137% Revenue Growth and Sequential Margin Improvement Drives Return to Sustainable Profitability, Realizing $1.1 Million in Net Income and a Record $3.0 Million in Operating Cash Flow in the Third Quarter
EAST RUTHERFORD, NJ, Dec. 12, 2022 (GLOBE NEWSWIRE) — MamaMancini’s Holdings, Inc. (NASDAQ: MMMB) a leading national marketer and manufacturer of fresh Deli prepared foods, today reported its financial results for the fiscal third quarter ended October 31, 2022.
Financial Summary:
| Three Months Ended October 31, | ||||||||||||
| $ in millions | 2022 | 2021 | % Change | |||||||||
| Revenues | $ | 25.7 | $ | 10.9 | 137 | % | ||||||
| Gross Profit | $ | 6.6 | $ | 2.7 | 148 | % | ||||||
| Operating Expenses | $ | 5.1 | $ | 2.7 | 92 | % | ||||||
| Net Income (Loss) | $ | 1.1 | $ | (0.0 | ) | – | ||||||
| Earnings per Share (Diluted) | $ | 0.03 | $ | (0.00 | ) | – | ||||||
| Adj. EBTIDA (non-GAAP) | $ | 2.1 | $ | 0.3 | 684 | % | ||||||
Key Third Quarter Fiscal 2023 Operational Highlights
- Received Four QVC® 2022 Customer Choice Food Awards, winning awards for the fourth year in row for Most Recommended Brand, Best Meatball, Best Plant Based Food and Best Sauce.
- Launched into three new customers and drove double digit new items into existing customers – half of which were cross-selling new T&L products into legacy relationships.
- Appointed experienced financial executive Anthony J. Gruber as Chief Financial Officer, effective September 19, 2022.
- Attended leading investor conferences nationally, including the LD Micro Main Event XV, Proactive Investors One2One Virtual Forum and the Q3 Investor Summit.
Management Commentary
“The third quarter was marked by record revenue growth and a return to sustainable profitability, beating our previously announced goal of a $100 million annualized sales run rate by year-end a quarter ahead of expectations,” said Adam L. Michaels, CEO of MamaMancini’s. “Looking ahead, as we leverage our recent acquisitions to build the foundations of a first-of-kind national deli solutions company, my immediate-term focus will remain on the continuous foundational improvement of our ‘3Cs’ strategy – Cost, Controls and Culture.
“On the cost front, we have designed and implemented new approaches to cost management, driving noticeable improvements in procurement, manufacturing and logistics management. While the third quarter gross margins improved over 1,110 basis points as compared to the first half of the year, we believe there is even more opportunity to drive operational efficiencies across both of our facilities. Turning to controls, our newly appointed CFO Anthony Gruber has been solidifying our finance and reporting capabilities, laying the foundation for the next stage of our maturation as a public company. Our enhanced approach to costing and pricing is already driving margin expansion – we expect to continue to capture this profit growth while also reinvesting some of this margin to serve as rocket fuel for accretive marketing and trade promotion. And last, but certainly not least, we are building a company culture that is geared for and incentivizes profitable growth. Our people are at the core of what we do and hiring, promoting and retaining talent is paramount to our long-term success.
“Turning to specific wins in the third quarter, we launched into three new customers and drove double digit new items into existing customers – half of which were through cross-selling new T&L products into legacy relationships. Our goal is to grow the average items carried per store severalfold to make it easier for consumers to find our products, as well as to make our logistics more efficient. Looking ahead to the fourth quarter, we have already successfully sold and received orders from three new customers and will ship an incremental double-digit portfolio of new items into existing customers, further expanding the breadth and depth of our coverage.
“The significant revenue growth we saw this quarter reflects our transition to a national deli solutions company – a vision I outlined on our last earnings call. Our profitability, which certainly benefitted from commodity cost improvements and successful pricing actions, was concurrently driven by a keen eye on cost controls and synergy realization. As we move through the holiday season and into 2023, I anticipate the third quarter will have marked the beginning of a sustainable return to profitability for MamaMancini’s as we prepare to embark on the next leg up in our growth trajectory,” concluded Michaels.
Third Quarter Fiscal 2023 Financial Results
Revenue for the third quarter of fiscal 2023 increased 137% to a record $25.7 million, as compared to $10.9 million in the same year-ago quarter. The increase in revenue for the third quarter was driven by organic growth across all divisions – chiefly through cross selling – as well as by inorganic growth through the acquisition of T&L and Olive Branch.
Gross profit increased to a record $6.6 million, or 25.5% of total revenues, in the third quarter of fiscal 2023, as compared to $2.7 million, or 24.4% of total revenues, in the same year-ago quarter. Gross profit increased in the third quarter back to targeted levels based on normalization of commodity costs, successful pricing actions and strong sales growth. The Company continues to identify procurement and logistics efficiencies and cost savings through stronger buying power created through the acquisitions of T&L and Olive Branch.
Operating expenses totaled $5.1 million in the third quarter of fiscal 2023, as compared to $2.7 million in the same year-ago quarter. As a percentage of sales, operating expenses decreased to 19.7% in the third quarter of fiscal 2023, as compared to 24.4% in the same year-ago quarter. Operating expenses, as a percentage of sales, benefited from synergies created through the acquisitions of T&L and Olive Branch.
Income from equity method investment in Chef Inspirational Foods totaled $0.1 million in the third quarter of fiscal 2023.
Net income for the third quarter of fiscal 2023 totaled $1.1 million, or $0.03 per diluted share, as compared to a net loss of $(0.0) million, or $(0.00) per diluted share, in the same year-ago quarter.
Adjusted EBITDA, a non-GAAP term, increased to $2.1 million for the third quarter of fiscal 2023, as compared to $0.3 million in the same year-ago quarter.
Cash and cash equivalents as of October 31, 2022 were $3.5 million, as compared to $0.9 million at January 31, 2022. The increase in cash and cash equivalents was driven by $3.0 million in cash flow from operations in the third quarter of fiscal 2023, $1.5 million of which was used to pay down the Company’s credit line.
Third Quarter Fiscal 2023 Earnings Conference Call
Management will host an investor conference call at 4:30 p.m. Eastern time today to discuss the Company’s third quarter fiscal 2023 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:
Q3 FY2023 Earnings Conference Call
Date: Monday, December 12, 2022
Time: 4:30 p.m. Eastern time
U.S. Dial-in: 1-877-451-6152
International Dial-in: 1-201-389-0879
Conference ID: 13734209
Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1581056&tp_key=4f39d94f1d
Please dial in at least five minutes before the start of the call to ensure timely participation.
A playback of the call will be available through Monday, December 19, 2022. To listen, please call 1-844-512-2921 within the United States and Canada or 1-412-317-6671 when calling internationally, using replay pin number 13734209. A webcast replay will also be available using the link above.
About MamaMancini’s Holdings, Inc.
MamaMancini’s Holdings, Inc. (NASDAQ: MMMB) is a leading marketer and manufacturer of prepared foods with products offered in over 45,000 grocery, mass, club and convenience stores nationally. The Company’s broad product portfolio, born from a rich history in Italian foods, now consists of a variety of high quality, fresh, clean and easy to prepare foods to address the needs of both our consumers and retailers. Our vision is to become a one-stop-shop deli solutions platform, leveraging vertical integration and a diverse family of brands to offer a wide array of prepared foods to meet the changing demands of the modern consumer. For more information, please visit www.mamamancinis.com.
Use of Non-GAAP Financial Measures
This press release includes the following non-GAAP measure – adjusted EBITDA, which is not a measure of financial performance under GAAP and should not be considered as an alternative to net income as a measure of financial performance. The company believes this non-GAAP measure, when considered together with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to the company’s results of operations. However, this non-GAAP measure has significant limitations in that it does not reflect all the costs and other items associated with the operation of the company’s business as determined in accordance with GAAP. In addition, the company’s non-GAAP measures may be calculated differently and are therefore not comparable to similar measures by other companies. Therefore, investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, measures of financial performance in accordance with GAAP. For a definition and reconciliation of EBITDA to net income, its corresponding GAAP measure, please see the reconciliation table shown in this press release below.
US-GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION
(Unaudited)
| Three Months Ended October 31, | ||||||||
| 2022 | 2021 | |||||||
| Net Income / (Loss) | $ | 1,085,527 | $ | -5,455 | ||||
| Depreciation | $ | 277,584 | $ | 190,506 | ||||
| Amortization of Debt discount | $ | 3,015 | $ | – | ||||
| Amortization of Right of Use Assets | $ | 90,065 | $ | 71,481 | ||||
| Amortization of Intangibles | $ | 137,130 | $ | – | ||||
| Taxes | $ | 285,686 | $ | -2,075 | ||||
| Interest | $ | 183,844 | $ | 8,731 | ||||
| Acquisition Related Expenses | $ | – | $ | – | ||||
| Adj. EBITDA (non-GAAP) | $ | 2,062,851 | $ | 263,188 | ||||
Forward-Looking Statements
This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may," "future," "plan" or "planned," "will" or "should," "expected," "anticipates," "draft," "eventually" or "projected." You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in the Company’s 10-K for the fiscal year ended January 31, 2022 and other filings made by the Company with the Securities and Exchange Commission.
Investor Relations Contact:
Lucas A. Zimmerman
Director
MZ Group – MZ North America
(949) 259-4987
MMMB@mzgroup.us
www.mzgroup.us
MamaMancini’s Holdings, Inc.
Condensed Consolidated Balance Sheets
| October 31, 2022 | January 31, 2022 | |||||||
| (unaudited) | ||||||||
| Assets: | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 3,479,287 | $ | 850,598 | ||||
| Accounts receivable, net | 6,892,699 | 7,627,717 | ||||||
| Inventories | 3,563,959 | 2,890,793 | ||||||
| Prepaid expenses | 380,135 | 269,209 | ||||||
| Total current assets | 14,316,080 | 11,638,317 | ||||||
| Property and equipment, net | 3,579,437 | 3,678,532 | ||||||
| Intangibles, net | 1,617,693 | 1,984,979 | ||||||
| Goodwill | 8,633,334 | 8,633,334 | ||||||
| Operating lease right of use assets, net | 3,323,390 | 3,596,317 | ||||||
| Deferred tax asset | 350,895 | 448,501 | ||||||
| Equity method investment in Chef Inspirational | 1,290,464 | – | ||||||
| Deposits | 52,249 | 52,249 | ||||||
| Total Assets | $ | 33,163,542 | $ | 30,032,229 | ||||
| Liabilities and Stockholders’ Equity: | ||||||||
| Liabilities: | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 8,065,749 | $ | 6,479,140 | ||||
| Term loan, net of debt discount of $48,726 and $57,771, respectively | 1,502,998 | 1,235,333 | ||||||
| Operating lease liability | 378,223 | 292,699 | ||||||
| Finance leases payable | 180,085 | 218,039 | ||||||
| Promissory note – related party | 839,170 | 759,917 | ||||||
| Series B Preferred Shares to be issued, net | 185,000 | – | ||||||
| Total current liabilities | 11,151,225 | 8,985,128 | ||||||
| Line of credit | 990,000 | 765,000 | ||||||
| Operating lease liability – net of current | 2,992,603 | 3,339,255 | ||||||
| Finance leases payable – net of current | 295,805 | 376,132 | ||||||
| Promissory note – related party, net of current | 2,250,000 | 2,250,000 | ||||||
| Term loan – net of current | 5,043,104 | 6,206,896 | ||||||
| Total long-term liabilities | 11,571,512 | 12,937,283 | ||||||
| Total Liabilities | 22,722,737 | 21,922,411 | ||||||
| Commitments and contingencies (Note 10) | ||||||||
| Stockholders’ Equity: | ||||||||
| Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of October 31, 2022 and January 31, 2022, 0 shares outstanding as of October 31, 2022 and January 31, 2022 | – | – | ||||||
| Series B Preferred stock, $0.00001 par value; 200,000 shares authorized; 47,200 and 0 issued and outstanding as of October 31, 2022 and January 31, 2022 | – | – | ||||||
| Preferred stock, $0.00001 par value; 19,680,000 shares authorized; no shares issued and outstanding | – | – | ||||||
| Common stock, $0.00001 par value; 250,000,000 shares authorized; 36,317,857 and 35,758,792 shares issued and outstanding as of October 31, 2022 and January 31, 2022 | 364 | 359 | ||||||
| Additional paid in capital | 22,472,793 | 20,587,789 | ||||||
| Accumulated deficit | (11,882,852 | ) | (12,328,830 | ) | ||||
| Less: Treasury stock, 230,000 shares at cost, respectively | (149,500 | ) | (149,500 | ) | ||||
| Total Stockholders’ Equity | 10,440,805 | 8,109,818 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 33,163,542 | $ | 30,032,229 | ||||
MamaMancini’s Holdings, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| For the Three Months Ended October 31, |
For the Nine Months Ended October 31, |
||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Sales-net of slotting fees and discounts | $ | 25,693,913 | $ | 10,852,682 | $ | 70,370,967 | $ | 33,230,666 | |||||||
| Costs of sales | 19,129,707 | 8,206,939 | 57,384,953 | 24,006,920 | |||||||||||
| Gross profit | 6,564,206 | 2,645,743 | 12,986,014 | 9,223,746 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 24,432 | 33,866 | 92,759 | 87,843 | |||||||||||
| General and administrative | 5,041,213 | 2,610,676 | 11,965,016 | 7,697,590 | |||||||||||
| Total operating expenses | 5,065,645 | 2,644,542 | 12,057,775 | 7,785,433 | |||||||||||
| Income from operations | 1,498,561 | 1,201 | 928,239 | 1,438,313 | |||||||||||
| Other income (expenses) | |||||||||||||||
| Interest | (183,844 | ) | (8,731 | ) | (447,159 | ) | (26,710 | ||||||||
| Amortization of debt discount | (3,015 | ) | – | (9,670 | ) | – | |||||||||
| Other income | – | – | 2,596 | 37,704 | |||||||||||
| Total other income (expenses) | (186,859 | ) | (8,731 | ) | (454,233 | ) | 10,994 | ||||||||
| Net income (loss) before income tax provision and income from equity method investment | 1,311,702 | (7,530 | ) | 474,006 | 1,449,307 | ||||||||||
| Income from equity method investment in Chef Inspirational | 71,924 | – | 90,464 | – | |||||||||||
| Income tax benefit (provision) | (285,686 | ) | 2,075 | (106,079 | ) | (391,313 | |||||||||
| Net income (loss) | 1,097,940 | (5,455 | ) | 458,391 | 1,057,994 | ||||||||||
| Less: Class B preferred dividends | (12,413 | ) | – | (12,413 | ) | – | |||||||||
| Net income (loss) available to common stockholders | 1,085,527 | $ | (5,455 | ) | $ | 445,978 | $ | 1,057,994 | |||||||
| Net income (loss) per common share | |||||||||||||||
| – basic | $ | 0.03 | $ | (0.00 | ) | $ | 0.01 | $ | 0.03 | ||||||
| – diluted | $ | 0.03 | $ | (0.00 | ) | $ | 0.01 | $ | 0.03 | ||||||
| Weighted average common shares outstanding | |||||||||||||||
| – basic | 36,317,857 | 35,728,821 | 36,020,209 | 35,683,484 | |||||||||||
| – diluted | 36,614,635 | 35,728,821 | 36,348,534 | 36,176,949 | |||||||||||
MamaMancini’s Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| For the Nine Months Ended October 31, | ||||||||||||
| 2022 | 2021 | |||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
| Net income | $ | 458,391 | $ | 1,057,994 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation | 678,710 | 572,238 | ||||||||||
| Amortization of debt discount | 9,670 | – | ||||||||||
| Amortization of right of use assets | 272,927 | 163,141 | ||||||||||
| Amortization of intangibles | 367,286 | – | ||||||||||
| Share-based compensation | 35,959 | 20,467 | ||||||||||
| Change in deferred tax asset | 97,606 | 383,313 | ||||||||||
| Income from equity method investment in Chef Inspirational | (90,464 | ) | – | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | 735,018 | 12,445 | ||||||||||
| Inventories | (673,166 | ) | (419,527 | |||||||||
| Prepaid expenses | (111,551 | ) | (75,184 | |||||||||
| Security deposits | – | (2,979 | ||||||||||
| Accounts payable and accrued expenses | 1,664,762 | 562,095 | ||||||||||
| Operating lease liability | (261,128 | ) | (141,206 | |||||||||
| Net Cash Provided by Operating Activities | 3,184,020 | 2,132,797 | ||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Cash paid for fixed assets | (507,547 | ) | (657,607 | |||||||||
| Cash paid for investment in Chef Inspirational | (500,000 | ) | – | |||||||||
| Net Cash (Used in) Investing Activities | (1,007,547 | ) | (657,607 | |||||||||
| – | ||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Proceeds in advance of preferred stock offering | 185,000 | – | ||||||||||
| Proceeds from preferred stock offering | 1,180,000 | – | ||||||||||
| Payment of stock offering costs | (57,200 | ) | – | |||||||||
| Repayment of term loan | (905,172 | ) | – | |||||||||
| Borrowings of line of credit, net | 225,000 | – | ||||||||||
| Repayment of finance lease obligations | (190,349 | ) | (144,910 | |||||||||
| Payment of Preferred B dividends | (11,313 | ) | – | |||||||||
| Proceeds from exercise of options | 26,250 | 19,080 | ||||||||||
| Net Cash Provided by (Used in) Financing Activities | 452,216 | (125,830 | ||||||||||
| Net Increase in Cash | 2,628,689 | 1,349,360 | ||||||||||
| Cash – Beginning of Period | 850,598 | 3,190,560 | ||||||||||
| Cash – End of Period | $ | 3,479,287 | $ | 4,539,920 | ||||||||
| SUPPLEMENTARY CASH FLOW INFORMATION: | ||||||||||||
| Cash Paid During the Period for: | ||||||||||||
| Income taxes | $ | 9,170 | $ | 6,830 | ||||||||
| Interest | $ | 369,400 | $ | 28,748 | ||||||||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||||||
| Finance lease asset additions | $ | 72,068 | $ | 128,050 | ||||||||
| Operating lease asset additions | $ | – | $ | 347,585 | ||||||||
| Non-cash consideration paid in common stock for equity investment in Chef Inspirational | $ | 700,000 | $ | – | ||||||||
| Preferred B accrued dividends | $ | 1,100 | $ | – | ||||||||
