Q2 2026 Financial Key Items (all comparisons to the prior year quarter)
Revenues from operations were $4,668,836 compared to $4,983,950, a decrease of over 6% which was almost entirely in the construction business
Operating income from continuing operations of $149,507 compared to $486,639 in the prior year quarter
Net income was $263,407 or $0.04 per share in the quarter compared to $401,511 or $0.05 per share in the prior year quarter
During the quarter the Company repurchased 166,146 shares, and subsequent to the end of quarter the Company repurchased an additional 50,000 shares. Repurchases under the program may be made through privately negotiated transactions when the Company is contacted directly or open market transactions (please see the Company's April 2, 2025, press release for more information and important disclosures). The press release is available on the Company's website
Management Comments Timothy M. Klusas, TMA's Chief Executive Officer, commented, "We continued to invest in the insurance distribution business but were not able to realize the benefit of anticipated growth in this quarter as insurance revenue remained flat. We finished the quarter with investments in business development and our call center that have the potential to show intended results in future quarters.
Further, as our business continues to evolve, in a previous quarter (ending December 2024) 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 treated non-refundable reimbursement and marketing fee revenue from carriers as earned when the agreed upon amount was invoiced. We acknowledged any timing differences of these payments as deferred revenue on the balance sheet. We continued to treat reimbursement and marketing revenue as a time-duration item and allocated revenue throughout its respective period and on the balance sheet as Deferred Revenue.
The construction business was affected by significant delays at a large project where we could not generate revenue despite incurring the labor and overhead costs of being onsite and committed to the project, as opposed to being able to work elsewhere on other projects. In prior periods we were able to balance multiple projects to be able to offset a delay such as this, but, unfortunately, this quarter we had no other alternatives. Our expectation at the end of this quarter was that revenue would be deferred into the next quarter as delays lessened".
Second Quarter Fiscal Year 2026 Financial Review
Revenues were $4,668,836 compared to $4,983,950 in the prior year quarter. Virtually all of the decline was in the construction business.
Net operating revenue (gross profit) for the quarter was $851,155 compared to net operating revenue of $1,454,419 in the prior year quarter for a decrease of $603,264. The insurance distribution business accounted for 33% (or $197,955) of the decrease due to flat revenue matched with increased commissions costs from an adverse product mix and increased Business processing and distributor costs due in our call center and added business development expense. The construction business accounted for 67% (or $405,310) of the gross profit decrease due to uncontrollable delays with a large project resulting in costs in excess of revenues generated. Our employees were not able to make progress on a large job despite the costs of being onsite and committed to the project.
Operating expenses were less this quarter than the prior year quarter, $701,648 compared to $967,780. An increase in compensation expense was offset by decreases in office and administrative expense and professional fees, as the Company hired employees that were previously its outsourced bookkeeping and administrative staff. Stock-based compensation expense also decreased from the prior year quarter.
The Company reported operating income from continuing operations of $149,507 compared to $486,639, in the prior year quarter, with differences due to factors discussed above.
Operating EBITDA (excluding investment portfolio income) of $202,480 was a decrease from the prior year quarter of $553,396. 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 $155,417 as compared with $61,203 in the previous year quarter.
Net income was $263,407, or $0.04 per share, compared to $401,511 or $0.05 per share in the previous year quarter.
During the first fiscal quarter, 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 October 15, the Company had repurchased 319,506 shares under this program. The April 2 announcement followed the successful completion of an 800,000 share repurchase program announced in October 2024 and completed March 2025.
Balance Sheet Information
TMA's balance sheet on September 30, 2025, reflected cash and cash equivalents of $2.0 million; working capital of $5.3 million; and shareholders' equity of $5.7 million; compared to cash and cash equivalents of $1.4 million, working capital of $6.1 million, and shareholders' equity of $6.4 million as of September 30, 2024.
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 StatementInvestors 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, or reduce expenses, 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; 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
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Six Months Ended
September 30,
September 30,
2025
2024
2025
2024
Insurance commission and fee revenue
$
4,391,678
$
4,391,680
$
9,071,982
$
8,752,271
Construction revenue
277,158
592,270
456,744
689,722
Total revenues
4,668,836
4,983,950
9,528,726
9,441,993
Insurance distributor related expenses:
Distributor bonuses and commissions
2,959,217
2,852,956
6,147,299
5,874,359
Business processing and distributor costs
539,130
446,389
1,058,756
837,784
Depreciation
864
1,913
1,728
4,834
3,499,211
3,301,258
7,207,783
6,716,977
Costs of construction:
