MamaMancini’s Reports Third Quarter 2022 Financial Results
Sales Increase 12% with Margins Temporarily Impinged by Higher Freight and Protein Commodity Costs; Significant Margin Improvement Efforts UnderwayNew Ready-to-Eat Products to be Introduced in Next Several Months
*EAST RUTHERFORD, NJ, Dec. 14, 2021 (GLOBE NEWSWIRE) -- *MamaMancini's Holdings, Inc. (NASDAQ: MMMB), a marketer of specialty pre-prepared, frozen and refrigerated food products, has reported its financial results for the fiscal third quarter ended October 31, 2021.
*Financial **Summary**:*
*Three Months Ended October 31,*
*Year-over-Year % Change* *2021* *2020*
Revenues $10.9 million $9.7 million 12.1%
Gross Profit $2.7 million $2.9 million (6.2%)
Operating Expenses $2.7 million $2.1 million 28.5%
Pre-Tax Net Income ($0.0) million $0.7 million (101.0%)
Net Income ($0.0) million $0.7 million (100.7%)
Earnings per Share ($0.00) $0.02 (100.0%)
Cash $4.5 million $1.8 million 153.2%
*Third** Quarter 2022 & Subsequent Operational* *Highlights**:*
· Notably advanced the Company’s active acquisition program targeting complementary food product firms with sales in the $12 to $35 million per year range, generating positive EBITDA. Products that are symbiotic to MamaMancini’s existing retail, club store and food service distribution network are high priority.
· Named the coveted Today’s Special Value deal on QVC for December 8^th, securing approximately 5 hours of airtime throughout the day. This drove expected sales of $2,000,000 spread out through calendar 2021 and 2022.
· Received the prestigious Food Product of the Month Award at QVC for the month of September, as well as three QVC Customer Choice Food Awards for Most Recommended Brand, Best Meatball and Best Sauce Among all QVC Food Brands.
· Attended leading virtual investor conferences including the Taglich Brothers Investment Conference on September 13^th and the LD Micro Main Event on October 13^th.
· New Ready-to-Eat product line ready to begin distribution.*Management Commentary*
“We notably advanced our ongoing active acquisition program in the third quarter, which could significantly expand our existing business in the prepared foods segment,” said Carl Wolf, Chairman and CEO of MamaMancini’s. “Any acquisition we make will be financed in a shareholder friendly way, targeting zero shares to be issued, leveraging cash on hand and attractive bank financing we have available to us. Given our growth expectations and the revenue from potential near-term acquisition targets, we believe MamaMancini’s could approach $100 million in annual sales within 18 months.
“We are particularly excited by the growth opportunities of companies we may acquire, made possible by leveraging our national network of tier-1 retailer and club store accounts. We believe we can significantly grow sales in the years to come by leveraging our nationwide platform, pushing through more of our SKUs per relationship and driving stronger sales per location in aggregate.
“We continue to innovate our core product lines as well – as we will soon begin to ship a major new line of ready-to-eat meals in up to 11 varieties. Due to the immense labor shortages facing retailers, we believe that this line will have great success. Our new, convenient Meatballs-in-a-Cup™ product will launch for testing in the first quarter at an attractive $3.99 price point. The high protein content of 16 grams, and very modest calories are attractive attributes to health-conscious consumers. This product has the potential to efficiently service the exciting convenience store, supermarket, and university food service opportunities. We have added to production capacity to handle $10-12 million in incremental annualized sales in both these lines.
“While we faced continued supply chain headwinds as well as record increases in protein commodity pricing in the third quarter, which temporarily impacted margins, we are implementing significant price increases and expect to see margin improvement by year-end. I would expect sales to grow to $11.5 – 12.5 million in the fourth quarter, up from $9.4 million in the same year-ago quarter. We are well positioned to notably improve margins in the long-term as supply chain bottlenecks clear up and prices normalize – enabling us to create sustainable value for our shareholders for years to come,” concluded Wolf.
*Third** Quarter **Fiscal **202**2** Financial **Results*
Revenue for the third quarter of fiscal 2022 increased 12.1% to $10.9 million, as compared to $9.7 million in the same year-ago quarter. The increase in revenue for the third quarter was a result of major new business with Whole Foods and Publix.
Gross profit totaled $2.7 million, or 25.2% of total revenues, in the third quarter of fiscal 2022, as compared to $2.9 million, or 30.1% of total revenues, in the same year-ago quarter. The lower gross profit margin in the third quarter was due to higher cost of protein and cost of freight in for all elements of supply. The Company expects gross margins will improve by fiscal year-end as commodity prices normalize and higher production volumes will result in higher plant operating efficiencies, and significant price increases come into effect.
Operating expenses totaled $2.7 million in the third quarter of fiscal 2022, as compared to $2.1 million in the same year-ago quarter. As a percentage of sales, operating expenses totaled 25.1% in the third quarter of fiscal 2022, as compared to 21.9% in the same year-ago quarter. Operating expenses in the third quarter were affected by over $300,000 in increased logistics expenses, higher marketing expenses of approximately $100,000, which were introductory demonstration expenses for a new rotational retail item at a major national retailer, as well as over $150,000 in increased corporate infrastructure expenses in the quarter, including higher Director fees, costs related to the Company’s NASDAQ-listing, increases in corporate management to handle new acquisitions, new management systems and recruiting costs.
Pre-Tax Income for the third quarter of fiscal 2022 totaled ($0.0) million, as compared to $0.7 million in the same year-ago quarter.
Net loss for the third quarter of fiscal 2022 totaled ($0.0) million, or $0.00 per diluted share, as compared to a net income of $0.7 million, or $0.02 per diluted share, in the same year-ago quarter.
Cash and cash equivalents as of October 31, 2021 were $4.5 million, as compared to $1.8 million in the same year-ago quarter and $3.2 million as of January 31, 2021. The increased cash balance benefitted from $2.1 million in cash flow from operations year-to-date.
*Conference Call*
Management will host an investor conference call at 4:30 p.m. Eastern time on Tuesday, December 14, 2021 to discuss the Company’s third quarter fiscal 2022 financial results, provide a corporate update, and conclude with a Q&A from participants. To participate, please use the following information:
*Q3 **Fiscal **2022 Earnings **& Corporate Update **Conference Call*
Date: Tuesday, December 14, 2021
Time: 4:30 p.m. Eastern time
U.S. Dial-in: 1-844-889-4326
International Dial-in: 1-412-317-9264
Conference ID: 10162267
Webcast: https://services.choruscall.com/mediaframe/webcast.html?webcastid=uExPphHP
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 December 21, 2021. To listen, call 1-877-344-7529 within the United States or 1-412-317-0088 when calling internationally. Please use the replay pin number 10162267.
*About MamaMancini’s Holdings, Inc.*
MamaMancini's Holdings, Inc. (NASDAQ: MMMB) is a marketer and distributor of specialty prepared, refrigerated and frozen all-natural Italian foods. MamaMancini’s product portfolio consists of over 20 products including meatballs, meat loaf, chicken parmesan, sausages and pasta bowl kits, with beef, turkey, chicken and pork varieties. The Company’s products are sold in over 45,000 locations nationwide, including at well-known retailers such as Sam’s Club, Whole Foods, Publix, Costco and Albertsons, as well as through national distributors such as Sysco and United Natural Foods. The Company also regularly maintains a direct-to-consumer presence through presentations on QVC. For more information, please visit www.mamamancinis.com.
*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, 2021 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, 2021* * * * * *January 31,2021* * * * * *(unaudited)* * *
*Assets*
*Current Assets:*
Cash $ 4,539,920 $ 3,190,560
Accounts receivable, net 3,961,348 3,973,793
Inventories 1,614,738 1,195,211
Prepaid expenses 595,071 519,887
*Total current assets* 10,711,077 8,879,451
Property and equipment, net 3,177,021 2,963,602
Intangibles 87,639 87,639
Operating lease right of use assets 1,536,927 1,352,483
Deferred tax asset, net 361,660 744,973
Deposits 23,156 20,177
*Total Assets* * * *$* *15,897,480* * * * * *$* *14,048,325* * *
*Liabilities and Stockholders’ Equity*
*Liabilities:*
*Current Liabilities:*
Accounts payable and accrued expenses $ 4,269,206 $ 3,707,111
Operating lease liability 188,590 147,684
Finance leases payable 226,111 190,554
*Total current liabilities* 4,683,907 4,045,349
Operating lease liability – net of current portion 1,383,960 1,218,487
Finance leases payable – net of current portion 422,326 474,743
*Total long-term liabilities* 1,806,286 1,693,230
*Total Liabilities* 6,490,193 5,738,579
*Commitments and contingencies (See Note 10)*
*Stockholders’ Equity:*
Series A Preferred stock, $0.00001 par value; 120,000 shares authorized; 23,400 issued as of October 31, 2021 and January 31, 2021, 0 and 0 shares outstanding as of October 31, 2021 and January 31, 2021 - -
Preferred stock, $0.00001 par value; 19,880,000 shares authorized; no shares issued and outstanding - -
Common stock, $0.00001 par value; 250,000,000 shares authorized; 35,751,792 and 35,603,731 shares issued and outstanding as of October 31, 2021 and January 31, 2021 359 357
Additional paid in capital 20,575,338 20,535,793
Accumulated deficit (11,018,910 ) (12,076,904 )
Less: Treasury stock, 230,000 shares at cost, respectively as of October 31, 2021 and January 31, 2021 (149,500 ) (149,500 )
*Total Stockholders’ Equity* 9,407,287 8,309,746
*Total Liabilities and Stockholders’ Equity* * * *$* *15,897,480* * * * * *$* *14,048,325* * *
*
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*MamaMancini’s Holdings, Inc.*
*Condensed Consolidated Statements of Operations*
*(unaudited)*
* * *For the Three Months Ended*
*October 31,* * * * * *For the Nine Months Ended*
*October 31,* * * * * *2021* * * * * *2020* * * * * *2021* * * * * *2020* * *
*Sales-net of slotting fees and discounts* $ 10,852,682 $ 9,684,195 $ 33,230,666 $ 30,766,700
*Costs of sales* 8,123,517 6,773,662 23,787,864 21,317,384
*Gross profit* * * * * *2,729,165* * * * * * * *2,910,533* * * * * * * *9,442,802* * * * * * * *9,449,316* * *
*Operating expenses:*
Research and development 33,866 30,765 87,843 86,103
General and administrative 2,694,098 2,092,640 7,916,646 6,793,366
*Total operating expenses* * * * * *2,727,964* * * * * * * *2,123,405* * * 8,004,489 * * * * *6,879,469* * *
*Income from operations* * * * * *1,201* * * * * * * *787,128* * * * * * * *1,438,313* * * * * * * *2,569,847* * *
*Other income (expenses)*
Interest (8,731 ) (45,822 ) (26,710 ) (171,872 )
Amortization of debt discount - (7,164 ) - (17,864 )
Other income * * * * *-* * * * * * * *-* * * 37,704 * * * * *-* * *
*Total other income (expenses)* * * * * *(8,731* *)* * * * * *(52,986* *)* * * * * *10,994* * * * * * * *(189,736* *)*
*Net income (loss) before income tax provision* * * * * *(7,530* *)* * * * * *734,142* * * * * * * *1,449,307* * * * * * * *2,380,111* * *
Income tax (benefit) provision (2,075 ) - 391,313 -
*Net income (loss)* * * *$* *(5,455* *)* * * *$* *734,142* * * * * *$* *1,057,994* * * * * *$* *2,380,111* * *
*Net income (loss) per common share*
*– basic* $ (0.00 ) $ 0.02 $ 0.03 $ 0.07
*– diluted* $ (0.00 ) $ 0.02 $ 0.03 $ 0.07
*Weighted average common shares outstanding*
*– basic* 35,728,821 34,225,446 35,683,484 32,832,450
*– diluted* 35,728,821 35,725,984 36,176,949 34,322,988
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*MamaMancini’s Holdings, Inc.*
*Condensed Consolidated Statements of Cash Flows*
*(unaudited)*
* * *For the Nine Months Ended* * * * * *October 31, 2021* * * * * *October 31, 2020* * *
*CASH FLOWS FROM OPERATING ACTIVITIES:*
Net income $ 1,057,994 $ 2,380,111
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 572,238 489,109
Amortization of debt discount - 17,864
Share-based compensation 20,467 51,435
Amortization of right of use assets 163,141 102,943
Change in deferred tax asset 383,313 -
Changes in operating assets and liabilities:
Accounts receivable 12,445 39,975
Other receivable - -
Inventories (419,527 ) (313,870 )
Prepaid expenses (75,184 ) (38,784 )
Security deposits (2,979 ) -
Accounts payable and accrued expenses 562,095 (111,024 )
Operating lease liability (141,206 ) (99,747 )
*Net Cash Provided by Operating Activities* * * * * *2,132,797* * * * * * * *2,518,012* * *
*CASH FLOWS FROM INVESTING ACTIVITIES:*
Cash paid for fixed assets (657,607 ) (304,048 )
Cash paid for intangibles - (16,284 )
*Net Cash Used in Investing Activities* * * * * *(657,607* *)* * * * * *(320,332* *)*
*CASH FLOWS FROM FINANCING ACTIVITIES:*
Repayments of term loan - (441,663 )
Repayments of related party notes payable - (641,844 )
Proceeds from promissory note - 330,505
Repayment of promissory note - (330,505 )
Borrowings of line of credit, net - (2,347,348 )
Repayment of finance lease obligations (144,910 ) (110,562 )
Proceeds from exercise of options 19,080 7,200
Proceeds from exercise of warrants - 2,735,697
*Net Cash Used in Financing Activities* * * * * *(125,830* *)* * * * * *(798,520* *)*
*Net Increase in Cash* 1,349,360 1,399,160
*Cash - Beginning of Period* 3,190,560 393,683
*Cash - End of Period* * * *$* *4,539,920* * * * * *$* *1,792,843* * *
*SUPPLEMENTARY CASH FLOW INFORMATION:*
Cash Paid During the Period for:
Income taxes $ - $ -
Interest $ 28,748 $ 174,735
*SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:*
Finance lease asset additions $ 128,050 $ 401,387
Operating lease asset additions $ 347,585 $ -
Software subscription liability in accounts payable and accrued expenses $ - $ 71,355