencies and are pleased with our [directional] progress. -Family Entertainment: "We have been pleased with the performance of this business. We continued to add upgrades at our two locations, such as video game machines which were added at the end of the previous quarter in one location, and during this quarter at the second location. We expect these items to help to enhance our customers' experience while also creating new revenue streams and bringing more customers into the stores." Fiscal 2014 Third Quarter Financial Review -Total revenues for the three-month period ended December 31, 2013, were $6,869,504, as compared to $8,513,742 in the prior year quarter. The decrease was due to a $1,189,302 decrease in insurance distribution revenue and a $501,469 decline in construction revenue, offset by a $46,533 increase from the two family entertainment facilities. -Net operating revenue (gross profit) for the quarter was $1,774,704, compared to net operating revenue of $2,351,801 in the prior-year fiscal period. Gross profit in the prior year period would have been increased by $295,000 if that same amount had not been included in direct and indirect construction expenses versus being included in operating expenses. Going forward, the Company believes the current quarter classification of this cost is more accurate. -Operating income was $222,699, compared to operating income of $1,328,846 reported in the prior-year period. This change was due in part to the factors discussed above in each of the businesses and increases in operating expenses that exceeded the increase in net operating revenue. -Operating EBITDA (excluding investment portfolio income) for the quarter was $387,278 compared to $1,490,859 in the prior-year period. A note reconciling operating EBITDA to operating income can be found at the end of this release. -Net income for the fiscal 2014 third quarter was $252,145, or $0.04 per share, as compared to net income of $864,706, or $0.14 per share, in the prior year period. (Operating EPS and Net EPS are stated after giving effect to the 100 percent stock split effective February 28, for all periods. Shares outstanding increased to 6,024,200 from 3,012,100 with this stock split, and per share information has been retroactively adjusted to account for the split.) -Investment gain, net (from investment portfolio) for the third quarter ended December 31, 2013 was $227,105, as compared to investment gain, net of $42,682, for the same quarter of the previous fiscal year. Fiscal 2014 Nine Months Financial Review -Total revenues for the nine months ended December 31, 2013, were $20,120,001, compared to $21,953,101 in revenues for the prior-year period. -Net operating revenue (gross profit) was $5,605,937, which compares to net operating revenue of $5,774,537 in the prior-year fiscal period. -Operating income was $977,639 compared to $2,161,989 for the prior-year period. -Operating EBITDA (excluding investment revenue) for the nine months was $1,455,271 versus $2,561,896 in the prior-year period. A note reconciling Operating EBITDA to Operating Income can be found at the end of this release. -Net income for the nine months ended December 31, 2013, was $729,964, or $0.12 per share, compared to $1,432,567 or $0.24 per share, in the prior-year period. (As noted above, per share information has been retroactively adjusted to account for the 100 percent stock split effective February 28.) Balance Sheet Information -TMA's balance sheet at December 31, 2013, reflected cash and cash equivalents of approximately $6.5 million, working capital of $12.9 million, and shareholders' equity of $14.0 million; compared to $6.0 million, $12.7 million, and $13.3 million, respectively, at March 31, 2013. 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. More information: http://www.themarketingalliance.com/shareholder-information ((Comments on this story may be sent to [email protected])) (c) 2014 ProQuest Information and Learning Company; All Rights Reserved. |